MW High Tech Projects UK Ltd & Anor v Biffa Waste Services Ltd

MW High Tech Projects UK Ltd & Anor v Biffa Waste Services Ltd

The court held that the condition precedent to calling on the retention bond was satisfied by Biffa making a call on the parent company guarantee, regardless of whether the underlying claim was contractually justified. There is no implied requirement that the call be 'valid' beyond being a call in form. The court will not restrain payment under an on-demand bond except in cases of fraud or where the contract clearly precludes the call, which was not established here.

Parties
First Claimant: MW High Tech Projects UK Limited; Second Claimant: MW High Tech Projects GmbH; Defendant: Biffa Waste Services Limited
Jurisdiction
England and Wales
Judgment Date
02 February 2015
Procedural Posture
Commercial Construction Dispute (injunction Application) / Judgment on Application to Set Aside Interim Injunction
Outcome
Interim injunction set aside; application to restrain call on retention bond refused.
Legal Topics
On Demand Bonds, Parent Company Guarantees, Liquidated Damages, Injunctions, Contract Termination
Commercial Law Construction Law Banking and Finance On Demand Bonds Parent Company Guarantees Liquidated Damages Injunctions Contract Termination

Case Brief

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Parties

MW High Tech Projects UK Limited

First Claimant

MW High Tech Projects GmbH

Second Claimant

Biffa Waste Services Limited

Defendant

Procedural Posture

Commercial Construction Dispute (injunction Application) / Judgment on Application to Set Aside Interim Injunction

Legal Issues

  1. 1 Whether the court should restrain the defendant from calling on a retention bond
  2. 2 Whether the condition precedent to calling the retention bond was satisfied
  3. 3 Whether a 'valid' call on the parent company guarantee is required

Ratio Decidendi

The court held that the condition precedent to calling on the retention bond was satisfied by Biffa making a call on the parent company guarantee, regardless of whether the underlying claim was contractually justified. There is no implied requirement that the call be 'valid' beyond being a call in form. The court will not restrain payment under an on-demand bond except in cases of fraud or where the contract clearly precludes the call, which was not established here.

Court Disposition

Interim injunction set aside; application to restrain call on retention bond refused.

Orders

  • The interim injunction restraining Biffa from calling on the retention bond is set aside.
  • No grounds to restrain Biffa from pursuing its call on the retention bond.