Simon Carves Ltd v Ensus UK Ltd [2011] EWHC 657 (TCC) (23 March 2011)

Simon Carves Ltd v Ensus UK Ltd [2011] EWHC 657 (TCC) (23 March 2011)

The court held that SCL had established a strong case that, as between SCL and Ensus, the bond was null and void and returnable after the Acceptance Certificate, as no claim had been made prior to that certificate within the meaning of the contract. The court found that SCL had reserved its rights when agreeing to extend the bond, and that Ensus was contractually barred from making a call. Accordingly, the injunction restraining Ensus from calling on the bond should continue.

Citation
[2011] EWHC 657 (TCC)
Parties
Claimant: Simon Carves Limited; Defendant: Ensus UK Limited
Jurisdiction
England and Wales
Judgment Date
23 March 2011
Procedural Posture
Interim Injunction Application (technology and Construction Court) / Interim Application for Injunction; Continuation of Injunction After Full Argument
Outcome
Injunction continued; Ensus restrained from calling on the bond pending final resolution.
Legal Topics
Performance Bonds, On Demand Bonds, Injunctions, Contractual Interpretation, Remedies for Breach of Contract
Commercial Law Construction Law Banking Law Performance Bonds On Demand Bonds Injunctions Contractual Interpretation Remedies for Breach of Contract

Case Brief

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Parties

Simon Carves Limited

Claimant

Ensus UK Limited

Defendant

Procedural Posture

Interim Injunction Application (technology and Construction Court) / Interim Application for Injunction; Continuation of Injunction After Full Argument

Legal Issues

  1. 1 Whether the beneficiary (Ensus) can be restrained from calling on an on-demand performance bond where the underlying contract provides that the bond is null and void and returnable after the Acceptance Certificate, absent pending or previously notified claims.
  2. 2 Whether a 'claim' had been made by Ensus prior to the Acceptance Certificate within the meaning of the contract.
  3. 3 Whether the court can grant an injunction to restrain a call on a bond in circumstances other than fraud.

Ratio Decidendi

The court held that SCL had established a strong case that, as between SCL and Ensus, the bond was null and void and returnable after the Acceptance Certificate, as no claim had been made prior to that certificate within the meaning of the contract. The court found that SCL had reserved its rights when agreeing to extend the bond, and that Ensus was contractually barred from making a call. Accordingly, the injunction restraining Ensus from calling on the bond should continue.

Court Disposition

Injunction continued; Ensus restrained from calling on the bond pending final resolution.

Orders

  • The interim injunction restraining Ensus from making a demand under the performance bond is continued.
  • SCL to maintain the bond in the sum of £2.3 million until the end of April 2011 or further order.