Ostfriesische Volksbank EG v Fortis Bank
A valid demand made before the expiry date suffices to keep the guarantee alive; the Lloyd’s decision, if triggered by a notice of dispute, need not be provided before the expiry date but must be provided within a reasonable time thereafter. The claimant did not breach any implied term as to timing.
- Parties
- Claimant: Ostfriesische Volksbank EG; Defendant: Fortis Bank
- Jurisdiction
- England and Wales
- Judgment Date
- 29 January 2010
- Procedural Posture
- Commercial Claim (bank Guarantee Enforcement) / Judgment After Trial
- Outcome
- Judgment for the claimant
- Legal Topics
- Advance Payment Guarantee, Strict Construction of Guarantees, Implied Terms, Reasonable Time for Performance
Case Brief
Summary, issues, holding and outcome
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Parties
Ostfriesische Volksbank EG
Claimant
Fortis Bank
Defendant
Procedural Posture
Commercial Claim (bank Guarantee Enforcement) / Judgment After Trial
Legal Issues
- 1 Whether the Lloyd’s decision had to be delivered by the guarantee expiry date for a valid claim
- 2 Whether there was an implied term to provide the Lloyd’s decision within a reasonable time
- 3 Whether the claimant breached any implied term regarding timing
Ratio Decidendi
A valid demand made before the expiry date suffices to keep the guarantee alive; the Lloyd’s decision, if triggered by a notice of dispute, need not be provided before the expiry date but must be provided within a reasonable time thereafter. The claimant did not breach any implied term as to timing.
Court Disposition
Judgment for the claimant
Orders
- Defendant to pay the sum claimed under the guarantee
Full Case Text
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