Wuhan Guoyu Logistics Group Co Ltd & Anor v Emporiki Bank of Greece SA

Wuhan Guoyu Logistics Group Co Ltd & Anor v Emporiki Bank of Greece SA

The Payment Guarantee is construed as an on demand guarantee, not a traditional guarantee. The presence of key elements—bank issued, relating to an international transaction, undertaking to pay on demand, and absence of limiting clauses—creates a presumption that the instrument is an on demand bond. The document's language and commercial context support this construction. Judgment is entered accordingly.

Parties
Appellant/claimant: Wuhan Guoyu Logistics Group Co Ltd; Appellant/claimant: Yangzhou Guoyu Shipbuilding Co Ltd; Respondent/defendant: Emporiki Bank of Greece SA
Jurisdiction
England and Wales
Judgment Date
07 December 2012
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
appeal allowed; judgment for the claimants
Legal Topics
Guarantees, On Demand Bonds, Performance Bonds, Contract Construction
Banking Law Commercial Law Contract Law Guarantees On Demand Bonds Performance Bonds Contract Construction

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Parties

Wuhan Guoyu Logistics Group Co Ltd

Appellant/claimant

Yangzhou Guoyu Shipbuilding Co Ltd

Appellant/claimant

Emporiki Bank of Greece SA

Respondent/defendant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether the Payment Guarantee is a guarantee properly so called or an on demand bond
  2. 2 Whether payment is due upon written demand or only if the underlying obligation is due

Ratio Decidendi

The Payment Guarantee is construed as an on demand guarantee, not a traditional guarantee. The presence of key elements—bank issued, relating to an international transaction, undertaking to pay on demand, and absence of limiting clauses—creates a presumption that the instrument is an on demand bond. The document's language and commercial context support this construction. Judgment is entered accordingly.

Court Disposition

appeal allowed; judgment for the claimants

Orders

  • The Payment Guarantee is an on demand guarantee; judgment entered for the claimants.