British Arab Commercial Bank Plc v Bank of Communications & Anor

British Arab Commercial Bank Plc v Bank of Communications & Anor

The BACB counter-guarantee is governed by Syrian law due to its closer connection with Syria. Under Syrian law, liability under the counter-guarantee requires either a demand for payment within the validity period or a consensual extension, neither of which occurred. Therefore, BACB and BOC are not liable under their respective counter-guarantees.

Parties
Claimant: British Arab Commercial Bank PLC; 1st Defendant: Bank of Communications; 2nd Defendant: Commercial Bank of Syria
Jurisdiction
England and Wales
Judgment Date
17 February 2011
Procedural Posture
Commercial Dispute / Final Judgment
Outcome
Claim dismissed; neither BACB nor BOC is liable under their respective counter-guarantees.
Legal Topics
Performance Bonds, Counter Guarantees, Governing Law, Public Procurement, International Banking Transactions
Banking Law Conflict of Laws Contract Law Performance Bonds Counter Guarantees Governing Law Public Procurement International Banking Transactions

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Parties

British Arab Commercial Bank PLC

Claimant

Bank of Communications

1st Defendant

Commercial Bank of Syria

2nd Defendant

Procedural Posture

Commercial Dispute / Final Judgment

Legal Issues

  1. 1 What law governs the BACB counter-guarantee to CBS?
  2. 2 Is BACB liable under its counter-guarantee to CBS under Syrian law?
  3. 3 Does BOC have any liability under its counter-guarantee to BACB?

Ratio Decidendi

The BACB counter-guarantee is governed by Syrian law due to its closer connection with Syria. Under Syrian law, liability under the counter-guarantee requires either a demand for payment within the validity period or a consensual extension, neither of which occurred. Therefore, BACB and BOC are not liable under their respective counter-guarantees.

Court Disposition

Claim dismissed; neither BACB nor BOC is liable under their respective counter-guarantees.