RADIANT INSURANCE COMPANY LTD v RWANDA AGRICULTURE BOARD

RADIANT INSURANCE COMPANY LTD v RWANDA AGRICULTURE BOARD

The insurer's obligation under the advance payment guarantee is to ensure the procuring entity is refunded the entire advance, regardless of whether the completed works exceed the advance. The guarantee remains valid until full refund, and the fact that the advance was used for its intended purpose does not discharge the insurer from liability if the advance is not fully refunded due to contract termination.

Citation
RLR V.3-2021
Parties
Appellant/defendant: Radiant Insurance Company Ltd; Respondent/appellant: Rwanda Agriculture Board (RAB)
Court
Court of Appeal
Jurisdiction
Rwanda
Judgment Date
8 February 2019
Case Number
RCOMAA 00026/2018/CA
Procedural Posture
Commercial Appeal / Court of Appeal Judgment
Outcome
Appeal allowed; cross-appeal dismissed; Commercial High Court judgment reversed.
Legal Topics
Advance Payment Guarantee, Refund of Advance Payment, Obligations of Insurer, Termination of Contract, Damages, Court Fees
Source Language
en
Public Procurement Insurance Law Contract Law Advance Payment Guarantee Refund of Advance Payment Obligations of Insurer Termination of Contract Damages +1 more

Case Brief

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Parties

Radiant Insurance Company Ltd

Appellant/defendant

Rwanda Agriculture Board (RAB)

Respondent/appellant

Procedural Posture

Commercial Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the insurer is discharged from liability to refund the advance payment when the advance was spent on tender-related activities but not fully refunded due to contract termination.
  2. 2 Whether the procuring entity is entitled to recover the balance of the advance payment from the insurer under the advance payment guarantee.
  3. 3 Whether damages are payable by either party for unnecessary lawsuits.

Ratio Decidendi

The insurer's obligation under the advance payment guarantee is to ensure the procuring entity is refunded the entire advance, regardless of whether the completed works exceed the advance. The guarantee remains valid until full refund, and the fact that the advance was used for its intended purpose does not discharge the insurer from liability if the advance is not fully refunded due to contract termination.

Court Disposition

Appeal allowed; cross-appeal dismissed; Commercial High Court judgment reversed.

Orders

  • Radiant Insurance Company Ltd to pay Rwanda Agriculture Board the balance of 54,017,468 Frw from the advance paid to ETECO.
  • Radiant Insurance Company Ltd to refund Rwanda Agriculture Board 100,000 Frw of court fees paid on the appeal.