STRONG CONSTRUCTIONS LTD v RADIANT INSURANCE COMPANY LTD

STRONG CONSTRUCTIONS LTD v RADIANT INSURANCE COMPANY LTD

Radiant Insurance Company Ltd, having agreed to be a joint guarantor (Caution Solidaire) and to pay on first demand in the event Strong Constructions Ltd failed to repay the loan from the proceeds of the specific tender, was contractually obligated to pay when Strong Constructions Ltd did not receive sufficient funds from the tender. Its refusal to pay constituted a breach of the guarantee contract, and it is liable for damages equivalent to the late fees charged to Strong Constructions Ltd by the Bank of Kigali.

Citation
RLR V.4-2024
Parties
Applicant: Strong Constructions Ltd; Respondent: Radiant Insurance Company Ltd
Court
Supreme Court
Jurisdiction
Rwanda
Judgment Date
11 December 2019
Case Number
RS/INJUST/RCOM 00002/2019/SC
Procedural Posture
Review of Supreme Court Judgment / Supreme Court, Post Judgment Review
Outcome
Judgment for applicant; previous Supreme Court judgment overturned; claim for review allowed.
Legal Topics
Suretyship, Joint Surety (caution Solidaire), Breach of Contract, Damages for Breach, Guarantee Contracts, First Demand Guarantee
Source Language
en
Contract Law Insurance Law Commercial Law Suretyship Joint Surety (caution Solidaire) Breach of Contract Damages for Breach Guarantee Contracts +1 more

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Parties

Strong Constructions Ltd

Applicant

Radiant Insurance Company Ltd

Respondent

Procedural Posture

Review of Supreme Court Judgment / Supreme Court, Post Judgment Review

Legal Issues

  1. 1 Whether Radiant Insurance Company Ltd breached the surety agreement with Strong Constructions Ltd
  2. 2 Whether Radiant Insurance Company Ltd is liable for damages resulting from breach of the guarantee contract

Ratio Decidendi

Radiant Insurance Company Ltd, having agreed to be a joint guarantor (Caution Solidaire) and to pay on first demand in the event Strong Constructions Ltd failed to repay the loan from the proceeds of the specific tender, was contractually obligated to pay when Strong Constructions Ltd did not receive sufficient funds from the tender. Its refusal to pay constituted a breach of the guarantee contract, and it is liable for damages equivalent to the late fees charged to Strong Constructions Ltd by the Bank of Kigali.

Court Disposition

Judgment for applicant; previous Supreme Court judgment overturned; claim for review allowed.

Orders

  • Radiant Insurance Company Ltd to pay Strong Constructions Ltd 84,271,004 Frw as damages for late fees charged by the Bank of Kigali.
  • Radiant Insurance Company Ltd to pay Strong Constructions Ltd 3,000,000 Frw for procedural and counsel fees.