STRONG CONSTRUCTIONS LTD v. RADIANT INSURANCE COMPANY LTD

STRONG CONSTRUCTIONS LTD v. RADIANT INSURANCE COMPANY LTD

Radiant Insurance Company Ltd, as a caution solidaire, was contractually obliged to pay the guaranteed debt to Bank of Kigali upon demand if Strong Constructions Ltd failed to pay due to insufficient funds from the specified contract. The insurer's refusal to pay, based on funds unrelated to the guaranteed contract, constituted a breach. The applicant is entitled to damages for delay imposed by the bank as a result of the insurer's breach.

Citation
RLR V.4-2020
Parties
Applicant: Strong Constructions Ltd; Respondent: Radiant Insurance Company Ltd
Court
Supreme Court
Jurisdiction
Rwanda
Judgment Date
15 November 2019
Case Number
RS/INJUST/RCOM 00002/2019/SC
Procedural Posture
Civil (commercial Contract Dispute) / Supreme Court Review on Grounds of Injustice (retrial After Prior Supreme Court Decision)
Outcome
Applicant's claim upheld; prior Supreme Court decision reversed.
Legal Topics
Suretyship (caution Solidaire), Performance Bonds, Breach of Insurance Contract, Damages for Delay, Interpretation of Contractual Obligations
Source Language
rw
Contract Law Insurance Law Commercial Law Suretyship (caution Solidaire) Performance Bonds Breach of Insurance Contract Damages for Delay Interpretation of Contractual Obligations

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Parties

Strong Constructions Ltd

Applicant

Radiant Insurance Company Ltd

Respondent

Procedural Posture

Civil (commercial Contract Dispute) / Supreme Court Review on Grounds of Injustice (retrial After Prior Supreme Court Decision)

Legal Issues

  1. 1 Whether Radiant Insurance Company Ltd breached its obligations under a caution solidaire (joint surety) contract with Strong Constructions Ltd.
  2. 2 Whether Strong Constructions Ltd is entitled to damages for delay and other losses due to Radiant Insurance Company Ltd's refusal to pay under the guarantee.

Ratio Decidendi

Radiant Insurance Company Ltd, as a caution solidaire, was contractually obliged to pay the guaranteed debt to Bank of Kigali upon demand if Strong Constructions Ltd failed to pay due to insufficient funds from the specified contract. The insurer's refusal to pay, based on funds unrelated to the guaranteed contract, constituted a breach. The applicant is entitled to damages for delay imposed by the bank as a result of the insurer's breach.

Court Disposition

Applicant's claim upheld; prior Supreme Court decision reversed.

Orders

  • Radiant Insurance Company Ltd to pay Strong Constructions Ltd RWF 84,271,004 as compensation for delay penalties imposed by Bank of Kigali.
  • Radiant Insurance Company Ltd to pay Strong Constructions Ltd RWF 3,000,000 for legal fees and RWF 126,000 for court costs as previously awarded by the High Commercial Court.