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The Supreme Court held that fraudulent procurement guarantees required termination of the contract and award, ordered return of the advance payment, and reversed prior judgments.
SORAS AG Ltd is liable to pay the outstanding advance payment guarantee to NAEB because the guarantee was unconditional and payable upon first demand, irrespective of whether the advance was used in the works. The advance payment is not considered payment for completed work but must be reimbursed as per the contract and procurement law. The surety's obligation is not extinguished by the use of the advance in the works. NAEB is entitled to partial litigation costs but not to punitive damages for being drawn into litigation.
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The Court of Appeal held that SORAS AG Ltd had to pay the outstanding advance-payment guarantee to NAEB on first demand, regardless of work already performed.
SORAS AG Ltd is unconditionally obligated under the advance payment guarantee to pay the outstanding amount upon first demand by NAEB, regardless of the value of works executed or the use of the advance, as per the terms of the guarantee and applicable law. The advance payment is not considered payment for completed works but must be reimbursed according to the contract and procurement law.
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The surety (SORAS AG Ltd) is unconditionally liable to pay the outstanding advance payment guarantee to NAEB upon first demand, as per the terms of the guarantee and procurement law, regardless of whether the advance is reflected in the works performed. The guarantee is not limited to cases of misuse but covers any failure to reimburse the advance as contractually required. The surety cannot raise defences based on the underlying contract unless exceptions are definitively established.
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The Court of Appeal held that the insurer was not liable because the 60,000,000 Frw advance was used for construction as intended, so the claim failed.
The Court of Appeal held that the insurer was not liable on the advance payment guarantee because misuse of the 60,000,000 Frw advance was not proven.
The Court of Appeal held that the advance payment was used for construction work, so the insurer was not liable under the guarantee. The appeal failed, but costs were adjusted.
The Court of Appeal held that Radiant Insurance Company Ltd had to honor the advance payment guarantee on first demand, but refused damages for lack of proof of loss.
The Court of Appeal held that an advance payment guarantee must be enforced until the advance is fully repaid, regardless of the value of work performed.
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