Kleinwort Benson Ltd v Malaysia Mining Corporation: CA 1989

The court at first instance had found enforceable a letter of comfort provided by the parent company of the bank’s client.
Held: The appeal succeeded. Ralph Gibson LJ said: ‘The court would not, merely because the parties had referred to the document as a comfort letter, refuse to give effect to the meaning of the words used. But in this case it is clear, in my judgment, that the concept of a comfort letter, to which the parties had resort when the defendants refused to assume joint and several liability or to give a guarantee, was known by both sides at least to extend to or to include a document under which the defendants would give comfort to the plaintiffs by assuming, not a legal liability to ensure repayment of the liabilities of its subsidiary, but a moral responsibility only.’
Ralph Gibson LJ, Nicholls and Fox LJJ
[1989] 1 All ER 785
England and Wales
Appeal fromKleinwort Benson Ltd v Malaysia Mining Corporation 1988
The bank sought to enforce ‘letters of comfort’ provided by the parent company of the bank’s debtor.
Held: The bank succeeded. . .

Cited by:
CitedAssociated British Ports v Ferryways Nv and Another CA 18-Mar-2009
The court considered whether a document was a guarantee requiring the formality of the 1677 Act, or an indemnity.
Held: The appeal failed. The letter agreement was properly a contract of guarantee which foundered on the subsequent variation. . .

Lists of cited by and citing cases may be incomplete.
Updated: 24 August 2021; Ref: scu.322764