An instrument was issued by a bank under an obligation in an international trade agreement to provide a performance bond. The instrument was described in correspondence between the parties and the bank as a performance bond.
Held: ‘There is in my judgment no real hardship on the bank in imposing this strict liability to pay. A performance bond is a commercial instrument. No bank is obliged to enter into it unless they wish to and no doubt when they do so, they properly exact commercial terms and protect themselves by suitable cross-indemnities, such as were entered into in the present case.’
Judges:
Hirst J
Citations:
[1986] 2 Lloyd’s Rep 146
Jurisdiction:
England and Wales
Cited by:
Cited – Marubeni Hong Kong and South China Ltd v Ministry of Finance of Mongolia CA 13-Apr-2005
A letter was written by the Mongolian Ministry of Finance guaranteeing payment for textile plant and machinery to be supplied to a Mongolian company. A letter from the justice minister confirmed the authority of the finance minister to sign the . .
Lists of cited by and citing cases may be incomplete.
Banking, Litigation Practice
Updated: 09 December 2022; Ref: scu.225898