A paper presented to the Society of Construction Law on 21st July 2020
The financial pressures caused by these uncertain times require cash-flow solutions, and demand bonds can be called in relatively quickly and easily. This paper sets out some core principles, in particular the difference between demand bonds and performance guarantees, and provides a useful overview, considering the approach of both domestic and international courts, and addressing the issues of principle and practice that can arise. The paper examines the Uniform Rules for Demand Guarantees, as highlighted in Leonardo SpA v Doha Bank Assurance Co LLC, in which the author appeared for the successful claimant. The detailed review of that case includes particular examination of the fraud defence. The author analyses some non-URDG cases from 2020, and offers some guiding principles to have in mind when considering, or advising on, this topic.
A. Introduction – B. Core Principles – C. The URDG in Demand Bonds, the Decisions in Leonardo, and Fraud – C1. The Interpretation Issue – C2. The Preclusion Issue – C3. The Stepping Down Issue – C4. The Fraud Issue – C5. Drawing the Threads Together – D. Non-URDG Cases: The Enduring Question of Characterisation – E. Concluding Note
The author: Simon Hale is a barrister practising from 4 Pump Court.
Text: 27 pages