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Note: Sadacharamani a/l Govindasamy (Guarantor) agreed to pay G. Narayanan a/l N. Gobala Panikker (Applicant) US$95,000 to request issuance of a letter of credit for US$501,534.00 in favor of Telematics, Inc (Beneficiary). of Florida, a client of Guarantor.

When the LC was issued by Standard Chartered Bank, Singapore, Guarantor issued a letter of guarantee guaranteeing payment of the fee. It provided that it was "an unconditional and irrevocable letter of guarantee" made "irrespective of whether any claim is made" on the LC. The signature of Guarantor was witnessed by the secretary of Applicant's attorney who had prepared the letter. When Guarantor failed to pay, Applicant sued it for non payment. The High Court (Kuala Lumpur), Maamor, J., entered judgment in favor of Applicant.

Guarantor claimed that his signature on the guarantee was forged and that he had no connection with the Florida company or the transaction. The court, however, rejected this claim. It noted that the defense had not been raised in the pleadings as was required under local law. It also noted evidence that Guarantor had signed the letter, namely that the secretary who had witnessed the signature "was not called to give evidence as she was already dead" but the court did give credence to a sworn statement given by her "when she was alive". The court also noted ample evidence of nexus between Guarantor and the Florida company which was a client of Guarantor.

As to the obligation, the court concluded that it was by its terms "absolute and unconditional".

[JEB]

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