Index

A

accessory guarantee see suretyship

adherence list, ICC, 89

advance payment guarantee, 3, 99, 191, 211,270, 387, 398, 561, 876, 979

advice of guarantee, 228, 616, 725, 823–836,1099

advising party, 178–179, 708, 777

• agent of guarantor, 826

• duty to notify an amendment, 261–262, 855–856

• guarantee, 215–228

• responsibility to beneficiary, 218

• presentation, 300, 884

• responsibilities

– guarantor, 827

– beneficiary, 828

• second advising party, 228, 825, 829

– defined, 178

– presentation, 300, 884

– responsibility of, 223, 832

– warranty given, 224, 833

• warranty, 221, 833

agent, see also advising party

• appointment of, 677

• beneficiaries, 152, 173, 374, 624, 627, 776, 777

• escrow, 203, 776

• of issuer, 202

• guarantors, 152, 176, 206, 328, 776, 777, 824, 826, 830

• syndicate, 465, 974

amendment, 435–437, 779, 1034–1036, 1116

• accepting amendment, 254

– extending the validity period, 256, 852

– presentation complying original guarantee and the amended guarantee, 257

– varying guarantee amount, 255, 851

advising of guarantee or, 823–836

• ISDGP on, 228

• advising party’s duty to notify, 261–262, 855–856

• to be agreed, 105

• beneficiary

– effect of rejection, 848–849

– no obligation to expressly accept or reject, 249, 844

– not bound, 247–248, 842

  • right to reject amendment, 847

– best practice as recorded in the ISDGP, 266

– to counter-guarantee, 861

– guarantee including, 866

– guarantor

  • bound from time of issue, 245, 839, 843
  • to be informed of rejection, 846
  • unwilling or unable to issue, 838

• issued without authority, 841

• loss of right to reject, 253

• no acceptance by silence, 858

• no effect if guarantee expired, 246, 840

• no exception benefiting beneficiary, 250, 845

• no partial acceptance, 857

• no rejection by silence, 859

• not used to effect transfer, 267, 860

• presentation, 850

• rejection of non-conforming demand not cured by subsequent, 260, 854

• same party to advise, 227

• successive, 259, 853

• and transfers, 285

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amount, see also variation of amount

• claimed, 357

• of demands, 938–946

• increase of amount clause, 270–272

• maximum amount of guarantee, 813

• no variation of amount absent agreement, 100

• reduction of guarantee, 1052

apparent authenticity

• advice of guarantee (of), 219–220, 226, 716–717, 828, 829, 832, 835

• document (of) see apparent compliance

apparent compliance, 406, 950–951

appeal bond see court guarantee

applicable law see law

applicant, 166, 709, 752, 754

application, 601–605, 696–700, 702–703, 710, 788, 820–822

application of URDG by incorporation, 62, 64, 76–90, 672–706

arbitral award (as supporting document), 3, 8, 38, 46, 47, 52, 336, 419, 762, 905, 942

arbitration, 11, 32, 46, 186, 626, 1139–1142

assignment of proceeds, 64, 142, 143, 292–295, 480–487, 1103–1126

asymmetrical guarantee, 76, 81, 104, 148

authentication, 313, 322, 711, 713–715, 758

autonomy of guarantee see independence of guarantee

availability for presentation see effectiveness of guarantee

B

Banking Commission, ICC, 49–51, 56, 59, 69, 72, 147, 164, 410–413, 417, 797, 800,

• list of adherences, 89

• meeting, 382

• Opinion

– 470/TA.940, 333

– 644 (2008), 395, 806

– 942rev, 318

– as invalid discrepancies, 378

– TA.904rev, 442, 1041

• Policy Statement, 759

• Technical Advisory Briefing No. 6 of 15 March 2023, 411, 955

• URDG and, 385

Basel Accords, 121

• Beneficiary advantages using URDG, 95–116

• breach of agreement between instructing party and, 631

• calculations, 423, 963

• changing identity, 273,

• effect of rejection, 252, 848

• making claim against counter- guarantor, 33

• no duty to inform, 1020

• not bound by amendment, 247–248, 842

• no exception for amendments benefiting, 250, 845

• no obligation on, 249, 844

• presenter, as, 299, 301, 883

• presenter other than beneficiary or applicant, 885

• responsibility of advising party to, 828

• right to reject amendment, 847

• to state, 52

bid bond see tender guarantee

bill of exchange (payment by acceptance of), 90

branches (of guarantor), 156, 573, 718, 764–765, 1064

breach of agreement, 631

business day, 101, 427–428, 719–724, 967

business hours, 304, 724, 887

C

capital adequacies see Basel Accords

cash deposit, 4, 44, 135

charges, 238–242, 1099–1102

• liability, 616–620

• transferor to pay, 284

choice of jurisdiction see jurisdiction

choice of law see law

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claim

• in restitution for unjust enrichment, 35

• as subrogee, 35–37

• in tort, 33, 35, 36

complying demand, 327–359

complying presentation, 296–376, 880–902

confirmation, 20, 27, 90, 143, 144, 157, 382, 389, 687, 1136

conflicting data, 448, 1042

consortium see multi-party guarantee

contractual nature (of URDG), 62–64, 77, 78, 91, 92, 163, 400, 686–687, 1136

control, 130–131, 203–208, 600–603, 775–778

counter-guarantee

• application of URDG, 672, 767, see also asymmetrical guarantee

• chain of counter-guarantees, 172, 731, 1028, 1038

• demand, 32, 102, 521, 915–918, 1012–1013, 1030

• governing law and jurisdiction, 32, 134,1131–1132, 1138, 1142

• in general, 29–30, 675, 731–733

• independence from guarantee, 32, 699,791–792, 1132, 1142

• issue, 208, 780

• structure, 31

• termination, 547, 555, 558, 1056

• transfer, 273, 1103

• transmission of documents (to instructing party), 475, 1103

counter-guarantor, 177, 734, 793, 1028

• beneficiary making claim against, 33

• force majeure affecting, 591–595, 1072

• guarantor, 459, 598, 1051

– advantages and, 117–134

– decision different from guarantor, 524

– to inform counter-guarantor of force majeure and extension, 578–580

– payment suspension, 1018–1019

• independence of, 32

• liability , 598, 1074

• structure of, 31

• transmission duty, 475, 992

course of dealing, 72, 81, 85–88, 385

court

• decision (as supporting document), 336, 905

• guarantee, 3

credit default swap (CDS), 1119

credit enhancement guarantee, 747

currency, 112, 488–504, 813, 977–990, 1064

custom see trade usage

customs guarantee, 3, 28, 762

D

damages, 13, 33, 132, 325, 371, 450, 458, 484, 625, 679, 827, 937, 1046, 1050

defences (unavailability of), 11, 53, 96, 789, 791, see also fraud

demand

• amount, 401–405, 423, 864, 941–946, 963

• counter-guarantee, 348–351, 915–918, 1012–1013, 1030

• date, 332–335, 924–927

• in general, 328–329, 726, 903

• incomplete see incomplete presentation

• multiple, 57, 109, 358, 359, 373, 374, 451, 545, 583, 589, 938–947, 1047

• non-complying, 997

– defined, 941

– payment, 375-376, 948–949

– presentation, 947

– waiver and notice, 433–459, 1032–1051, see also waiver

• partial, 344, 358, 359, 402, 530, 583,589, 813, 913, 938–946, 979, 1052

• rejection, 111, 260, 367–368, 372, 381,854, 934, 940

• terms of, 186, 340, 347, 815, 908, see also supporting statement

• transfer of guarantee, 286, 1121

demand guarantee

• distinguished from documentary credit, 18–21, 680

• distinguished from indemnity, 16–17,685

• distinguished from standby letter of credit, 22–23, 674

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• distinguished from suretyship guarantee, 13–15, 681–684

dépeçage see law

direct guarantee, 675, 692

direct-pay standby, 73, 330

discrepancy

• information to the beneficiary see notice of rejection

• non detection, 407, 949

• waiver, 132, 171, 369, 433, 439, 442, 474, 754, 935, 991, 997, 1032, 1038, 1040, 1043

DOCDEX, 49, 164, 186, 730, 1139, 1141

documentary character (of guarantee), 54, 73, 119, 795, 868

documentary credit, 18–21

documents

• content, 143, 418–421

• date, 334, 925

• demand see demand

• electronic, 57, 158, 160–162, 229, 711, 713, 738, 758, 760, 769, 1078

• in general, 8, 737, 795

• issuer, 322, 449, 773–774, 1045

• non-required, 258, 396, 417, 807, 808, 960, 962

• original, 152, 322, 450, 470, 759, 760, 1046

• paper, 219, 309, 311, 458, 711, 714–715, 717, 758, 760, 1050

• return of, 113, 437, 450, 456, 458, 474, 551, 744, 867, 962, 997, 1036, 1046, 1050, 1053, 1097

• supporting document, 336, 351, 661,905, 918, see also supporting statement

• transfer, 287, 1122

domestic guarantee, 145, 153

E

economic sanctions, 130, 388, 604, 794, 801, 820, 1063, 1133

effectiveness of guarantee, 99, 124–128, 187, 460–461, 1040, 1075–1077

electronic guarantee, 145, 158, 206, 777

electronic presentation

• electronic address, 107, 162, 182, 310, 316–318, 891, 895

• format, 311–315, 738, 892–894

• in general, 107, 160–162, 309, 769, 891

• system for data delivery, 107, 162, 316, 895

electronic records, 309, 311, 322, 372, 450, 456, 458, 474, 737, 892, 997, 1046, 1050

e-mail, 316, 322, 712, 715, 724, 895

embargo see economic sanctions

entire agreement, 118–119

entry into effect see effectiveness of guarantee

estoppel, 442, 536, 1006, 1040

eUCP, 311, 769, 892, 899, 902

examination of presentation

• force majeure (suspension of examination due to), 564, 568, 573, 581, 582, 591, 594, 595, 1060, 1065, 1068–1069, 1072

• standards see standards of examination

• time for examination, 966–976

– demand, 426–432

– no extension of, 440

excessive amount (of demand), 401–405, 864, 941–946

exchange rate see rate of exchange

exclusion of a rule see party autonomy

exemption from liability

• acts of another party, 234–236, 1081–1086

• effectiveness of documents, 460–461,1075–1077

• error in translation or interpretation, 232, 1079

• force majeure, 598, 1074

• good faith limit see good faith

• in general, 602, 702, 1087–1088

• loss, delay, mutilation, error in transmission, 229–231, 478, 996, 1078

• transmission without translation, 232–233

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expiry

• counter-guarantee, 32, 791

• date, 304, 549, 741–744, 887, 1058

• event, 408, 554–560, 740, 745–747, 750, 887, 952

• in general, 546–550, 553–563, 740, 814

• non-business day, 562, 720, 724, 1058

• unspecified see open-ended guarantee

extend or pay

• direct guarantee, 509, 1002

• effect on instructing party, 512, 523, 536, 540–543, 1006, 1011, 1012, 1026–1028

• in general, 103, 132, 138, 505–510, 521, 999–1031

• indirect guarantee, 510, 521–525, 1003, 1012–1014

• suspension, 132, 138, 510, 512, 513, 516, 518, 519, 521–527, 530, 538, 1003, 1005–1012, 1015, 1017, 1018, 1020, 1021, 1029

extension, 250, 256, 852, see also extend or pay; force majeure

F

facsimile signature, 158, 758, 760

fax, 161, 322, 715, 724, 760

fees see charges

force majeure

• affecting examination, 581–583,

1068–1070

• affecting payment, 587–590, 1070

• affecting presentation, 577, 1067

• conditions of, 569–598, 1062–1066

• counter-guarantee (under), 591–595, 1071, 1072

• duty to inform see information duty

• extension, 114, 589, 591–593, 1055, 1060

– counter-guarantee, 1072

– guarantor to inform counter- guarantor, 578–580

– presentation, 1067

• guarantee (under), 577–590, 1062–1071

• in general, 114

• ISP (in), 567, 1060

• resumption of business, 584, 1068

• suspension, 141, 432, 581, 582, 594, 970, 1068, 1072, 1073

• UCP (in), 565–568, 1060

foreign laws and usages, 16, 75, 133, 602, 606–615, 702, 1089–1098

forgery see fraud

formula (calculation of), 423, 963

fraud, 623, 624

• absence of, 11, 865, 866

• beneficiary’s fraud under guarantee, 32

• forged or otherwise invalid documents, 627

• guarantee cancellation for misrepresentation, 628

• and injunctive relief, 687

• and other defences, 7

• procedural aspects, 625–626

• proof of fraud, 794

• sales of guarantees, 283, 1118

• unconscionable or unfair conduct, 630

G

Global Trade Finance Programme, 3

good faith, 199, 385, 444, 460, 478, 536, 624, 1044, 1075–1077, 1086, 1087

• acting in, 1011

• exemption from liability conditional upon acting, 129, 237

• guarantor failing to act, 236, 461

• lack of, 1006

governing law see law

guarantee see demand guarantee

guarantee document (intrinsic value of), 549, 551, 1053

guarantor

• branches see branches (of guarantor)

• in general, 175, 749, 766

• individual, 93, 96

• non-bank see non-bank guarantee

• own records, 390, 395, 747, 750, 803, 870, 887, 951, 952

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H

hold for value, 331, 904

I

identification of guarantee, 183, 323–325, 812, 898–900

illegality

• of payment, 91, 389, 468, 490, 492, 621, 632, 984, 985, 1064

• of underlying relationship, 794

incomplete presentation, 106, 306–307, 346, 511, 728, 888–890, 912, 913, 1004

increase of amount see variation of amount

indemnity (to guarantor)

• extend or pay see extend or pay

• force majeure, 564

• foreign laws and usages see foreign laws and usages

• in general, 599, 710, 751, 1098

• rate of exchange see rate of exchange

indemnity against loss, 29, 613, 673, 685

independence of counter-guarantee see counter-guarantee

independence of guarantee, 10–12, 767, 785–795, 862

index, 393, 870

indirect guarantee see asymmetrical guarantee, counter-guarantee

information duty

• demand, 360–371, 441, 476, 525, 526, 928–937

• extension, 543, 1028

• force majeure, 578–580, 1063, 1067, 1072

• inability or unwillingness to act, 225, 226, 834, 835, 838

• payment, 513, 543, 1021, 1028

• rejection see notice of rejection

• suspension, 472, 513, 523, 525–526, 1008, 1012, 1018–1019

• termination of guarantee, 563, 1059

• waiver process, 369, 935

injunction see provisional court measures

instructing party, 169–171, 691–693, 751–754

International Federation of Consulting Engineers (FIDIC), 668–670

International standard banking practice for the examination of documents under documentary credits, 730

International Standard Demand Guarantee Practice (ISDGP), 65–70, 144, 168, 192, 335, 342, 516–517, 1015, 1016

• advice of guarantee or amendment, 228

• application of, 381, 385

• best practice in relation to amendments as recorded, 266

• demand, 329

– dating, 335

– guarantees issued before publication, 381

– interaction of information and payment/rejection, 368

– international standard demand guarantee practice, 383

– multiple, 359

– presentation, 342

• digital and electronic records, 309

• drafting history, 71

• foreign exchange fees, 242

• mode of application, 72

• multiple demands, 359

• presentation of original or copy of document, 322

• SWIFT, relation to use of, 317–318

International Standby Practices (ISP98), 415,

567, 650, 674, 958, 1060

• and demand guarantees, 645–646

• documents examined for inconsistency, 958

• URDG 758

– differences between, 648–652

– similarities between, 647

interruption of business, 78, 564, 573, 575,695, 1065

irrevocability, 98, 137, 153, 209, 554, 639, 656, 781

issue

• for guarantor’s own account, 27, see also two-party guarantee

[Page595:]

J

joint venture see multi-party guarantee jurisdiction, 32, 134, 186, 627, 630, 631, 633, 765, 792, 1128, 1138–1143

L

language, 817, 965

• of presented documents, 326, 901

• stamp in foreign, 425

• URDG in, 635

law

• applicable law, 33, 35, 37, 64, 67, 72, 75,76, 81, 91, 93

• dépeçage, 1130

• foreign law, 16, 75, 133, 139, 602, 702

• indemnity and usages, 606–615, 1089–1098

• mandatory law, 92, 93, 235, 606, 609–612, 794, 1089, 1136

• non-national legal rules, 1129

liability (extent of guarantor’s), 182, 862–867, see also exemption from liability

liability for charges see charges

M

maintenance guarantee see warranty guarantee

mandatory law see law

model forms for issuing demand guarantees, 45, 51, 188–193, 340, 688, 908

modification of a rule see party autonomy

money laundering, 11, 130, 280, 345, 388, 801

multi-party guarantee, 24–26, 145, 149–152, 677

multiple applicants see multi-party guarantee

multiple beneficiaries see multi-party guarantee

multiple demands see demand

multiple transfers, 288

N

non-bank guarantee, 154–155

non-documentary conditions, 9, 386, 387, 389,

796–808

• consistency of data, 417, 960–961

• disregard of, 394–395

non-national legal rules see law notice of rejection, 450, 1041–1046

• content, 101, 445

• demand, 372–373

• limit for sending, 452–453

• return of documents, 458, 1050

• specification of discrepancy, 447–448

• strict rule for, 443–444

• time, 1048

O

“on its face” see apparent compliance open-ended guarantee, 140, 546, 554, 556, 1056–1057

opinions of the ICC Banking Commission, 69, 72, 164, 443, 1043

Organization for the Harmonization of Business Law in Africa (OHADA), 55, 96, 666–667

original documents, 152, 322, 450, 470, 759, 760, 1046

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P

paper presentation, 108, 313, 319–320, 896

parent company guarantee, 3, 752

partial demand see demand

partial transfer, 288, 1110

partnership see multi-party guarantee

party autonomy, 690, 1127

“pay first, argue later”, 52

pay or extend see extend or pay

payment

• acceptance or negotiation of drafts, 157

• delay, 138, 182, 464, 465, 544, 598, 934, 972, 973, 1012, 1074

• force majeure, 564–598, 1060–1074

• in general, 3, 462–545

• information about, 364–366

• non-complying demand, 375–376, 433–459, 948–949, 997

• place for, 467–469, 495–503, 975, 976, 978–980, 983–989, 1060, 1064

• under reserve or against indemnity, 438, 1037

• suspension see suspension

payment guarantee

• advance, 3, 99, 191, 211, 270, 387, 398,561, 876

• deferred, 3

• rental, 273, 1103

performance guarantee, 3, 40, 46, 121, 138,299, 341, 746, 762, 883, 909, 979

perpetual commitment see open-ended guarantee

porte-fort, 16

preclusion, 455–456, 1049

• limiting guarantor’s choice, 536, 1006

• rule inoperative if guarantee expires during examination period, 457

• time and content of notice of rejection, 101

presentation

• complying, 378, 379, 406–407, 727–730

• demand (of) see demand

• electronic see electronic presentation

• force majeure, 114, 141, 565–569, 577–582, 595, 1060, 1061, 1067, 1072

• form, 321, 897

• in general, 297, 755–756, 880–902

• incomplete see incomplete presentation

• linkage to the guarantee see

identification of guarantee

• paper see paper presentation

• place for, 302, 304, 304, 886

– business day, 427–428, 518, 562

– impact on guarantor’s guarantee business, 573, 574

• presenter, 297, 301, 303, 308, 880–885,1045

• time, 114, 141, 303–305, 625, 746, 864,887

prime bank instrument fraud, 130, 283

Principles of European Contract Law, 988, 1129

provisional court measures, 144, 621, 661, 662, 794

R

rate of exchange, 499–504, 988–990

reduction of amount see variation of amount

reference to the underlying relationship see underlying relationship

reimbursement see indemnity against loss

reinsurance guarantee, 3

rejection

• amendment, 285

– beneficiary’s right, 847, 848

– loss of right, 253, 849

– non-conforming demand not cured by subsequent amendment, 260

– no obligation on beneficiary to expressly accept, 249

[Page597:]

• demand, 260, 367–368, 372–373, 381, 433–437, 446, 854, 934, 940, 1038, see also notice of rejection

• guarantee, 210, 548, 779, 782, 1053–1055

remedy see claim

resumption of business see force majeure

retention money guarantee, 3, 191, 505, 746, 756, 999

risk participation, 3, 24, 26

risk-weighting, 121–123

S

scope of URDG, 73, 79, 90, 142–162, 1136

second advising party, 825, 828, 829

• presentation made, 300, 884

• responsibility of, 223, 832

• warranty given, 224, 833

separateness of demands, 373, 374, 940

set-off, 633

signature

• electronic signature, 158, 711, 758

• facsimile signature, 158, 758, 760

• in general, 287, 383, 418–421, 714, 758–760, 914–918, 961, 1075, 1122

• transfer of guarantee, 1103–1104,1121–1122

stamp, 424–425, 964–965

standards of examination

• apparent compliance see apparent compliance

consistency of documents, 347, 415, 422, 923, 957–959

• in general, 153, 379–380

• strict compliance see strict compliance principle

standby letter of credit, 22, 166, 330, 382, 415, 674, 733, 736, 958

statement of breach see supporting statement

strict compliance principle, 410–412, 954–955, 979

sub-contract guarantee, 3

subrogation see claim

supporting statement, 761

• demand, 286, 1121

• exclusion

– or modification of requirement, 352–353, 919, 921

– not constituting exclusion of demand or other documents, 356, 920

• statement of breach, 337–338, 906–908

• waiver of requirement, 922

• wording modification, 354–355

suretyship

• accessory, 79, 96, 117, 122, 135, 185, 194, 195, 197

• demand guarantees vs., 13–15, 681–684

• guarantee, 13–16, 121, 694, 808, 811

• term in other languages, 17

suspension

• extend or pay see extend or pay

• force majeure see force majeure

SWIFT, 317

syndication see multi-party guarantee

T

tender guarantee, 3, 46, 138, 341, 746, 762, 785, 909

termination, 113, 140, 546–598, 1052–1059, see also expiry

termination of underlying relationship, 53, 860

terrorism financing, 130, 280

tort see claim

trade usage (application of URDG as), 85–88

transfer, 116, 267, 274–283, 285, 288–295, 1103–1126, 1134

transition (to URDG 758), 705

translation see exemption from liability

transmission of documents, 229, 230, 477, 995, 1078

tripartite agreement, 754

tripartite indemnity agreement see indemnity against loss

[Page598:]

trustee see agent

two-party guarantee, 150–151, 678

U

underlying relationship, 762

• definition, 763

• non-contractual, 679, 762

• reference to, 185, 286, 682, 811

undertaking, 224

unfair demand, 48, 130 143, 331, 338, 660–662, 904

UNIDROIT Principles of International Commercial Contracts, 983, 1129

Uniform Act on Secured Transactions, 55, 96, 666–667

Uniform Customs and Practice for Documentary Credits (UCP), 54, 566, 637–640

Uniform Rules for Contract Bonds (URCB), 641, 670

Uniform Rules for Contract Guarantees (URCG), 45–50, 63, 135, 643–644

Uniform Rules for Demand Guarantees(URDG)

• revision of, 56–57, 337, 645, 1103

• URDG 458, 50–51, 55

United Nations Commission on International Trade Law (UNCITRAL), 653, 663, 665, 1057

United Nations Convention on Independent Guarantees and Stand-by Lettersof Credit, 63, 556, 621, 624, 627, 645, 653–665, 1057

usage see trade usage

W

waiver (of discrepancies), 132, 171, 369, 433, 439, 442, 474, 754, 935, 949, 991, 997, 1032, 1038, 1040, 1041, 1043

warranty guarantee, 3, 74, 505, 673, 999

withdrawal of demand, 363, 374, 531, 940, 947, 1023

without delay standard, 934, 935

World Bank, 3, 55, 340, 667, 67

V

variation of amount

• in general, 268, 851, 868–879

• increase, 270–272, 876–878

• reduction, 100, 269, 757, 870–875, 1052