Article

Type of Lawsuit: Principal sued Guarantor to enjoin payment of a performance bond.

Parties: Plaintiff/Principal - China Weave Industry Foreign Cooperation Company

Defendant/Guarantor - China Import-Export Bank

Underlying Transaction: Construction of cotton textile factory.

Undertaking: Performance Bond for US$18,250,000.00

Decision: The Beijing High Court awarded the injunction and ordered Principal to commence the suit within 15 days as of the date of delivery of the injunction.

Rationale: Granting a temporary injunction to save the property in question from damage is appropriate.


Legal Analysis:

Comment by the Institute: This decision, unless portions are unstated, violates LC law and the PRC Supreme Court rules in that there is no finding of LC fraud. Damage is not enough if the undertaking is independent.

[JS/CQ/ny]

* Jin Saibo is partner of Commerce & Finance Law Offices, jinsaibo@tongshang.com. Assisted by CHEN Qiang. Niu Yue, J.D. Candidate 2012, George Mason University School of Law, assisted in the edits.

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