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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
2010 LC CASE SUMMARIES Civil Decision (2005) Gao Min Bao Zi No. 320 (Beijing High Ct., 2005) [PRC] Abstracted by Jin Saibo and Chen Qiang*
Topics: Demand Guarantee; Irrevocable Guarantee; Performance Bond; Counter Guarantee; Independence; Accessory Guarantee; Jurisdiction; Applicable Law; URDG458; Limitations, Statute of; Claim; Freeze; Injunction; Fraud.
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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