ICC Digital Library Forum

Jeremy,
The beneficiary’s request for extension is in reality an “extend or pay” clause. The issuing bank does not have an option, if it is not prepared to extend then it must pay. To add to this, it is stated in the rules for bank guarantees issued by the regulators that the beneficiary’s request for extension should have an “extend or pay” clause in it.

Dimitri

Dimitri,

Thanks for the information. I find it curious that there should be such a mis-match between the guarantee terms and the regulations, but that’s another matter. If there is local law on the subject of such ‘extend or pay’ demands then I agree one would expect local banks to comply with it.

Jeremy