“4. CURRENCY Any and all payments by the BUYER to the SELLER under this Contract shall be made in United States Dollars in freely transferable funds. Any refunds made by the SELLER to the BUYER for any reason whatsoever shall be made in United States Dollars in freely transferable funds. 5.METHOD OF PAYMENT The BUYER shall remit the instalments in accordance with Article II, Pararaph 3a,)b),c)and d) by telegraphic transfer to a BANK as receiving bank nominated by the SELLER and accepted by the refundment guarantor, for credit to the account of the SELLER with the BUYER requesting SWIFT advice.”
“There is clearly a dispute between you and our clients as to whether the Delivery Date has been extended, and accordingly whether the date on which our clients became entitled to terminate the Contract has now passed. Our client’s position is that the Delivery Date...has not been extended, and that the 210 day period…therefore expired on29th August 2009 (or has in any event by now already expired… It is our client’s intention to terminate the Contract once the present dispute has been resolved and they have obtained an Award declaring that they are entitled to terminate the Contract… Please treat this letter as a demand for arbitration of the above dispute pursuant to Article XIII C (3) of the Contract. For the purposes of the same clause, the general nature of the dispute is whether the Delivery Date under the Contract has been extended, and if so whether and on what basis our clients are entitled to terminate the Contract. Our clients will, without limitation, seek declaration from the Tribunal to reflect their position in the dispute outlined above, including a declaration that they are entitled to terminate the Contract.”
“By this letter, we inform you that there now exists an arbitration between the Buyer and the Seller. By way of summary, the dispute submitted to arbitration relates to the Delivery Date under the Shipbuilding Contract referred to in the Guarantee; whether the Buyer is entitled to terminate the Contract forthwith (if it has not already done so by the date of the Award); whether upon the exercise [of] that right, the Seller shall be liable to repay any instalments paid by the Buyer; and consequently whether, should the Seller fail to make such repayment to the Buyer, the Buyer shall have the right to demand payment from you under the Guarantee, together with interest, pursuant to the terms of the Guarantee. The Buyer also seeks from the Tribunal an order that [the Sellers] must jointly and severally make repayment of the above-mentioned instalments upon notice from the Buyer that it has exercised its rights to terminate the Shipbuilding Contract, as aforesaid. We would accordingly be grateful for your confirmation that the validity of the guarantee has been automatically extended until the date falling on the fourth-fifth...day after the arbitration award has been published. We look forward to receiving the requested confirmation by return.”
“WE CONFIRM THAT THE VALIDITY OF A/M GUARANTEE IS EXTENDED UNTIL THE DATE FALLING ON THE FORTY-FIFITH (sic) CALENDAR DAYS AFTER THE ARBITRATION AWARD OR COURT ORDER IS PUBLISHED.”
“...Therefore in order to ensure that the applicant has the lawful right and interest to avoid further losses, they specifically apply to the court to freeze and prohibit [BOC]…to make payment relating to the principle [sic] amount and interests to the respondent…”
“116. Kwangju Bank’s argument on [the proviso] is to the effect that the reference to an arbitration award is an indication that its liability is secondary…This provision does not in my view imply in any way that the guarantor’s liability is secondary. The instrument is conditioned either up on the certification in the demand, or (if the dispute as to cancellation/refund goes to arbitration) the amount of the award. Essentially the same argument on very similar provisions was rejected in Meritz…”
“25……It might, for example, have been included to avoid any argument that variation of the shipbuilding contract by, for example, postponing a stage payment or remitting part of it in settlement of any cross-claim would imperil recovery under the refund guarantees. It could have been inserted simply to ensure that the rule applicable to true guarantees did not apply to this instrument.”
“30. Turning to the MMOF Letter, the starting point in my view is that it is not a banking instrument, and it is not described, either on its face or in the supporting Legal Opinion letter, in terms appropriate to a demand bond or something having similar legal effect. The Legal Opinion describes it as a guarantee. The terminology is not of course conclusive. However…if MHK had wanted the additional security of a demand bond, one would have expected them to have insisted on appropriate language to describe it, in both the instrument itself, and in the Legal Opinion. The absence of such language, in a transaction outside the banking context, creates in my view a strong presumption against MHK’s interpretation…”
“Chapter III Preservation of Maritime Claims Section I General Provisions Article 12 Preservation of maritime claims means the compulsory measures taken by a maritime court on the application of a maritime claimant against the property of the person against whom a claim is made, for the purpose of ensuring fulfilment of the claim of the maritime claimant… Article 16 The maritime court, having entertained an application for preservation of a maritime claim, may enjoin the maritime claimant to provide security. If the maritime claimant fails to do so, the court shall reject the application.”
“Chapter 9: Property Preservation and Advance Execution Article 92 In the cases where the execution of a judgment may become impossible or difficult because of the acts of either party or for other reasons, the people’s court may, at the application of the other party, order the adoption of measures for property preservation. In the absence of such application, the people’s court may of itself, when necessary, order the adoption of measures for property preservation. In adopting property preservation measures, the people’s court may enjoin the applicant to provide security; if the applicant fails to do so, his application shall be rejected. After receiving an application, the people’s court must, if the case is urgent, make an order within 48 hours; if the order for the adoption of property preservation measures is made, the execution thereof shall begin immediately… Article 94 Property preservation shall be limited to the scope of the claims or to the property relevant to the case. Property preservation shall be effected by sealing up, distraining, freezing or other methods as prescribed by the law. After the people’s court has frozen the property, it shall promptly notify the person whose property has been frozen. The property that has already been sealed up or frozen shall not be sealed up or frozen for a second time.”
“Article 1 When sealing up, detaining, or freezing the movable property, real property, or other property rights of a person subject to enforcement, a people’s court shall make a decision and serve the decision on the person subject to enforcement and serve the notice on the person who provides assistance to the enforcement together with a duplicate of the written decision. The written decision and the written notice shall become legally effective upon the service… Article 4 Where property preservation measures are taken prior to or during an action, or in an arbitration, such measures shall, after entering into enforcement procedure, be automatically transformed to the measures of seal up, detainment or freezing in enforcement, and the provisions on seal-up, detainment or freezing in Article 29 of these Provisions.”
“Article 29 The time period where a people’s court freezes the bank deposits and other funds of a person subject to enforcement shall not exceed six months, the time period for seizing or detaining movable properties shall not exceed one year, and the time period for seizing real property and freezing other property rights shall not exceed two years, except as otherwise specified by laws or judicial interpretations. Where the applicant applies for an extension of the time period, the relevant people’s court shall go through the formalities for continuous seal-up, distrainment or freezing prior to the expiry of the time period of the seal-up, distrainment or freezing, provided that the extension of the time period shall not exceed one half of the time period specified in the preceding paragraph.”
“(105)Where the debtor’s property fails to satisfy the request for preservation but the debtor has due creditor’s rights against a third person, a people’s court may, on the basis of the creditor’s application, make a decision prohibiting the third person from repaying the debt to the debtor concerned in the case. Where the third person submits a request to repay the debt, the property or price shall be placed in escrow with the people’s court…”
“(109) The preservation of the property in litigation shall remain in force until the effective legal document is enforced. Where, in the course of proceedings, the preservation measures need to be cancelled, a people’s court shall, on a timely basis, render a decision to cancel the preservation measures.”
“It has been asserted by [SBV] that the injunctions that relate to the [Guarantees] have expired in light of the provisions in the Interpretations of the Supreme People’s Court on Property Sealing Up, Distraining and Freezing in Civil Enforcement by the People’s Courts, in particular Articles 29 and 30 thereof. We respectfully request that the Court confirm in writing the legal validity of the above mentioned injunctions, together with any detailed reason for your conclusion.”
“Such injunctions were a preservation measure granted by this Court of prohibiting certain acts in accordance with applicable laws. An issue of expiration would not arise from a preservation measure of prohibiting certain acts. Article 100 of the Civil Procedural Law of the People’s Republic of China provides that: “If the enforcement of a judgment to be issued in an action might be hampered or the interest of a party to an action might be damaged by any act of a party to such action or for any other reasons, the people’s court may, upon the request of the other party to the action, issue an order to take preservation measures against its property, or to require it to take certain actions or prohibit it from taking certain actions; even if no party files any request for such preservation measures, the people’s court may nevertheless decide to take such preservation measures as it deems necessary.”
“Article 1 The amended Civil Procedure Law shall be applicable to unsettled cases as at January 1 2013, unless otherwise provided for in these Provisions…”
“32. Overseas judgments given in proceedings brought in breach of agreement for settlement of disputes. (1) Subject to the following provisions of this section, a judgment given by a court of an overseas country in any proceedings shall not be recognised or enforced in the United Kingdom if (a) the bringing of those proceedings in that court was contrary to an agreement under which the dispute in question was to be settled otherwise than by proceedings in the courts of that country; and (b) those proceedings were not brought in that court by, or with the agreement of, the person against whom the judgment was given; and (c) that person did not counter claim in the proceedings or otherwise submit to the jurisdiction of that court. 33(1) For the purposes of determining whether a judgment given by a court of an overseas country should be recognised or enforced in England and Wales…the person against whom the judgment was given shall not be regarded as having submitted to the jurisdiction of the court by reason only of the fact that he appeared (conditionally or otherwise) in the proceedings for all or any one or more of the following purposes, namely …. a) to contest the jurisdiction of the court;… c) to protect, or obtain the release of, property seized or threatened with seizure in the proceedings.” (a) the bringing of those proceedings in that court was contrary to an agreement under which the dispute in question was to be settled otherwise than by proceedings in the courts of that country; and (b) those proceedings were not brought in that court by, or with the agreement of, the person against whom the judgment was given; and (c) that person did not counter claim in the proceedings or otherwise submit to the jurisdiction of that court. a) to contest the jurisdiction of the court;… c) to protect, or obtain the release of, property seized or threatened with seizure in the proceedings.”
“Submission by voluntary appearance 7.49 If the defendant appears and defends the merits of the claim he will, in general be held to have submitted to the jurisdiction. Whether he has submitted by virtue of his voluntary appearance, or his participation in the action, is in the first place determined by recourse to the common law… As to whether the acts of the defendant constituted a submission, the usual approach is to ask whether the defendant took a step in the action to contest the merits : if he did, his act will be seen as a submission. It may not be necessary that the step be one which unequivocally demonstrates a submission to the merits jurisdiction of the court. Instead, the court is more likely to ask the question the other way round : were the acts of the defendant which are pointed to “obviously and objectively” inconsistent with the defendant’s submission to the jurisdiction of the foreign court: if they were, they will not be characterised as submission…but otherwise they will. In principle, at least, an act should not be interpreted as a submission if it would not be so regarded under the law of the foreign court : it would appear be a little odd for an act to be regarded as submission to a court which does not consider itself to have been submitted to. But this should, perhaps, not be pressed too far. For one thing, a foreign court’s concept of submission may be quite different from that of English law……Submission is found or found to be absent by reference to English, not foreign law…”
“A foreign defendant who raises no objection to jurisdiction and files a defence is to be taken to have accepted that the Chinese court has jurisdiction over him.”
“Where the defendant contests the jurisdiction of a foreign court, the position is regulated by s.33 of the [CJJA]. If his challenge to the jurisdiction of the foreign court is successful, no question of submission arises. If it is unsuccessful and he goes on to contest the case on the merits, he will have submitted to the jurisdiction of the foreign court.”
“If the defendant in the foreign court fails on any of these issues, but nevertheless goes on to defend the case on the merits, he will be regarded as having submitted.”
“v) In this connection s.32(3) also states that in such a case, i.e. in a case where the general rule does not apply – for where it does the rule is that the foreign judgment “shall not” be recognised or enforced – it is for the UK to decide “whether a judgment given by a court of any overseas country should be recognised or enforced”
“The suggestion (obiter) in AES Ust-Kamenogorsk Hydropower Plant LLP v AES Ust-Kamenogorsk Hydropower Plant JSC[2011] EWCA Civ 647 , [2011] 2 Lloyd’s Rep. 233, [149], that if the defendant has, as a matter of English law, submitted to the jurisdiction of the foreign court, the English court may, but is not bound to, recognise or enforce the foreign judgment, is not supportable. If proceedings are brought in a foreign court contrary to a jurisdiction agreement, but the defendant submits to the jurisdiction of the foreign court, he loses the shield which s.32 might otherwise have afforded him; and the judgment is to be recognised by reason of his submission to the jurisdiction of the court.”
“A foreign judgment is impeachable on the ground that its enforcement or, as the case may be, recognition, would be contrary to public policy.” and at paragraph 14-156 : “It will in principle be contrary to public policy to recognise or enforce a judgment which has been obtained in disobedience of an injunction not to proceed with the action in a foreign court.”
“There are cases where it is in blatant disregard of an arbitration provision that a party has commenced proceedings abroad and where the party is acting vexatiously and oppressively. In such cases, judgments obtained on the substance of the dispute (it can be argued) should not be recognised…It would seem to be me prima facie that if someone proceeds in breach of, and with notice of, an injunction granted by the English court to obtain judgments abroad, those judgments should not, as a matter of public policy, be recognised in the UK.”
“121.....It is also arguable that, even if the April and December 2005 judgments were relied on as assignments, they should not be recognised on public policy grounds, in the light of the way in which Fellowes obtained the judgments in breach of a[n] English arbitration agreement and of orders of the English and BVI courts, and in the light of the way in which the Krygyz courts dealt with the case.”
“65…It would be manifestly against public policy to give recognition to the foreign judgment at the behest of the defendants who have procured it in breach of an order emanating from this court.”
“Following verification by our bank, there are no material discrepancies in the claim documents. In accordance to the terms of the guarantee, our bank shall make the payout prior to April 10, 2012…The full amount of the monies claimed must be deposited into your company’s bank guarantee account no later than April 9 2012…”
“RE YOUR DEMAND UNDER OUR ADVANCE PAYMENT GUARANTEE…WE REGRET TO INFORM YOU THAT YOUR DEMAND FOR PAYMENT HAS NOT BEEN HONORED BY US, BECAUSE THERE ARE COURT INJUNCTION ORDERS …PROHIBITING US…AT HOME AND ABROAD FROM PAYING YOU UNDER THIS GUARANTEE. WE, AS THE GUARANTOR…, APPLIED TO THE DOMESTIC COMPETENT COURT [QMC] FOR LIFTING THE PAYMENT INJUNCTION, HOWEVER, THE APPLICATION WAS REJECTED BY THE COURT ON 120306, SO ALL PAYMENT UNDER THE A/M GUARANTEE SHALL NOT BE EFFECTED BY US WITHOUT LIFTING THE INJUNCTION.”
“With the exception of the final letter from the Janata Bank sent in response to a specific request to give reasons, I can find nothing which could be regarded as amounting to a representation. Having found what, at the particular times, they considered to be good and sufficient reasons for rejection, the Janata Bank specified them. To hold that they thereby made any representation would in my view involve a radical departure from the accepted legal position and would seriously undermine the whole system of documentary credits, for banks would be obliged, for their own protection and the protection of their customers, always to scrutinise with the utmost care every document presented from beginning to end, notwithstanding that they may find in the first few lines of the first document at which they looked one or more good and sufficient reasons for refusal to pay…It is for the beneficiary to see that the documents are all in order and he has no cause for complaint if the bank rejects as soon as they find one or more defects or if they reject again on finding further defects, and so on…”
“Our obligations under this guarantee shall not be affected or prejudiced by any dispute between you as the Buyer and the Seller under the Shipbuilding Contract or by the Seller’s delay in the construction and/or delivery of the Vessel due to whatever cause or by any variation or extension of their terms thereof or by any security or other indemnity now or hereafter held by you in respect therefore, or by any time or indulgence granted by you or any other person in connection therewith, or by any invalidity or unenforceability of the terms thereof, or by any act, omission, fact or circumstances whatsoever, which could or might, but for the foregoing, diminish in any way our obligations under this guarantee.”
“A non-repudiatory breach of contract by the creditor, that is, a breach sounding in damages only, will not discharge the surety unless it involves a “not unsubstantial” departure from a term of the principal contract which has itself been incorporated into the guarantee. Discharge of the surety in these circumstances is explicable on the basis of a variation of the surety’s obligations.”
“…I do not think that a non-repudiatory breach of the principal contract will, with nothing more, discharge a surety who has guaranteed that contract. A repudiatory breach, if accepted, will certainly do so, but a non-repudiatory breach will not unless it can be shown in fact to amount to a “departure” from a term of the principal contract which has been “embodied” in the contract of guarantee…”
“…Further, in my opinion the case of Blest v Brown…was an “embodied term” case, because the guarantee then in suit refers specifically to the principal contract, in fact one with the government, payment where under the surety guaranteed, even though the surety contract did not set out the terms of that principal contract.”
“Not only was the breach non-repudiatory and intrinsically insubstantial but the contractual obligation broken was not part of the obligations guaranteed and was not, in my judgment, a significant part of the basis on which New Hampshire assessed the risk it was undertaking.”
“A general reference in the guarantee to the terms of the general contract will not, however, be sufficient to “embody” those terms within the guarantee. Thus in [Mercers] it was held that the terms of principal transaction should not be “treated as embodied or incorporated in the contract of guarantee” simply where the guarantee referred to the principal building contract, and the guarantee was given as security against the failure of the builder to perform “in accordance with the terms and conditions” of the building contract. More specific wording of incorporation is required. Matters relevant to determining whether the terms of the principal contract are embodied in the guarantee are the fact that the two documents (the guarantee and the principal transaction) are physically annexed and that both the guarantor and the principal execute one instrument, which constitutes both the principal transaction and the guarantee. But, again, these matters are probably insufficient in themselves without clear words of incorporation.”
“67. I accept the submission [for Calyon] as to the principle to be derived from the decision in Ralli Bros. However, I consider that there is a distinction to be drawn between a judgment which determines what, as a matter of contractual obligation, a party is obliged to do and the enforcement of any payment obligation under that judgment. In this case, as a matter of contractual obligation Calyon is obliged to pay AES the sum of E 96.604, 166.83. I see no reason why this court cannot express a judgment in those terms. What the French injunctions do is to prevent Calyon from currently complying with their obligations under the bond or that judgment. What Ralli Bros establishes is that the English court will not, in such circumstances, require Calyon to act in a manner which is illegal under French law because of the existence of the injunctions. 68. The expectation would be that on the basis of this judgment, handed down by a court which has jurisdiction to determine liability under the bond, the French court would discharge the injunction. That however, is [a] matter for the French court.”
“16….I am firmly of the view that justice does not require a stay of these proceedings on jurisdictional grounds……(5) if the Court gives judgment in favour of the Claimants this would be judgment for a sum of money and would not be in the form of a compulsory order breach of which would be a contempt of court; (6) whilst the Preservation Order is in force it is inconceivable that the Claimants would be able to enforce a judgment in their favour in the RPC; (7) it seems very doubtful that execution of a judgment by a third party debt order or charging order in London where CCB has a branch would render CCB liable to criminal or financial sanctions under Chinese law; (8) in any event, following a judgment in favour of the Claimants, if the Preservation Order is in force it would be open to CCB to apply for a stay of execution either generally or within the RPC.”
“After receiving the notice issued by the court with regard to the assistance of enforcement, if a unit still make payment to the person subject to enforcement or other person despite the order, the people’s court shall order them to recover the payment within a period of time; if no payment could be recovered by that person or unit, the people’s court shall rule that that person or unit shall be liable for the amount of payment in which it have paid for others.”