Wuhan Ocean Economic & Technical Cooperation Co Ltd and Another v Schiffahrts-Gesellschaft “Hansa Murcia” mbH & Co KG [2012] EWHC 3104 (Comm)

Shipbuilding contracts – Failure to extend refund guarantee before the expiry of the existing guarantee – Whether implied term to extend within a reasonable time

Being described as a “financial cornerstone”, the importance of a refund guarantee to a shipbuilding project is remarkable. The refund guarantee is of vital important to the buyer or the owner of the newbuilt vessel, because the owner (or its financing bank) will pay a substantial amount of money by instalments to the shipbuilder during the shipbuilding process but has nothing in hand until the delivery of the vessel.