SHAGANG SHIPPING COMPANY LTD (IN LIQUIDATION) v HNA GROUP COMPANY LTD

[2020] UKSC 34, Supreme Court, Lords Hodge, Briggs, Hamblen, Leggatt and Borrows, 5 August 2020

Liability under a guarantee – Whether underlying contract had been procured by a bribe – Allegation that evidence had been obtained by torture – Validity of approach adopted by trial judge

The appellant, Shagang Shipping Company Ltd, entered into a charterparty with a subsidiary of the respondent, HNA Group Company Ltd. The liability of the subsidiary under the charterparty was guaranteed by the respondent. The appellant terminated the charterparty following default by the subsidiary, which default amounted to a repudiatory breach. In these circumstances the appellant commenced proceedings against the respondent under the guarantee. The respondent defended these proceedings on the ground that the charterparty had been procured by bribes paid by or on behalf of the appellant to senior employees of the subsidiary but the respondent submitted that the confession evidence on which these allegations were based were inadmissible because they had been obtained by torture.