Esal (Commodities) Ltd. and Anr. v. Oriental Credit Ltd. and Anr. - Court of Appeal (Ackner, Neill and Glidewell L.JJ.) - 31 July 1985

Performance bond - Whether bank entitled to be indemnified against judgment of foreign tribunal in respect of unsatisfied demand thereunder

Pursuant to an agreement for the sale of sugar to Egypt entered into on 22 May 1981 and made between R., as sellers, and E., as purchasers, OCL, as R.’s bankers in London, instructed another bank, WF, to enter into a performance bond in favour of E. for a sum equal to 10% of the purchase price. WF telexed a performance bond through BDC, their correspondent bank in Cairo which undertook: