Guardian Ocean Cargoes Ltd. v. Banco do Brasil (The Golden Med) - Q.B.D. (Com.Ct.) (Hirst J.) - 18 February 1992

Sums deposited with bank as earnest for shipbuilding refinancing deal - Breakdown of negotiations - Whether bank to pay compound interest on sums retained

The plaintiffs deposited U.S. $600,000 with the defendant bank in 1981 as an earnest of their sincerity in a proposed financing deal for a contract to build the vessel Golden Med . The sums deposited were conditional on conclusion of a re-financing deal. The negotiations, having nearly come to a successful conclusion in 1981, dragged on for five years until November 1986, when they broke down. The plaintiffs then demanded return on the $600,000, but the bank refused to pay.