VOSSLOH AKTIENGESELLSCHAFT V ALPHA TRAINS (UK) LTD

[2010] EWHC 2443 (Ch), High Court, Chancery Division, Sir William Blackburne, 5 October 2010

Contract - Guarantee - Whether guarantee a demand bond - Whether primary or secondary liability

The claimant VAG had guaranteed the obligations of the defendant Alpha to a number of beneficiaries under a contract referred to as the 2009 Guarantee. This was the claimant's action for a declaration as to the circumstances under which liability to the beneficiaries of that guarantee would arise. VAG contended that such liability was triggered upon proof of a breach of contract by any one or more of the entities referred to as the guaranteed party. Alpha, which was sued in its own right and as a representative beneficiary, argued that VAG's liability was triggered by demand alone.