SEA-CARGO SKIPS AS V STATE BANK OF INDIA

[2013] EWHC 177 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Teare, 26 June 2013

Contracts - Interpretation - Shipbuilding - Refund guarantee - Form of demand where issuing bank not a party to the shipbuilding contract

This was a claim under a refund guarantee issued by the defendant, the State Bank of India ("the bank") to the claimant, Sea-Cargo Skips AS in connection with a shipbuilding contract entered into with Sea-Cargo as buyer and Bharati Shipyard Ltd as builder. The contract was dated 12 June 2007 and provided for the construction and sale of a ro-ro/container vessel. Under the refund guarantees, the bank's "irrevocable and unconditional" obligation to pay the buyer was expressed to arise in three different ways. In the event the demand made was under the third option: