Trade credit insurance: fraud by the debtor

In Thera Agri Capital No 2 Pty Ltd v BCC Trade Credit Pty Ltd [2022] NSWSC 669 Rees J in the New South Wales Supreme Court discussed the effect of fraud on a trade credit policy issued by the insurers to cover failure by the debtor to pay sums due and, in default, failure by the guarantor of that debt to honour the guarantee. What would otherwise have been a straightforward case was complicated by the fact that the parties had agreed to a funding transaction that was Sharia-compliant, although in the event they did not do so.

Thera Agri: the facts