SLB and Others v PAK and Others [2026] EWHC 449 (Comm)

Classification of the refund guarantee obligation under shipbuilding contracts

The Commercial Court has recently held that a shipyard's obligation to deliver refund guarantees by a specified date will not be construed as a condition merely because those guarantees are integral to the financial architecture of a shipbuilding transaction. Although the buyers had the right to cancel upon late delivery of the guarantees, they were not entitled to recover damages for loss of bargain. This was because the obligation was characterised as an innominate term rather than a condition.