With the remarkable rise in activities around the ordering of vessels to be constructed after years of very limited orders, industry players have yet again to be aware of the legal aspects and pitfalls relating to newbuilding contracts and refund guarantees.
The English Court of Appeal’s recent decision in Shanghai Shipyard Co Ltd v Reignwood International Investment (Group) Company Limited provides important clarification on how the courts will construe such instruments and indicates a movement away from presumptions based on the identity of the guarantor.
In this article, we look at an interesting decision from the English Commercial Court concerning the implication of terms into guarantees, which may raise alarm bells for some parties in the maritime sector.