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There are two main types of guarantee: “see to it” guarantees, where the guarantor is only liable to pay out if the underlying debtor is found liable to the creditor, and “demand” guarantees, where the guarantor is liable to pay out against the creditor’s demand, irrespective of whether or not the underlying liability is proven. The difference can clearly be crucial for the party seeking to draw down on the guarantee as demonstrated in the recent case of Shanghai Shipyard Co. Ltd. v Reignwood International Investment (Group) Company Ltd [2020] EWHC 803 (Comm).

In Tricon Energy Ltd v. MTM Trading LLC (“MTM Hong Kong”) [2020] EWHC 700 (Comm), the High Court (Robin Knowles J) held that the owners were required to submit bills of lading in support of a demurrage claim for a part cargo to prevent the claim from being time-barred.

A recent decision of the English High Court in MUR Shipping BV v Louis Dreyfus Company Suisse SA (“The Tiger Shanghai”) is likely to add to the sleepless nights of claims handlers who need to submit claims with supporting documents in order to comply with a short contractual time limit.

In this case the court rejected the charterer’s attempt to time bar the owner’s claim for demurrage. The strict approach taken by the court is yet another example of the English courts holding parties to the deal agreed in the contract, in order to achieve contractual certainty. It is a reminder to both owners and charterers to consider carefully the terms of their charterparty to ensure strict compliance with the same.

The impact of coronavirus on international arbitration and litigation: are virtual hearings a solution? The COVID-19 outbreak has rapidly developed into a pandemic, causing wide-scale disruption as countries around the world battle to prevent the further spread of the virus. In a world where all but essential travel has been restricted and social distancing is the new norm a key concern for those parties who have ongoing legal proceedings is whether or not their case will proceed.


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