Court Practice: Bank Guarantees

 

On 23 March 2012 a Plenary Session of the Supreme Commercial Court approved Resolution No. 14 “On Certain Aspects of the Practice of Resolving Disputes Related to Challenging Bank Guarantees.”

The Resolution clarifies a number of issues related to the issuance of bank guarantees:

  • Bank guarantee is to specify the underlying obligation; this requirement is deemed fulfilled if the guarantee indicates i) the identity of the debtor under obligation; ii) the amount to be paid by the guarantor; and iii) the underlying contract or the nature of the underlying obligation;
  • Bank guarantees issued for a term shorter than the term of an underlying obligation cannot be found invalid on that basis;
  • Bank guarantees may be issued in an e-form through the telecommunication system SWIFT; and
  • The absence of a chief accountant’s signature on a bank guarantee does not invalidate such bank guarantee.

The Resolution is mandatory for lower commercial courts when considering similar issues.

For further information please contact Igor Ostapets or Alexandra Schukina in the Moscow office of White & Case, tel + 7 495 787 3000 .

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