QFC 003/2019
Leonardo SPA v Doha Bank Assurance Company LLC
This case involved the obligation for a bank to pay under an advance payment guarentee and bond for a prepayment made to a subcontractor where a contract was terminated. Key points included this was a pay when paid agreement and payments had not been made by the client. Levels of documentation which were needed were based on the specifics in the guarantee and bond contracts. Guarantees of this type were designed to provide for prompt payment any dispute around the original contract should be heard later.
Background
A claimant made a valid demand on an advance payment guaranteed dated 19 April 2016 which had been amended by the defendant's letter dated 9 May 2016. They were entitled to 10,549,440 Euros for a performance bond which was payable under their second demand under the guaranteed. The were also entitled to 4,070,000 Euros under the payment guarantee.