Rainy Sky S. A. and others (Appellants) v Kookmin Bank (Respondent)
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Rainy Sky S. A. and others (Appellants) v Kookmin Bank (Respondent)
Michaelmas Term [2011] UKSC 50
On appeal from: [2010] EWCA Civ 582 JUDGMENT Rainy Sky S. A. and others (Appellants) v Kookmin Bank (Respondent) before Lord Phillips, President Lord Mance Lord Kerr Lord Clarke Lord Wilson JUDGMENT GIVEN ON 2 November 2011 Heard on 27 July 2011Appellants Respondent Mark Howard QC Guy Philipps QC Michael Ashcroft QC James Cutress (Instructed by Ince & Co LLP) (Instructed by Linklaters LLP) LORD CLARKE, (WITH WHOM LORD PHILLIPS, LORD MANCE, LORD KERR AND LORD WILSON AGREE) Introduction and factual background 1. This appeal raises a short question of construction of shipbuilder's refund guarantees given pursuant to six shipbuilding contracts ("the Contracts"). The Contracts, which were all dated 11 May 2007, were between each of the first to sixth claimants ("the Buyers") and Jinse Shipbuilding Co Ltd ("the Builder"). Under the Contracts the Builder agreed to build and sell one vessel to each of the Buyers. The price of each vessel was US$33,300,000, payable in five equal instalments of US$6,660,000 due at specified points of time, with the final instalment payable on delivery.1 By Article X.8 of the Contracts it was a condition precedent to payment by the Buyers of the first instalment that the Builder would deliver to the Buyers refund guarantees relating to the first and subsequent instalments in a form acceptable to the Buyers' financiers. As envisaged by Article X.8, by letter dated 22 August 2007 the respondent, Kookmin Bank ("the Bank"), issued six materially identical "Advance Payment Bonds" ("the Bonds"), one to each of the Buyers. The seventh claimant ("the Assignee") is the assignee of the benefit of the Bonds. 2. On 29 August 2007, the Buyers each paid the first instalment of US$6,660,000 due under the Contracts. On 29 September 2007, the first claimant paid the second instalment of US$6,660,000 under the contract to which it is a party. 3. In 2008 the Builder experienced financial difficulties and in late January 2009 it entered into and/or became subject to a debt workout procedure under the Korean Corporate Restructuring Promotion Law 2007. On 25 February 2009 the Buyers wrote to the Builder notifying it that this devel...See the full content of this document
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