STRICT CONFORMITY OF DOCUMENTS UNDER A PERFORMANCE GUARANTEE. DOES A SIGNED COPY OF A DOCUMENT QUALIFY AS AN ORIGINAL? Stefanutti & Bressan (Pty) Ltd v Nedbank Ltd (unreported judgment delivered on 30 July 2008) (case no 5311/2008) (D&CLD)
Keywords:instruments of payment, guarantees for payment, demand and/or performance guarantees
Unlike in many overseas jurisdictions, there is a paucity of South African reported case law dealing with certain instruments of payment and guarantees for payment such as documentary letters of credit and performance guarantees, to mention but two examples of instruments prevalent in the field of payment and financing. For this reason any new case law dealing with either letters of credit or performance guarantees is to be welcomed as it would hopefully not only contribute to our understanding of this area of the law, but also provide an opportunity for comment and reflection. This holds especially true since the International Chamber of Commerce has recently (in July 2007) accepted and introduced a new version of the Uniform Customs and Practices for Documentary Credits (hereinafter “the UCP”): UCP 600. In passing: Apart from the main distinction between direct (three-party) and indirect (four-party) demand guarantees, they (ie, demand guarantees) may also be classified by reference to the phase or part of performance they
are designed to secure, hence the following classification of the different types of demand guarantees: tender guarantee (tender bond); performance guarantee (performance bond); advance payment guarantee (repayment guarantee); retention guarantee; and maintenance guarantee (warranty guarantee). In what follows below the author will use the concept of “guarantee”, being a generic
term, when referring to demand and/or performance guarantees in general. The recent decision in Stefanutti & Bressan (Pty) Ltd v Nedbank Ltd (unreported judgment delivered on 30 July 2008 (case no 5311/2008) by the Durban & Coast Local Division of the High Court (now: KwaZulu-Natal High Court, Durban) is a rare and welcome addition to the rather modest collection of South African decisions dealing with performance guarantees.
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