MERITZ FIRE AND MARINE INSURANCE CO LTD V JAN DE NUL NV

[2010] EWHC 3362 (Comm), Commercial Court, Mr Justice Beatson, 21 December 2010

Guarantee - Advance payment guarantees for shipbuilding contracts - Whether performance bonds or classic contracts of suretyship - Whether guarantor discharged by variations of the shipbuilding contracts - Whether corporate changes limited defendant's right to make contractual demands triggering liability under the guarantees - Application of contra proferentem principle

The claimant insurer had given a guarantee for the repayment of advance payments to a shipbuilder by the defendant buyer of a ship. The shipbuilder had undertaken to build several hulls but failed to complete them due to financial difficulties. The shipbuilder became liable to repay the advance payments but did not do so. Instead a change of the shipbuilder's corporate identity was effected. The insurer sought a declaration of non-liability and the buyer counterclaimed for sums it said were due under the guarantee.