Law of the Guarantee

With the introduction of Uniform Rules for Documentary Guarantee or URDG 758, the rules for Documentary Guarantee seem to be popular again. It can be imagined from the increasing number of questions that have popped up in recent days. Documentary Guarantee Forum is an effort to develop a platform to discuss these questions.
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ahmed323
Posts: 10
Joined: Mon Oct 31, 2011 11:37 am
First Name: Ahmed
Last Name: S Aziz
Organization: GIB
Filter: Two Plus Two =: 4
Location: Bahrain

Law of the Guarantee

Post by ahmed323 »

Dears,

I have just an inqiry can I issue a guarantee and to be governed and interpreted by the law of other county of issuing party such as i.e. the issuing bank in Bahrain and the guarantee under the law of Englamd.

Regards
AS
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picant
Posts: 1942
Joined: Wed Aug 20, 2008 1:49 pm

Rules and laws

Post by picant »

Hi Pal,


Guarantee can be ruled by issuing bank Country Law, Court of ...., and by URDG 758 as international rules.
IMHO you can choose another law if the issuing bank's Country law will allow it.
Other comments appreciated
Ciao
leekaiyin55
Posts: 35
Joined: Wed Feb 29, 2012 10:37 pm
First Name: Lee
Last Name: Kai Yin
Organization: DB
Filter: Two Plus Two =: 4
Location: Hong Kong

Rules and Laws

Post by leekaiyin55 »

Dear Pal,

There is nothing above the law in the way that the any activity, in this example of BG, the governing law must be the local law no matter it is mentioned or not within the BG text. Any terms voilating the local law become unenforceble even though it is written and/or agreed upon by all parties.
Nevertheless, while the BG has included certain governing rules (e.g. URDG 758) or other jurisdiction such instructions are normally considered as the true intentions of the parties. In this sense, the local court will tend to pay respect to this fact in its decision of the underlying lawsuit accordingly.

Rgds
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