Specialists International
This Knowledge Check examines CR Construction's application to restrain Barclays Bank from paying Northern Gateway under a performance bond. The employer had demanded GBP 2,475,441.02 for liquidated damages, and CR Construction also sought an order requiring the bank to return money received under a counter-guarantee.
The application was made against the issuing bank, not the employer. CR Construction did not allege fraud. The court held that the wider ground available to restrain a beneficiary with no contractual right to call a bond did not provide the same route to an injunction against the bank.
The court also considered the bond wording, the employer's certificate, the demand's letterheading, discharge by alleged repudiatory breach, set-off, damages and balance of convenience. None of CR Construction's grounds amounted to a strong case, and the injunction was refused.
- The payment restraint and counter-guarantee relief sought
- The distinction between injunctions against banks and beneficiaries
- The amended JCT contract and performance bond
- The effect of termination under clause 2.2 of the bond
- The guarantee and net-liability wording in clause 5.1
- The certificate requirements and conclusive-evidence provision
- The Hong Kong counter-guarantee
- The demand made for liquidated damages
- The adequacy of the evidence of financial harm
- The balance of convenience and refusal of relief