In an important case for the shipbuilding industry, the Court of Appeal has ruled that a guarantee of the buyer’s payment obligation is a demand bond, and discouraged the use of presumptions in construing a guarantee.

In this SerleShare, Zoe O’Sullivan QC provides a case note on the Court of Appeal’s decision in Shanghai Shipyard Co Ltd v Reignwood International Investment (Group) Company Limited [2021] EWCA Civ 1147 together with an analysis of earlier guarantee decisions.

Zoe acted for the guarantor Reignwood (leading Harry Wright of 7KBW).

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