Foreign Economic and Technical Cooperation Co., Ltd. of China Changjiang National Shipping Group et al. v. China Construction Bank Co., Ltd. Qingdao Zhongshan Road Sub-branch

Abstract

The Defendant, Zhongshan Bank, guaranteed CIEC Shandong Company’s liability to pay for two vessels. CIEC Shandong breached its obligation to pay the Plaintiff for the two vessels. The Defendant refused to pay the Plaintiff, because the name of the beneficiary as stated in the guarantee contract differed from the Plaintiff’s name as stated in other documents relating to the sale. The Plaintiff sued the Defendant to enforce the guarantee. The court held that because the Defendant had actual knowledge that the Plaintiff’s name as stated in the guarantee contract was, despite the lack of conformity, referring to the same company as in the other documents, the Defendant was at fault in refusing to pay the Plaintiff and was liable for the amount claimed plus interest.