- Russian Federation
- N A40-3175/2017
- Commercial Court of the Moscow Region
- Ministry of the Internal Affairs of the Russian Federation v. Sberbank
BANK GUARANTEE - ISSUED BY A RUSSIAN BANK IN FAVOUR OF A RUSSIAN BENEFICIARY- REFERENCE TO UNIDROIT PRINCIPLES IN SUPPORT OF SOLUTION FOUND UNDER APPLICABLE DOMESTIC LAW (RUSSIAN LAW)
BANK GUARANTEE CONTAINING REFERENCE TO UNDERLYING CONTRACT - REFERENCE DOES NOT ALTER INDEPENDENCE OF GUARANTEE FROM UNDERLYING CONTRACT AS STATED BY ART. 370 OF THE RUSSIAN CIVIL CODE - REFERENCE ALSO TOE ARTICLE 4.6 UNIDROIT PRINCIPLES (PRESUMABLY) SINCE BANK GUARANTEE WAS DRAFTED BY BANK
A bank guarantee issued by a Russian bank contained a reference to the underlying contract, i.e. a supply agreement between two Russian companies. When the bank was asked by the beneficiary to honour the guarantee, the bank asserted that, on account of the reference to the underlying contract, it was entitled to raise objections that the defaulting party would have under the underlying contract.
The Court pointed out that a bank guarantee is independent from the underlying contract and a reference in it to the latter did not change the nature of a bank guarantee as envisaged by Art. 370 of the Russian Civil Code. Moreover, the Court also cited the “contra proferentem” rule laid down in Art. 4.6 of the UNIDROIT Principles defining it a well-established rule to interpret commercial contracts, presumably because the bank guarantee had been drafted by the bank and hence the reference to the underlying contract was to be interpreted against the drafter.