Does The Guarantor's Withdrawal Extinguish The Guarantee? A Recent Decision By ABF

The recent decision of the Banking and Financial Arbitrator (“ABF”) No. 9238 of 14 June 2022 addresses the issue concerning the possibility for a guarantor to withdraw from an omnibus-type guarantee provided in favour of a bank. The omnibus guarantee is a guarantee contract that is widespread in banking practice and which originates from Article 1938 of the Italian Civil Code, by means of which the guarantor undertakes to guarantee the performance of all obligations, present and future, that the principal debtor has undertaken or will undertake towards the bank.

In the present case, the applicants seised the ABF to ascertain that the amount they were requested to pay by the defendant bank pursuant to an omnibus guarantee provided by them for a debt of a limited liability company of which their father was a shareholder was not due.