Guarantees, Conditions And Sinking Claims (SLB v Pak)

Commercial analysis: Unsuccessful appeal under section 69 of the Arbitration Act 1996 (AA 1996) arising out of ten separate arbitral awards concerning ten shipbuilding contracts for container vessels. The buyers contended that the yard’s obligation to provide refund guarantees within 120 days of novation was a condition of the contracts, so that breach entitled them to recover loss of bargain damages. The Commercial Court upheld the tribunal’s conclusion that the obligation was an innominate term. The buyers were entitled to cancel the contracts pursuant to the express contractual regime, but not to claim loss of bargain damages.

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