Bonds and Guarantees

Herbert Smith acted for the defendant in the widely-reported case of OTV Birwelco Ltd v Technical & General Guarantee Co Ltd. This was an action by a main contractor for enforcement of a bond issued by the defendant bondsman in respect of the electrical sub-contractor, who went into liquidation without completing the works. It subsequently became apparent that the company name of the sub-contractor as stated on the bond was incorrect. The name on the bond was Woodbank UK Limited, whereas the name of the company entering into the sub-contract was Woodbank UK (Mechanical and Electrical) Limited ("M&E"). Companies under both these names had existed at different times and it was not clear which company was said to be in default. The bondsman denied liability. One contention was that the bond was either unenforceable or a nullity, since M&E was the actual party to the subcontract but was not named as the party to the bond. The