Negative Stipulations Prohibiting Calls on Performance Bonds: NSWCA Confirms No Special Requirement for “Clear Words”

    View Authors January 2018

    The New South Wales Court of Appeal has recently unanimously dismissed an appeal brought against the decision of the Supreme Court in Laing O’Rourke Australia Construction Pty Ltd v. Kawasaki Heavy Industries Ltd [2017] NSWSC 541 of 5 May 2017 that saw Kawasaki Heavy Industries Ltd (Kawasaki) restrained from calling on certain surety bonds until further order of an arbitral tribunal. The surety bonds totalled approximately AU$50 million and it is believed that this case was the largest value of “on demand” or “unconditional” bonds considered by Australian courts.

    We acted for the plaintiff, Laing O’Rourke Australia Construction Pty Ltd (Laing O’Rourke), in the proceeding at first instance and as respondent to the appeal.