CL-2022-000456 - [2025] EWHC 1938 (Comm)

The contracts between EuroChem NW2 and Tecnimont/MT Russia (“the Contracts”) required them to provide EuroChem NW2 with financial security including the Bonds. Tecnimont duly procured the necessary security to be issued by SocGen and ING. SocGen and ING, in turn, have the benefit of various counter-guarantees/indemnities, including an agreement by Tecnimont to indemnify ING under its Bond.

The Bonds, and the sums demanded under them, are as follows:

The Bonds are in near identical form. The “Issuer” was a defined term referring to the relevant Bank. The “Owner” was a defined term referring to EuroChem NW2. EuroChem NW2 was also described in the transmission instructions given to the receiving bank (PJSC Rosbank) as the “Beneficiary”. The Bonds identified Tecnimont and MT Russia as “Contractor”, and also identified the Contracts.

Taking the text of the first SocGen Bond (No. 17002-0059299 ETR), the key terms are as follows:

“3.1

The Owner may from time to time make a written demand upon the Issuer stating that a contractor has defaulted in its obligations under a contract with respect to the advance payment or has failed to make any payment in accordance with a contract and the amount claimed by the Owner. This demand shall be sent to the Issuer through the Owner's bank which shall confirm that demand was signed by authorized signatories.

3.2

The Issuer shall immediately but in any case not later than four (4) business days upon receipt of any such compliant demand pay to the Owner the amount or amounts demanded up to the maximum sum.

…

4.2

The Issuer is not entitled to rely on any defenses or claims which may be available to a contractor under a contract.

4.3

Any demand made by the Owner in accordance with clause 3 and any sum or sums stated in such demand shall be conclusive evidence that such sum or sums are properly due and payable to the Owner under this bond.

…

6.

Continuity and discharge of the bond

The Issuer confirms that:

(a)

Its obligations under this bond shall be irrevocable and primary.

(b)

this bond shall come into force on the date hereof and shall remain in full force and effect until the earlier of:

(i)

16.09.2023, or

(ii)

the date on which the owner notifies the issuer of repayment in full of the advance payment by EP Contractor to Owner,

when this bond shall cease to have effect save in connection with any demand notified to the Issuer on or prior to the said date.

…

9.

Assignment

9.1

The Owner may assign, charge or transfer this Bond to:

(a)

any of the following parties: EuroChem MCC or EuroChem Group AG to whom rights, obligations and benefits under the Contracts have been assigned by Owner, without Issuer’s consent and provided that at the time of the assignment, charge or transfer such action would not cause Issuer to be in breach of any restrictions imposed by sanctions laws or regulations issued by the Republic of Italy, European Union, the United Kingdom…, and/or

(b)

any other person or entity to whom the rights, obligations and benefits under the Contracts have been assigned by Owner, subject to Issuer’s consent, such consent not to be unreasonably withheld, conditioned or delayed.

Once the Financing Agreement will be closed, we will check the list of Financiers and upon Issuer’s approval, an amendment will be issued, including them in the list of approved assignees sub a) and sub the below paragraph.

The Owner may assign the proceeds arising from the possible drawdown of this Bond to any of the following parties: EuroChem MCC or EuroChem Group AG without the consent of Issuer, remaining understood that any request of payment to the possible assignee shall be executed by Issuer provided that such action would not cause Issuer to be in breach of any restrictions imposed by sanctions laws or regulations issued by the Republic of Italy, European Union the United Kingdom...”

…

10.

Notice

Any notice or other communication to be given, served or made under this bond:

(a)

shall be written in English and shall be delivered by hand, and/or by registered mail/express courier with return receipt to:

(i)

the Issuer at:

Societe Generale Paris

GTPS/GPS/OPE/TRA/GAR

Immeuble Cristallia

189, Rue D'Aubervilliers

75886 Paris Cedex 18 France

Attention: International Guarantees Dept

(ii)

the Owner at:

EuroChem North-West-2 Limited Liability Company

Building 7, Central Lane, Industrial Area 'Phosphorit',

Bolshelutskoe Rural Settlement,

Kingisepp Municipal District,

The Leningrad Region, 188452, Russian Federation

Attention: Ilya Beloborodov, Executive Director

or to such other address as a party may specify from time to time by notice to the other party,

…

11.

Governing law

This bond, and any non-contractual obligations arising out or in connection with this bond, shall be governed by and construed in accordance with the laws of England and Wales.

Each party irrevocably submits to the exclusive jurisdiction of the courts of England with regard to all matters arising from or in connection with this bond and agrees that a judgment on any proceedings brought in the courts of England shall be conclusive and binding upon them and may be enforced in the courts of any other jurisdiction.”

One difference between the SocGen Bonds and the ING Bond is that the SocGen Bonds all provide that there are no applicable rules, whereas the ING Bond provided for the application of the URDG Rules. Article 20(c) of the URDG 758/2010 provides as follows:

“(c)

Payment is to be made at the branch or office of the guarantor or counter-guarantor that issued the guarantee or counter-guarantee or such other place as may be indicated in that guarantee or counter-guarantee (“place for payment”).”

Other than this, the only other material difference concerns the address given in clause 10 for notice to the Banks. For all the SocGen Bonds, the address for notice to SocGen was as set out above. This includes the Bond issued by SocGen’s branch in Milan (No. 08502-0009506MIL). By contrast, for the Bond issued by ING (No. DLG 1440/20), the address for notice to ING was the address of the Milan branch – “ING Bank N.V. - Milan Branch, Via Santa Margherita 16, 20121 Milano.”