Urdg 758 rules

It is recommended that all guarantees specify: The counter-guarantor shall without delay inform the instructing party of any demand under the counter-guarantee and of any request, as an alternative, to extend the expiry of the counter-guarantee. Various editions of the Uniform Rules for Demand Guarantees have been in use by banks and other guarantors around the world for over 24 years 23 and have proven to be advantageous and dependable, as it creates a reasonable balance between the competing interests of the contracting parties, tilting in favour of the guarantor; The URDG has been endorsed by various bank regulators, financial institutions 24 , international organizations such as the World Bank and the United Nations Commission on International Trade Law UNCITRAL 25 as well as a number of professional bodies Potentially, the offshore market may create a financing stop gap in meeting Nigerian importers' FX requirements and offshore financiers in sponsoring FX backed LCs, may require Nigerian importers to provide demand guarantees from Nigerian banks. They are binding on all parties to the demand guarantee or counter-guarantee except so far as the demand guarantee or counter-guarantee modifies or excludes them.

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A guarantee may provide for the reduction or the increase of its amount on specified dates or on the occurrence of a specified event which under the terms of the guarantee results in the variation of its amount, and for this purpose the event is deemed to have occurred only: Except where urfg guarantee otherwise provides, documents issued by or on behalf of the applicant or the beneficiary, including any demand or supporting statement, shall be in the language of the guarantee.

By advising a guarantee, whether directly or by utilizing the services of another party "second advising party"the advising party signifies to the beneficiary and, if applicable, to the second advising party, that it has satisfied itself as to the apparent authenticity of the guarantee and that the advice accurately reflects the terms and conditions of the guarantee as received by the advising party.

Uniform Rules for Demand Guarantees (URDG)

The guarantor shall without delay inform the instructing party or, where applicable, the counter-guarantor of any demand under the guarantee and of any request, as an alternative, to extend the expiry of the guarantee.

Where a complying demand includes, as an alternative, a request to extend the expiry, the guarantor may suspend payment for a period not exceeding 30 calendar days following its receipt of the demand.

Where the guarantee does not indicate whether a presentation is to be made in electronic or paper form, any presentation shall be made in paper form. Guarantors deal with documents and not with goods, services or performance to which the documents may relate.

When the guarantor determines that a demand is complying, it shall pay.

Following the widespread acceptance ufdg application of the URDG on demand guarantees all over the world, relevant regulators and institutional bodies in Nigeria like the Central Bank of Nigeria and the Nigerian National Committee of the ICC, have supported the adoption of URDG by organizing and conducting various seminars to reflect and disseminate information on the URDG to authorized dealers and stakeholders.

If no such period of extension is granted, the complying demand shall be paid without the need to present any further demand. Nevertheless the guarantor is irrevocably bound by an amendment from the time it issues the amendment, unless and until the beneficiary rejects that amendment.

URDG | Practical Law

Real Estate and Construction. Rrules, a counter-guarantee is not transferable. Charges mean any commissions, fees, costs or expenses due to any party acting under a guarantee governed by these rules.

Complying presentation under a guarantee means a presentation that is in accordance with, first, the terms and conditions of that guarantee, second, these rules so far as consistent with those terms and conditions and, third, in the absence of a relevant provision in the guarantee or these rules, international standard demand guarantee practice. Each presentation shall identify the guarantee under which it is made, such dules by stating the guarantor's reference number for the guarantee.

A guarantee is by its nature independent of the underlying relationship and the application, and the guarantor is in riles way concerned with or bound by such relationship. Where the guarantee provides that only one demand may be made, and that demand is rejected, another demand can be made on or before expiry of the guarantee. Article 15 of the URDG provides that where a beneficiary makes a demand on a guarantor, the demand shall be accompanied by the documents specified in the guarantee 7558 also by a supporting statement which indicates in what respect the applicant is in breach of its obligations under the underlying contractual relationship.

Document means a signed or unsigned record of information, in paper or in electronic form, that is capable of being reproduced in tangible form by the person to whom it is presented. When used with a date or dates to determine the start, end or duration of any period, the terms:.

A guarantee is transferable only if it specifically states that it is "transferable"in which case it may be transferred more than once for the full amount available at the time of transfer. This protection is important for various reasons amongst which are: A guarantor is liable to the beneficiary only in accordance with, first, the terms and conditions of the guarantee and, second, these rules ryles far as consistent with those terms and conditions, up to the guarantee amount.

Article 21 of the URDG ensures that a guarantor bank is not held in default in the event that it is unable to pay the beneficiary in the currency specified in the demand guarantee, due rulles an impediment beyond ru,es control or because it is illegal under the law of the place for payment, by providing that the guarantor may make payment in the currency of the place for payment, which need not be urddg same as the place where the presentation was made.

Any other document may be dated before that date. Entire Agreement Article 12 of the URDG limits the liability of the guarantor ugdg only the terms contained in the agreement, hence further alienating and protecting the guarantor bank from liabilities emanating from other agreements entered into by the other parties to the contract of which it may or may not even be aware.

Uniform Rules for Demand Guarantees (URDG) | Practical Law

When the counter-guarantor determines that a demand under the counter-guarantee is not a complying demand, it may reject that demand or, in its sole judgement, approach the instructing party for a waiver of the discrepancies. They are binding on all parties to the demand guarantee or counter-guarantee except so far as the demand guarantee or counter-guarantee modifies or excludes them.

Under these rules, a document includes a demand and a supporting statement; Expiry means the expiry date or the expiry event or, if both are specified, the earlier of the two. The following provisions apply to the transfer of a guarantee: If the guarantee does not specify any such document and the fulfilment of the condition cannot be determined from the guarantor's own records or from an index specified in the guarantee, then the guarantor will deem such condition as not stated and will disregard it except for the purpose of determining whether data that may appear in a document specified in and presented under the guarantee do not conflict with data in the guarantee.

Data need not be identical to, but shall not conflict with, data in that document, any other required document or the guarantee.

ICC Uniform Rules for Demand Guarantees (URDG) Including Model Forms

Counter-guarantee means any signed undertaking, however named or described, that is given by the counter-guarantor to another party to procure the issue by that other party of a guarantee or another counter-guarantee, and that provides for payment upon the presentation of a complying demand under the counter-guarantee issued in favour of that party.

Advising party means the party that advises the guarantee at the urfg of the guarantor. The guarantor assumes no liability or responsibility for:

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4 Responses to Urdg 758 rules

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