Protect yourself in tackling on-demand bonds

摘要

The recent decision of Doosan v MABE indicates a softening in the courts' attitude when faced with a call on a bond. Doosan was concerned MABE was going to make calls on two on-demand bonds that had been provided in the supply of two boilers for a power plant in Brazil. The bonds were stated to expire upon the issue of the taking-over certificate for these boilers. Despite the two boilers exporting more than 7,500 hours of power at various loads to the local grid, MABE had refused to issue these certificates, arguing they were using the power plant as a "temporary measure".