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URDG 758 and application

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Fri, 07/11/2014 - 23:27
weiguang83
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Joined: 04/25/2014
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I have encountered some questions recently about a counter-guarantee issuance. The guarantee is subject to URDG758. Our internal approval excludes Articles 13 (Variation of Amount), 23 (Extend or pay) & 33 (Transfer of guarantee and assignment of proceeds). However, the underlying guarantee did not mention such exclusions.

From my understanding, Once the URDG are incorporated in the guarantee or counter-guarantee text by contractual reference to the URDG, they are deemed to be entirely incorporated, unless specific article(s) are expressly excluded or amended.

My legal advisor feels that exclusion of these articles need not be expressly stated. For Article 13 and 33, I think it is ok. However for Article 23, I have my doubts.

What is your opinion regarding this?

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Sat, 07/12/2014 - 00:29
#1
pan
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Joined: 09/13/2007
IMHO

Hi Friend,

IMHO, art 23 URDG 758 is a consequence, the guarantee is valid and the beneficiary is claiming correctly giving the guarantor the possibility of not to pay but to extend the validity. The guarantor has the possibility to pay or to extend in a determinate period of time. If your bank does not want to extend it, due to its internal policy, it is free to do it by paying and bear the risk to lose a customer.

Other comments appreciated

Ciao

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