Interpreting deeds of guarantee and indemnity (Natwest Markets Nv v CMIS Nederland BV)
Banking & Finance analysis: The court was tasked with interpreting the language of various Deeds of Indemnities in the context of complex financial transactions. In doing so the court construed the Deeds and other securitisation documents in accordance with the principles contained in Rainy Sky v Kookmin Bank and Wood v Capita Insurance Services Ltd. This involved the court considering the language used, the relevant surrounding circumstances and the commercial consequences of rival constructions. The court also had to consider the principle of co-extensiveness, which applies to contracts of guarantee and not contracts of indemnity, and distinctions between the accrual of debts and payment obligations in the context of Master Agreements. The court found in favour of the claimants, dismissing the defendants’ arguments, and finding that sums in the region of €155m were due from the defendants to the claimants. Written by Dale Timson, barrister at Enterprise Chambers.