Principal Jos Mulcahy and Law Graduate Beatrisa Dubinsky have had an article published by the Australian Construction Law Bulletin, entitled 'The doctrine of strict compliance in performance securities — a cautionary tale: Santos Ltd v BNP Paribas'.
This article analyses a recent decision by the Supreme Court of Queensland, Santos Ltd v BNP Paribas, which reinforced adherence to the doctrine of strict compliance in relation to calls on performance securities.
Echoing previous Australian and English authorities, this case recognised that financial institutions are not at liberty to investigate whether the contractor’s performance of the underlying contract was sufficient to give rise to the demand. Therefore, ensuring that the demand strictly complies with the instrument’s terms before requiring that a financial institution make payment is the only protection afforded to financial institutions against wrongly making payment.
Please read the full article here.
If you have any questions, please contact Jos Mulcahy on 03 8640 2377.
