Conformity of demands submitted under independent guarantees

Lombard Insurance Co Ltd v Schoeman 2018 1 SA 240 (GJ)The conformity of demands submitted under independent (demand) guarantees has been a dominant theme over the past decade in South African jurisprudence. (See in this regard, for example, Compass Insurance Co Ltd v Hospitality Hotel Developments (Pty) Ltd 2012 2 SA 537 (SCA); State Bank of India v Denel SOC Ltd 2015 2 All SA 152 (SCA); Nedbank Ltd v Procprops 60 (Pty) Ltd 2013 ZASCA 153 (20 Nov 2013); Group Five Construction (Pty) Ltd v MEC for Public Transport, Roads and Works, Gauteng 2015 5 SA 26 (GJ); Kristabel Developments (Pty) Ltd v Credit Guarantee Insurance Corporation of Africa Limited 2015 ZAGPJHC 264 (20 Oct 2015); University of the Western Cape v ABSA Insurance Company 2015 ZAGPJHC 303 (28 Oct 2015). This also applies to academic writing. (See eg Kelly- Louw “The documentary nature of demand guarantees and the doctrine of strict compliance” part 1 2009 SA Merc LJ 306 and part 2 2009 SA Merc LJ 470; Kelly- Louw “General update on the law of demand guarantees and letters of credit” in Hugo (ed) Annual Banking Law Update (2016) 43 57-69; “Must all the required documents for a demand guarantee be presented at the same time?” 2017 THRHR 148 156-164; Hugo “Die uitbeiteling van die leerstuk van nougesette nakoming in onafhanklike waarborgverband” in Schlemmer and O’Brien (eds) Liber Amicorum: JC Sonnekus (2017) 292; and Hugo “Bank guarantees” in Sharrock (ed) The Law of Banking and Payment in South Africa (2016) par 10.4.) The recent case Lombard Insurance Co Ltd v Schoeman (2018 1 SA 240 (GJ)) contains a comprehensive analysis of this troublesome issue in South African case law, and deserves close scrutiny.