Point of law: whether guarantor (a bank) may refuse paying to the beneficiary under bank guarantee with reference to the fact that the principal failed to perform his contractual duty of returning advance payments to the beneficiary due to reasons which evolved without principal’s fault.

Ratio decidendi: the Presidium answered in the negative to this question. It pointed out that bank guarantee must be interpreted in favour of the beneficiary for the purposes of saving the guarantee. The property interest of the beneficiary consists in the opportunity to receive performance, when the beneficiary believes that triggering events took place, as quickly as possible and without fearing the objections of the debtor (principal). Refusal to satisfy the demands of the beneficiary may be justified exclusively by circumstances related to the failure to comply with the conditions of the guarantee itself. The bank, when issuing the guarantee for the sake of securing proper performance by contractor (principal) of his obligations to return advance payments, did not anyhow limit the list of triggering events.

Practical consequences: the Judgment says that prior court decisions in analogous cases if inconsistent with this interpretation may be reversed in the procedure and within the limits envisaged by Art 311 of the Commercial Procedure Code.