summary of on-demand bonds and see-to-it guarantees, see our Law-Now on Autoridad Del Canal De Panamá v Sacyr, S.A.) In English law, there is a presumption (the ‘Marubeni presumption’)1 against construing an instrument as an on-demand bond (rather than merely a see-to-it guarantee) if the party providing the instrument is not a bank or financier. Krisenergy accepted that clause 5 made the Guarantee, at least in part, an on-demand instrument, so there was no need to apply the Marubeni presumption in order to establish whether Krisenergy had assumed autonomous on-demand liabilities. However, Krisenergy sought to argue that: • The Marubeni presumption should be applied “by analogy” when interpreting the scope of such autonomous on-demand liabilities in clause 5. • This should lead the court to construe clause 5 restrictively, as Krisenergy was not a bank. • The reference in clause 5 to “liability in respect of any amount(s)” should therefore be narrowly construed to only trigger the payment obligation where liability to pay sums had been admitted by Kegot (and only quantum remains in dispute). • As liability had not been admitted, clause 5 did not apply. The Commercial Court rejected this argument. It confirmed that the Marubeni presumption is directed to the question of whether a particular instrument is an on-demand bond or a see-to-it guarantee. Once the parties accepted that the Guarantee was (at least to an extent) an on-demand bond, that presumption was spent. It then became necessary to interpret the scope of clause 5 “simply by considering the words the parties chose to use to record their agreement, free from any antecedent presumption as to what meaning they are likely to have, or as towards a wide or narrow construction”. Following this approach, the Commercial Court considered the words “…where the amount(s) demanded are not in dispute” in clause 4 as clearly referring to disputes as to both liability and quantum. Further, that clause 5 captured “what is left over from Clause 4”, so that it applied where Kegot disputed either liability to pay an amount, or where Kegot disputed the quantum demanded. The Commercial Court’s reasoning was not impacted by a provision in the charter stating that “where an item billed is disputed in good faith, it is not payable until any dispute has been resolved”. Just because this rule applied to Kegot did not mean this needed to apply to Krisenergy as well. In fact, the Commercial Court considered that it may well make commercial sense for a guarantor to be obliged to “pay-now-argue-later”, even if the party to the relevant underlying contract is not, on the basis that the guarantor has more cash and can more easily “weather the cash flow strain” of making an immediate payment. (2) Compliant Demand Krisenergy also argued that clause 3 of the Guarantee, which required a demand to be accompanied by “any supporting documents reasonably required to assess such demand”, would naturally include any documents reasonably required to ascertain: i. What work had been done (so Krisenergy could assess whether that work was within the scope of works for which Kegot was liable under the charter); and ii. whether the costs of that work were reasonably incurred, or were reasonable in amount. It argued that since such documentation had not been provided, the demand was not compliant with the terms of the Guarantee, and that Rubicon had therefore not validly triggered Krisenergy’s payment obligation meaning that Krisenergy was therefore not required to pay. The Commercial Court disagreed. It considered that while Kegot would require the documents at (i) and (ii) above in order to assess the merits of the arguments against Kegot, such documents were not reasonably required by Krisenergy to assess the demand. Instead, all that Krisenergy reasonably required were documents from which Krisenergy