Piraeus Financial Holdings SA v Grand Anemi & Ors

A contract may combine guarantee and indemnity obligations. Its character depends on the words used and their true construction. Where an instrument makes the surety liable as principal debtor, that primary obligation is enforceable independently of any secondary guarantee obligation and ordinarily does not require a prior demand. A first-demand guarantee governed by Greek law may likewise create an indemnity-equivalent primary obligation where the contract so provides. A dissolved corporation remains capable of defending proceedings issued within the statutory period, and continues thereafter until the proceedings and any judgment are concluded. Limitation runs from the accrual of the contractual cause of action, which may arise when an acceleration declaration makes the debt immediately payable.

The Claimant sought US$96,272,124.04 from Grand Anemi under a loan agreement, and from Grandunion and Mr Zolotas under related indemnities. The Defendants neither acknowledged service nor filed defences and did not attend trial. The Court proceeded in their absence under CPR 39.3.

The issues included whether Grandunion could be sued after dissolution, whether the indemnities imposed primary debtor liability under English and Greek law, whether the Claimant had acquired the relevant contractual rights, and whether the claims were time-barred. The central questions were whether the contractual obligations were enforceable as primary obligations and whether the Claimant had proved the sums due.

1. Disposition. The claim was proved against all three Defendants for US$96,272,124.04, comprising principal and contractual interest.
2. Grandunion. The Grandunion Indemnity was a hybrid contract combining guarantee and indemnity obligations. Applying Vossloh Aktiengesellschaft (VAG) v Alpha Trains [2010] EWHC 2443, the Court construed the instrument according to its actual language. Clause 7.1 made Grandunion liable jointly and severally as principal debtor. That liability was not contingent on a shortfall or on the Bank first proceeding against another obligor. No demand was therefore required before suit, although a demand had in any event been made.
3. Mr Zolotas. Under Greek law, the true intention of the parties was ascertained under Articles 173 and 200 of the Greek Civil Code. The first-demand guarantee provisions and clause 7.1 made Mr Zolotas liable as principal debtor, with an obligation equivalent to an indemnity. A separate demand under that indemnity was unnecessary.
4. Transfer and dissolution. The Loan Agreement and indemnities were transferred to the Claimant under the Sale and Transfer Agreement. Grandunion remained capable of being sued under section 105(1) of the Marshall Islands Business Corporations Act because the claim was issued within three years of dissolution. The provision also continued the corporation until final conclusion and execution.
5. Limitation. The Grand Anemi claim accrued when the lender declared cancellation and the indebtedness became immediately due on 1 March 2013. The claim issued within six years and was not time-barred. The Greek-law claim against Mr Zolotas was also timely: the principal claim fell within the 20-year period under Article 249 of the Greek Civil Code, while recognition of the debt interrupted the shorter limitation period for interest under Article 250.