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Standby Bank Guarantee

Standby Bank Guarantee Template for United Arab Emirates

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Key Requirements PROMPT example:

Standby Bank Guarantee

"I need a Standby Bank Guarantee for AED 5 million to secure a construction contract with Dubai Municipality, to be issued by Emirates NBD, with validity until March 15, 2025, incorporating URDG 758 rules."

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Document background
The Standby Bank Guarantee is a crucial financial instrument in UAE commercial transactions, providing security and risk mitigation for various business dealings. It is commonly used in contexts ranging from construction projects to international trade, where one party seeks financial assurance of the other party's performance. The document must comply with UAE Federal Law No. 18 of 1993 (Commercial Code), UAE Federal Decree Law No. 14 of 2018 (Central Bank Law), and relevant Central Bank circulars. A Standby Bank Guarantee typically includes detailed information about all parties involved, the guaranteed amount, trigger events for payment, validity period, and claim procedures. It serves as an independent obligation of the issuing bank, separate from the underlying commercial contract, and can be structured to accommodate various commercial requirements while maintaining compliance with UAE banking regulations.
Suggested Sections

1. Bank Details and Reference: Complete details of the issuing bank, including branch, reference numbers and date of issuance

2. Beneficiary Details: Full name and address of the party in whose favor the guarantee is issued

3. Guarantee Amount: The maximum amount of the guarantee expressed in both numbers and words, including the currency

4. Principal/Applicant Details: Full details of the party requesting the guarantee

5. Underlying Transaction: Reference to the primary contract or obligation being guaranteed

6. Purpose of Guarantee: Clear statement of the specific purpose and scope of the guarantee

7. Conditions for Payment: Specific conditions under which the guarantee can be called upon

8. Expiry Details: Clear statement of the expiry date and any conditions affecting validity

9. Governing Law and Jurisdiction: Specification of UAE law as governing law and relevant courts' jurisdiction

10. Claim Procedure: Detailed process for making claims under the guarantee

Optional Sections

1. Language Provision: Required when the guarantee is issued in multiple languages, specifying which version prevails

2. Reduction Clause: Include when the guarantee amount may be reduced over time according to specific conditions

3. Assignment Provisions: Required when the guarantee needs to be transferable

4. Counter-Guarantee Reference: Include when the guarantee is issued based on a counter-guarantee from another bank

5. Special Conditions: Any specific conditions required by the underlying transaction or parties' agreement

6. URDG 758 Incorporation: Optional clause incorporating ICC Uniform Rules for Demand Guarantees

Suggested Schedules

1. Form of Demand: Template for making a compliant demand under the guarantee

2. Supporting Documents: List and/or copies of documents required to be presented with any demand

3. Authentication Details: SWIFT or other authentication details if applicable

4. Underlying Contract Extract: Relevant excerpts from the underlying contract referring to the guarantee requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Banking & Financial Services

Construction & Real Estate

International Trade

Manufacturing

Energy & Utilities

Infrastructure Development

Telecommunications

Government & Public Sector

Retail & Commerce

Transportation & Logistics

Relevant Teams

Legal

Compliance

Treasury

Trade Finance

Risk Management

Corporate Banking

Commercial Banking

Operations

Credit

Finance

Relevant Roles

Treasury Manager

Credit Risk Officer

Trade Finance Manager

Commercial Banking Officer

Legal Counsel

Compliance Officer

Relationship Manager

Project Manager

Contract Manager

Chief Financial Officer

Financial Controller

Banking Operations Manager

Trade Finance Specialist

Corporate Banking Manager

Industries
UAE Federal Law No. 18 of 1993 (Commercial Code): Governs commercial transactions and provides the legal framework for bank guarantees, including their issuance, validity, and enforcement in commercial contexts
UAE Federal Law No. 5 of 1985 (Civil Code): Contains general provisions regarding guarantees, contractual obligations, and the basic principles of security arrangements under UAE law
UAE Federal Decree Law No. 14 of 2018 (Central Bank Law): Regulates banking operations and provides specific requirements for banks issuing guarantees in the UAE
ICC Uniform Rules for Demand Guarantees (URDG 758): While not law, these international rules are commonly incorporated into UAE bank guarantees and provide standardized practices for demand guarantees
UAE Federal Law No. 10 of 1980 (Central Bank Law): Historical legislation establishing the framework for banking supervision and regulation, including provisions affecting bank guarantees
UAE Central Bank Circulars and Regulations: Various circulars and regulations issued by the UAE Central Bank that specify requirements for bank guarantees, including format, content, and operational procedures
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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