Bank Counter Guarantee Template for Nigeria

The Bank Counter Guarantee serves as a risk mitigation tool in banking transactions under Nigerian law, commonly used in international trade, construction projects, and large commercial transactions. It is typically required when a bank issues a guarantee on behalf of its client (the principal) and seeks back-to-back protection from another bank, often due to credit risk considerations or regulatory requirements. The document details the counter-guarantor's obligation to pay upon demand, specifies conditions for valid demands, includes compliance with Nigerian banking regulations, and addresses cross-border banking considerations where applicable. The counter guarantee's value typically mirrors the original guarantee amount, and its validity usually extends beyond the primary guarantee's expiry date to allow for claim processing.

1. Parties: Identification of the Counter-Guarantor Bank and the Beneficiary Bank

2. Background: Context of the original guarantee and the reason for this counter guarantee

3. Definitions: Key terms used in the counter guarantee including 'Original Guarantee', 'Principal', 'Beneficiary', etc.

4. Counter Guarantee Details: Specific details of the counter guarantee including amount, currency, and reference to original guarantee

5. Scope of Counter Guarantee: Extent and limitations of the counter guarantee obligation

6. Payment Terms: Conditions and process for payment upon demand

7. Duration and Validity: Effective date, expiry date, and any automatic extension provisions

8. Demand Requirements: Format and content requirements for making a valid demand

9. Bank's Rights and Obligations: Specific rights and obligations of the counter-guarantor bank

10. Governing Law and Jurisdiction: Nigerian law as governing law and jurisdiction specifications

11. Notices: Communication methods and contact details for all parties

12. Miscellaneous: Standard provisions including severability, amendments, and entire agreement