Construction Guarantee moved its branch in Yesan County, South Chungcheong Province, to Naepo New City, South Chungcheong Province on Nov. 10 and named it as its Hongseong Branch before formally opening it in a ceremony on Nov. 10.
Dignitaries at the opening ceremony included Chairman Park Seung-joon of Construction Guarantee; Chairman Park Hae-sang of the Construction Association of Korea’s branch in Sejong City, South Chungcheong Province; CEO Sung Woo-jong of Dowon E & C; and CEO Kim Yang-joong of Seojin Industrial Co., among others.
Chairman Park, in his congratulatory speech at the ceremony, said the new branch relocated to Naepo New City due to the city’s potential to become a fresh and vibrant commercial hub in South Chungcheong Province to provide more financial benefits to its members in the province in return for their support.
He added that they will try to do its part in a bid to help the construction industry take a dynamic flight once again recovering from the current sluggish conditions brought on by the reduced new public construction projects.
The Hongseong Branch is located on 3rd floor of the Central Tower in Hongbuk-myon, Hongseong County in the center of the commercial district, where the South Chungcheong Provincial Government has its offices, which will be a great help to the new branch extending the benefits to the Construction Guarantee members in the area. Construction Guarantee has extensive global operations.
Major construction works are currently underway in various cities and towns across South Africa. Most of the contracts governing these works require the contractor to provide a construction guarantee to the owner (or employer) guaranteeing the contractor’s performance undertaken in terms of the construction contract, or principal building agreement (PBA). Construction guarantees are used to indemnify the employer against damages suffered in the event of the contractor’s default under the PBA.
Various short-term insurance companies (or guarantors) are issuing construction guarantees on behalf of contractors to provide a benefit to employers upon the occurrence of certain eventualities relating to the failure of the contractor to perform its obligations under the PBA. The Short-Term Insurance Act defines a guarantee policy as “a contract in terms of which a person, other than a bank, in return for a premium, undertakes to provide benefits if an event, contemplated in the policy as a risk relating to the failure of a person to discharge an obligation, occurs.”
In a number of recent cases, the respondents endeavored, unsuccessfully, to go behind the provisions of the guarantee with a view to finding reasons in the PBA why the guarantee should not be paid.
On appeal by the respondent, the Appeal Court upheld the principle enunciated by the High Court (albeit three years after the matter had been instituted) and confirmed that the respondent was liable under the guarantee, irrespective of the allegation that the applicant had been in default of the terms of the PBA. A further application by the respondent for special leave to appeal to the Supreme Court of Appeal failed.
In a recent decision by the Supreme Court of Appeal, the court came to the same conclusion when considering the terms of a construction guarantee similar to that issued by Federated Insurance Guarantees Brokers. In summary, the facts were that the appellant had issued a construction guarantee on behalf of a contractor in favor of the employer.
The first respondent executed an indemnity in favor of the appellant in terms of which the first respondent undertook to indemnify (and keep indemnified) the appellant from and against all loss which the appellant may sustain by reason of it issuing the construction guarantee on behalf of guarantor.