Abstract
In light of the infrastructure investment by China in Africa, it is important to understand how Chinese law is similar to, or differs from South African law. This dissertation compares the position regarding demand guarantees in the construction sector between China and South Africa.
The recent Independent Guarantee Provisions of the People’s Republic of China (IGP) is especially relevant in this respect. This document, which sets out the Chinese law, differs in important respects from South African law. Determining the applicable law can therefore be crucially important.
Accordingly this dissertation seeks to investigate and clarify: (a) when a guarantee will be regarded as independent or accessory in the two legal systems; (b) the exceptions to the independence of demand guarantees in the two systems; and (c) the determination of the applicable law in cross-border demand guarantees between China and South Africa, especially in the construction context.
The most important results of the research are that the Chinese law regards a guarantee as independent when it meets any of the criteria set out in article 3 of the IGP. This results in a guarantee being regarded as independent more lightly than in South African law where the question is approached on the basis of interpreting the guarantee. Chinese law recognises more exceptions to the independence of guarantees than South African law. As a rule it will accordingly be easier to block payment of a guarantee under Chinese law than under South African law.
Finally it would seem that the private international law rules governing guarantees in China are similar to those in South Africa.
LL.M.