International Performance Bond: Repayment Obtained Without Litigation

The Case

An Italian company operating in the steel industry and specialized in the building of industrial plants had signed an agreement with an Egyptian company for the project and the installation of a rolling mill. The contract required the Italian supplier to issue a bank guarantee (performance bond) of a significant amount, valid for 12 months following the successful completion of the plant’s performance test. However, the plant was never installed due to the direct liability of the foreign client, creating the concrete risk that the guarantee would be enforced despite the Italian client’s breach.

Applied Actions

The agreement was thoroughly analyzed, with the identification of the legal scope to challenge the enforcement of the bond. So an international negotiation was undertaken through Italian lawyers for the client and Egyptian lawyers appointed by the client. A solid technical and legal argument was constructed to demonstrate the foreign client’s liability and the ineffectiveness of the condition to activate the guarantee.

The Result

Thanks to this targeted strategy, the client obtained the voluntary and definitive release of the €500,000 performance bond, without any enforcement and international litigations. This ensured full client protection, with significant cost savings and no reputational risks.

Why the Case Is Significant

This case demonstrates the value of assisted international negotiation, even in the absence of explicit contractual clauses in favor of the client. It highlights the importance of an integrated approach between Italian and foreign lawyers, capable of producing concrete and rapid results. This case represents a model of legal protection for Italian companies involved in complex international agreements, especially in the industrial sector. In a critical international context, the Law Firm of Avv. Tanya Zanotti has confirmed how legal preparation, targeted strategy and negotiation can make the difference in the protection of client’s interests.

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