Restated Facility Agreement

The Bank submitted that a guarantee for the purposes of the facility, as originally documented, had been extended to the „revised and revised“ facility agreement that came into force following a default when the global financial crisis hit. Much on the interpretation of the documents to the ease and the guarantee itself, although the case is both interesting for financiers, lawyers and guarantors, since it was a standard guarantee used by one of the big four banks and the situation is common in practice. In Manasseh, two of the three members of the Court held that the „modification and recovery“ would replace (and thus terminate) the old facility agreement to which the guarantee relates. As the guarantor of the replacement body did not give its consent, its guarantee did not extend to it. In its decision, the Court reaffirmed the recognized principle that an agreement to „modify“ an existing agreement can either modify the existing agreement without affecting its existence or denounce and replace the existing agreement. This question is determined by the objective intentions of the parties. During the duration of a facility, the borrower`s financial situation should vary. Sometimes its circumstances change to such an extent that they want the conditions of the installation documentation to be formally changed to reflect this change. For example, a borrower could ask its lenders to relax the financial pacts imposed on them if their financial situation has improved significantly and is expected to continue. Conversely, if the borrower does not perform well financially, the borrower could ask its lenders to reprogram the debt to make repayment maturities achievable. These amendments are permanent. In the decision of the Court of Appeal of Western Australia in Australia and New Zealand Banking Group Limited/.

Manasseh (March 10, 2016) was the central theme of the legal nature and the effect of an amendment and reassessment. In the case, this was a request from the Bank as part of a guarantee granted at the time of the initial grant of the facility. The result was a victory for the guarantor, who successfully argued that the guarantee granted at the beginning of the facility would not be extended to amended investment agreements that were „modified and amended“ at a later date.