Settlement and Court Orders preventing the liquidation of performance guarantees 

Loizides & Associates LLC is pleased to announce that our law firm has successfully represented a client in a complex construction dispute involving a multimillion-euro project in Limassol Cyprus.

The project in question is a prominent luxury tower.

The performance guarantees almost Euro 2.000.000 were issued under the provisions of Ε1 (Α) – Form of Main Contract for Building Projects (With Quantities) and Υ1- Form of Sub-Contract (With Quantities) for Nominated Sub-Contractors in Building or in Civil Engineering Projects.

Following the termination of the main contract, the contractor obtained an exparte court order to prevent the project owner from disbursing or liquidating performance guarantees amounting to several million euros.

In a notable development, one of the main subcontractors, a distinguished mechanical contractor, was instructed by the main contractor to renew its performance guarantees despite the termination of both the main contract and the subcontract. The above instructions of the main contractor were in total breach of the express provisions of the subcontract agreement. However, failure of our clients to comply would have resulted in the liquidation of their guarantees.

Loizides & Associates LLC successfully represented the subcontractor, in relation to legal advice and representation before DistrictCourt of Limassol in the legal proceedings and the ex-parte application prohibiting the main contractor from disbursing or liquidating the subcontractor’s performance guarantees.

In light of the above, yesterday the dispute between the main contractor and the sub-contractor has been settled without any further renewal of our clients performance guarantees.