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Contra Bank Guarantee Template for Malaysia

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Key Requirements PROMPT example:

Contra Bank Guarantee

"I need a Contra Bank Guarantee for a Malaysian construction project worth RM 5 million, where HSBC Malaysia will issue a guarantee against a counter-guarantee from Standard Chartered Singapore, with the guarantee period running until March 2025."

Document background
The Contra Bank Guarantee is a specialized financial instrument used in Malaysian banking practice when two parties require mutual guarantees, often in international trade or large commercial transactions. This document type is particularly relevant when a local bank needs to issue a guarantee in favor of an overseas beneficiary, backed by a corresponding guarantee from a foreign bank, or vice versa. The Contra Bank Guarantee establishes the terms, conditions, and mechanisms for both guarantees, ensuring compliance with Malaysian banking regulations and Bank Negara Malaysia requirements. It's commonly used in international contracts, construction projects, and trade finance where parties seek reciprocal security arrangements. The document includes detailed provisions for activation, demand procedures, payment terms, and enforcement mechanisms, all structured within the Malaysian legal framework.
Suggested Sections

1. Parties: Identifies all parties involved - the issuing bank, the beneficiary, and the principal

2. Background: Explains the context of the contra guarantee and references the original guarantee against which this is being issued

3. Definitions: Defines key terms used throughout the guarantee document

4. Guarantee Amount and Currency: Specifies the maximum amount of the guarantee and the currency

5. Nature and Scope of Guarantee: Details the specific obligations being guaranteed and the relationship with the original guarantee

6. Duration and Validity: Specifies the effective date, expiry date, and any automatic extension conditions

7. Conditions for Demand: Sets out the circumstances and procedures under which a demand can be made

8. Payment Terms: Specifies how and when payment must be made upon valid demand

9. Reduction and Release: Conditions under which the guarantee amount may be reduced or the guarantee released

10. Assignment and Transfer: Provisions regarding whether the guarantee can be assigned or transferred

11. Governing Law and Jurisdiction: Specifies Malaysian law as governing law and defines jurisdiction for disputes

Optional Sections

1. Counter-Indemnity: Required when there's a separate counter-indemnity arrangement from the principal

2. Tax Provisions: Include when there are specific tax implications or withholding requirements

3. Force Majeure: Optional clause defining circumstances beyond control that might affect the guarantee

4. Language: Required only if the document might be translated or used in multiple languages

5. Electronic Presentation: Include when electronic presentation of documents is permitted

6. Anti-Money Laundering Compliance: Required for high-value guarantees or when dealing with certain jurisdictions

7. Multiple Banking Facilities: Include when the guarantee is part of a larger banking facility arrangement

Suggested Schedules

1. Schedule 1 - Form of Demand: Standard format for making a demand under the guarantee

2. Schedule 2 - Original Guarantee Details: Copy or details of the original guarantee against which this contra guarantee is issued

3. Schedule 3 - Fee Schedule: Details of bank charges, fees, and commission applicable

4. Appendix A - Supporting Documents: List of required supporting documents for guarantee activation or demand

5. Appendix B - Authorized Signatories: List of authorized signatories and specimen signatures if required

6. Appendix C - Communication Details: Contact details and communication protocols for all parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions






























Clauses




























Relevant Industries

Banking and Financial Services

International Trade

Construction and Infrastructure

Manufacturing

Energy and Utilities

Transportation and Logistics

Real Estate Development

Telecommunications

Mining and Resources

Government and Public Sector

Relevant Teams

Legal

Finance

Treasury

Trade Finance

Corporate Banking

Risk Management

Compliance

International Banking

Credit Administration

Operations

Relevant Roles

Trade Finance Manager

Corporate Banking Officer

International Banking Manager

Credit Risk Officer

Treasury Manager

Financial Controller

Chief Financial Officer

Legal Counsel

Compliance Officer

Project Finance Manager

Bank Guarantee Officer

Commercial Banking Director

Trade Operations Manager

Documentary Credits Manager

Banking Relationship Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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