CIMC Raffles (Singapore Ltd & Anr v Schahin Holdings SA  EWCA Civ 644
Well–drawn guarantees contain comprehensive “anti-discharge” provisions, designed to prevent a guarantor being discharged from liability by any post-guarantee amendments to the prinicipal transaction or extensions of time to pay or other indulgence given to the principal debtor without the guarantor’s knowledge or consent. This right to be discharged is generally known as the rule in Holme v Brunskill (1878) 3 QBD 495) after the leading case that set out the mature principle. Banks and others have continuously refined these “anti-discharge” provisions to try to make sure that the rule in Holme v Brunskill is stripped of its effect.
Tucked away in an obscure corner of the arcane and complex law of principal and surety is the doctrine of “purview of the guarantee”. This doctrine originates in academic commentary, but was taken up by the House of Lords in Trade Indemnity Company Limited v. Workington Harbour and Dock Board  AC 1 where the dispute concerned the effect of alterations to a dock building contract on the guarantor’s liability and the guarantee included an “anti-discharge” cause. Lord Atkin said (at 21):
“The words “any arrangement…for any alteration in or to the said works or the contract” are very wide. Probably they would have to be cut down so as not to include such changes as have been suggested as substituting a cathedral for a dock, or the construction of a dock elsewhere, or possibly such an enlargement of the works as would double the financial liability. An author of great authority [Rowlatt on Principal and Surety, 2nd ed. (1926), p. 118], happily still with us, suggests that such words only relate to alterations “within the general purview of the original guarantee”.”
It was not until 2006 in Triodos Bank NV v. Dobbs  EWCA Civ 630 that the doctrine got the full blessing of the Court of Appeal after detailed analysis that had hitherto been lacking. However, the case has been criticised because it was the subject of different reasoning by different judges and is difficult to apply in practice. There are no clear guidelines to help determine whether or not a variation or alteration goes beyond the general purview of the original guarantee.
In the CIMC case the Court of Appeal conducted a further review in an appeal against summary judgment that indicates that if there is a good arguable case that amendments to the principal contract after the giving of the guarantee have altered the nature of the obligation guaranteed to such an extent as to have changed the nature of the obligation beyond the reasonable contemplation of the parties at the time the guarantee was given the matter will need to go to trial. As Sir Bernard Rix said at :
“Ultimately, the various questions of construction which arise on both appeal and cross-appeal, or the closely allied question of the purview of the guarantee, will have to be considered as a whole, in the light of the evidence which will be forthcoming at trial. Moreover, this is not a case where the issues of law which arise on the appeal are straightforward: each of them presents difficulties of analysis, and the jurisprudence is somewhat opaque.”
Sadly, however, the jurisprudence does, indeed, remain opaque. Sir Bernard identified three possibilities for the purview doctrine:
In addition Sir Bernard considered the effect of a term making the guarantor a “primary obligor”. His conclusion hardly assists -:
“In sum, the role of primary obligor language in a guarantee is complex and ultimately dependent, as it would seem, on the language and nature of the particular guarantee concerned. None of the cases deal with the purview doctrine.
I would nevertheless accept, for the sake of argument, that section 1(b) of the guarantee (rather than section 1(c)) appears on the face of it to be a powerful clause for the purpose of excluding the Holme v. Brunskill doctrine. The question remains, however, whether it also excludes the purview doctrine, in any of its manifestations. There is no authority which provides any guidance in that respect. In principle, it is at least reasonably arguable that it does not.”
Relevant link: profile of Richard Perkoff