Guarantor liability in Polish insurance guarantee disputes

Under Polish law, a guarantor's obligation in the case of an irrevocable, unconditional, and on-first-demand insurance guarantee is independent. This means the guarantor is responsible for their own debt, which is defined by the terms of the guarantee rather than the underlying contract.

Recent rulings, including a Supreme Court decision from April 10, 2024, confirm that guarantors should not investigate whether a contractor actually caused a delay, whether contractual penalties were correctly calculated, or if a contract termination was effective. These issues belong to the primary relationship between the client and the beneficiary.

A guarantor may only refuse payment if the demand fails to meet the formal conditions specified in the guarantee or in exceptional cases involving an obvious abuse of the guarantee.