Obligation to obtain extension of Refund Guarantee within a reasonable time
Under a shipbuilding contract, repayment of the contract price paid by the Buyers was secured by a Refund Guarantee issued by the Seller’s Bank. The Refund Guarantee was to remain in force until the delivery and acceptance of the Vessel… or until June 30 th 2010, whichever occurs earliest. In the event that either Party initiated Arbitration proceedings before delivery of the Vessel, the validity of the guarantee was extended to 60 calendar days after issuance of the final arbitration award. Pursuant to an Addendum, the Parties agreed to extend the delivery date and the Sellers undertook to extend the validity of the Refund Guarantee until 31 May 2012. On 28 June 2010, two days before the expiry date of the Refund Guarantee, the Buyers terminated the shipbuilding contract on the grounds that the Sellers have failed to obtain the extension of the Refund Guarantee and are therefore in repudiatory breach of the Shipbuilding Contract. On 29 th June 2010, the Buyers served