Lockdown has presented many challenges in unanticipated areas. In legal transactions, one challenge has been managing the execution of documents where it was difficult for parties to meet. The recent case of Umrish v Gill  EWHC 1513 (Ch) -although its circumstances predate lockdown - provides a useful reminder of how remote execution works to bind the parties.
Mr Gill had signed four personal guarantees in 2016 for a sum of up to £1.5m plus interest. The guarantees related to certain loan obligations of Swisspro Asset Management AG (Swisspro).
Mr Gill denied that he delivered those guarantees, delivery being a requirement for the successful execution of the guarantees.
Mr Gill also claimed that Swisspro was estopped from relying upon the guarantees, based on alleged conversations between him and Mr Ventakesh (who represented the claimant companies in the case). In those conversations, Mr Gill alleged that Mr Ventakesh had said that the guarantees should not be regarded as enforceable and would expire on 31 March 2017. The judgment involves a detailed consideration of the disputed circumstances and what the parties had agreed. However, this article focuses on the issues around the delivery of those guarantees.
Execution of the personal guarantees
The guarantees were executed in 2016.
The signature block to each guarantee (where Mr Gill signed), said “EXECUTED and DELIVERED as a DEED (the day and year first above written) by BOBBY GILL in the presence of” – beneath which was a space in which the witness’s name, signature address and occupation were required. His wife completed these fields. Once signed and witnessed, Mr Gill sent scanned copies of the signed pages to Ms Ventakesh (who was assisting Mr Ventakesh).
In 2018, Swisspro defaulted on its repayment obligations. Mr Ventakesh requested copies of the fully signed guarantees for his records.
Mr Gill’s argument around delivery focused on the fact that he claimed he was expecting everyone to sign the transaction documents at a physical all parties meeting the following week. Mr Gill’s counsel argued that the guarantees were not delivered because “greater formality was required and would be expected in the form of passing across the complete document with an original signature”.
Helpfully for modern legal practice (especially during lockdown!), that submission was held not to be realistic in the current age. The court held that (especially given he had a legal qualification) Mr Gill would have understood that by signing the guarantees and returning the signature pages, he would have intended to be immediately bound.
Considering the point, the Judge held that - in the absence of any contrary context, such as to hold the documents in escrow or pending some minor amendments - party A sending a scanned copy of his signature to party B on an identified document would indicate an intention to be bound by the terms of that document. It was held that the guarantees were delivered unconditionally.
Tim Carter, co-head of restructuring and insolvency at Stevens & Bolton LLP, comments:
This case is a useful reminder of the importance of understanding the point at which a party becomes contractually bound to another. Remote execution is a huge benefit in the world of modern legal transactions, so this case is a welcome confirmation for practitioners. However, it reiterates just how crucial it can be to have the right advice so you understand your own legal position when executing documents.