By Meg Utterback, Holly Blackwell, Michael Zhang, and Chen Yizhe[1]  King & Wood Mallesons’ Dispute Resolution group

The use of a parent company guarantee (PCG) can be a valuable tool for securing the performance obligations of a counterparty to a contract.  A PCG is often used in the construction industry where parent companies give guarantees to bolster the financial credibility of their subsidiary contractor companies.  PCGs are often used in commercial contracts for the sale of goods to insure payment obligations. PCGs are frequently offered as security by Chinese companies in transactions offshore.
Continue Reading Chinese Parent Company Guarantees—Is Your Payment Guaranteed?