JUDGMENT :

(Moushumi Bhattacharya, J.)

1. The issue which falls for consideration in the present case is the ground on which invocation of a bank guarantee can be restrained.

2. By an order dated 10th May, 2021 a learned Single Judge restrained the respondent No. 2 from making any payment under a bank guarantee invoked by the respondent No. 1. The said order was modified on 18th May, 2021 by another Learned Judge confirming the interim order of injunction and further restraining the respondent No. 1 from encashing the bank guarantee. The letter of invocation was stayed and the petitioner was given the liberty of producing a copy of the order before the respondent No. 2 in their seats at Kolkata and Dhaka. The petitioner and the respondent No. 2 have filed their respective affidavits thereafter. The respondent No. 1 has however not contested in the proceedings and has not challenged or responded to the orders of injunction by way of affidavit or otherwise. These orders were passed in the present application filed by the petitioner under Section 9 of The Arbitration and Conciliation Act, 1996.

3. A brief background of the facts is necessary for a better understanding of what brought the petitioner to this court by way of the present Arbitration Petition.

A brief factual background:

4. The petitioner was awarded a contract for supply of conductor and related accessories to the respondent No. 1 pursuant to a global tender floated by the latter. The contract dated 15th November, 2015 was a Carriage and Insurance Paid (CIP) contract for a price of USD 830,290 + BDT 371,000. The petitioner was required to furnish a performance security for an amount of USD 83,505 for a period of 24 months under the relevant clause of the General Conditions of Contract (GCC). The contract was governed by the GCC and the Special Conditions of Contract (SCC) which also provided for the mode of payment to be made by the respondent No. 1 to the petitioner. The petitioner submitted the performance security in the form of a bank guarantee dated 5th November, 2015. The petitioner, being a constituent of Citibank NA, Kolkata applied for the bank guarantee to be issued in favour of the respondent No. 1 whereupon Citibank NA, Kolkata issued a stand-by letter of credit in favour of the Citibank NA, Bangladesh at Dhaka. Citibank, NA Dhaka issued a performance security in the form of a bank guarantee based on the stand-by letter of credit.

5. The petitioner supplied the entire material under the contract by February 2018 and the respondent No. 1 prepared Receiving Reports containing the details of the goods dispatched upon receipt of the goods. The warranty in respect of the goods shipped and supplied by the petitioner to the respondent No. 1 was to remain valid for 12 months after delivery of the goods and acceptance of the same at the final destination under Clause 28.3 of the GCC. The warranty expired on 24th February, 2019.

6. On 23rd January, 2020, the respondent No. 1 alleged short-supply of goods and demanded a sum of USD 19,389.08 and BDT 4,21,374.19 from the petitioner which was followed by another demand on 7th April, 2021 on account of the alleged short-supply, packing deviation and CD-VAT. The petitioner paid a sum of USD 15,622 to the respondent under cover of a letter dated 28th April, 2021 with a request for release of the bank guarantee. The respondent No. 1 issued a letter of invocation dated 5th May, 2021 and requested the Citibank NA, Dhaka to encash the bank guarantee. The petitioner had renewed the bank guarantee and kept it alive on account of 10% of the contract price having been retained by the respondent No. 1 under the relevant clause of the GCC.

Contentions of the Respondent No. 2 Citibank NA:

7. The primary contention of Mr. S.N. Mookherjee, learned senior counsel and Mr. K. Thakker, learned counsel appearing for Citibank NA, is that this court lacks territorial jurisdiction to entertain the present application.

8. According to counsel, th