The Bank Guarantee was unconditional and the Tribunal exceeded its jurisdiction by restraining its invocation.

JUDGMENT

Jyoti Singh, J. - The present appeal has been filed by the appellant under Section 37(2)(b) of the Arbitration & Conciliation Act, 1996 ("Act") challenging the order dated 16.08.2019 passed by the Arbitral Tribunal on an application of the respondent herein under Section 17 of the Act whereby the appellant has been restrained from encashing a Bank Guarantee ("BG") No. 0372BG002614 dated 13.11.2014 for a sum of Rs. 2,37,14,150/- till the pendency of the arbitration proceedings.

2. The brief facts which need to be captured herein for the purpose of adjudication of this appeal are that the respondent was awarded a Contract for "Ash Dyke Package for Muzaffarpur Thermal Power Project, Stage - II" by the appellant vide Letter of Award ("LOA") dated 23.09.2014. The detailed scope of work was provided in the Technical Specifications, Special Conditions of Contract and other documents of the formal Contract executed on 11.12.2014.

3. The entire project was to be completed within a period of 24 months from the date of issue of LOA. As per the appellant, the respondent did not commence work even after a period of more than two months from the date of LOA and the appellant vide letter dated 25.10.2014 cautioned the respondent that the time schedule of the work was very critical. It is the case of the appellant that the respondent kept on delaying the construction at the project site on one pretext or the other and several letters in this regard were sent to the respondent. The respondent in order to further delay the completion of the Project kept on writing letters to the appellant levelling false allegations of delay on the part of the appellant. As averred in the appeal, a lot of correspondence was exchanged between the parties on the aspect of delay in completion of the Project.

4. It is the further case of the appellant that the respondent sent a letter dated 30.09.2015 raising hypothetical claims of compensation on account of idling, manpower mobilization, etc. at the Project site. The appellant refuted all the allegations vide a letter dated 10.11.2015 and subsequently advised the respondent to remobilize men and machinery and start the work. The appellant vide letter dated 17.06.2016 specifically informed the respondent that a work of only Rs. 4 Crore value, out of a total Contract value of Rs. 118.57 Crore had been carried out till that time. A number of reminder letters were sent thereafter requesting the respondent to expedite the work, at site.

5. The respondent vide its letter dated 24.09.2018 submitted its completion programme till December 2019. The appellant wrote two letters dated 26.09.2018 and 29.01.2019 advising the respondent to augment its resources and carry out the work of Lagoon-II. The case of the appellant is that to the utter shock of the appellant instead of completing the work, the respondent invoked the Arbitration Agreement vide its letter dated 05.02.2019. The appellant, however, continued to write letters to the respondent to complete the work which had been completely stopped since 20.03.2019. On 19.04.2019, further communication was sent that the respondent must perform its respective obligations notwithstanding any reference of the disputes to the Resolution Mechanism.

6. The respondent, however issued a letter dated 22.04.2019 informing that the Contract stood closed on 31.03.2019. This was without any legal notice or a valid reason. As the chronology goes, the Arbitral Tribunal was thereafter constituted and held its first procedural hearing on 27.04.2019. The matter was listed for further proceedings on 10.08.2019.

7. It is averred that left with no option, the appellant vide letter dated 31.05.2019 advised the respondent to take remedial action for resumption and completion of the entire work within seven days from the receipt of notice, failing which under clause No. 51.3.1(a) the appellant would have no other option but to terminate the Contract and execute the balance work at the risk an