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SANJEEV NARULA
Canara Bank – Appellant
Versus
Helm Dungemittel Gmbh – Respondent
JUDGMENT
Sanjeev Narula, J. - The present petition under Section 9 of the arbitration and Conciliation act, 1996 [hereinafter, 'the act'] has been filed seeking interim measures for securing the amount in dispute of 38 crores, pending appointment of the arbitral tribunal. Canara Bank - the Petitioner - also seeks continuation of orders of restrain against withdrawal of bank guarantee of Rs. 15 Crores, furnished by Respondent No. 1 in O.M.P. (I.) (COMM.) 318/2018.
2. Briefly stated, the background of the case is as follows:
2.1. Canara Bank issued a performance bank guarantee [hereinafter, 'PBG'] of USD 67,86,450/- for securing transaction between Respondent No. 1 [hereinafter, 'Helm'] and Respondent No. 2 [hereinafter, 'STC']. The exposure was safeguarded by way of a counter guarantee of/by HypoVereins Bank [hereinafter, 'German Bank'].
2.2. Upon invocation of the PBG, Canara Bank paid the amount to STC [the beneficiary], and parallelly invoked the counter-guarantee issued by the German Bank. However, German Bank failed to make good its obligation to pay Canara Bank. Later on, in proceedings before this court, the amount of counter guarantee was deposited in court by Helm - which by t
The court's decision emphasized the principles guiding the grant of interim measures under Section 9 of the arbitration and Conciliation act, 1996, and the importance of establishing a prima facie ca....
Interim measures under Section 9 of the Arbitration and Conciliation Act require establishing a prima facie case, balance of convenience, and irreparable loss; court granted interim protection by ret....
The court emphasized the importance of the arbitral tribunal providing reasons for its decisions, especially regarding unadjudicated claims for interest arising from wrongful invocation of guarantees....
The main legal point established in the judgment is the limited scope of judicial review under Sections 34 and 37 of the Arbitration Act, emphasizing that the court cannot modify an award under Secti....
Court affirmed the importance of maintaining a bank guarantee during pending arbitration proceedings while allowing parties to explore their legal remedies regarding claims.
Bank guarantees are independent contracts and can only be restrained from invocation in cases of fraud or special equities, which were not established in this case.
The main legal point established in the judgment is that a bank guarantee cannot be invoked in the absence of default on the part of the respondent company, and the interim relief is not maintainable....
Invocation of an unconditional bank guarantee cannot be restrained unless fraud or irretrievable injustice is established; the nature of bank guarantees is independent and absolute.
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