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DELHI HIGH COURT
C.HARI SHANKAR
Ananta Procon Pvt. Ltd. – Appellant
Versus
National Highways Authority of India – Respondent
| Table of Content |
|---|
| 1. petition seeks interim order under arbitration act (Para 1 , 1) |
| 2. respondent's communication indicates no urgency (Para 2 , 3) |
| 3. court disposes petition, allows future re-approach (Para 4) |
1. The prayer clause in this petition, under Section 9 of the Arbitration and Conciliation Act, 1996, read as under:
"It is therefore, humbly prayed that this Hon'ble Court may be pleased to.-
a. Pass an ex-parte ad interim order and confirm the same upon return of notice restraining the Respondent from raising any taking any precipitative or any other coercive action against the Petitioner, till the resolution of the disputes by arbitration;
b. Pass an ex-parte ad interim order and confirm the same upon return of notice restraining the Respondent from invoking the Performance Bank Guarantee dated 06.07.2019 issued by Yes Bank having reference number 007BG0719187001 for a sum of Rs.1.5145 Crore (Rupees One Crore Fifty One Lacs and Forty Five Thousand only) valid up to 30.09.2024, till the resolution of the disputes by arbitration;
c. Pass any other further orders as this Hon'ble Court may deem fit and appropriate in the facts and circumstances of the present case.
The court found that without an immediate intent to invoke the bank guarantee, the petition filed was premature and thus dismissed.
An interim order can restrain the encashment of bank guarantees pending arbitration if there is a risk of irreparable harm to the aggrieved party.
The dismissal of a petition for interim relief does not prevent a party from invoking arbitration as per the contract terms.
The invocation of bank guarantees must adhere strictly to the contractual terms; courts may intervene to prevent encashment if it risks undermining arbitration.
Parties in arbitration should initially seek interim measures from the arbitrator, especially when proceedings are underway under an established arbitration framework.
Writ petition closed without prejudice upon arbitration invocation; interim relief extended conditionally.
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.
The invocation of a bank guarantee must strictly adhere to its stipulated terms, particularly the requirement to assert loss or damage; otherwise, it may be restrained.
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