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DELHI HIGH COURT
NEENA BANSAL KRISHNA
Satish Chand Rajesh Kumar Pvt. Ltd. – Appellant
Versus
New Delhi Municipal Council – Respondent
| Table of Content |
|---|
| 1. interim relief in arbitration cases. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7) |
| 2. respondents deny petitioner's claims. (Para 8 , 9 , 10 , 11) |
| 3. hearing of interim submissions. (Para 12) |
| 4. continuation of interim order. (Para 13) |
JUDGMENT
Neena Bansal Krishna, J. (Oral)--A petition under Section 9 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as the Act, 1996) read with Section 151 Code of Civil Procedure,1908 has been filed for grant of interim order to restrain the respondents from encashing the Performance Bank Guarantee.
2. It is submitted in the petition that the respondent had floated a tender for the work of redevelopment of Bapu Samaj Sewa Kendra, Panchkuian Road, New Delhi. The petitioner being the lowest bidder was awarded the contract which was accepted vide letter dated 07th February, 2018 by NDMC. The date of start of work was 22nd February, 2018 and the date of completion was 21st August, 2019. The stipulated period of work was eighteen months to be reckoned from 15th day of the issue of letter of Acceptance. The value of the work awarded was Rs.24,66,00,633/-. Petitioner in terms of paragraph 2 of Acceptance letter dated 07th February
An interim order can restrain the encashment of bank guarantees pending arbitration if there is a risk of irreparable harm to the aggrieved party.
Unconditional bank guarantees can only be interdicted on grounds of egregious fraud and special equities.
Unconditional bank guarantees can only be interdict on grounds of egregious fraud or special equities; mere disputes about contract performance are insufficient for such a relief.
The main legal point established in the judgment is the limited scope of interference in Arbitral Awards and the importance of complying with contractual conditions, such as the submission of a No De....
The court upheld the arbitral award directing the release of the performance bank guarantee, finding all contractual requirements were satisfied and counter claims were untimely.
The court ruled that bank guarantees must be honored regardless of existing disputes, affirming their unconditional nature and limiting judicial intervention to cases involving fraud or irretrievable....
The court found that without an immediate intent to invoke the bank guarantee, the petition filed was premature and thus dismissed.
The court upheld the right to arbitration as per the terms of the contract, emphasizing the importance of adherence to contractual dispute resolution mechanisms.
The invocation of bank guarantees must establish loss due to breach; disputes must be arbitrated as per contract.
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