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IN THE HIGH COURT OF DELHI AT NEW DELHI
REKHA PALLI, AJAY DIGPAUL, JJ.
Velocity Enterprises - Appellant
Versus
Jaiprakash Associates Ltd. & Anr. - Respondents
FAO (COMM) 7 of 2025, CM APPL. 1697 of 2025 –Stay & CM APPL.1698 of 2025
Decided on : 13-01-2025
ORDER :
1. The present appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 (hereinafter “the Act”) seeks to assail the order dated 24.12.2024 passed by the learned District Judge (Commercial Court-03), Patiala House Courts, New Delhi, in OMP(I)(COMM.) 311/2024. Vide the impugned order the learned Trial Court has dismissed the petition preferred by the appellant under Section 9 of the Act, seeking an interim order restraining the respondents from invoking the Advance Bank Guarantee furnished by the appellant, by holding that the petition itself was not maintainable. The learned Trial Court, consequently, granted liberty to the appellant to approach the National Company Law Tribunal (NCLT) for seeking relief(s) as sought in the said petition.
2. After some arguments, learned counsel for the appellant submits that instead of pressing the present appeal, the appellant would invoke arbitration and therefore, prays that it may be clarified that the impugned order will not come in the way of the appellant from invoking arbitration as per the arbitration clause contained in the contract entered into between the parties.
3. Learned counsel for the respondents, who appear on advance notice, have no objection to this limited request.
4. Further, taking into account that the appellant intends to invoke arbitration, learned counsel for the Resolution Professional of respondent no.1 assures the Court that since the Bank Guarantee is, in any event, valid till 31.03.2025, the said respondent, without prejudice to its rights and contentions, will not invoke the same till 19.01.2025.
5. In the light of the aforesaid, the appeal is dismissed as not pressed making it clear that the impugned order will not come in the way of the appellant invoking arbitration as per law. The aforesaid assurance given by respondent no.1 is taken on record, making it clear that the respondent no.1 will stand restrained from invoking the Bank Guarantee till 19.01.2025, whereafter, it will be open for the said respondent to take action in respect of the same as per law.
6. The appeal alongwith pending applications is, accordingly, dismissed as not pressed.
The dismissal of a petition for interim relief does not prevent a party from invoking arbitration as per the contract terms.
Writ petition closed without prejudice upon arbitration invocation; interim relief extended conditionally.
The court found that without an immediate intent to invoke the bank guarantee, the petition filed was premature and thus dismissed.
A party must pursue counter-claims and comply with procedural requirements for securing claims; failure to do so can render subsequent appeals infructuous.
Failure to comply with statutory obligations under the Arbitration and Conciliation Act, 1996 results in the expiration of interim orders, necessitating the appointment of an Arbitrator for dispute r....
Parties in arbitration should initially seek interim measures from the arbitrator, especially when proceedings are underway under an established arbitration framework.
The invocation of bank guarantees must establish loss due to breach; disputes must be arbitrated as per contract.
Arbitration - Interim measures - Once Arbitral Tribunal directed return of entire Bank Guarantee, and Bank has also written to appellant, intimating that Bank Guarantee stood discharged in full in fa....
Bank Guarantee – Courts should be reluctant in granting injunction against invocation of Bank Guarantee, except in cases of established fraud, or where irretrievable injury is likely to be caused to ....
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