Gammon -OJSC Mosmetrostroy JV, represented by its Authorised Signatory vs Chennai Metro Rail Limited represented by tis Chief General Manager (Construction)

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2015 Supreme(Mad) 2839

IN THE HIGH COURT OF JUDICATURE AT MADRAS
K.RAVICHANDRABAABU, J.
M/s.Gammon -OJSC Mosmetrostroy JV, represented by its Authorised Signatory and Ors. – Petitioner
Vs.
M/s. Chennai Metro Rail Limited represented by tis Chief General Manager (Construction) and Ors. – Respondents
O.A.Nos.731, 732 and 734 of 2015 and A.Nos.4685 and 4686 of 2015 and A.Nos.5258 & 5259 of 2015
Decided On : 08.09.2015

Advocates:
Advocate Appeared:
For Appellant : Mr.P.S.Raman, Senior Counsel, Mr.T.R.Rajagopalan, Senior Counsel, Mr.Sathish Parasaran for M/s.P.J.Rishikesh, M/s.Sanjay Ramaswami
For Respondents: Mr.R.Thiyagarajan, Senior Counsel for Jayesh B.Dolia, Mr.A.L.Somayaji, Senior Counsel for Mr.Abdul Saleem, M/s.Shivakumar & Suresh for ICICI Bank.

Headnote:Contract Act, 1872 Section 2 Arbitration and Conciliation Act, 1996 Sections 2 and 7 Bank guarantee - Invoking of injunction- Application filed under Section 9(ii)(d) of the Arbitration and Conciliation Act,1996 to pass an order of interim injunction restraining the respondent from invoking or encashing or receiving any amounts under Bank Guarantee Nos-sec 9 injucted the Gammon on maintaining the applications individually-clause(19), clause 19.7,clause19.11 all clauses are important to consider to decide the existence of joint venture, even if one party leaves-existence of clauses indicates respondent is not correct and the case was given in favour of applicant and thus respondent
Contentions cannot be sustained-section 9 of the arbitration and conciliation in respect of bank guarantee-existence of fraud and irretrievable need not to co-exist for injunction, existence of any one the court considers the same-. Arbitration and Conciliation Act, 1996 Section 9 Termination of contract-contact’s stay has already been terminated-court does not grant the stay

ORDER :

O.A.Nos.731, 732 and 734 of 2015 are filed to pass an order of interim injunction restraining the Chennai Metro Rail Limited from invoking or negotiating or receiving any amounts under the Bank guarantee referred to in the respective applications from the respective second respondent Bank, pending disposal of the arbitration proceedings.

2. Application Nos.4685 & 4686 of 2015 are filed to stay the operation of the order of termination dated 13.07.2015 passed by the Chennai Metro Rail Limited/Employer with respect to the contract agreement dated 18.03.2011 pertaining to Contract UAA-02 and Contract UAA-03 respectively until disposal of arbitral proceedings.

3. The applicant in all these applications are one and the same viz., M/s. GAMMON-OJSC Mosmetrostroy JV. Since the issues involved in all these applications are common, the facts and circumstances as narrated in all these applications are also common, they are extracted hereunder as follows:

3(i). The Chennai Metro Rail Limited (hereinafter called CMRL) called for bids for works related to Contract UAA-02, design and construction of Underground Stations of Government Estate, LIC Building and Thousand Lights and Associated Tunnels relating to Package-II and Contract UAA-03, Underground Stations at Gemini, Teynampet, Chamiers Road, Saidapet, and Associated Tunnels relating to Package-III.

3(ii) M/s. GAMMON India Limited (hereinafter called as GAMMON) and M/s. OJSC Mosmetrostroy (hereinafter called as MMS) entered into a Joint Venture, namely M/s. GAMMON OJSC Mosmetrostroy JV, for executing the said works. The said Joint Venture Company is the applicant herein. The Joint Venture Agreement was approved by the CMRL. The applicant participated in the bids and emerged successfully. Ultimately, the parties namely, CMRL and JV entered into a contract dated 18.03.2011. The said Contract is hereinafter called as 'Contract Agreement'. Pursuant to the Contract Agreement , the applicant furnished Bank Guarantees that are alive as on today, as follows:

Bank Guarantee No.ICCI Bank	Value of the BG in Rs.	Date of Expiry
0393BG00071211/ 0393BG00071011	68,86,45,320.00	30.04.2017

No.(Bank of Baroda)	Value of the BG in Rs.	Date of Expiry
291011GPER014911	9,32,88,100	30.06.2017

Bank Guarantee No.ICCI Bank	Value of the BG in Rs.	Date of Expiry
039BG00071111/ 039BG00070911	62,20,62,230	31.07.2017
0393BG00068314	2,00,00,000	01.12.2016
0393BG00068014	2,00,00,000	01.12.2016
0393BG00072611	31,10,31,115	30.06.2017

3(iii). The schedule duration for completion of the project was originally fixed as 1521 days from the date of commencement, which is on 02.04.2011.

The applicant had mobilised all the required resources and were progressing with the work. However, during the execution of the said works, there were several delays and hindrance that the applicant Company had to face which are as follows:

a. Delay in handing over of work site

b. Delay in approval of traffic management plan

c. Delay in utility diversion works

d. Delay in getting permission for barricading from traffic department.

e. Delays due to permission for work in stages by the Traffic Department.

f. Delay in pre-condition survey.

g. Delay in approval of designs.

h. Delay in approval of lead designer.

i. Delays/ additional time needed due to change in geology.

j. Delays on account of re-designing necessitated due to change in alignment.

k. Delays due to withdrawal of consent to M/s. AGCF

l. Delays on account of Extra/ Additional items of work in utility diversions.