The court confirmed that a valid arbitration agreement exists under the Arbitration and Conciliation Act, 1996, and granted an injunction against bank guarantee invocation due to potential irreparable harm.

JUDGMENT

(Prayer: Arbitration Original Petition (Commercial Division) filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 to appoint a sole arbitrator to adjudicate the dispute between the petitioner and the respondent and to direct the respondent to pay the cost.)

1. The issue that arises for consideration in Arb.O.P.(Com.Div) No.302 of 2023 as well as in the application O.A. No.267 of 2023 are as follows:

a) Whether the dispute raised by the applicant / petitioner is an arbitrable dispute;

b) Whether the applicant / petitioner has satisfied the legal requirements for obtaining an order of injunction from invocation of bank guarantee.

2. The brief facts leading to the filing of O.A. No.267 of 2023 and Arb.O.P.(Com.Div) No.302 of 2023:

The applicant/petitioner participated in a tender called for by the first respondent for setting up of 500 MW ISTS connected Solar Power Project on PAN India basis with Operation and Maintenance for 3 years. One of the tender requirements was that the bidder will have to furnish a bank guarantee for a value of Rs.10,94,06,000/- for every 100 MW along with the bid.

3. The applicant / petitioner as the leader of the consortium, responded to the tender and had bid for 200 MW of Solar Power Project. The other consortium partners were

(i) M/s. U-Solar Clean Energy Solutions Private Limited; and

(ii) M/s.Nitin Sai Constructions.

4. In compliance with the tender requirements, the applicant/petitioner had furnished a bank guarantee from the second respondent bank for a sum of Rs.21,88,12,000/- dated 31.12.2022 which was valid till 30.11.2023. The first respondent, by its letter dated 27.03.2023, informed the applicant/petitioner that its bid is disqualified, since the letter dated 20.06.2021 issued by M/s.Ajmer Vidyut Vitran Nigam Limited (AVVNL) is a fabricated document. The said letter was submitted by the applicant/petitioner to the first respondent as part of the tender requirements.

5. According to the applicant/petitioner, even without giving any opportunity to clarify with regard to the letter dated 20.06.2021 issued by M/s.Ajmer Vidyut Vitran Nigam Limited (AVVNL) which is the reason given by the first respondent for disqualification of the applicant''s/petitioner''s bid, the first respondent has attempted to arbitrarily and illegally invoke the bank guarantee of Rs.21,88,12,000/- given by the applicant/ petitioner along with its bid.

6. According to the applicant/petitioner, if the bank guarantee is allowed to be invoked by the first respondent, the petitioner will suffer irreparable injury. The applicant/petitioner also contends that the allegation of the first respondent that the applicant/petitioner had submitted a fabricated document, viz., the letter dated 20.06.2021 issued by M/s.Ajmer Vidyut Vitran Nigam Limited (AVVNL) is false.

7. In the aforementioned circumstances, O.A.No.267 of 2023 has been filed by the applicant/petitioner for an injunction to restrain the first respondent from invoking the bank guarantee for a sum of Rs.21,88,12,000/- pending disposal of the arbitration.

8. The applicant/petitioner also contends that there is a valid arbitration agreement between the parties to the dispute. According to the applicant/petitioner, Volume - I A, whi