Arun Mishra, J.

( 1. ) This Arbitration Appeal has been filed under section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act of 1996) assailing the order passed by the Court of First Additional Judge to the Court of First Additional District Judge, Narsinghpur in Misc. Arbitration Case No. 9/2008.

( 2. ) M/s B.C.Biyani Projects Pvt. Ltd filed an application under section 9 of the Act of 1996 in the backdrop of the fact that M/s B.C.Biyani Projects Pvt. Ltd entered into an agreement with Ssangyong Engineering Constructions Company Ltd. for providing all adequate labour plant, machinery, construction equipment and all other resources-financial and administrative etc required in order to perform the work order under the project signed between Ssangyong Engineering Constructions Company Ltd. and National Highways. The work in question which was to be performed, was given to Ssangyong Engineering Constructions Company Ltd by National Highway Authorities of India (for short NHAI) for construction of four laning of Jhansi-Lakhanadon section Km.351.0 to Km.405.7 of NH-26 in the State of Madhya Pradesh on 12.4.2006. The agreement of subcontract between appellant and Ssangyong Engineering Constructions Company Ltd was entered into on 2.8.2006, period of completion of the work was 30 months. It is not in dispute that in the agreement of subcontract, clause 27 provides for arbitration in case any dispute arises between the parties.

( 3. ) It was submitted by M/s B.C.Biyani Project Pvt. Ltd in the application filed under section 9 of the Act of 1996 that the appellant company have expertise in constructing and completing the work assigned to it by Ssangyong Engineering Constructions Company Ltd under package No. ADB-II/C-9 of NHAI and the appellant company mobilized all resources including the financial, administrative, manpower and machineries as were required to undertake the work in amicable manner as detailed in the agreement and schedule of work. The appellant had also furnished performance guarantee in the form of irrevocable and unconditional Bank Guarantee @ 1% of the contract price of Rs. 203,50,43,148/-. The Bank Guarantee was furnished for a sum of Rs. 2 Crores with UCO Bank, through Branch Manager Bhusawal District Jalgaon. It was also submitted that it was necessary for Ssangyong Engineering Constructions Company Ltd to obtain prior permission of NHAI, however, the appellant was kept in dark and was informed that permission has already been obtained. Appellant performed the work. It appears that employing of an agency under subcontract was objected to by NHAI. The NHAI warned Ssangyong Engineering Constructions Company Ltd to discontinue the subcontract otherwise main contract was threatened to be terminated. Thus fraud was played with the appellant. Appellant performed the work of more than Rs. Five Crores, payment of which was received by the appellant. The plight of the appellant did not stop up to the termination of agreement of subcontract by Ssangyong Engineering Constructions Company Ltd on 2.8.2006. Due to termination of agreement dated 24.4.2008 effort was being made to invoke the Bank Guarantee. There was non cooperation of Ssangyong Engineering Constructions Company Ltd in referring the matter for Arbitration as per clause 27 of the agreement. Appellant would like to invoke the arbitration clause and move to the court for appointment of Arbitrator under section 11 of the Act of 1996. Prayer was made in the application to restrain Ssangyong Engineering Constructions Company Ltd from encashment of Bank Guarantee furnished by the appellant to the bank in the interest of justice.

( 4. ) Application was resisted by Ssangyong Engineering Constructions Company Ltd. It was submitted that there is no arbitration clause in Bank Guarantee dated 23.5.2007 and the Bank Guarantee being a separate contract is governed by the terms and conditions. Its an unconditional Bank Guarantee and there