ORDER :

The applicant herein is SEW Infrastructure Limited (SEW), a company incorporated under the laws of India and having its registered office at Begumpet, Hyderabad; the respondent No.1 is the Ethiopian Roadways Authority (ERA), an entity of the Federal Democratic Republic of Ethiopia; the respondent No.2 is the Bank of Abyssinia (BOA) and the respondent No.3 is the State Bank of India (SBI).

Background facts:

2. In the bidding process floated by ERA, a contract for construction of roads under Mombassa – Nairobi – Addis Ababa Corridor Phase III Project: Hawassa – Ageremarian Section, Lot 1 : Hawassa – Chuko in Ethiopia was awarded to SEW and contract agreement dated 30.11.2012 was entered into by the parties. In terms of the contract BOA has issued four Bank Guarantees (BGs) to ERA on the basis counter BGs issued by SBI on behalf of SEW. Out of four BGs, two BGs are Advance Bank Guarantees (ABG), which are encashable on the condition of SEW applying the funds received for the project to purposes, which are outside the scope of the roads project. The other two BGs are Performance Bank Guarantees (PBG), which are encashable upon declaring the contractor/SEW being in default under the contract.

3. Disputes arose between SEW and ERA, as, admittedly, there was delay in execution of the project. SEW claimed that delay is attributable to ERA, as it did not hand over the project sites without obstructions and encumbrances for execution of the road project. The General Conditions of Contract (GCC) provided for mechanism of forming a Dispute Board to which any dispute arising between the parties has to be referred to. It is the case of SEW that as per Clauses 20.4 and 20.5 without referring the dispute to the Dispute Board and without following any conditions of settlement under GCC, ERA unilaterally issued notice of termination dated 20.05.2016, which was served on SEW on 23.05.2016 giving a notice of 14 days for termination of the contract. SEW issued reply dated 30.05.2016 asserting that delay and slow progress of work was due to various reasons attributable to ERA.

4. SEW approached this Court by way of this Arbitration Application under Section 9 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) seeking to restrain ERA, its agents, officers, employees etc. by way of injunction from invoking two ABGs and two PBGs; to restrain BOA from honouring/encashing ABG and PBG on behalf of SEW; to restrain SBI from honouring/encashing counter BG issued to BOA; to stay operation of all further actions pursuant to the notice of termination dated 20.05.2016 including any coercive steps and encashment of BG issued on behalf of SEW by BOA and SBI.

5. Clause 20.06 of the GCC provides for arbitration, which reads as follows:

“20.6 Arbitration

20.6.1 Any dispute between the Parties arising out of or in connection with the Contract not settled amicably in accordance with GC Clause 20.5 above, and in respect of which the DB’s decision (if any) has not become final and binding, shall be finally settled by arbitration. Arbitration shall be conducted as follows:

(a) for contracts with foreign contractors, international arbitration (i) with proceedings administered by the institution designated in the Particular Conditions, and conducted under the rules of arbitration of such institution; or, if so specified in the Particular Conditions,

(ii) international arbitration in accordance with the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL); or (iii) if neither an arbitration institution or UNCITRAL arbitration rules is specified in the Particular Conditions, with proceedings administered by the International Chamber of Commerce (ICC), and conducted under the ICC Rules of Arbitration; by one or more arbitrators appointed in accordance with the said arbitration rules.

The place of arbitration shall be the neutral location specified in the Particular Conditions, and the arbitration shall be conducted