The invocation of bank guarantees pending arbitration is restrained if the petitioner demonstrates a prima facie case and irreparable injury.

O R D E R

% 11.07.2025

1. This is a petition filed under section 9 of the Arbitration and Conciliation Act, 1996 seeking the following reliefs:-

“(i) Injunct Respondent No.1 from invoking Bank Guarantee No.0385IFBG2410001, issued by J&K Bank, Hyderpora Branch, Srinagar, for Rs. 1,50,00,000 (Rs.1.5 crores); Bank GuaranteeNo.0023IFBG2209001, issued by J&K Bank, Canal Road, BranchJammu, for Rs. 2,50,00,000 (Rs.2.5 crores); and Bank Guarantee No.0023IFBG2211001, issued by J&K Bank, Canal Road, Branch Jammu,for Rs. 1,50,00,000 (Rs.1.5 crores) till such time as an arbitral tribunalisconstituted, and the Tribunal has had an opportunity to hear the partieson a prayer for urgent interim relief, and (ii) Injunct Respondent No.2 from invoking Bank Guarantee No.0385IFBG2405001, issued by J&K Bank, Hyderpora Branch, Srinagar, for Rs. 1,50,00,000 (Rs.1.5 crores) in favour of Respondent No. 2, till such time as an arbitral tribunal is constituted, and the Tribunal has had an opportunity to hear the parties on aprayer for urgent interim relief, and”

2. The brief facts are that the petitioner and respondent No.1 entered into aFranchisee Agreement dated 13.05.2022 by which the petitioner (Franchisee) agreed to operate, run and manage retail outlets of the respondentNo.1(Franchisor)inthedesignatedareas.Atthesametime, the petitioner entered into a Product Supply Agreement with respondent No. 2, a related sister-concern of respondent No. 1, for supply of products to the petitioner-managed stores.

3. Under the aforesaid Agreements, the respondents made the petitioners furnishbank guarantees assecurity.Thesebankguarantees were meant tobeinvokedincasethepetitionerdefaultedinpayingtheagreedshare of the respondent agreed in the revenue sharing model.

4. The said Franchise Agreement contains an arbitration clause being clause No. 17 which reads as under:-

“Dispute Resolution

17.1 The parties shall seek to resolve any dispute, controversy, claim or breach arising out of or in relation to this agreement including any dispute as to the existence or validity of this agreement, by amicable arrangement and compromise and only if the parties fails to resolve the same by amicable arrangement and compromisewithin a period of thirty (30) days of receipt of written notice of the same by the other party, either party may resort to arbitration as provided for hereinbelow.

17.2 In the event of any dispute/s the parties shall refer the same to arbitration under the Arbitration & Conciliation Act.…………

17.3 The seat and venue of the arbitration shall be New Delhi, India and the language of the arbitration shall be English. The arbitration shall be governed by the laws of India.”

5. On 20.12.2022, the petitioner company took a store on rent to run the franchise of the respondent no. 1. The petitioner continues to bear the rent running into lakhs till date. Subsequently, on 22.03.2024, the said Agreement between petitioner and respondent No. 1 was renewed and also, the Agreement with respondent No. 2.

6. On 15.05.2025, the respondents wrote to the petitioner claiming a total outstanding amount of Rs. 3.28 crores as on 31.03.2025.

7. The same has been disputed by the petitioner.

8. On 03.06.2025, the respondent No. 1 wrote J&K Bank, Hyderpora Branch, Srinagar seeking invocation of the Bank Guarantees.

9. The petitioner had initially approached the Srinagar Court but on account of lack of territorial jurisdiction, the matter was dismissed on 09.07.2025.Hence,thepresentpetitionseekingaforementionedreliefs.

10. Mr. Talukdar, learned counsel for