Dismissed

Shiva Engineering Works v. Utility Energytech and Engineers Pvt. Ltd. and Anr.

Bombay HC24 Aug 2009ARBP/656/2009

Case brief

AI extract

What is this about?

The Bombay High Court dismissed an arbitration petition seeking an injunction against the encashment of a bank guarantee. The single-judge court held that breaches of contract could not justify interfering with the commercial document, as disputes were to be settled via arbitration.

What did the court decide?

The petition seeking an injunction against the encashment of the bank guarantee was dismissed.

Shiva Engineering Works Vs Utility Energytech and Engineers Pvt… — Arbitration | Bombay HC (2009)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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ARBITRATION PETITION (LODGING) NO. 725 OF 2009

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M/s. Shiva Engineering Works

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...Petitioner.

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Vs.

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Utility Energytech & Engineers Pvt. Ltd. & Anr.

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...Respondents.

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Mr. O.P. Lohia with Mr. Sureshkumar for the Petitioner. None for the Respondents.

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CORAM :- ANOOP V. MOHTA, J. DATED :- 24^th AUGUST, 2009.

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P.C.-

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1 Heard finally at the stage of admission only.

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2 The Petitioner has invoked Section 9 of the Arbitration and Conciliation Act, 1996 (for short, the Act), basically seeking an order for restraining Respondent No.1 to encash the bank guarantee. The work contract in question of Thermal Power Plant, Parichha, Jhansi, U.Pconstruction of General Civil work-II, is terminated on 20/06/2009. As per clause 10.2 of the agreement, the Court at Mumbai has exclusive jurisdiction to deal with all matters arising under this contract.

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3 The submission based upon the breaches/ defaults committed by the Respondents with regard to their part of obligation, just cannot be the reason to interfere with the commercial document like the bank guarantee

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for the contract performance in question.

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4 It is settled that the breach of terms and conditions between the parties, even if any, in no way material to overlook the present commercial document i.e. the performance bank guarantee. The submission with regard to the alleged fraud and or misrepresentation, merely because the Respondents failed to perform their part of agreement/ obligation, in no way sufficient to consider the case on that grounds also. There is no material on record to support the case of fraud and of irreparable injury. This is not the case of fraud and irreparable loss and injury, as contemplated by the various decisions of the Apex Court, as well as, of High Courts.

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5 Once, the contract is terminated of this nature, and if it is the case of default and or breach of obligation committed by the parties, in that case the Petitioner is entitled to raise appropriate defence/claim damages/ compensation before the Arbitral Tribunal, if constituted in accordance with the arbitration agreement.

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6 The basic binding agreement involved here is the bank guarantee which is unconditional, irrevocable, extended upto 26^th August, 2009. I am not inclined to interfere with the terms and conditions of the same, as there is no prima facie case made out for any relief / injunction, as prayed. There is nothing to show that the invocation is wrong or in breach of any term of this bank guarantee. There is ample material on the record to show various

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disputed facts raised and denied by the Respondents through their respective letters/ replies. Those facts need full trial.

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7 However, the parties are at liberty to settle the matter. I do not deny the right of the parties to raise appropriate pleas and or the defences before the Arbitral Tribunal, if any.

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8 The Petition is dismissed. No order as to costs.

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(ANOOP V. MOHTA, J.)

Shiva Engineering Works v. Utility Energytech and Engineers Pvt. Ltd. and Anr.

Case brief

What is this about?

What did the court decide?

Shiva Engineering Works v. Utility Energytech and Engineers Pvt. Ltd. and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

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