17 December 2021, Friday

2 years ago

Arbitral tribunal’s order of interim relief is discretionary. A sound and reasoned order injuncting encashment of bank guarantee cannot be upset: Madras High Court

01 November 2021 | Chennai Metro Rail Limited v. Transtonnelstroy - Afcons (JV) | C.M.A. No. 1773 of 2021 and C.M.P. No. 9469 of 2021 | Abdul Quddhose J | Madras High Court | 2021 SCC OnLine Mad 5637

While dismissing an appeal against the arbitral tribunal’s order injuncting the encashment of bank guarantee, the Madras High Court has applied the “irretrievable injustice” ground and has also summarized the law on the issue.

It said that the relief under Section 17 ACA is discretionary , and the reasons given by the tribunal were sound and justifiable and for those reasons the appellate court would not interfere with an interim order of an arbitral tribunal

The court also noted that the though the recitals disclosed that the bank a clause made it clear that the indemnification under the guarantee was only for any liability of damages resulting from any defects or shortcomings.

Read the judgment here.


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