Calcutta High Court
Lmj International Ltd vs The Grain Board Of Iraq on 15 February, 2011
Author: Jayanta Kumar Biswas
Bench: Jayanta Kumar Biswas
GA No. 465 of 2011
CS No. 32 of 2011
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
LMJ INTERNATIONAL LTD.
Versus
THE GRAIN BOARD OF IRAQ, MINISTRY
OF TRADE, GOVERNMENT OF IRAQ & ANR.
BEFORE:
The Hon'ble JUSTICE JAYANTA KUMAR BISWAS
Date : 15th February, 2011.
Mr. Surojit Nath Mitra, Sr. Adv.
Mr. Asis Chakraborty, Adv.
Mr. D.N. Sharma, Adv.
...for the plaintiff
The Court : In view of the urgency leave has been granted
to present the plaint and move this interlocutory application.
The plaintiff is seeking an ad-interim injunction
restraining the first defendant from encashing the performance guarantee
that was given by the plaintiff in connection with the contract dated
August 18, 2010 between the plaintiff and the first defendant for supply of
rice of Vietnami origin.
In terms of the contract (as will appear from p. 23) the
plaintiff was to supply the goods between August and September 2010 and
2
the first defendant was to ensure issue of an irrevocable letter of credit in
favour of the plaintiff.
By a letter dated February 14, 2011 (at p. 66) the second
defendant has informed the plaintiff that it has received a request from the
first defendant for encashment of the performance guarantee on the
grounds that the petitioner failed and neglected to supply the goods in
terms of the contract.
Case stated in para. 9 is quoted below :
"9. The respondent no. 1 in deliberately breach of its obligations under the
said contract did not cause to issue the required irrevocable letter of credit in favour of your petitioner as a result whereof your petitioner was prevented from delivering the said contracted quantity of rice to the respondent no. 1 by September, 2010. Ultimately, such letter of credit was issued by the Trade Bank of Iraq, Baghdad on 13th October, 2010. A copy of the said Letter of Credit is annexed hereto, marked with the letter "C".
Case stated in para. 11 is quoted below :
"11. In the meantime and on or about 1st October, 2010 the Government of Vietnam assigned with immediately effect Ho-Chi-Minh City based Vinafood-2 to handle rice demand from Philiphines, Indonesia and Malasya and Vinafood-1 based in Hanoi to deal with Iraq and Cuba and as per such assignment by the Government of Vietnam only those two companies were authorized to deal with Government to Government deal in respect of export of rise to Philiphines, Malasya and Indonesia and Iraq & Cuba respectively. Such assignment by the Government of Vietnam would be evident from a Circular dated 1st October, 2010 issued by Vietnam Food Association. A copy of the said Circular dated 1st October, 2010 is annexed hereto, marked with the letter "D"."
Mr. Mitra appearing for the plaintiff has submitted that when for reasons beyond control the plaintiff could not supply the goods in terms of the contract, citing the plaintiff's failure to perform its part of the contract the first defendant cannot encash the performance guarantee. 3
In my opinion, the plaintiff has made out a strong prima facie case for an ex parte ad-interim order. I am also of the opinion that the balance of convenience and inconvenience is entirely in favour of making a restraining order.
For these reasons, I make an ad-interim order restraining the defendants from encashing the performance guarantee executed by the plaintiff in connection with the contract dated August 18, 2010.
Notice shall be given to the defendants at once and affidavit of service shall be filed next day when the question of maintaining this interim order or making any other order will be examined.
List the application as "New Motion" on March 1, 2011. Certified xerox.
(JAYANTA KUMAR BISWAS, J.) TR/