Shandong Tiejun Electric Power ... vs Paharpur Cooling Towers Limited on 18 December, 2019

[Cites 8, Cited by 1]

Gujarat High Court

Shandong Tiejun Electric Power ... vs Paharpur Cooling Towers Limited on 18 December, 2019

Bench: Sonia Gokani

         C/IAAP/113/2019                                     IA ORDER




          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD


          CIVIL APPLICATION (FOR DIRECTION) NO. 4 of 2019
         In R/PETN. UNDER ARBITRATION ACT NO. 113 of 2019
==========================================================

SHANDONG TIEJUN ELECTRIC POWER ENGINEERING COMPANY LIMITED Versus PAHARPUR COOLING TOWERS LIMITED ========================================================== Appearance:

LR. SR. ADV. MR. KAMAL TRIVEDI with MR ANUJ K TRIVEDI , MR. RANJIT PRAKASH, MR. GAURAV LAVANA, MR. VINAY BAIRAGRA for the PETITIONER(s) No. MR. SIDDHARTH DATTA with MR. ROHIT MUKHERJI, MS. SURBHI BINANI, MR. MUNJAAL BHATT for the RESPONDENT(s) No. ========================================================== CORAM: HONOURABLE MS JUSTICE SONIA GOKANI Date : 18/12/2019 IA ORDER

1. A petition came to be preferred challenging the award of Arbitral Tribunal. In a pending petition under the Arbitration and Conciliation Act 1996 being 113 of 2019, at the instance of judgment creditor, interim relief was granted by this Court directing the judgment debtor to deposit cash amount as also furnishing solvent surety on 28.08.2019/ 04.09.2019. The petitioner applicant (judgment debtor) is before this Court by way of this application seeking following Page 1 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER prayers:

"10...

(A) Your Lordships may be pleased to partially modify the Order dated 28th August, 2019 (as modified vide order dated 4th September, 2019), to the extent it directs the Applicant to deposit a cash amount of Rs.42.56 Corers, considering the fact that the Bank Guarantee furnished by the Applicant would serve as solvent security, for securing the amount of the Award, under Section 36 of the Arbitration and Conciliation Act, 1996; (B) Your Lordships may be pleased to grant an ex parte relief in terms of para 10(A) above. (C) Your Lordships may be pleased to grant any other and further relief/s as may be deemed just and proper in the interest of justice and fitness of things."

2. This Court on 10.12.2019 passed the following order:

"1. The petitioner is before this Court seeking modification of the order dated 28.08.2019 to the extent that the applicant instead depositing the cash amount of 42.50 Crores be permitted to furnish the bank guarantee as a solvent security for securing the entire amount of award under Section 36 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act').

2. This Court notices that in the order passed by this Court dated 28.08.2019, the following was the operative order: Page 2 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER "(2) the applicant shall furnish the bank guarantee of the entire principal amount of Rs 40,64,20,363/ and also of the interest on the said amount being at the rate of 9% per annum and the sum of 23,31,01.12 so also for the cost of litigation amounting to Rs 1,92,34,720/ which in all would come to Rs 66,04,86,096.21/ (to be rounded to Rs 66 crores). This amount of 66 crores by way of bank guarantee shall be furnished within 8 weeks with the Registry of this Court till the applicanat deposits the principal amount of Arbitral award. (3) Once the amount of Rs 42.56 crores is deposited by way of cheque, the requirement for the amount to be secured by way of bank guarantee will stand limited to the extent of interest @ 9% per annum of the principal amount will stand of Rs 42.56 crores. The bank guarantee shall be furnished for a period of two years and shall be renewed time again till further order of the Court.

(4) The amount deposited by way of cheque with the Registrar of Gujarat High Court, shall be fixed deposited by the Registry for a period of one year and shall be renewed periodically till further orders.

The main matter shall be listed on 26.11.2019. Direct service is permitted."

3. The applicant is before this Court with a plea that it has obtained the bank guarantee from the Scheduled Bank namely Industrial and Commercial Bank of China Limited, Mumbai Branch, in India. It has already executed the Bank Guarantee in favour of the Registrar of this Court. The original document of Bank Guarantee shall be filed subject to the Court's order.

3.1.It is the say of the applicant that the bank guarantee considered of the principal amount along with interest at the rate of 9% and the litigation cost as awarded by the Arbitral Tribunal in the award impugned stands completely secured in terms of the provisions of Section 36 of the Act. It is further his say that the Bank Guarantee is in form of assurance and such security is accepted all across the country by all the courts. Further the say of the applicant is that the subject project work has come to an end and the applicant is currently in a process of final closure of the Project Office Page 3 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER Account and as per the existing regulations and guidelines of the Foreign Exchange Management Act, 1999 the applicant will not be permitted to receive any inward remittance for its project office account in India. There will be also severe difficulties since China would also not permit the transfer of funds from the Principal Office in China due to regulatory approval constraints. It is reiteratively emphasized that it is not the financial inability of the applicant to satisfy the award but, the difficulty is transferring the fund in cash, which has made the petitioner to approach this Court.

3.2. It is further requested that the applicant be permitted to furnish a bank guarantee in light of the order passed by this Court on 28.08.2019 which was subsequently modified by the speaking to minutes note of the petitioner.

4. This has been resisted severely by way of affidavit for and on behalf of the opponent who has urged that this application is essentially and predominantly made to set aside the order dated 28.08.2019 and is in a grab of application for modification / review in place of preferring the appeal. This must not be entertained as it seeks to change the very substance of the order.

4.1. It is further the say of the respondent that this essentially is to overcome the directions to furnish security made in order dated 28.08.2019 as corrected by the order dated 04.09.2019. It was further the say that the application for modification is an attempt to subvert the very purpose of the detailed directions made in the order for furnishing security which would be proper in the present circumstances. It is further the say of the respondent that the petitioner does not dispute the details collected from the public record and the Court has also recognized the facts as to how the 100% deposit of the sum was necessary in the present case. Nothing has changed and therefore, the order would not warrant any modification.

4.2. It is further lamented that principal amount was to be Page 4 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER secured by deposit of cheque or cash amount and by way of bank guarantee, the interest component was to be secured, by this application the petitioner has sought to be nullify the same, which should not be permitted. It is also the grievance of the respondent that the petitioner has taken the advantage of the stay granted during the pendency of the matter before the Apex Court and it has suppressed the material facts and it has subsequently sought modification of the order. The chronology has been given as to how already much time has been allowed to lapse.

4.3. Moreover, in connection with the very document of Bank Guarantee also, many objections have been raised. One of the vital contentions raised before this Court is that the bank stands as a surety through the bank guarantee and it is not an acceptable proposition. The liability to pay should be independent and of the bank alone, as far as the liability under the said bank guarantee is concerned. The document which is titled as 'Letter of Guarantee' does not inspire any confidence according to the opponent who urged that the bank guarantee presented is not payable on demand nor is the same unconditional and without demur nor irrevocable as far as invocation by the Court is concerned in the future.

4.4. It is therefore urged that the petitioner since is seeking closure of the said project office in India and is in the process of attaining financial closure, there would not be any prospect of satisfaction of the award. The maximum 7 days' time be granted for compliance of the Court's order on a separate application which has been moved.

5. This Court has heard learned senior advocate Mr. Kamal Trivedi appearing for the applicant with learned advocates Mr. Ranjit Prakash, Mr.Gaurav Lavana, Mr. Anuj Trivedi and Mr. Vinay Bairagra. He has fervently urged that the Bank Guarantee is acceptable form of the guarantee which is permissible. Taking this Court to the provisions of Section 36 of the Arbitration and Conciliation Act and also under Order 41(1)(3) of the Code of Civil Procedure, it has been urged that even in case of money decree, when execution of decree is to be made, one of the modes of payment Page 5 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER of decree is also the bank guarantee. It can either be paid by cash or by cheque or by bank guarantee. It is an assurance of payment of the entire amount anywhere, accepted legally and officially. He also has further urged that at China, the entire amount of 66 Crores has been deposited by the petitioner and therefore, the Scheduled Bank has issued bank guarantee. The Court may call for the entire detail in relation to the same. The petitioner is desirous of complying with the order of the Court, however, the regulatory constrains are posing the difficulties, therefore, the request is made for allowing the bank guarantee to be furnished. He has urged that this should not be construed as the closure of the company nor shaken foundation of financial capacity of the petitioner but, it is pure and simple case of the closure of the particular project in this Country.

5.1. He has further relied upon various decisions to urge that this is a guaranteed form of payment accepted by the Courts all across the Country.

5.2. Following are the decisions relied upon to substantiate the oral version by the learned senior advocate Mr. Trivedi:

(a) Bhadani Associates vs. Kamlini Dharamraj Ashar and Others, reported in 2017(3) Mh.L.J. 437,

(b) M/s. Kassiopi Maritim Co.Ltd. vs. M.T.A.L Layyah and Another, reported in 2014 SCC Online Bom 1061,

(d) Delhi Metro Rail Corporation Ltd. vs. Delhi Airport Metro Express Private Limited, reported in 2017 SCC Online Del 8868, (e) AFCONS Infrastructure Ltd. vs. Board of Trustees of Port of Mumbai, reported in 2013 SCC Online Bom 1946.

6. Learned advocate Mr. Siddharth Datta appearing with learned advocates Mr. Rohit Mukherji, Ms. Surabhi Binani and Mr. Munjaal Bhatt for the opponent - respondent has strongly resisted this application on the ground that although Page 6 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER there is no question to the bank guarantee being the acceptal form of payment of decreetal dues, the bank guarantee in the instant case be not accepted for various reasons. He has urged that nearly period of five years has gone and the contractor has not been compensated in any manner. The final hearing may also take further few years and he will be further deprived of the cash which would be required for carrying on his business. He further has urged that it is the hardship felt by the contractor which has been recognized by Niti Ayog which came out with the memorandum dated 05.09.2016 containing the scheme by which the contractor is able to retrieve 75% of awarded amounts together with interest thereon which was referred to 'payout amount', to a limited extent.

6.1. According to him, he should be permitted the withdrawal of the amount on his furnishing the counter guarantee if at all the Court permits the furnishing of the bank guarantee instead of the amount of cash. He has pointed out the various expressions in the document itself to urge that it should not be accepted in the present form.

7. Having heard both the sides and also on noticing the various decisions of the different High Courts, this Court in principle accepts that for execution of the money decree, the bank guarantee is a secured form of payment. It has been legally accepted over a period of time across the countries in all court proceedings and therefore undoubtedly, there cannot be any dispute per se to the furnishing of the bank guarantee in lieu of the fulfillment of decree or amount of award pending the proceedings before the courts. However, in the instant case, as can be noticed by this Court, there is already a specific order passed by this Court on 28.08.2019 where after the detailed hearing of both the sides, the Court had directed the deposit of cash component to the tune of Rs. 42.56 Crores and the remaining amount from out of Rs. 66 Crores to be furnished by way of bank guarantee.

8. The Court at the relevant time, had taken note of the petitioner's inability to deposit the same due to various clearances issues and had also noted weakening financial Page 7 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER condition of the petitioner. Now when the question has come up for consideration of the request of the petitioner on account of, (I) its project in India coming to the stage of closure in near future and (ii) because of the restrain and constrain spell out by the petitioner for bringing the money from China to India for the project which is coming to the closure, there will be a requirement for the Court to consider the request of the petitioner.

9. Before this Court decides on the request of the petitioner to consider the modification of the earlier order, it would be essential and necessary for this Court to get the light thrown upon certain issues raised by the opponent, in relation to the very instrument of the bank guarantee.

Since, today the Court has permitted the petitioner to deposit the document with the Registry, before further adjudicating the prayer of modification, the Scheduled Bank namely Industrial and Commercial Bank of China Limited, Mumbai Branch is directed to clarify the following aspects and also file an affidavit of its authorized officer on the returnable date. 9.1. Whether the instrument titled "Letter of Guarantee"

dated 04.12.2019 for the amount of INR 66 Crores is an unconditional and irrevocable Bank Guarantee issued in favour of the Registrar of the High Court of Gujarat?

9.2. Whether under the said instrument titled "Letter of Guarantee" ICBC, Mumbai is obliged to unconditionally and without any demur, objections, whatsoever, transfer the proceeds of the Bank Guarantee amount to the Registrar of the High Court of Gujarat on mere written demand of the Registrar of the High Court of Gujarat and without recourse to STEPCL?

9.3. Whether there are any restrictions and conditions stipulate in the terms of the Bank Guarantee issued by ICBC, Mumbai Branch or otherwise which may frustrate and defeat the purpose of issuing this Bank Guarantee in terms of the order dated 28.08.2019 (as amended vide order dated 04.09.2019) in favour of the Registrar of the High Court of Page 8 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER Gujarat?

10. Let Notice be issued for the said purpose to the said Bank, making it returnable on 18.12.2019. As the affidavit is insisted upon from the Bank official as mentioned above, there will be no requirement for formally impleading the bank as a party respondent.

11. Direct service is permitted."

3. Pursuant to the said order, today the additional affidavit on behalf of the applicant has been filed by authorised signatory and Manager (Legal) stating as follow:

"2. I state that I have been advised by my counsel to depose on affidavit that for procuring the Bank Guarantee issued by Industrial and Commercial Bank of China, Mumbai Branch (hereinafter referred to as "ICBC, Mumbai"), the Applicant has deposited a sum of USD 10,299,999.700 (US Dollar Ten Million Two Hundred and NinetyNine Thousand Nine Hundred NinetyNine Only), with the Qingdao Renmin Road subbranch of the Applicant's Principal Bank, viz. China CITIC Bank situate in Qingdao, People's Republic of China (hereinafter referred to as the "Counter BankGuarantee issuing Bank"), which amount (hereinafter referred to as the "Margin Deposit") has been frozen in the Applicant's account by the Counter BankGuarantee issuing Bank for the purpose providing a CounterBank Guarantee to ICBC, Mumbai.

3. It is stated such Margin Deposit has been submitted by the Applicant with the Counter BankGuarantee issuing Bank Page 9 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER for furnishing a Counter BankGuarantee, so as to, enable ICBC, Mumbai, to furnish an unconditional and irrevocable Bank Guarantee, which is liable to be paid on mere demand by the Registrar of the Hon'ble High Court of Gujarat, for securing the amount of Rs.66 Crores (being the sum total of the principle amount of the award, along with interest at 9% and litigation cost) with the Registrar of the Hon'ble Court of Gujarat, as directed by this Hon'ble Court vide its order dated 28th August, 2019, as modified vide order dated 4 th September, 2019. Herein annexed and marked as AnnexureI,is the copy of the receipt issued by the Counrter Bank Guarantee issuing Bank in favour of the Applicant company certifying that the Margin Deposit of USD 10,299,999.700 (US Dollar Ten Million Two Hundred and NinetyNine Thousand Nine Hundred and NinetyNine Only) has been deposited by the Applicnat company for enabling it's Principal Bank to issue the Counter BankGuarantee in favour of ICBC, Mumbai along with its true translated copy.

4. It is stated that pursuant to the order of this Hon'ble Court dated 10th December, 2019, passed in CA/3/2019 in IAAO/113/2019, the Applicant has submitted the original Bank Guarantee of Rs.66 Crores with the Registry of this Hon'ble Court."

4. The affidavit is filed by Mr.Ayush Ganediwala, the authorised signatory and Vice President (Legal) of the Industrial and Commercial Bank of China, Mumbai Branch ('the Page 10 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER ICBC' hereinafter). He has also produced the authority letter of the Chief Executive Officer of the ICBC, Mumbai Branch giving details of his Employee No.0075 stating therein that for the purpose of verification of the instrument and clarifying the query as may be raised by the Court, with regard to the letter of guarantee dated 04.12.2019 bearing the number LG28501B900292 issued by ICBC he has been authorised.

4.1 He states in his affidavit answering to the queries raised by this Court in its order dated 10.12.2019 in the following manner:

"9.1. Whether the instrument titled "Letter of Guarantee"

dated 04.12.2019 for the amount of INR 66 Crores is an unconditional and irrevocable Bank Guarantee issued in favour of the Registrar of the High Court of Gujarat?

4. I state and confirm that the above mentioned Bank Guarantee was issued at the instance of Applicant against the receipt of the CounterGuarantee bearing No.737106LG19000029 dated 22.10.2019,issued by the Qingdao Renmin Road subbranch of the Applicant's Page 11 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER principal bank, viz. China CITIC Bank, situated in Qingdao, People's Republic of China for the amount equivalent to Rs.660,000,000.00 (Rupees SixtySix Crores Only).

5. I further state, clarify and confirm that the liability to pay the amount of INC 66 Crore under the aforementioned Bank Guarantee is unconditional,irrevocable and is completely independent from the Applicant and has been issued by ICBC directly in favour of the Registrar of this Hon'ble High Court. 9.2 Whether under the said instrument titled "Letter of Guarantee" ICBC, Mumbai is obliged to unconditionally and without any demur, objections, whatsoever, transfer the proceeds of the Bank Guarantee amount to the Registrar of the High Court of Gujarat on mere written demand of the Registrar of the High Court of Gujarat and without recourse to STEPCL?

5.1 I reaffirm that as and when this Hon'ble Court passes any direction for invocation and encashment of the subject Bank Guarantee and based thereon, the Learned Registrar of this Hon'ble Court passes any direction for invocation and encashment of the subject Bank Guarantee and based thereon, the Learned Registrar of this Hon'ble High Court invokes the subject Bank Guarantee, ICBC is obliged to unconditionally and without any demur, protest or objection, whatsoever Page 12 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER transfer the proceeds of the Bank Guarantee amount to the Registrar of this Hon'ble Court on mere written demand and without recourse to the Applicant.

9.3. Whether there are any restrictions and conditions stipulate in the terms of the Bank Guarantee issued by ICBC, Mumbai Branch or otherwise which may frustrate and defeat the purpose of issuing this Bank Guarantee in terms of the order dated 28.08.2019 (as amended vide order dated 04.09.2019) in favour of the Registrar of the High Court of Gujarat?

6. I further state, clarify and confirm that there are no restrictions and conditions stipulated in the subject Bank Guarantee which may frustrate and defeat the purpose of issuing this Bank Guarantee in terms of the Order of this Hon'ble Court dated 28.08.2019(as amended vide order dated 04..09.2019) . It is further stated that there are no terms and conditions in this subject Bank Guarantee which may dilute in any manner the unconditionality and irrevocability of the said Bank Guarantee.

5. This Court has heard the learned senior advocate, Mr.Kamal Trivedi appearing for the applicant, who has urged this Court the affidavit today filed by the authorised signatory of the Page 13 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER company clarifies that the sum deposited in USD 10,299,999.700 with the subbranch of the applicant's Principal Bank in Qingdao, People's Republic of China has already been frozen in lieu of Bank guarantee, which has been provided by the ICBC, Mumbai. He has also further submitted that all possible measures have been taken by the applicant to ensure securing of the amount of Rs.66 Cr. which is the sub total of the principal amount of the award, along with the interest at the rate of 9% and when the applicant has already spelt out the difficulties in bringing the cash amount, this is a mechanism legally permissible to satisfy the Court's order. He has urged that if the Court additionally is of the opinion that there will be a requirement of topping up more amount for the interest, the applicant is ready to abide by the Court's direction. He has relied on two decisions of the Apex Court rendered in case of Hindustan Construction Company Limited and anr vs. Union of India and Others, reported Page 14 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER in (2019) SCC OnLine SC 1520 in an answer to the submissions made by the other side on the office memorandum of NITI Aayog dated September 05, 2016 which contained a scheme by which contractors were able to retrieve 75% of awarded amounts together with interest thereon referred to as "payout amount". He has also relied on the decision of the Apex Court rendered in case of SIHOR NAGAR PALIKA BUREAU VS BHABHLUBHAI VIRABHAI & ORS, reported in (2005) 4 SCC 1 to urge that the variation should be permitted and the security of furnishing the Bank guarantee is well accepted by the Court. In the matter before the Apex Court, it was a money decree where there was a requirement of furnishing security instead of deposit of decree amount in the Court. The Court has held that it is the descretion of the Appellate Court to direct either of it as it may think fit. The Court went to an extent of holding that such exercise needs to be done judicially and the Court ought to have permitted furnishing Page 15 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER of security instead of insisting on deposit in cash of the amount. He fairly submitted that any top up if is required by way of an additional Bank guarantee, the applicant will be abiding by the same. However, to insist on the cash amount despite the genuine difficulty of the applicant on the part of the other side would mean it ill desires the applicant to be non suited.

6. Learned advocate, Mr.Datta appearing for the opponent has fervently urged that there is no requirement for this Court to modify its order in as much as after detailed hearing of both the sides, the Court had struck a balance. The Court did recognize the difficulties for the initial period and therefore, for the entire principal amount of the award + 9% interest, the Bank guarantee was permitted to be furnished. However, that leeway is not to continue further till the Court finally adjudicates the matter. He has also urged that nothing has been pointed out as to why the cash amount cannot be transferred to India.

Page 16 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020

C/IAAP/113/2019 IA ORDER He also argued that if in case it is difficult for the other side to bring the cash, now since the Bank guarantee has already been given due to the deposit of the cash amount at China, by the Branch at Mumbai, the Court can always invoke the same and the entire amount can be directed to be deposited in the name of the Registrar of the High Court of Gujarat so that in the future there are no difficulties in securing the principal amount till the date of the award dated 26.05.2019. The post award interest, according to learned advocate, is not calculated and respondent has also not admitted. The amount worked out by this Court while passing the order was based on calculation of the principal amount at Rs.40,64,20,363.50 and the interest amount of Rs.23,48,31,012.71/, as has been given by the applicant.

7. Having heard learned advocates on both the sides and also on considering the decisions of the Apex Court so also the details which have Page 17 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER been furnished before this Court as mentioned in the last order by this Court, undoubtedly after fullfledge hearing of the parties, this Court had directed that deposit by separating two components, the principal amount and the interest and had permitted the applicant to deposit the entire amount by way of security till it becomes possible for the applicant to deposit the cash component of Rs.42.56 Crore. Even while passing such an order, the Court was conscious, since it had been argued before this Court, the difficulties in making the arrangements of getting the cash from the principal office of applicant China more particularly, when the project was on the verge of completion. It is true that there are no detailed documents which have been laid before this Court to point out the inexplicable difficulties in bringing the cash to India however, on affidavit, it has been stated and the application itself is providing the reason for seeking such modification as reflected by this Court in its order dated 10.12.2019. The Page 18 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER Bank guarantee, as an instrument, is a well accepted mode of security. The Court would have no reason to deny furnishing of the Bank guarantee provided the instrument in its present form is inspiring confidence. In wake of certain lurking doubts, which had been ventilated by the respondent, the Court had directed the Bank to clarify them and the Vice President (Legal) of the ICBC has furnished his affidavit clarifying all the questions reflected in the order. It appears that this letter of guarantee has been issued only because the amount of Rs.76 Crore has been deposited at China with the main Branch of ICBC. It is in no unclear term stated before this Court that as and when the Court would pass an order and direct invocation and encashment of the said guarantee, the ICBC would be obliged to unconditionally and without any demurr, protest or objection transfer the amount stipulated in the Bank guarantee to the Registrar of this Court. This Court also notices from the very document that its validity is for the period of Page 19 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER two years, i.e. upto 24.10.2021 and its further validity could be ensured by revival of the Bank guarantee every year. The only requirement is of further directing the revival of the same within 60 days prior to its expiry. It has also further ensured to this Court that there are no hidden agreements or documents nor are any conditions stipulated anywhere which could possibly frustrate and defeat the purpose of issuance of this Bank guarantee. It is thus being ensured that no circumstances would make this Bank guarantee questionable nor would it frustrate the very purpose of deposition as the principal aim of this Court at the time of directing the deposit of the amount in cash as well as in the Bank guarantee was to secure the amount after the court adjudicated between the parties in relation to the arbitral award. This Bank guarantee since is satisfying those requirements, the Court deems it appropriate to modify its order and in lieu of the earlier order of bifurcation of the cash component and the Bank guarantee, the entire Page 20 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER amount is permitted to be deposited by way of a Bank guarantee for securing the same at the end of the final adjudication. However, as the rate of interest awarded by the Arbitral Tribunal is 18% and the Court has directed 9% of the interest and there is a likelihood of the matter taking some time to be concluded finally, the additional 10% of the Bank guarantee would be required to be directed to ensure the further interest component per annum and that aspect shall need to be governed by this order. It is not out of context to mention that the same has also been voluntarily ensured by the applicant during the submissions of learned senior advocate, Mr.Kamal Trivedi. Let the same be furnished every year topping up by calculating the 10% interest on the total amount of Rs.66 Crore. It is also further directed that the Bank guarantee also shall be automatically renewed by the Bank without waiting for further directions of the Court.

8. This application is accordingly allowed in Page 21 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER the above terms.

9. By way of a parting note, it is being clarified that the amount of interest calculated is 23.48 Crore. According to learned advocate, Mr.Datta who has given this bifurcation calculating the same from the date of invocation of the Bank guarantee and also the invoice raised from the date of amount due as per the award.

Other side since would have a right to challenge this calculation, it choses not to admit this figure at this stage and the Court would not like to enter into that arena and the same can be argued and calculated at the time of final submissions.

10. Let the parties complete their pleadings so far as the main matter is concerned by the end of February, 2020. Matter once ready, the request can be made by either side for proceeding with the same finally.

11. The respondent will be permitted to make a Page 22 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020 C/IAAP/113/2019 IA ORDER request to the Registrar (Judicial) to furnish him the certified copy of the Bank guarantee.

12. With the above, present application stands disposed of accordingly.

(MS SONIA GOKANI, J) M.M.MIRZA Page 23 of 23 Downloaded on : Mon Jun 15 08:08:18 IST 2020

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