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The Appellant/original Petitioner filed Petition under Section 9 of the Arbitration and Conciliation Act, 1996 essentially for restraining Respondent No.2 (original Defendant No.2) from encashing certain Standby Letters of Credit (SBLC) issued by Respondent No.3 (original Defendant No.3).

6. The SBLC is shown to be made 90 days from the date of shipment. The terms and the description of the agreements are not specified. The SBLC is especially shown to be independent of the terms and conditions of the agreements between the Petitioner and Respondent No.1. The SBLC is expressly made subject to the uniform, customs and practice for Documentary Credits, (2007 Revision) International Chamber of Commerce (Publication 600) ("UCP"). The SBLC is issued by the Petitioner's banker upon the banker of Respondent No.1 who is the beneficiary. The payment under the SBLC is to be made in a specified Bank Account.

10. The SBLC stipulates payment within 90 days from the date of shipment, but it does not stipulate any documents indicating the date of shipment. In this case no document was required to be presented for filing of SBLC e.g. any bill of lading. The banker is enjoined to disregard such condition. The learned Judge has correctly considered the applicability of the UCP whilst interpreting the SBLC.

13. There is an arbitration contemplated by the parties. The arbitration agreement is invoked. In the arbitration the rights of the parties to the contract with regard to the delivery of the goods and the payment of the price would be decided and determined. The SBLC is quite different. The very fact that there is an arbitration provided in the contract between the parties is the umbrella to guard against the injustice claimed. There is, therefore, no "irretrievable injustice"; it would be retrieved in arbitration. That is precisely why a separate guarantee for the demand by way of a SBLC or a bank guarantee is given. Hence such SBLC is independent of the contract. Consequently even the term of the SBLC determining the mode of payment e.g. being 90 days from the date of the shipment is inconsequential when the description of the document is not supplied. The banker would not know and would not be concerned with the date of shipment. The banker, who has issued the SBLC or given the bank guarantee, would only be required to reimburse the amount upon a demand being made to the issuing bank. It need hardly be mentioned that commercial trade, more specially international trade, would collapse if banks or even Courts are required to go into each of the breaches of the contracting parties before honouring the SBLCs which are in the nature of guarantees for the payment.