National Highways Authority Of India vs Elsamex-Tws-Snc Joint Venture on 28 April, 2008
15. The aforesaid grounds of challenge, are primarily based on the
statement of the petitioner that from the perusal of the language of the
bank guarantees and the letter of invoking bank guarantees, it is a case of
egregious fraud and of special equities. I am afraid, that the language of
the bank guarantees and the letter invoking bank guarantees surely, does
not make out a case of special equities or egregious fraud. On a perusal of
the pleadings, no case of fraud has been made out. The only ground
being, the bank guarantees could only be invoked upon termination or
when an amount is due, or the amounts being set off, would not make a
case of fraud of egregious nature as to vitiate the underlying transaction.
The ground that encashment of bank guarantees would cause irreparable
injury, suffice to state, that the parties are before the Arbitral Tribunal and
the amount has been directed to be deposited in an escrow account. So
the said ground is unsustainable. I note for benefit, the reliance placed by
ARB. A. (COMM) 07/2016 Page 15 of 17
Mr. Sethi on the judgment of this Court in National Highways Authority
of India (supra), wherein this Court has held plea of lack of good faith
and/or enforcing the guarantee with an oblique purpose or that the bank
guarantee is being invoked as a bargaining chip, a deterrent or in an
abusive manner are all irrelevant, hence have to be ignored.