Unconditional bank guarantee invocation may proceed despite contractual disputes; interim restraint requires egregious fraud or irretrievable injustice.

An unconditional bank guarantee securing mobilization advance may be invoked despite disputes over permissions, work fronts, or recovery of the advance, because judicial interference is confined to established egregious fraud or irretrievable injustice; on that basis, restraint on the mobilization bank guarantee was refused. A performance bank guarantee may, however, be temporarily restrained where the beneficiary agrees not to press invocation until the contractor can approach the arbitral tribunal, preserving the contractor's opportunity to seek interim relief; limited interim protection was therefore granted for that purpose.

---

---

Issues: (i) Whether invocation of the mobilization bank guarantee could be restrained on the basis of alleged fraud, non-availability of work fronts and disputes regarding recovery of mobilization advance; (ii) Whether invocation of the performance bank guarantee should be restrained till the contractor had an opportunity to seek relief before the arbitral tribunal.

Issue (i): Whether invocation of the mobilization bank guarantee could be restrained on the basis of alleged fraud, non-availability of work fronts and disputes regarding recovery of mobilization advance;

Analysis: The mobilization advance was expressly recoverable and secured by an unconditional bank guarantee. The contract terms showed that recovery of permissions and compliance with statutory requirements were part of the contractual framework and the advance remained unrecovered because little work had been billed. In the law governing bank guarantees, interference is justified only where there is established fraud of an egregious nature or irretrievable injustice. The disputes between the parties, including who was responsible for permissions and whether the contractor had mobilized resources, did not meet that high threshold.

Conclusion: Invocation of the mobilization bank guarantee could not be restrained and the request for interim protection failed.

Issue (ii): Whether invocation of the performance bank guarantee should be restrained till the contractor had an opportunity to seek relief before the arbitral tribunal.

Analysis: The beneficiary stated that invocation of the performance bank guarantee would not be pressed until the contractor could approach the arbitral tribunal. On that basis, temporary protection was warranted to preserve the contractor's opportunity to seek relief under the arbitral process.

Conclusion: Invocation of the performance bank guarantee was restrained for the limited period stated in the order.

Final Conclusion: The petition was disposed of with the principal relief declined as to the mobilization bank guarantee and limited interim protection granted in relation to the performance bank guarantee.

Ratio Decidendi: An unconditional bank guarantee securing mobilization advance can be invoked notwithstanding pending contractual disputes, and judicial interference is justified only upon established egregious fraud or irretrievable injustice.

---