Bank guarantee restraint and sale of seized machinery were managed through interim protection and open-auction relief.

Interim protection over encashment of a bank guarantee was continued because the arbitration had remained pending for a substantial period, so the restraint was maintained until the arbitrator finally disposed of the dispute. Limited relief was also granted in relation to seized machinery: as the respondent did not oppose sale, permission was given for an open auction with notice to the respondent and deposit of the sale proceeds in court to prevent the machinery from becoming useless. The matter was otherwise disposed of on these terms.

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Issues: (i) Whether the restraint on encashment of the bank guarantee should continue pending disposal of the arbitration; (ii) Whether the seized machinery could be sold by open auction and the sale proceeds deposited in court.

Issue (i): Whether the restraint on encashment of the bank guarantee should continue pending disposal of the arbitration.

Analysis: The arbitration had remained pending for a substantial period and the earlier restraint on encashment of the bank guarantee had been operating for several years. In these circumstances, the interim protection was treated as appropriate to continue until the arbitrator finally disposed of the matter.

Conclusion: The restraint on encashment of the bank guarantee was continued till disposal of the dispute by the arbitrator.

Issue (ii): Whether the seized machinery could be sold by open auction and the sale proceeds deposited in court.

Analysis: The respondent did not oppose sale of the seized machinery. To prevent the machinery from becoming useless, permission was granted for sale by open auction with notice to the respondent and deposit of the sale proceeds in the trial court.

Conclusion: The appellant was permitted to sell the seized machinery by open auction and deposit the sale proceeds in court.

Final Conclusion: The interim restraint on the bank guarantee was maintained, while limited relief was granted to permit sale of the seized machinery, and the appeal was disposed of accordingly.

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