Enjoining Order restraining encashment of BOC advance guarantee bond by Spencer Tower dissolved

The Commercial High Court Judge Sampath Wijeratne yesterday 2020 dissolved the Enjoin Order and refused the application for interim Injunction by N & A Engineering Services Ltd. seeking to prevent the three Defendant partners of Spencer Towers from encasing the advance guarantee issued in favour of Spencer Tower by N & A Engineering Services.

N & A Engineering Services by plaint dated 14 May, stated inter alia that N & A Engineering Services forwarded a bank guarantee issued by BOC to Spencer Tower in a sum of Rs. 89,230,730.47.

 The Plaintiffs stated inter alia that the Defendants had not informed the Plaintiffs of the said encashment in terms of the ‘Uniform Rules for Demand Guarantee 2010 ICC Publication No. 78’ and further that the construction was on going.

The Defendants objecting to the said Enjoining Order issued, and the Interim Injunction application stated inter alia that the Plaintiff had suppressed parts of standard bidding document which contains specific clauses for arbitration and that the said advance guarantee bond had to be renewed 28 days before the expiry which was 2 April. The Defendants also stated N & A Engineering Services had not stuck to the time lines of the constructions.

The Commercial High Court Judge refused the application of the N & A Engineering Services and held with the Defendants Spencer Tower refusing the Plaintiffs’ application for an Interim Injunction and thus permitted Spencer Tower to encash the Advance Guarantee bond issued by the BOC in their favour. The said matter fixed for answer of Defendants on 26 October.

President Counsel Farman Cassim, with Charaka Jayaratne and Budwin Siriwardena, instructed by Lanka Dharmasiri, appeared for the Defendants. Ravi Dabare, instructed by Arundathi Divisekara, appeared for the Plaintiffs.