Delhi High Court
M/S Multitex Filtration ... vs M/S Fernas Construction Compnay ... on 25 April, 2017
$~5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgement delivered on: 25th April, 2017
+ FAO(OS) (COMM) 61/2017
M/S MULTITEX FILTRATION ENGINEERS LTD
..... Appellant
Through Mr.Arun Kumar Varma, Sr. Adv.
with Mr.Abhay Raj Varma,
Mr.Ashish Joshi, Ms.Priyanka Ghosh,
Mr.Himanshu and Mr.Nikhil Arya,
Advs.
versus
M/S FERNAS CONSTRUCTION COMPNAY INC & ORS
..... Respondent
Through Mr.Krishna Chandra Dubey, Adv.
with Mr.Bharat Saini, Adv. for R-1
Mr.Sandeep Mahapatra and
Mr.Ashish Mukhi, Advs. for R-3
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE YOGESH KHANNA
S.RAVINDRA BHAT, J. (Oral)
The appellant's (Multitex Filtration Engineers Ltd.) grievance
is that despite an interim order restraining the encashment of the bank
guarantee (which was reduced in value to US Dollar 145,000.00), the
third respondent - Turkiye Garanti Bankasi, Turkey, which had issued
a counter guarantee, claimed to have paid out the amount of USD
290,000.00. This statement became the basis of the impugned order,
which held that the interim order and consequently the Section 9
application under the Arbitration and Conciliation Act, 1996 was
rendered infructuous. During the pendency of these proceedings the
Court had restrained encashment of the bank guarantee to the tune of
USD 145,000.00 by the second respondent - Bank of India. In the
subsequent proceedings the Court had not passed any order since it
was represented that the appellant and the first respondent - Fernas
Construction Company Inc., were in negotiations. Today the Court
was informed that out of the balance USD 145,000.00, the first
respondent can - in terms of agreement/minutes of meeting dated 19th
April, 2017 - retain USD 70,000.00 and the balance USD 75,000.00
would be returned to the appellant and new bank guarantee of USD
30,000.00 would be provided by the appellant to the first respondent.
The minutes of meeting relied upon by the party are extracted below:
Minutes of meeting
A meeting was held on April 19, 2017 between representatives of
Fernas Construction Company Inc. Turkey (FCCI, the Contractor of
GTCL) and Multitex Filtration Engineers Ltd. India (Multitex, the
Specialist Subcontractor of FCCI) at GTCL Head Office Bhaban,
Dhaka, Bangladesh in presence of representatives of GTCL (the
Employer). List on attendees is enclosed at Annexure-1. After
detailed discussion, the minutes of meeting are as follows:
SL. No. Decision
01. BG No.6041FPEBG150034 was issued by Multitex to
FCCI for total face value of USD 290,000.00 (US
Dollars two hundred ninety thousand).
FCCI has issued BG reduction letters addressed to
Multitex's Bank of total value USD 145,000.00 (USD
72500+USD 72500) against supply of Ball valves and
spare parts (SL No.2 & 4) as per MoM between Multitex
and FCCI dated 27th May, 2016 (Annexure-2). In view
of above the face value of the BG stand reduced to USD
145,000.00 instead of USD 290,000.00 and FCCI will
send an instruction letter addressed to Multitex's Bank
as well as to Turkey counter Bank.
02. Multitex confirmed that their Bank of India has already
transferred USD 145,000.00 to FCCI Bank as per the
Court order. Transfer details will be provided by
Multitex to FCCI.
03. On receipt of above details FCCI agreed the followings:
a. FCCI will retain USD 70,000.00 (US Dollar
Seventy thousand) in lieu of various claims for
the cost spent by them at site and on
procurement of flow computer directly.
b. Balance amount of USD 75,000.00 (US Dollar
Seventy five thousand) will be returned to
Multitex as
- USD 45,000.00 (US Dollar Forty five
thousand) to be retained by Multitex and new
Bank Guarantee of USD 30,000.00 (US
Dollar Thirty thousand) to be provided by
Multitex to FCCI valid for discharge on
completion of commissioning support for all
the three metering/RMS stations at
Bakhrabad, Haripur and Siddhirganj.
Multitex will also provide all the relevant
technical document wherever necessary. It
has been discussed jointly that
commissioning of RMS packages shall be
completed within one months after site is
ready for commissioning.
c. FCCI confirms that they will make site available
and also provide air ticket, transportation,
fooding and accommodation for Multitex
representative (s).
d. Request for commissioning support will be sent
by FCCI two weeks in advance. Multitex
confirms that they will organise accordingly and
will provide three nos. visits only.
e. FCCI has to provide Bank instruction under
serial no.1 and the payment under serial no.3.b
as above and on completion of the same Multitex
shall provide commissioning support.
04. FCCI and Multitex shall have no other financial claim
in future.
05. Joint application will be made for withdrawal of all
Court cases base on above agreement.
In view of the above development it is directed that the first
respondent shall be entitled to USD 70,000.00 and that the balance
USD 75,000.00 shall be returned to the appellant. The appellant shall
in turn ensure that the bank guarantee, in accordance with agreed
terms, be furnished to the first respondent/FCCI within three weeks.
This is subject to payment of USD 75,000.00. The existing bank
guarantee No.6041FPEBG150034 shall be discharged in terms of the
minutes of meeting.
It is clarified at the same time that the rights and contentions as
well as legal remedies available to the third respondent bank -
Turkiye Garanti Bankasi, Turkey are in no way affected nor is any
ruling upon its entitlements made in these proceedings or deemed to
have been made. The said third respondents' rights are not affected
in any manner with respect to first respondent - Fernas Construction
Company Inc. and second respondent - Bank of India.
The appeal is disposed of in above terms.
Dasti under signature of the Court Master.
S. RAVINDRA BHAT, J
YOGESH KHANNA, J
APRIL 25, 2017
VLD
