Delhi HC restrains Vedanta from invoking Bank guarantees of Halliburton Offshore Services
Delhi High Court restrained Vedanta Ltd. (Respondent) from invoking eight Bank guarantees of Halliburton Offshore Services Pvt. Ltd. (Petitioner) of which five were due to expire on June 30, 2020 and three on November 24, 2020.Halliburton Offshore Services Pvt. Ltd. had entered into a contract with Vedanta Ltd. to develop oil blocks for Vedanta Ltd.Mr. Sandeep Sethi appearing for the...
Delhi High Court restrained Vedanta Ltd. (Respondent) from invoking eight Bank guarantees of Halliburton Offshore Services Pvt. Ltd. (Petitioner) of which five were due to expire on June 30, 2020 and three on November 24, 2020.
Halliburton Offshore Services Pvt. Ltd. had entered into a contract with Vedanta Ltd. to develop oil blocks for Vedanta Ltd.
Mr. Sandeep Sethi appearing for the petitioner emphasized that Vedanta had initially granted extension of time, to complete the project till 31st March, 2020. He further submitted that a substantial part of the project was completed prior to the said date. However, due to the complete nationwide lockdown on industrial activities as well as on movement of persons in the country consequent to the n-COVID-2019 pandemic, the petitioner was unavoidably handicapped in performing the contract.
Mr. Sethi also submitted that Halliburton Offshore Services was in the process of proceeding with the project, and that, had the lockdown not be imposed, the project might have been completed by 31st March, 2020.
Dr. Abhishek Manu Singhvi, who represented Vedanta Ltd. argued that the only ground on which invocation of a bank guarantee can be stayed, is the existence of egregious fraud. He submitted that the contract for the three projects were to be completed on the 16th January, 2019, 16th March, 2019 and 16th June, 2019 respectively. He further argued that the Petitioner had raised the issue of force majeure, for the first time, in its communication dated 25th March, 2020 which according to him was, merely taking advantage of the nCOVID-2019 crisis that had befallen the country, and to reap benefits therefrom.
Justice C Hari Shankar of the Delhi High Court held that, “For the present, I am convinced, prima facie, that, in view of the submission, of the petitioner, that it was actually working on the project till the imposition of lockdown on 22nd March, 2020, or at least shortly prior thereto, and in view of the sudden and emergent imposition of lockdown, the interests of justice would justify an ad interim injunction, restraining invocation or encashment of the aforesaid eight bank guarantees, till the expiry of exactly one week from 3rd May, 2020, till which date the lockdown stands presently extended.”
The Court granted an ad interim injunction and restrained Vedanta Ltd. from invoking the Bank guarantees till the next hearing.