WARTSILA PAKISTAN (PVT.) LIMITED vs GUL AHMED ENERGY LIMITED S — 2023 CLD 1511 KARACHI-HIGH-COURT-SINDH

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

WARTSILA PAKISTAN (PVT.) LIMITED VS GUL AHMED ENERGY LIMITED S. 13---Civil Procedure Code (V of 1908), O. XXXIX, Rr. 1 & 2---Specific Relief act (I of 1877), Ss. 42 & 54---Suit for declaration and injunction---Interim injunction, refusal of---Performance guarantee/ Letter of Credit---Encashment---Plaintiff company sought encashment of its invoices for services provided to defendant company from bank on the basis of a document alleged to be a Performance Guarantee issued by Bank---Contention of defendant company was that there was no Performance Guarantee issued by Bank rather there was a Letter of Credit issued---Validity---Claim of plaintiff company was seriously disputed by defendant company on the ground that total amount owed by plaintiff company to defendant company was much more than their claimed amount, and even if a set-off was allowed, plaintiff company still owed more than Rs.800 million---Such disputed facts could not be resolved at injunctive stage and required parties to lead evidence---Letter of Credit had per se no nexus with payments claimed by plaintiff company---Relief of injunction was an equitable relief---Conduct of party seeking such relief had to go through a threadbare scrutiny before any such discretionary jurisdiction could be exercised in its favor---While considering application for grant of injunction, Court not only had to take into consideration basic elements regarding existence of a prima face case, balance of convenience and irreparable injury but it also had to take into consideration conduct of parties as grant of injunction was otherwise an equitable relief---Plaintiff company made an attempt to conceal material facts by withholding complete document i.e. annexure "G", and only part of it (amendment) was filed while filing the suit and had obtained ad-interim injunction---authorized person of plaintiff company concealed and furnished false information as well as false affidavit in violation of Ss. 177, 181, 182, P.P.C. and other enabling provisions and also committed contempt in the face of the Court with such conduct and act---High Court declined to grant interim injunction in favour of plaintiff company and against defendant company--- application was dismissed, in circumstances. Citation Name: 2023 CLD 1511 KARACHI-HIGH-COURT-SINDHBookmark this Case WARTSILA PAKISTAN (PVT.) LIMITED VS GUL AHMED ENERGY LIMITED S. 13---'Letter of Credit' and 'Bank Guarantee'---Distinction---In a letter of credit, payment is made by bank, as it becomes due and does not wait for default of applicant and beneficiary to invoke undertaking---Conversely, a bank guarantee becomes effective, when applicant defaults in making payment to beneficiary---Letter of credit ensures payment of amount as long as services are performed in a defined manner---Unlike, bank guarantee mitigates loss, if parties to the guarantee do not satisfy stipulated conditions---Letter of credit is appropriate for import and export business---In contrast, a bank guarantee suits government contracts.

WARTSILA PAKISTAN (PVT.) LIMITED vs GUL AHMED ENERGY LIMITED S — 2023 CLD 1511 KARACHI-HIGH-COURT-SINDH

Case information

Judgment text as reported

Other judgments reported in 2023 CLD