PARAGON TECHNOLOGIES vs SUI NORTHERN GAS PIPELINES LIMITED Ss — 2024 PLD 1 LAHORE-HIGH-COURT-LAHORE

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PARAGON TECHNOLOGIES VS SUI NORTHERN GAS PIPELINES LIMITED Ss. 13 & 5---arbitration act (X of 1940), S. 41 & Second Sched. Clause 4---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---On-demand performance guarantee---Bank guarantee, encashment of---arbitration proceedings before the Court---Principles relating to grant of an injunction to restrain the encashment of abank guarantee stated. Citation Name: 2024 PLD 1 LAHORE-HIGH-COURT-LAHORE PARAGON TECHNOLOGIES VS SUI NORTHERN GAS PIPELINES LIMITED Ss. 13 & 5---Unconditional bank guarantee or a letter of credit---Autonomy principle---Scope---Fate of an unconditional bank guarantee or a letter of credit being independent contracts is not dependent upon any dispute between the contracting parties and payment thereunder has to be made if an unconditional undertaking has been made by the issuer---Payment obligation under both the instruments is dependent on documentary demands and the issuer is barred from making any determination of objective facts---This is called the autonomy principle--- Premise on which this principle rests is that as between parties to documentary credit transactions a dispute related to the underlying transaction has to be pursued through a separate action for breach of the underlying contract and not by withholding payment under the letter of credit---"Pay first, sue later" is the core objective underlying the autonomy principle. Citation Name: 2024 PLD 1 LAHORE-HIGH-COURT-LAHORE PARAGON TECHNOLOGIES VS SUI NORTHERN GAS PIPELINES LIMITED Ss. 13 & 5---Bank guarantee, encashment of---Principles and exception---Fundamental rule of payment under the bank guarantee independent of any dispute between the contracting parties is excepted only where fraud is alleged as against the beneficiary of the bond/guarantee and the bank has notice of such fraud. Citation Name: 2024 PLD 1 LAHORE-HIGH-COURT-LAHORE PARAGON TECHNOLOGIES VS SUI NORTHERN GAS PIPELINES LIMITED Ss. 13 & 5----Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Unconditional bank guarantee, realization of---Power of the Court to grant interim injunction---Jurisprudence relating to grant of an injunction to restrain the realization of an unconditional bank guarantee as developed by the Courts of India stated. Citation Name: 2024 PLD 1 LAHORE-HIGH-COURT-LAHORE PARAGON TECHNOLOGIES VS SUI NORTHERN GAS PIPELINES LIMITED Ss. 13 & 5---arbitration act (X of 1940), S. 41 & Second Sched. Clause 4---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Contract for supply of goods---Supplies made beyond the period stipulated in the contract---Late payment charges---Unconditional bank guarantee, encashment of---Payment under the bank guarantee regardless of the dispute between the contracting parties---Scope---Bank guarantee is an independent contract and if it is unconditional the payment thereunder has to be made regardless of dispute between the contracting parties---Guarantee in the present case was unconditional and thus the demand made by respondent on the bank guarantee was required to be met by the Bank---Petitioner (supplier) had not made out the case required for the purposes of considering whether interlocutory relief should be granted to restrain payment under the guarantee---In relation to the order refusing to grant injunction by the courts below preventing respondent from making a call on the guarantee, no case for fraud had been made out---Case put forward by the petitioner that it was not in breach of its obligations, which assertion the respondent disputed, required proof for its validity and adjudication in this regard shall be done before the arbitrator(s)---Petitioner furthermore had not made any allegation about its prospective financial bankruptcy in case an injunction was refused---In any event, there did not appear to be any serious doubt about the financial position of respondent to pay the amount back to the petitioner together with compensatory costs should it succeed before the arbitrators in demonstrating that respondent could not have imposed late payment charges on it---In such circumstances, the petitioner had on facts and material before the Court failed to dislodge the burden of getting around the twin considerations underpinning the non-interference rule---Both the courts below had rightly dismissed the application of the petitioner for interim injunction to restrain the respondent from making any demand on the bank guarantee---Writ petition was dismissed. Citation Name: 2024 PLD 1 LAHORE-HIGH-COURT-LAHORE PARAGON TECHNOLOGIES VS SUI NORTHERN GAS PIPELINES LIMITED Ss. 13 & 5----Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Performance bond, encashment of---Power of the Court to grant interim injunction---'Unconscionability'---Jurisprudence on grant of interim injunctionon the ground of 'unconscionability' as developed by theCourts of Singapore and its criticism stated. Citation Name: 2024 PLD 1 LAHORE-HIGH-COURT-LAHORE PARAGON TECHNOLOGIES VS SUI NORTHERN GAS PIPELINES LIMITED S. 41 & Second Sched., Clause 4---Civil Procedure Code (V of 1908), O.XXXIX, Rr.1 & 2---Arbitration proceedings before the Court---Power of the Court to grant interim injunction---Principles and prerequisites stated.

PARAGON TECHNOLOGIES vs SUI NORTHERN GAS PIPELINES LIMITED Ss — 2024 PLD 1 LAHORE-HIGH-COURT-LAHORE

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