Court rejects L&T request to block K-RIDE from encashing bank guarantees for Bengaluru Suburban Rail Project Corridor-4

A Commercial Court dismissed L&T’s request for interim protection to stop K-RIDE from invoking bank guarantees for Corridor-4 of the Bengaluru Suburban Rail Project, and set a date for an earlier injunction to be vacated while giving L&T time to approach the arbitral tribunal.
Court rejects L&T request to block K-RIDE from encashing bank guarantees for Bengaluru Suburban Rail Project Corridor-4
A What happened
An Additional City Civil and Sessions Judge (Commercial Court) dismissed L&T’s Section 9 application seeking interim protection against K-RIDE invoking and encashing bank guarantees connected with Corridor-4 of the Bengaluru Suburban Rail Project. The court allowed K-RIDE’s application to vacate an interim injunction that had been granted on July 30, 2025, and ordered that the injunction would stand automatically vacated on January 24, 2026. The court said the balance of convenience did not favor L&T, noted the unconditional nature of the bank guarantees, and said the constitution of the arbitral tribunal barred further interim measures by the court under Section 9(3) of the Arbitration and Conciliation Act, 1996. L&T was given liberty to seek similar relief before the arbitral tribunal within 20 days, and the court noted a remedy under Section 17 before the tribunal.

Key insights

  • 1

    Court said Section 9(3) limited its power once the arbitral tribunal was constituted: The court observed that once the arbitral tribunal was constituted, the court’s power to grant interim measures or an injunction on invocation of bank guarantees was barred under Section 9(3) of the Arbitration and Conciliation Act, 1996, and pointed to Section 17 relief before the tribunal.

  • 2

    Unconditional bank guarantees weighed against interim protection: The court noted the unconditional nature of the bank guarantees when concluding that the balance of convenience did not favor L&T.

Takeaways

L&T’s court bid to restrain K-RIDE from encashing bank guarantees was dismissed, the existing injunction was set to lapse on January 24, 2026, and L&T was directed to seek relief from the arbitral tribunal within 20 days.

Topics

Law & Public Safety Crime & Justice Courts

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