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Injunctions against calls on bank guarantees and the relevance of emergency arbitration (Shapoorji Pallonji (India) v Yumn Limited (Rwanda))

Injunctions against calls on bank guarantees and the relevance of emergency arbitration (Shapoorji Pallonji (India) v Yumn Limited (Rwanda))
Published on: 23 April 2021
Published by: LexisPSL
  • Injunctions against calls on bank guarantees and the relevance of emergency arbitration (Shapoorji Pallonji (India) v Yumn Limited (Rwanda))
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Arbitration analysis: This case is about the court’s approach to the determination of whether an injunction should be granted requiring the beneficiary of the proceeds of a bank guarantee (bond) to reverse its call on the bond. There is little authority in this area and the court clarified that the principles it will apply are the same as those that relate to the grant of an injunction against the beneficiary from making the call on the bond or from continuing with the call once made but before having received the proceeds. A further issue before the court was whether the court should apply a different (and more lax) test in determining the grant of an injunction when dealing with an underlying dispute between parties that had would have to finally be resolved in arbitration. It was argued that the arbitral tribunal (or, more specifically, an emergency arbitrator appointed before the constitution of the arbitral tribunal proper) operating under the International Chamber of Commerce Arbitration Rules in a Singapore-seated arbitration would not be constrained to apply the strict English law principles that the English court would apply, and, for this reason, the English court should not apply the principles of English law that would otherwise be applicable to such applications. This argument was rejected by the court. Written by Shourav Lahiri, barrister at Atkin Chambers. or take a trial to read the full analysis.

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