Court dismisses L&T’s plea on interim protection against invocation of bank guarantees by K-RIDE

Bengaluru, Jan 13 (PTI) A court has dismissed an application filed by L&T seeking interim protection against the invocation of bank guarantees by K-RIDE in connection with Corridor-4 of the Bengaluru Suburban Rail Project, while granting limited temporary relief to enable the company to approach the arbitral tribunal.

The Additional City Civil and Sessions Judge (Commercial Court), C D Karoshi, held that "the main application filed under Section-9 of Arbitration and Conciliation Act, 1996 by the applicant is hereby dismissed," while allowing K-RIDE’s plea to vacate the interim injunction earlier granted by the court.

In its detailed order dated January 5, 2026, the court noted that although L&T had made allegations of fraud and non-availability of encumbrance-free land, "the balance of convenience does not lie in favour of the applicant," particularly in view of the unconditional nature of the bank guarantees and the constitution of the arbitral tribunal.

The court further observed that "after constitution of the arbitral tribunal, power of this court to grant interim measures or injunction relating to invocation of bank guarantees… is barred under Section 9(3) of the Arbitration and Conciliation Act, 1996," adding that L&T had an efficacious remedy under Section 17 before the tribunal.

Allowing Rail Infrastructure Development Company (Karnataka) Limited's (K-RIDE) application under Order 39 Rule 4 of the CPC, the court ordered that the interim injunction granted on July 30, 2025 "shall stand automatically vacated on 24.01.2026," while granting L&T liberty to seek similar relief before the arbitral tribunal within 20 days.

"The Commercial Court has dismissed the application as filed by L&T, which had sought for restraining K-RIDE from invoking/encashing bank guarantees given under the contracts," a K-RIDE official told PTI. PTI GMS GMS KH