SHC Appellate Side Grants Stay Against Encashment of Bank Guarantee

MTC recently filed an appeal before the Sindh High Court, seeking to restrain the encashment of a bank guarantee. The dispute stems from a contract between our client and a government-owned public limited company for the supply of high and low bed trailers. Unfortunately, due to a fire at their supplier’s factory, our Client failed to complete delivery within the timelines stipulated in the contract.

Consequently, the company issued a notice to our client, demanding the encashment of the bank guarantee for damages incurred. Initially, the matter was pursued in the District Courts, where the judgment favored our client. However, the respondent filed an appeal to the District Judge, resulting in a reversal of the initial ruling.

Subsequently, MTC filed a second appeal before the Sindh High Court, where we successfully argued that the respondent failed to substantiate damages before the Trial Court. Therefore, their claim to encash the bank guarantee on account of liquidated damages was unjustified and unlawful.

Upon hearing our arguments, the Sindh High Court was pleased to grant a status quo to the parties until the pendency of the appeal. MTC’s team in this matter included Talha Javed, Senior Associate, and Hassan Abbas, Associate.