- (1.) The petitioner, a renowned civil engineer and construction company entered into a contract with the respondent no.1 - Combined Group Contracting Company, a company incorporated under the appropriate laws of the State of Kuwait for construction of 45 properties of public buildings in Kuwait. The scope of main contract covered engineering, designing, procurement and supply of materials, shipping, project management, construction, inspection, testing, pre-commissioning and assistance in performance testing, training of company's personnel and all other works with utilities and services. Pursuant to the main contract a back-to-back sub- contract was executed by and between the parties which included submission of the mobilisation bank guarantee by the petitioner in order to receive the mobilisation advance from the respondent no.1. The commercial terms also included the submission of the performance bank guarantee by the petitioner. As per the terms of the said back-to-back sub-contract, the respondent no.1 was entitled to recover the mobilisation advance money provided to the petitioner from the Running Account bills (RA bills) raised by the respondent no.1 on the petitioner from time to time and similarly PAHW was entitled to their mobilisation advance from running account bills raised on the respondent no.1 in the same manner.
(2.) The total value of the sub-contract was KWD 24,387,360. In terms of Clause 6.5 of the sub-contract, the petitioner was to receive 10% of the sub-contract price as mobilisation advance. It was also agreed by the petitioner that the respondent no.1 would be entitled to deductions to retain amount from all due payments in terms of the main contract i.e., 10% deduction of the retention from each of the RA Bills. The petitioner duly furnished moblisation of advance bank guarantee and performance bank guarantee at the rate of 10% of the contract price each in favour of the respondent no.1. The details of guarantee stipulated the following:- "THIS GUARANTEE IS CONSIDERED VALID UNTIL 02-04-2016. THIS BOND REMAINS VALID IN ITS FULL AMOUNT UNTIL THE ISSUE OF THE CERTIFICATE OF COMPLETION UNDER THE MAIN CONTRACT. THIS GUARANTEE SHALL BE VALID AND CANNOT BE CANCELLED WITHIN THE MENTIONED PERIOD WITHOUT YOUR WRITTEN APPROVAL. THIS ADVANCE PAYMENT GUARANTEE WILL BE EFFECTIVE ON RECEIPT OF THE ADVANCE MONEY AT OUR END." Further, stipulation in the bank guarantee is quoted below:- "YOUR CLAIM, IF ANY, MUST CERTIFY THAT THE AMOUNT CLAIMED REPRESENTS THE UNPAID APPLICABLE PRINCIPAL AND INTEREST AMOUNT DUE BY THE BORROWER WITH REFERENCE TO THE CREDIT FACILITY."
(3.) Subsequently, the terms of the bank guarantee were modified as per the following Clauses: "(3)THE LAST 3(THREE) PARAGRAPHS OF GUARANTEE TEXT AMENDED TO READ AS FOLLOWS: QUOTE THIS GUARANTEE IS CONSIDERED VALID UNTIL 02-04-2016 OR UNTIL ISSUANCE OF THE CERTIFICATE OF COMPLETION UNDER THE MAIN CONTRACT WHICHEVER OCCURS EARLIER." "ANY CLAIM OR CLAIMS MADE BY YOU UNDER THIS COUNTER GUARANTEE WILL BE PAID ON YOUR FIRST WRITTEN DEMAND BY SWIFT OR REGISTERED MAIL DESPITE ANY CONTESTATION ON THE PART OF OUR PRINCIPAL OR ANY OTHER PARTY PROVIDED YOUR CLAIM IS SUBMITTED TO US ON OR BEFORE THE EXPIRY DATE OF THIS COUNTER GUARANTEE." ;