SIMPLEX PROJECTS LIMITED Vs. COMBINED GROUP CONTRACTING COMPANY

JUDGEMENT

(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:-

(3.) Subsequently, the terms of the bank guarantee were modified as per the following Clauses: