KARACHI, May 1: The Sindh High Court has restrained the GHQ works directorate, Rawalpindi, and the Pakistan Aeronautical Complex, Kamra, from encashing a bank guarantee furnished by a multinational grid station contractor pending its suit over payment of demurrage charges to the Karachi Port Trust.

Alstom Pakistan (Pvt) Limited, formerly AEG Pakistan, installed a 132-kv grid station at Kamra under a contract signed in 1996. The construction was delayed because of the customs department’s refusal to treat the machinery imported by the contractor as ‘defence stores’. The import consignments remained stranded for a considerable period of time and the the KPT demanded demurrage from the PAC, Kamra. The PAC, the GHQ works department and the embarkation headquarters at Karachi, which were responsible for clearance of imports and had earlier obtained a bank guarantee from the contractor, demanded its encashment.

The contractor filed a suit and sought an interim injunction against the encashment of bank guarantee which was granted by a single SHC judge. The defendants challenged the interim order before a division bench, saying it had virtually decreed the pending suit.

The bench, which consisted of Justices S. Ahmed Sarwana and M. Mujibullah Siddiqui, upheld the impugned order.

Agreeing with the contentions raised by the contractor’s counsel, Yawar Farooqui, the bench observed in its order that an arguable case had been made out for issuance of a temporary injunction. The balance of convenience was in favour of the contractor company. An irreparable loss was likely to be suffered by it if the injunction was declined.