Shapoorji Pallonji & Company Private Ltd v Yumn Ltd & Anor

Shapoorji Pallonji & Company Private Ltd v Yumn Ltd & Anor

SPC failed to demonstrate to the enhanced evidential standard that YL’s demand was fraudulent or in breach of any express or implied contractual condition; English law principles governing on demand bonds apply irrespective of arbitration agreements; therefore, the application for mandatory orders requiring YL to withdraw its demand is dismissed.

Parties
Claimant: Shapoorji Pallonji & Company Private Limited; Defendant: Yumn Ltd; Third Party: Standard Chartered Bank
Jurisdiction
England and Wales
Judgment Date
06 April 2021
Procedural Posture
Arbitration Claim / Judgment on Applications for Injunction and Related Orders
Outcome
application dismissed
Legal Topics
On Demand Bonds, Injunctions, Arbitration Agreements, Fraud Exception, Balance of Convenience
Commercial Law Arbitration Banking Law On Demand Bonds Injunctions Arbitration Agreements Fraud Exception Balance of Convenience

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Parties

Shapoorji Pallonji & Company Private Limited

Claimant

Yumn Ltd

Defendant

Standard Chartered Bank

Third Party

Procedural Posture

Arbitration Claim / Judgment on Applications for Injunction and Related Orders

Legal Issues

  1. 1 Whether the English court should grant an injunction restraining Yumn Ltd from enforcing or making further demands under an on demand bond pending determination by an ICC emergency arbitrator
  2. 2 Whether the demand made by Yumn Ltd under the bond was fraudulent or in breach of express or implied contractual conditions
  3. 3 Whether the existence of an arbitration agreement alters the principles applied by the English court in granting injunctive relief

Ratio Decidendi

SPC failed to demonstrate to the enhanced evidential standard that YL’s demand was fraudulent or in breach of any express or implied contractual condition; English law principles governing on demand bonds apply irrespective of arbitration agreements; therefore, the application for mandatory orders requiring YL to withdraw its demand is dismissed.

Court Disposition

application dismissed

Orders

  • SPC’s application for mandatory orders requiring YL to withdraw its demand is refused
  • Permission to appeal is refused