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The High Court restrained a bank from honouring performance and advance payment guarantees pending arbitration over a subcontract dispute.
The trial judge committed a fatal irregularity by raising and determining the issue of locus standi without hearing the parties, violating the fundamental right to be heard and principles of natural justice, thereby vitiating the judgment and decree.
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The High Court held the defendants breached an advance payment guarantee and ordered repayment, interest, and costs, but refused general damages.
The Plaintiff's claim for reimbursement under the advance payment guarantee failed because the contractual condition precedent—a decision of the Engineer establishing the contractor's default—was not fulfilled or served on the Defendant. The claim was therefore premature and not maintainable in court.
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