Q: What are the grounds of Injunction against invocation of bank guarantee ?

Ans: Grounds for grant of Injunction against the Invocation of Bank Guarantee 

A. Fraud 

i. Nature of the fraud 

ii. Knowledge of Fraud 

iii. Duty of care on the part of the negotiating bank 

iv. Specific averments as to the allegation of fraud 

v. Arbitrability of fraudulent invocation of a bank guarantee 

B. Special Equities 

i. Balance of Convenience and Prima Facie Case 

ii. Genuine Apprehension of Irretrievable Injury 

iii. Outstanding liability of the beneficiary in the underlying contract 

iv. Threshold of Irretrievable Injury as set out in the Itek Corporation case 

v. Existence of disputes in and/ or breach of the underlying contract 

vi. Invocation of the bank guarantee by a third party 

vii. Recovery of the amount in the underlying contract

viii. Absence of assets of the beneficiary in India 

ix. Violation of principles of natural justice 32

x. Invocation of bank guarantee should be in accordance with the terms thereof 

xi. Proportionality