Court refuses to restrain BapCo’s US$484.4m performance-bond call

The Technology and Construction Court refused TTSJV and its parent companies an injunction to suspend BapCo's US$484,406,323 demand on an HSBC performance guaranteeNationalarchives. The court also refused relief against further demands on that guaranteeNationalarchives and a retention bondNationalarchives in the dispute over modernisation of BapCo's Bahrain refinery.

Mr Justice Pepperall held that a seriously arguable case of breach of the underlying contract was insufficient to restrain the beneficiaryNationalarchives. In the absence of fraud, TTSJV had to clearly establish that the parties' contract precluded BapCo from making the call. The judgment endorsed the analysis in MW High Tech Projects UK Ltd v Biffa Waste Services Ltd and rejected a less rigorous reading of the authorities.

Urgency allowed the court to hear the application in support of anticipated London-seated LCIA arbitration. Funds might be released before an emergency arbitrator could be appointed and act effectively. The court considered that any relief would have been temporary, pending the emergency arbitrator's ability to act. It heard the urgent application but refused relief on the substantive grounds considered below.

TTSJV argued that delay liquidated damages were penal because BapCo could use the works and retain revenue without a corresponding reduction in damages. The judge found that TTSJV had not clearly established an unenforceable penalty, or even its proposed strongly arguable caseNationalarchives. Whether the damages were disproportionate required a fact-sensitive assessment, including the parties' negotiated allocation of risk, certainty, and BapCo's interest in completion of the whole works. The judgment did not finally decide that penalty question on the limited evidence at the urgent hearing.

The challenge to the demand's form also failed. The court read the prescribed form's placeholder as requiring identification of the EPC contract, rather than details of the alleged breachesNationalarchives. It noted that article 15(a) of the Uniform Rules for Demand Guarantees permitted the breach statement to be in a separate signed document accompanying or identifying the demand. Counsel accepted for the hearing that a supporting statement existed, although it had not been put before the court.

TTSJV also failed to establish that delay damages were not due and payableNationalarchives. The judge identified a contractual requirement to give effect to determinations despite a challenge, while noting that he had not heard adversarial argument on that provision. Separately, TTSJV had not engaged with BapCo's detailed rejection of its extension-of-time claim. The argument that the retention bond did not secure delay liquidated damages was abandoned after the relevant contractual provisions were identifiedNationalarchives.

The decision is TTSJV W.L.L. & Ors v BapCo Refining B.S.C. (Closed) [2026] EWHC 2047 (TCC), applying Arbitration Act 1996 section 44 and the contractual bond terms.