TTSJV v BapCo Refining: High Court refuses to block $484 million bond call

The Technology and Construction Court has refused to restrain Bahrain's state refining company from calling on performance and retention bonds worth close to half a billion US dollars, in a dispute arising from delays to a major refinery modernisation project.

In TTSJV W.L.L. and Others v Bapco Refining B.S.C. (Closed) [2026] EWHC 2047 (TCC), Mr Justice Pepperall dismissed an urgent application brought by the contractor consortium behind the upgrade of Bapco's Bahrain oil refinery, finding that none of the four grounds advanced came close to establishing that Bapco was contractually barred from making its demand.

The dispute centres on a $4.2 billion engineering, procurement and construction contract signed in 2018, under which a consortium including Technip Energies, Técnicas Reunidas and Samsung E&A, operating through joint venture vehicle TTSJV, agreed to modernise the refinery. Bapco maintains that the contractor missed a key completion milestone and has claimed liquidated damages of just over $484 million, the maximum recoverable under the contract's cap. TTSJV disputes this, arguing it is entitled to an extension of time following a fatal hydrogen explosion at the site in May 2025 that it says was Bapco's responsibility. With Bapco having called on a performance guarantee issued by HSBC and threatening a further call on a retention bond issued by Mashreqbank, TTSJV sought an injunction pending arbitration before the London Court of International Arbitration, warning that funds risked being released before an emergency arbitrator could be appointed.

Mr Justice Pepperall accepted the application was sufficiently urgent to be heard on short notice under the court's powers to support arbitral proceedings, but rejected the legal basis on which TTSJV sought to restrain the bond calls. Resolving a tension in earlier authorities, he held that a beneficiary can only be restrained from drawing on an on-demand bond, absent fraud, where it has been clearly and positively established that the underlying contract precludes the call, rather than merely where there is a seriously arguable case of breach. In doing so, he preferred the approach taken in MW High Tech Projects v Biffa Waste Services over a looser formulation drawn from Simon Carves Ltd v Ensus UK, noting that the latter case had in fact been misquoted in the contractor's skeleton argument, an error counsel for TTSJV, Sean Brannigan KC, promptly and properly acknowledged as inadvertent.

Applying that stricter test, the judge rejected each of TTSJV's grounds. He was not persuaded that the liquidated damages clause amounted to an unenforceable penalty, noting the strong presumption in favour of upholding terms negotiated between sophisticated commercial parties and distinguishing cases such as Bramall & Ogden v Sheffield City Council, where contractual drafting had genuinely failed to function. A challenge to the form of Bapco's demand under the Uniform Rules for Demand Guarantees also failed, not least because TTSJV's own counsel accepted, once challenged, that a supporting statement of claim had in fact accompanied the demand. The argument that liquidated damages were not yet due and payable pending resolution of the extension of time dispute fared no better, with the judge pointing to a contractual provision requiring parties to give effect to Bapco's determination notwithstanding any ongoing challenge. A fourth ground, that the retention bond did not secure liquidated damages at all, was abandoned once its terms were examined.

Injunctive relief was accordingly refused in full, leaving Bapco free to pursue its calls on both instruments while the underlying dispute proceeds to arbitration.