Ship Release Security in Bangladesh: Bank Guarantee vs P&I Letter of Undertaking (2026)

Ship release bank guarantee Bangladesh practice: the 2026 position

A ship release bank guarantee Bangladesh courts will accept is, in most cases, the only practical way to get an arrested vessel moving again. The Admiralty Court Act 2000 gives the High Court Division power to arrest ships but says nothing about the form, amount or wording of the security that frees them, so the court sets the terms case by case and practice fills the gap.[1] That practice favours a guarantee from a scheduled Bangladeshi bank in court-approved wording. A P&I club letter of undertaking is accepted only when the claimant agrees.[2] [3]

This guide is about the release itself: which forms of security work, how the amount is fixed, what the guarantee must say, how a foreign owner arranges one under Bangladesh Bank rules, when an LOU is the better choice, what counter-security a claimant may have to give, and how the security is returned at the end. Jurisdiction, maritime claims and the mechanics of arrest are covered in our companion guide to the Admiralty Court Act Bangladesh, and we do not repeat them here.

Summary: An arrested ship is released when the owner gives security the Admiralty Court accepts, usually a guarantee from a scheduled Bangladeshi bank covering the claim, interest and costs. Cash paid into the Marshal's account also works. A P&I club letter of undertaking is accepted only with the claimant's consent. The court can reduce excessive security, accept a lower agreed figure, and in unusual cases order counter-security from the claimant. The security stays in place until the suit, or any arbitration it supports, is decided or settled, and the court then directs its release or payment.

Key point: Bangladesh is known as a claimant-friendly arrest jurisdiction, but the court is not bound to a single formula. In MT Gala (11 March 2025) the owner had released the ship on a USD 10 million bank guarantee, while the cargo claimant had been ordered to give a USD 1 million guarantee as counter-security. In MV Titu 54 (15 March 2026) the court released a vessel on a Tk 3 crore guarantee against a claim of about Tk 8.78 crore once the claimant consented. The terms can be negotiated, and the negotiation starts the day the ship is arrested.

At a glance

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Table of Contents

How a ship release bank guarantee Bangladesh courts accept fits into the arrest

An arrest in Bangladesh is an interim order in an admiralty suit in rem, under which the Marshal of the Admiralty Court holds the ship as security for the claim. In May 2026, for example, the court ordered the arrest of M.V. Princess Jia Jia at Chattogram outer anchorage in Admiralty Suit No. 25 of 2026 and directed that it stay under arrest unless the court was satisfied that nothing was owed or the defendants provided adequate security.[13] Those are the two exits: defeat the arrest, or secure the claim.

The statute does not regulate the second exit. Section 11 of the Admiralty Court Act 2000 lets the Supreme Court make rules and keeps earlier rules in force so far as they are consistent with the Act, which preserves the Admiralty Rules 1912.[1] Practitioners describe release as a matter of the court's order: the owner applies, the court fixes the security, the security is filed, and a release order follows, which the Marshal serves on payment of the Marshal's fee.[2] [4] Our briefing on vessel arrest and release in Bangladesh sets out the statutory record behind that process.

Release is not a concession on the merits

Owners often fear that putting up security amounts to accepting the court's jurisdiction. In MT Mandala, decided on 27 January 2026, the Admiralty Court rejected that argument. It held that submission cannot be readily inferred from appearance, from filing a vakalatnama or from steps taken solely to protect the ship, vacate an arrest or furnish security; submission must be clear, voluntary and unequivocal.[7] An owner can therefore secure release first and argue limitation or jurisdiction afterwards, as the owners did successfully in that case. Reserving those defences in the guarantee and the release application is still good practice.

Forms of security the Admiralty Court accepts

Four instruments come up in practice. Only one, the local bank guarantee, is accepted without argument.

A guarantee from a scheduled bank in Bangladesh

The settled practice is a guarantee issued by a scheduled bank in Bangladesh, in wording the court has approved, which the parties cannot freely amend.[3] Practitioners describe it as the easiest route to release.[2] [4] Recent cases show the range: a guarantee from Southeast Bank's Agrabad branch equal to a bunker supplier's claim of USD 728,052.32 in MT Mandala, a USD 10 million guarantee in MT Gala, and a Tk 3 crore guarantee in favour of the Marshal in MV Titu 54.[5] [6] [7]

Cash paid to the Marshal

Sources disagree on cash. A 2013 practitioner paper stated that the court never accepts a cash deposit to vacate an arrest.[3] Other practitioners say a ship is released on deposit of the claim amount in court or on a local bank guarantee.[2] [4] The court's own records show cash in use. In the MT Malhari detention suit, the owner deposited Tk 1,69,59,986.46 by pay order into the Marshal's account under the court's release order of November 2020, alongside a Standard Chartered bank guarantee, and the money sat with the Marshal until the suit was compromised in December 2025.[8] Cash is possible; it is rarely efficient, for reasons explained below.

A P&I club letter of undertaking

Unlike London or Singapore, Bangladesh does not treat a club LOU as standard security. The court allows an LOU when the claimant agrees to accept it, and not otherwise.[2] [4] The letter of undertaking is therefore a negotiated instrument, not a filing.

What does not count as security

MV Titu 54 shows the court's approach to improvised offers. The owner offered the vessel's certificate of registration and a hull insurance policy. On 15 March 2026 the court rejected the policy, because it had been issued to secure a credit facility from a financial institution and would not be available to satisfy any decree, and returned it to the owner's advocate.[5] A document that does not give the claimant a payment right it can enforce is not security.

The table below compares the options. On a phone, scroll it sideways.

Amount of security: how the figure is fixed

The starting point for any ship release bank guarantee Bangladesh courts order is the full amount claimed, including interest and costs.[2] [4] A 2013 practitioner paper described the guarantee as covering the entire suit value.[3] The claimant's plaint figure therefore drives the security, which is why claimants are tempted to inflate it and owners should test it at once.

Reduction of inflated claims

The court may reduce the security where the owner shows, on a prima facie basis, that the claim is inflated.[2] The application must show that the claimant's allegations are unsupported, with documents rather than argument.[3] Two timings are available. An owner can apply before release, which practitioners estimate takes one to two weeks to be heard and is not advised when the ship must sail, or release the ship on the full figure and then apply to reduce, after which a revised guarantee is furnished.[2] [4] The MT Malhari guarantee was reduced by a bank letter of amendment in January 2021, two months after release.[8]

Agreed partial security

The court will accept a lower figure where the claimant consents. In MV Titu 54, a collision claim of Tk 8,77,50,000, the owner offered a Tk 3 crore bank guarantee, the claimant's advocate raised no objection, and the court ordered release on that guarantee in favour of the Marshal, with the security to abide the result of the suit.[5] The court added a protective term: it restrained the owner from transferring the vessel or altering its nature and character until the suit was decided.[5] Owners negotiating a discount should expect that kind of condition and price it in.

Currency of the security

Guarantees can be in Taka or US dollars. MT Gala was released on a USD 10 million guarantee, while the court template described in practitioner literature is in Taka, with the claim stated in dollars and its Taka equivalent.[3] [6] The choice matters when the Taka moves. A Taka guarantee fixed at the filing rate may cover less of a dollar claim by the time of decree, and Bangladesh Bank requires a Taka guarantee issued against a foreign counter-guarantee to carry suitable cover for exchange-rate movement.[11]

Ship release bank guarantee Bangladesh wording: a checklist

A ship release bank guarantee Bangladesh banks issue for an admiralty suit is not a commercial guarantee with the court's name added. The Admiralty Court has a settled form, and a 2013 practitioner paper reproduced the court-accepted wording and warned that no alternative or amendment was allowed.[3] The safest course is to obtain the current form from the Admiralty Court's section through local counsel and give it to the bank before the bank drafts anything.

Elements of the court form

The template described in that paper contains the following elements.[3]

• Title of the suit: the High Court Division in its admiralty jurisdiction, the suit number and year, the plaintiff, and the vessel and others as defendants.
• Addressee: the Registrar of the Supreme Court. Recent orders may instead require the guarantee to be in favour of the Marshal, as in MV Titu 54, so follow the release order.[5]
• Purpose and reservation: security given by the owners to release the vessel from arrest, without prejudice to all defences, objections and challenges to jurisdiction.
• Payment trigger: the bank deposits the guaranteed sum, or a lesser amount, in court when called on following a decree against the vessel or owners, or an amicable settlement.
• Limit: the bank's liability is capped at the stated amount.
• Validity: until disposal of the suit or 12 months, with automatic 12-month renewals while the suit is pending.
• Claim period: written claims within 90 days of disposal of the suit, after which the bank is discharged.

Points to check before the guarantee is filed

Most rejections and later disputes come from a short list of drafting faults. We check each guarantee against these questions before it is lodged.

• Does the amount match the order? The figure, currency and words must match the release order, including any agreed reduction.
• Is interest and costs cover inside the cap? If the court fixed security to include interest and costs, the capped sum must already include them.
• Is the trigger tied to the right forum? Where the suit is stayed for a foreign arbitration, the trigger should also refer to a final award or a settlement, so the guarantee answers the forum that actually decides the merits.
• Does validity survive a long case? Contested suits take three to four years at first instance, so automatic renewal is essential.[2]
• Is the issuing branch named? the order discharging the Mandala guarantee named the issuing branch and directed it to return the instrument, so name the branch that will act.[7]
• Are defences reserved? Keep the reservation of jurisdiction, limitation and arbitration defences in the text.

Owners familiar with demand guarantees should note the difference. A release guarantee pays into court on the court's direction, not on the beneficiary's unilateral demand, so the fraud-exception disputes discussed in our analysis of bank guarantee encashment in Bangladesh rarely arise. The risk lies in drafting and validity rather than in an unjustified call.

Arranging the guarantee for a foreign owner under Bangladesh Bank rules

Most arrested ships are owned abroad, and a Bangladeshi bank cannot simply issue a guarantee on a foreign owner's request. Guarantees on behalf of non-residents in favour of residents are regulated under the Foreign Exchange Regulation Act 1947, and the current rules are in Bangladesh Bank's FEPD-1 Circular No. 32 of 2 September 2026, valid for one year from issue.[11] Before any ship release bank guarantee Bangladesh banks issue for a foreign owner, the bank will check which route in that circular applies.

Route one: a back-to-back counter-guarantee

Under paragraph 11(1), an authorised dealer bank may, without prior Bangladesh Bank approval, issue a guarantee in foreign currency on behalf of a non-resident company in favour of residents if it holds a back-to-back guarantee for the guaranteed amount from an overseas correspondent or other bank abroad, and is satisfied the overseas guarantee is bona fide.[11] Where the beneficiary needs Taka, the bank may issue a Taka guarantee against a Taka-equivalent foreign-currency counter-guarantee with cover for exchange-rate movement.[11] In practice the owner, its club or its financier instructs a bank abroad, which counter-guarantees a Bangladeshi bank with the necessary correspondent relationship.

Route two: cash in the bank's nostro account

Paragraph 11(2) allows the bank instead to issue the guarantee against funds the non-resident remits to the bank's nostro account, held in a foreign-currency margin account. When the beneficiary releases the guarantee, the money can be remitted back to the non-resident; if the guarantee is invoked, the claim is settled in Taka.[11] This route avoids the need for a foreign counter-guarantor, but ties up the owner's cash for the life of the suit.

Everything else needs prior approval

Under paragraph 12, any other guarantee on behalf of a foreign-owned company or non-resident in favour of residents needs Bangladesh Bank's prior approval, sought by letter stating the guarantee, its period and purpose, and how the bank will be reimbursed if it is invoked.[11] Approval takes time the ship rarely has. Owners trading regularly to Chattogram, Mongla or Payra should put a counter-guarantee facility in place with a Bangladeshi bank before any arrest, so the paperwork is ready when it is needed.

P&I club letters of undertaking: when the court will accept one

A club letter of undertaking is the cheapest and fastest security for an entered ship, because it costs the owner no bank commission and no cash. In Bangladesh it works only by agreement: the court allows an LOU when the claimant agrees to accept it.[2] The 2013 practitioner paper went further and stated that the court does not accept a club letter as a security instrument at all; the more recent practitioner view is that consent is the gateway.[2] [3] [14]

Why a claimant may agree

Claimants accept an LOU for practical reasons. An International Group club is often a better credit than a local bank, a quick agreement avoids a contested reduction application, and a claimant that accepts an LOU usually obtains it for the full claim, interest and costs rather than a reduced court figure. A claimant that plans to arbitrate abroad may also prefer a club undertaking that responds to a London or Singapore award, which a Bangladeshi bank guarantee tied to the suit may not do cleanly.

What an acceptable letter of undertaking contains

Recent practitioner commentary identifies the features that make an LOU acceptable: an irrevocable promise to pay, a limit covering claim, interest and costs, a clear payment trigger such as a final judgment, award or settlement, a jurisdiction or arbitration clause that preserves the parties' agreed forum, a method for serving a demand, and proof of the signatory's authority.[14] The same commentary lists the usual reasons LOUs are rejected: missing authentication, inadequate limits, conditional wording and unworkable jurisdiction clauses.[14] Where a correspondent signs, annex its authority.

Recording the LOU in a consent order

Because the court accepts the LOU only on the claimant's consent, the release application should be joint, or supported by the claimant's written no-objection, and should ask for an order that the vessel is released on the LOU and that the suit continues, or is stayed for arbitration, with the LOU standing as security. The Admiralty Court has released ships on agreed terms before, as MV Titu 54 shows, and an agreed order is the cleanest way to put the undertaking on the record.[5]

Choosing between a bank guarantee and an LOU

For the owner, choosing between a ship release bank guarantee Bangladesh banks issue and a club LOU turns on four questions: will the claimant consent, how fast must the ship sail, what will the security cost over the life of the case, and where will the merits be decided.

• Consent: if the claimant refuses an LOU, the decision is made. A local bank guarantee is the only security the court will impose on an unwilling claimant.[2]
• Speed: once a guarantee is in hand, a release order can be obtained the same afternoon.[2] The delay lies in arranging the guarantee, especially a counter-guarantee from abroad, which is where an LOU can save days.
• Cost: a bank guarantee carries the local bank's commission, any counter-guarantor's charges and, under the cash route, idle funds for the whole case. An LOU usually costs nothing beyond the club's administration.
• Forum: where the merits will be arbitrated abroad, an LOU drafted to respond to the award may serve both parties better than a guarantee tied to the Bangladeshi suit.

A combination is often the deal. Owners can offer an LOU for most of the claim with a smaller local guarantee or cash deposit for costs, or a full LOU in exchange for an agreed lower figure. The claimant's leverage is the ship; the owner's leverage is the cost and delay of a contested reduction application and the risk of a counter-security order.

Counter-security and wrongful arrest

Bangladesh is described as an advantageous arrest jurisdiction partly because the court does not require counter-security when it orders an arrest, and because there is no established practice of awarding damages for wrongful arrest.[2] [4] MT Gala shows that both statements need qualification.

MT Gala: counter-security in a large cargo claim

The plaintiff, a Chinese buyer, claimed USD 53,516,511.80 for non-delivery of about 99,380 tonnes of crude oil and arrested the tanker at Chattogram in March 2022. On 25 August 2022 the court ordered release on a USD 10 million owner's guarantee and directed the plaintiff to provide a bank guarantee as counter-security covering interest on the USD 10 million for three years; the plaintiff provided USD 1 million and the ship was released.[6] The plaintiff's counsel later described that counter-security as protection for parties interested in the vessel if the arrest proved unjustified.[6]

The Evangelismos test applies

The owner then counterclaimed USD 14,264,419.30 for wrongful arrest and asked for a further USD 2.6 million of security against the counterclaim. On 11 March 2025 the court refused. It held that ship arrest is a statutory right under section 4(4) of the Act and rules 4 and 5 of the Admiralty Rules 1912, and that, in the absence of legislation, the Privy Council's test in The Evangelismos remains good law: damages for wrongful arrest require bad faith or gross negligence.[6] Non-disclosure of foreign proceedings did not meet that test on the facts.[6]

What owners can still claim

Short of bad faith, an owner's protections are procedural. Where all plaintiffs reside outside Bangladesh and hold no sufficient immovable property here, the court may order them to give security for the defendant's costs.[2] Section 35A of the Code of Civil Procedure allows compensatory costs of up to fifty thousand taka where a claim objected to as false or vexatious is disallowed.[12] And an arrest with no in rem basis can be vacated, which costs the claimant its security entirely, as the plaintiff in MT Mandala discovered.[7]

Timelines and costs of release

Once a ship release bank guarantee Bangladesh banks have issued is in hand, release is fast; arranging the guarantee is the slow part. The sequence below is the one we follow for owners.

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How long each stage takes

Practitioners estimate that an arrest order can be obtained within about 48 hours of receiving the file and power of attorney, and that a release order can be obtained in the afternoon if the security is received in the morning.[2] The 2013 practitioner paper gave two to four days for release overall, and four to five days in its FAQ.[3] A contested application to vacate the arrest or reduce security takes longer: practitioner estimates range from half a week to one or two weeks.[2] [4] MV Titu 54 shows the fast end in a recent case: arrest ordered at admission on 11 March 2026, release ordered on agreed security on 15 March 2026.[5]

What release costs

The owner pays the Marshal's fee for serving the release order, its own lawyers and the cost of the security.[4] The 2013 practitioner paper estimated release costs at USD 4,000 to 6,000 and arrest costs at USD 3,500 to 5,000; these figures are now dated and exclude the security itself.[3] Bank commission on the guarantee is the largest recurring cost, because it accrues for as long as the suit runs. On the claimant's side, section 7 of the Act caps the court fee on an admiralty plaint at Tk 1,00,000, or Tk 100 for master's and seamen's wage claims.[1]

Release by consent, settlement and remittance

Many arrests end in settlement once security is in place, because the claimant is secured and the owner wants its guarantee back.

Compromise decrees under Order XXIII rule 3

In MT Malhari the parties filed a joint application under Order XXIII rule 3 of the Code of Civil Procedure, and on 17 December 2025 the court decreed the suit in terms of their settlement. The court directed the Marshal to issue pay orders to the settlement payees, return the balance of the cash deposit to the owner's P&I insurer, Britannia, by remittance on Bangladesh Bank permission, and return the Standard Chartered guarantee to the owner's advocate for cancellation.[8] A settlement agreement should specify each of those steps, because the Marshal acts only on the court's directions.

Getting cash out of Bangladesh

Cash security creates a remittance problem when the payee is abroad. In MV Prosperity, decided with the Malhari matter on 2 August 2026, Bangladesh Bank had permitted remittance of the decretal sums only after deduction of VAT, tax and advance income tax. The court held that an amount decreed by the court assumes the character of a judgment debt, that such deductions had no legal foundation, and directed remittance as ordered.[9] The Malhari balance had been ordered returned in December 2025 and was still unremitted when the matter came back in August 2026.[9] For a foreign owner, a bank guarantee that is simply cancelled avoids that delay.

Getting the guarantee back

A ship release bank guarantee Bangladesh courts have accepted is discharged only by court order. The order can come at any of three points.

When the suit fails

In MT Mandala, the bunker claim was filed in April 2023 for supplies made in 2017. The owners applied in March 2025 for return of the plaint and release of the guarantee. On 27 January 2026 the court rejected the plaint as barred under the Limitation Act 1908, released the Southeast Bank guarantee and directed the branch to return it.[7] The court also found that the in rem conditions were not met, because the charterer liable in personam was not shown to be the vessel's beneficial owner.[7] An owner with a strong limitation or jurisdiction point should not wait for trial to recover its security.

When the suit settles or is decreed

On settlement, the compromise decree should direct return of the guarantee for cancellation, as in MT Malhari.[8] On a decree for the claimant, the guarantee responds according to its trigger, and the bank pays into court for disbursement.[3]

While parallel proceedings run

Security given in the admiralty suit stays tied to that suit. In MV Asia Zircon II, decided on 26 July 2026, the court refused to transfer a related foreign award enforcement case into the admiralty suit, noting among other things that the plaintiff's claim was already sufficiently secured by the bank guarantee furnished on release.[10] Where the merits go to arbitration, the court usually keeps the arrest security in place and stays the suit.[2] Our guide to maritime arbitration in Bangladesh explains how that interacts with LMAA and SCMA references.

Negotiation strategy for owners and claimants

The terms of release are usually agreed, not imposed. Each side has a short list of moves that matter.

For owners and clubs

• Prepare before arrest: file a caveat where a claim is threatened, which gives the owner a hearing and a chance to reduce security, and set up a counter-guarantee line with a Bangladeshi bank.[2] [11]
• Attack the figure with documents: payments made, invoices in dispute, contractual interest rates and limitation dates support a reduction or an agreed discount.[3]
• Offer the LOU early: pair it with a time-limited offer and a draft consent order, before the claimant's costs of opposing release build up.
• Keep the defences: release first, then pursue limitation, jurisdiction or vacation of the arrest; furnishing security is not submission.[7]

For claimants

• Plead a defensible figure: an inflated claim invites a reduction application and, in a large case, a counter-security order like the one in MT Gala.[6]
• Price the LOU: accept a club undertaking only in wording that responds to the forum that will decide the merits and covers interest and costs.[14]
• Ask for protective terms: where partial security is agreed, seek an injunction against transfer or alteration of the vessel, as the court granted in MV Titu 54.[5]
• Check limitation before filing: a time-barred claim loses both the suit and the security, as MT Mandala shows.[7]

Claimants pursuing particular claim types should also read our guides to demurrage and detention claims in Bangladesh and cargo loss and short delivery claims, which deal with how each claim is quantified before it becomes a security figure.

Mistakes to avoid with a ship release bank guarantee Bangladesh banks issue

• Using a foreign template: a guarantee in a foreign bank's or club's standard wording invites rejection. Start from the Admiralty Court's form.[3]
• Offering the wrong document: hull insurance policies and registration certificates are not security.[5]
• Letting validity lapse: without automatic renewal, a guarantee can expire long before a contested suit ends.[2] [3]
• Ignoring the exchange-control route: a guarantee for a foreign owner needs a back-to-back counter-guarantee, nostro funds or Bangladesh Bank approval.[11]
• Choosing cash without planning its return: cash with the Marshal can take months to remit abroad after the case ends.[9]
• Assuming LOU acceptance: an LOU works only once the claimant agrees, so obtain that agreement in writing before relying on it.[2]

What to watch in 2026 and 2027

Three developments will shape release practice. First, whether the Admiralty Court extends MT Gala and orders counter-security more often in large claims, or treats it as exceptional, given its refusal of further security on the wrongful arrest counterclaim.[6] Second, whether the court's ruling in MV Prosperity resolves the remittance difficulties that make cash security unattractive to foreign owners.[9] Third, Bangladesh Bank's guarantee rules are reissued annually, and FEPD-1 Circular No. 32 is valid only until September 2027, so the counter-guarantee routes should be rechecked for each new matter.[11]

TRW acts for owners, P&I clubs, charterers and claimants on arrests and releases before the Admiralty Court, from guarantee wording and counter-guarantee structures to LOU negotiations, reduction applications and consent orders. Our banking and finance litigation practice handles the guarantee side, and our international arbitration practice coordinates security with foreign references. You can also contact TRW directly when a ship has been arrested.

Frequently asked questions

What security releases an arrested ship in Bangladesh?

Usually a guarantee from a scheduled Bangladeshi bank in the court's wording, covering the claim, interest and costs. Cash paid into the Marshal's account and, with the claimant's consent, a P&I club letter of undertaking are the alternatives.[2] [3] [8]

Does the Admiralty Court accept a P&I club LOU?

Only if the arresting claimant agrees to accept it. Without consent, the court will expect a local bank guarantee.[2] [4]

How much security must the owner provide?

Normally the full claim including interest and costs. The court may reduce an inflated figure on a prima facie showing, or accept a lower agreed amount, as it did in MV Titu 54 in March 2026.[2] [5]

Can the wording of the bank guarantee be changed?

Practitioners report that the court has a prescribed form and does not allow alternative or amended text. Obtain the current form before the bank drafts anything.[3]

How quickly is a ship released once security is ready?

A release order can be obtained the same day the security is received, and is then served by the Marshal. Arranging the guarantee, especially a counter-guarantee from abroad, usually takes longer than the court stage.[2] [4]

Can a Bangladeshi bank issue a guarantee for a foreign shipowner?

Yes, without prior approval if it holds a back-to-back guarantee from a bank abroad or funds remitted by the owner, under FEPD-1 Circular No. 32 of 2 September 2026. Other cases need Bangladesh Bank's prior approval.[11]

Must the claimant give counter-security?

Not routinely. In MT Gala, however, the court ordered the cargo claimant to give a USD 1 million guarantee as counter-security when it released the tanker on a USD 10 million guarantee.[2] [6]

Can an owner recover damages for wrongful arrest?

Only on proof of bad faith or gross negligence. In March 2025 the Admiralty Court held that The Evangelismos test remains good law in Bangladesh.[6]

Does giving security mean the owner accepts jurisdiction?

No. In MT Mandala the court held that furnishing security or seeking release is not submission to jurisdiction, and later rejected the plaint as time-barred.[7]

How is the guarantee returned?

Only by court order, after the suit is rejected, dismissed, decreed or compromised. The order directs the Marshal or the issuing bank to return the guarantee for cancellation.[7] [8]