Kathmandu. Bank of Kathmandu Limited and Himalayan Bank have won a lawsuit in a Chinese court over an advance and guarantee payment of an international contract.

Bank of Kathmandu will get around Rs 900 million and Himalayan Bank will get back Rs 660 million.

Dr. Gandhi Pandit, a senior advocate, informed the media that the decision was taken in the contract case of the Melamchi drinking water project.

Both the banks had set up a counter guarantee for the Chinese contractor who was awarded the contract to work on the Melamchi project in April 2018.

The China Railway 15 Bureau had brought the performance guarantee counter of Melamchi Drinking Water Project from China Construction Bank Corporation.

However, the government terminated the contract with China Railway on September 26, saying that the construction of the tunnel was delayed. After winning the case from the court, the government confiscated the bail of the Chinese company in both the banks.

The Bank of Kathmandu seized 1.4 million euros and 6.6 million US dollars (about Rs 840 million) advance payment guarantee and the Himalayan Bank 6.6 million dollars (about 660 million rupees) performance guarantee.

After the forfeiture of the guarantee, China Railway 15 had filed a case in the Zhengzhou Intermediate People's Court, a lower court in China, alleging fraudulent payments. After that, China Construction Bank Corporation of China did not give the guarantee money to both the banks.