Authored by: Uditha Egalahewa, President’s Counsel, and N.K.Ashokbharan, Attorney-at-Law.
This Article endeavours a brief comparative analysis of the law in Sri Lanka, the UK, India, and Singapore pertaining to whether a court can look into the underlying contract where injunction is sought against the encashment of a bank guarantee, and argues that in the question of granting an equitable relief of injunction against the encasement of a demand guarantee, the Courts may, when equity demands, look into the underlying contract. In any event, as the law stands in Sri Lanka, where there are restrictions imposed in the underlying contract pertaining to the encashment of the demand guarantees, the Court must look at it and uphold such restrictions.
This Article was published in the Judges Journal (Vol. VII, 2021) of the Sri Lanka Judges Institute.
To read the full article click here: Injunctions against encashment of demand guarantees: To look; or not to look at the underlying contract?
