Indica Traders (Pvt) Ltd. v. Seoul Lanka Construction (Pvt) Ltd. and Others – sllr 1994 volume 3 page 387

In the case between INDICA TRADERS (PVT) LTD. and SEOUL LANKA CONSTRUCTION (PVT) LTD., the court addressed the issue of whether the construction contract was wrongfully terminated by unilateral action or by mutual agreement, and evaluated the enforceability of related advance payment guarantees and performance bonds. It was held that the termination resulted from mutual agreement, and that the bank guarantee in question was unconditional and payable on demand. The principle reaffirmed is that such guarantees are to be honored by the bank unless clear and convincing evidence of fraud is presented. The decision, grounded in established authorities regarding the nature of bank guarantees and performance bonds, emphasized that interim injunctions restraining payment are inappropriate where fra