Juduwara & Others v. L.B. Finance Co. Ltd. – sllr 2004 volume 2 page 151

In the case between L.B. Finance Co. Ltd. (plaintiff) and Uduwara & Others (defendants, guarantors for W.L. Wijesiri), the court addressed the issue of whether an arbitration clause in a lease agreement extends to bind guarantors who are not parties to that agreement, and whether the lessee is a necessary party to a recovery action against guarantors. It was determined that the arbitration clause applied only to the lessor and lessee, and specific written consent is required to derogate from the right to litigate in courts when proceeding against guarantors. The guarantee bonds executed by the defendants did not incorporate an arbitration provision and instead contemplated liability to be pursued in court. Additionally, as the arbitration award had already been obtained against the lessee,