Sri Lanka Mahaweli Authority vs Dharshani Construction – SC APPEAL 101/2017-2021

In the case between Sri Lanka Mahaweli Authority and Dharshani Construction (solely owned by Amarasiri Masakorala), the court addressed whether the cause of action was prescribed under section 6 of the Prescription Ordinance and the appropriate commencement of the prescriptive period concerning a construction contract terminated for breach. The holding established that the cause of action arises from the date of demand issued after termination, not from the termination itself, thus the action was not time-barred. The judgment reaffirmed the principle that the accrual of a cause of action, within the context of contractual claims following termination, depends on the demand for payment as per contract provisions, not merely the breach. Reliance was placed on the interpretation of contractua