Union Bank of Colombo Ltd vs Emm Chem (Pvt) Ltd – SC APPEAL NO. CHC 22/11-2019

In the case between Union Bank of Colombo Ltd (Plaintiff-Respondent) and Emm Chem (Pvt) Ltd, Kodduru Arachchige Don Adrin Lakshman Perera (2nd Defendant-Appellant), and Mailwaganam Surendran (3rd Defendant), the court addressed whether a personal guarantee executed in 1998 by the 2nd and 3rd defendants remained operative after the bank restructured the original credit facility via a new offer letter in 2001. Central issues included whether the rescheduled arrangement constituted a new loan requiring a new guarantee, whether the claim against the guarantor was time-barred by prescription, and whether the rescheduling amounted to a material variation discharging the guarantor’s liability. It was held that the 2001 restructuring did not constitute a new loan but was a continuation of the orig