Lanka Milk Foods (CWE) Limited vs Seylan Bank Limited – SC/CHC/16/2007-2025

The Court, in a dispute between Lanka Milk Foods (CWE) Limited (Plaintiff‐Respondent) and Seylan Bank Limited (Defendant‐Appellant), considered a claim arising from two performance bonds (P6 and P9) issued by BCCI for sums aggregating US$129,463.48 together with legal interest. The dispute originated from alleged non‐performance by a contractor under supply contracts, with the bonds serving as security for the contractor’s obligations. Reliance was also placed on a vesting order executed under emergency financial regulations, which purportedly precluded the Bank from denying its obligations. The Defendant raised objections regarding the legal validity of the vesting order, the conditional nature of the bonds, and alternative remedies against the contractor. Detailed analysis examined emerg