Wattedurage Sanath Ranjith Premarathne vs LB Finance PLC and others – SC (C.H.C.) Appeal No. 64/2013-2024

The Plaintiff LB Finance PLC entered into a lease agreement with a lessee, with the 1st Defendant and the Appellant acting as guarantors. Following the lessee’s default and inability to execute an arbitration award due to death, the Plaintiff sued the guarantors. The High Court ruled for the Plaintiff. The Appellant’s appeal contested issues of pursuing the lessee’s decree, liability increase from delay, prescription, and interest rates. The court determined the ‘Guarantee and Indemnity’ created an independent, primary obligation, distinguishing it from suretyship under Roman-Dutch law, and noted the waiver of excussion. Prescription arguments were dismissed. The appeal was partly allowed, with the interest calculation adjusted to limit recovery to twice the principal sum up to the action’