IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA: Gamini Ranasinghe v. Commercial Bank of Ceylon Limited – SC CHC APPEAL NO. 29/2003-2014

In the case between Gamini Ranasinghe and Commercial Bank of Ceylon Limited, the court addressed whether the Respondent Bank wrongfully effected payment and subsequently set off funds from the Plaintiff’s Resident Foreign Currency Account under an irrecoverable Letter of Credit. It was held that the bank’s set-off was not justified, as material discrepancies—specifically in the shipping documents concerning goods’ description and the timing of document presentation—justified rejection under the doctrine of strict compliance. The decision reaffirmed that even minor errors impacting fundamental contractual requirements under the Uniform Customs and Practice for Documentary Credits (UCP 400) may be considered material. The burden of proof for document presentation and custody of internal reco