Southland Apparels (Pvt.) Ltd. v. Hatton National Bank Plc. – SC CHC APPEAL 33/07-2018

Brief
In the case between Southland Apparels (Pvt.) Ltd. and Hatton National Bank Plc., the Supreme Court addressed the liability of a bank for the loss of original shipping documents required for documentary credit transactions. It was held that the Defendant Bank could not be held liable for the loss or misplacement of the original shipping documents after their dispatch through third-party courier services, acting via an intermediary bank. The findings established that the Uniform Customs and Practice for Documentary Credits (UCP 500) governed the parties’ obligations and that liability could not be attributed to the Defendant or connected banks for loss occurring in transit absent direct evidence of negligence. This decision reaffirmed the principle that a bank is not automatically lia