Alliansz Insurance Lanka Limited vs Lagan International Limited – SC/CHC/APPEAL NO: 52/2007-2025

In the case between Lagan International Limited (and related entities) and Alliansz Insurance Lanka Limited (formerly Janashakthi Insurance entities), the court addressed the enforceability of an on-demand performance bond, specifically whether the Defendant was obligated to pay USD 247,000 to the Plaintiff in response to several payment demands. It was determined that the Plaintiff’s demands (including documents P10, P16, and P17) satisfied the requirements of the bond, and that minor procedural issues—such as an unsigned copy—did not invalidate the claims. Legal reasoning emphasized the autonomous nature of demand guarantees, establishing that the issuer’s obligation is independent of underlying contractual disputes. The High Court’s ruling was upheld, with the appeal dismissed and costs