Pan Asia Bank Ltd. vs Bentota MPCS Ltd. and Another – sllr 2012 volume 1 page 051

In the case between Pan Asia Bank Ltd. and Bentota MPCS Ltd., the court addressed the issue of whether an interim injunction restraining the bank from making payment under an irrevocable bank guarantee may be granted based on allegations of fraud. It was held that unless fraud is firmly established, a bank is obligated to honour its guarantee in accordance with the terms of the contract. The decision reaffirmed the principle that mere allegations of fraud, without clear evidence, are insufficient to justify injunctive relief against the enforcement of a bank guarantee. This position relied on established case law surrounding the autonomy of bank guarantees and emphasized the strict standard required for interference by the courts, underscoring the significance of certitude in claims of fra