The appellant guarantor appealed a summary judgment enforcing a demand guarantee in favour of the respondent bank.
The appellant argued the claim was statute-barred under the Limitations Act, 2002, asserting the limitation period began either when the principal debtor defaulted or when the bank sent an initial courtesy letter.
The Court of Appeal dismissed the appeal, holding that a demand guarantee requires a clear and unequivocal demand before it is enforceable, and the limitation period does not commence until such demand is made.
The court found the bank's initial letter was not a demand, and the action was commenced within the two-year limitation period following the actual demand.