Judicial inefficiencies hurting Sri Lanka investments: BOI chief
Mar 04, 2017 10:09 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Sri Lanka's treasury has failed to honour a court order for nearly seven years underscoring the problems investors faced in enforcing contracts and seeking justice, board of investment chief Upul Jayasuriya.
Sri Lanka's ease of doing business has suffered largely due to delays in enforcing contracts, unusually long time taken to conclude trials and failure to effectively enforce court rulings, Jayasuriya said.
He said the legal ineffectiveness was shown in a case where the Commercial High Court ordered the treasury to pay 174 million in damages to Globe Commercial Trading, the company which bought a 60 percent stake the Tractor Corp in 1993.
The state had then appealed to the Supreme Court against the High court award of damages, but failed as a three-judge bench headed by the then chief justice Shirani Bandaranayake dismissed the appeal.
The court ordered that the state pay 1.8 million a month plus legal interest for any delay in paying the 174 million damages awarded, but the treasury is yet to pay up, Jayasuriya said. He added that the total currently due was about 900 million.
"As a lawyer, I can tell you that there are lot of issues with our legal system... the delays in trials,, failure to enforce contracts and court orders," Jayasuriya told reporters at his office on Friday.
The current secretary to the treasury will be hauled up before court for contempt for the company to get at the damaghes due to them, Jayasuriya' said.
The former government had also named Tractor Corp for expropriation under a controversial 2011 law that seriously damaged investor confidence.
Jayasuriya has also been a former chairman of the then state-run Tractor Corp which was privatised in 1993, but it was scuttled after a new government came in a year later.
The new owners of a 60 percent stake of the company had paid 144 million rupees, but the state had later gone back on its agreement to transfer land at Nawala and Pettah to the company on a 99 year lease.
(COLOMBO, March 4, 2017)