Foreign Affairs

‘Marshall Plan’ And Sri Lanka



What a war devastated nation needs most is resource for rebuilding. What Sri Lanka lacked most was the requisite capital. When local resources cannot be fully mobilized recourse is necessary for infusion from abroad. Both strategies have been employed by the present regime. No doubt adding to debt, but permitting of first world expenditure  in a third world economy. Public debt of Rs. 2.222 trillion in 2005 has risen to Rs.6.000 trillion in 2012. Year on year increase alone was Rs. 867 billion in 2012. The GDP which grew by Rs. 1.038 trillion in the same year, has the resilience to accommodate this debt.

What the people are peeved about is the uneven spread smacking even of profligacy. What the Tamils cry for is equity in distribution to make amends for past misfortunes. In desperation, they direct their sights to foreign countries and institutions for their initiative and assistance. What they can look forward to from the government is proactive response. Their   experience of the Tokyo Pledge of 2003 for Sri Lanka and of Marshall Plan of 1947 for Europe is particularly comforting.

Marshall Plan

What is most striking about the Marshall Plan (MP) is the speed with which initiatives were taken for the economic  reconstruction  of Europe after the War.  It was considered a prelude to political stability. Both placed together were seen to ensure the health of Europe and as importantly, the economic  well-being and growth of the United States. The pace is a contrast to the failure of the Sri Lankan Government even four years after the end of the war. There is not even a thought of it. Launching  of  a redevelopment programme to get over war devastation was perhaps wished for. As culpable in this lapse are Tamils, failing to press forth the concept of a ‘Marshall Plan’ as an effort at redemption.  The idea of political solution now with reconstruction to follow will be realized in the Greek kalens.

The MP was enormous in scope and vast in geographical spread. The amount US spent in three years 1948 to 1951 was$ 12.7 billion. To get the perspective clear, it may be observed that the GDP of US in 1948 was $ 258 billion. In comparison the GDP of 2012 was $ 15.65 trillion. The beneficiaries of MP in Europe were 16 states of which, UK, France, W.Germany, Italy and Netherlands received nearly three-fourths. All five are among the top in the world in state GDP as well as per capita. Timely aid was as important as the volume disbursed. Grants to all 16 countries composed 90% and the balance was loans.

Benefits of the MP did not come easily to the recipient countries. The plan may be said to have originated with Marshall’s speech at Harvard in June 1947. The US was to assist in normalizing economic health in the world. No political stability or peace was assured otherwise. This was the germ of his thinking which was elaborated on. There were however reservations, criticism and even opposition.   From conception to delivery to the affected, the path was tortuous. Some had illusions of relegating Germany to a ‘pastoral state’. Statesmanship overwhelmed such ideas. Realization eventually prevailed that when Germany’s industrial capacity remained idle, Europe’s economic recovery can only get delayed. Germany’s economic recovery was deemed central to Europe’s progress. Pragmatism was more compelling than antagonism.

Other Aid

In passing, reference must be made to US grants and loans in Europe amounting to $ 14 billion outside MP. This was between 1945-1947. Britain alone received $ 3.75 billion. Post war Asia too received sizeable aid. Japan, Taiwan, South Korea and Phillipines were principal beneficiaries. In the period 1945 to 1953, grants and loans given by America to the world totaled $ 44.3 billion. This was a huge amount and it had a tremendous impact  on the recovery of Europe not to mention the countries of Asia.

Inner Vitality

There is something very significant to be observed however.  Six major powers fully involved in the war, both allied and axis, are now among the topmost economic power houses. Five of them barring US – Germany, Italy, Japan, UK and France – had experienced severe destruction. With a little moistening the seeds have sprouted. There was hardly a spell when they remained dormant. Their inner vitality and entrepreneurial spirit explain. Perhaps their elan vital pushed them to the top even before the war. What is noteworthy is that physical destruction did not cause despondency, but infused a new vigour. Even before the MP went into implementation, they had launched their recovery programmes with their own resources.  This is not to discount the very important part that MP played in providing the initial spurt and then maintaining the momentum. Timeliness was of the essence.

Sri Lanka

Lending a helping hand to lift a prostrate people is all what the concept of ‘Marshall Plan’ is invoked here for. The parallel ceases thereafter. The five nations were able to do so since the nation building process was completed decades earlier. They moved ahead single mindedly as a single polity. The situation in Sri Lanka is distinctly different. The Tamils fought and lost. What they lost in war they cannot gain in peace. If what they want is equality, it is only inequality that we will give. This is the official attitude of the government. Reducing the North East to a ‘pastoral state’ will take the country nowhere.

“Come and see” is the oft thrown challenge. Having seen two there is no appetite for more. The no. of industries in the country is 4,816 in 2012. In the Northern Province-NP- it is 11. The no. grew by 470 in the last 4 years island wide. In the NP it grew by 6. The GDP of the Province is 3.68% of the nation’s. What is seen is enough.

The initiative of the donor community is necessary for a wholesome change. A country cannot prosper when a segment is impoverished. Russia spurned US aid and mulcted East Germany almost to the tune of MP aid. Unified Germany’s mission was to bring East and West to a level of parity. Same ethnicity one would say. If for the benefit of reconciliation and unity ethnicity blindness is called for, embracing it may be compulsive to all.

Tokyo Pledge

The Tokyo Pledge of 2003 drawn up with a magnitude of $ 4.5 billion is a little bit of a Marshall Plan. With a tenth implemented and nine-tenth remaining, it is a viable entry point to resume the redevelopment programme.  The Needs Assessment Report of 3,400 pages encompassing the North East and the adjoining Provinces is appropriate for an immediate beginning. The Report has identified projects. As funding becomes available, they are picked up, detailed estimates are worked out and projects are implemented. Even as this segment gets under implementation, a Needs Assessment survey can be carried out for the subsequent period up to 2009. Mid – course revisions are practicable.


A future of promise should firstly enable those in governance to see the sentiments of all citizens in objective light. Those thrown aside have to be facilitated to come back to mainstream economic life. Local and foreign resources have to be mobilized and utilized for this purpose.

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Foreign Affairs

Preparing For Northern Elections And Winning Hearts And Minds

Jehan Perera – colombo telegraph

Jehan Perera

The A9 highway that bisects the Northern Province and leads to its capital of Jaffna would be the best advertisement for the government in its election campaign to win the provincial council elections scheduled to be held in September. The dramatic improvement in the highway and the network of roads that connect to it have enhanced the quality of life to all who make use of them, be they the businessman or landless labourer, northerner or southerner.  But the A9 highway, which was once called the highway of death on account of the thousands of lives it consumed during the war, also shows why the government cannot win those forthcoming elections unless there is a change of course.

The huge military checkpoint at Omanthai, which was once the border between government and LTTE-controlled territories in the north, still stands like an ageing dinosaur. All vehicles traversing the road at this point have to stop to be checked.  At the best it means getting out of one’s vehicle and giving one’s identity card and vehicle number to be written down in a register.  But sometimes it can mean having one’s bags poked and opened for inspection.  Passengers in private vehicles are usually spared the hassle of getting down to be checked, but those travelling by bus have to disembark and line up to be checked. This war-time practice serves as a reminder of the war and the division of the country.

A police officer who flagged down our vehicle and requested a short ride was present when this exercise took place.  He explained that the roots, or is it seeds, of militancy still remained in the people of the North and needed to be guaded against.  The visible surveillance serves as a reminder to them that the government is watching and it is better to keep out of trouble.  Viewed from the other side the visible presence of the military in the North is a constant reminder to the people that they are mistrusted and being treated differently.  It also sends a harsh message that the North is still not fully integrated with the rest of the country, remains a potential threat, and hence it is under a state of military occupation, even if largely benign.

Military Presence

The large military presence in the Northern and Eastern provinces, even after the war, has been a source of grievance to the people living in those parts. The issue of the military presence has re-emerged in full force due to the government’s decision to acquire over 6000 acres of prime land in the Jaffna peninsula to set up a regional military headquarters.  It is reported that as many as 25 Grama Niladari divisions (which means more than 25 villages) will be affected.  Thousands of people will be affected, with an estimated 29,000 still in camps for the displaced.  The military has said that this land is being acquired under relevant law, and this is done in other parts of the country also.  But given the large territory and population that will be affected, and the lack of transparency in military affairs, it has also given rise to fears of army-sponsored Sinhalese settlements in the North.

It is noteworthy that the Lessons Learnt and Reconciliation Commission has recommended the de-militarisation of the north and the full restoration of civilian administration.  The two resolutions passed by the UN Human Rights Council in 2012 and again in 2013 call upon the government to implement the constructive recommendations of the LLRC.  The LLRC was very specific on this issue, especially in regard to land issues, which is at the heart of people’s sense of belonging and security.  The LLRC said that many people who were displaced in the war had lost their title deeds and other documents proving their ownership or rights to use the land.  It recommended an expert and civil administration to restore to the people what had been theirs.  It also said that land policy should not be used to effect artificial changes in demography and the ethnic composition of the population.

The refusal of the military authorities to permit the Leader of the Opposition and a delegation of opposition parliamentarians from entering the area to see the situation for themselves is bound to send an adverse message to the Tamil people and to the international community about the ground realities in the north.  It highlights the lack of transparency that accompanies military affairs, which is why the military is unsuited to engage in civilian affairs. Unfortunately the indications of a shift in government policy towards the demilitarization of the north are bleak at the present time.  The government has recently added a second compulsory checkpoint in the North in addition to the one at Omanthai.  This is one at Elephant Pass at the entry/exit point of the Jaffna peninsula.  This latest checkpoint was announced a few days ago in the context of the sudden upsurge of politically motivated violence in the North which saw events organized by opposition parties broken up allegedly by security personnel in civilian attire.

Government Concern

The acts of violence that have started taking place against opposition activities in the North, as occurred with the Uthayan newspaper and TNA meetings, can be a harbinger of things to come.  The government’s determination to win the Northern Provincial elections reflects the government’s concern that it will pave the way to political and international challenges with the establishment of an opposition Tamil-led administration with a democratic mandate.  So far the government’s chief response to its local and international critics has been that it is the sole elected authority in the country entitled to speak on behalf of all the people.  Every time it wins an election it reminds its detractors that whatever they may say, it has the democratic sanction of the people.  An opposition and Tamil led provincial administration in the North would have a corresponding legitimacy to speak on behalf of the people who elected it.

Already two constituent parties of the government have expressed their opposition to these elections being held.   The All Ceylon Muslim League headed by Minister Rishard Bathiuddin has objected to the elections being held until all war-displaced Muslims are resettled in the Northern Province.  The National Freedom Front headed by Minister Wimal Weerawansa has stated that these elections can lead to an outcome that is detrimental to the country’s unity.  He has also said that the system of provincial councils should be scrapped and replaced by district councils.  Interestingly, President Rajapaksa himself articulated this vision of district-based devolution several years ago until local and international pressure caused him to withdraw from this position.  It is possible that views such as these are being floated to justify a postponement of the elections.

However, too much is at stake for the government to now seek to either abolish the provincial council system or postpone the promised September elections.  The President’s promise to hold the elections by September this year is noted in too many international documents, such as the joint communiqué signed by the Prime Minister of Japan and President Rajapaksa following his visit in March to Japan, and also in the UN Human Rights resolution on Sri Lanka which was also passed by a large majority of countries in March this year.  With the provincial elections to be held in September, there is still time for the government to make the shift that would make it more attractive to the northern voters.  De-militarisation of the North would come as the first priority accompanied by the resettlement of displaced people in their own lands.

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The Electricity Tariffs, Populism And Smarter Consumption: Some Reflections

pradeep Jeganatan Colombo Telegraph

Dr. Pradeep Jeganathan

In midst of the noise of populist political posturing on the electricity tariff increase, there has also been, as always, a considerable amount substantial discussion on the issue. While a number of OpEds have been edifying, and of our legislators, Harsha de Silva‘s lone, yet richly informed analytical voice has been most stimulating, I do feel there is an aspect of the matter that has still not drawn attention. In the paragraphs below, I will attempt to delineate this.

I will not go over all the numbers here, yet suffice to say that simply throwing out percentages of the increase does not paint a worthwhile picture. For example telling us that a 30 unit consumer’s bill will rise, 52% is a great, factually correct but misleading headline – that may allow the reader to miss, the fact that for nearly half the electrified households in Sri Lanka (0-30), this increase will amount to Rs. 75/=. Consider at this point that a loaf of bread is 60/=, a packet of milk powder 400/=, and the cost of mobile telecommunication perhaps 400/=, to say nothing of other utilities. Tub thumping about a 75/= increase of one utility is neither here nor there. On the other hand, electricity subsidies, unlike many others are beautiful and elegant since they are not easily transferable to an affluent consumer. Comparing this to the old style ration books, which were, and the new style car permits that are, would clinch the case. In any event this small increase comes in at some thing like Rs. 575 million, which again given the CEB short fall of nearly 60 Billion, is neither here nor there.

The brunt of the increase in rupee terms is borne by the lower-middle band 90-180 consumers. A 150 unit household will see its bill rise, from 2850/= to 4515/=. That’s not just 58%, its also Rs. 1,670/= or so. A 180 unit household will see its bill go up to 5130/= an increase of only 33% and rupee addition of 1275/= ( Yes, the rate of increase decreases with consumption. All figures have been rounded off, and are rough).

That’s a lot.  For a family of four, in the urban service sector, living on some thing like 40,000/= a month, spending some thing like 12% of its income on one utility is a heavy burden, given others like cooking gas, water and telecommunications. Transportation while not a household utility is another thicken slice of the families budget.

So what should be done? Indeed one can agitate for a reduction; but unless this cost is recovered, those very households will see price inflation in other segments of their monthly basket of goods.

Promoting energy efficiency is the other way to go. Indeed if we are to accept and live with the form capitalism we have, it seems rather contrary to suggest as some do that the answer is to discourage consumption. That may be one model of using resources, but its silly to impose it in electricity consumption and promote it in other areas.

For example are we to have a sliding scale of pricing for personal miles flown each year? In this model, if you’ve flown 10,000 miles this year your next ticket would be twice the price of your old one. On the contrary, airlines encourage frequent fliers, by giving them perks. At the bottom of this system of capitalism – which is flawed but still viable – is the idea that flying becomes more energy efficient each year. So its not that you fly less. You fly more, at lower energy cost.

Returning to the lower-middle band of 90-180 customers of the CEB, we can make the same kind of argument, which a false, child like populism is masking. What does that mean? Well, we only speak of light blubs when we speak of energy efficiency. Since lighting is so basic, it seems safely populist to speak of moving from incandescent lighting to CFL or LED lighting. Yet is it unclear, if these well known new technologies are supported by duty waivers.

But once we leave lighting behind we will find that a household in the 90-120 band has both a refrigerator and a television. 40% of Sri Lankan households have a fridge, 80% a TV. But in the lower-middle band I speak of ownership of these appliances has to be pretty universal. It stands to reason; or else where would the units go? What is the average energy efficiency of these appliances as used in the lower middle band? I am not sure any one knows – but we can guess estimate that the turnover cycle among this consumer is long – unlike with the affluent who may turn over their appliances every 3-5 years. Older appliances are far more inefficient than new ones.

Let us look at some numbers. Switching from a 17” CRT TV to a 15” LCD TV (which has the equivalent viewing area), will save 13+ units a month, if daily viewing is set at an avarage 8 hours a day. With a refrigerator, switching from a 8 CF model that’s 20-10 years old to a fresh model, will save more than 50 units a month.

Lets say a savings of 59 units a month. Our 150 unit household is down to 91, and their bill is back down to, 2,225/= or from 4,500/=. A reduction of huge proportions. Our 180 unit household is down to 121 in this simple calculation (the reductions could be higher if the TV and/or fridge was bigger); and their bill is now 3,500 down from 5130. (If 60 units were used as the savings, the drop would even larger, but perhaps misleading, because of the quantum jump at the pricing bands).

No doubt its not that simple; new appliances do have a considerable capital cost. Yet, there is little doubt that home appliance chains sell new low end TVs and fridges by the truck load; the question is how does a consumer learn about her choices?

Shouldn’t we be rating household appliances on an efficiency scale? Shouldn’t such rating be regulated, just as the ingredient listing on a can of fish or packet of sausages is regulated? Shouldn’t there be huge duty concessions for the highest energy band? Shouldn’t consumers be told at the point of purchase, this model will cost you so much a month to run, the other one more?

We don’t seem to doing any of this. At the very top end of things, several retailers advertize energy efficient air conditions. But even they do not actually tell us what the power consumption of the model is. If you walk into one of the large home appliances chains in Sri Lanka  – there are three big ones – and ask casually or other wise (I’ve tried both) – what the power consumption of the reverent appliance is, you will find that the sales staff are clueless. In fact, when recently at the service center to pick up an appliance, I asked the technician in front of me, at the testing table, what was the power consumption of a LCD TV he was testing. He looked blank. I rephrased the question a number of ways; he looked about the back of the TV and said, ’220.’ Yes he did. He was pointing to a white sticker that said, the appliance was rated for 220-240 A/C. For the uninitiated, the rated voltage of an appliance has nothing to do with its power consumption; if a trained repairmen is as clueless as a sales person on these matters, I am very much afraid the consumer may be quite lost. We really need to do better.

My numbers are rough, and I am skeptical, to say the least, about the great project of consumer capitalism. But that’s where we are. Populist protests mask this because consumer capitalism seems dirty, and unworthy of street protests. I think we need to grow up, and for the time being at least, simply consume  smarter.

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Why Commonwealth SG Sharma Need to Show Leadership On Sri Lanka

Callum Macrae

Callum Macrae

This is a crucial moment in the ongoing campaign for truth and justice in Sri Lanka.

Tomorrow, Friday 26th April, the Commonwealth Ministerial Action Group will collect in London.  There they will go over developing calls for the next meeting of the Commonwealth Heads of Government (CHOGM) to be taken away from Sri Lanka.  CHOGM is scheduled to be held in Colombo in November this year.

The concept that CHOGM should be hosted by a regime accused of such serious war crimes is abhorrent to most people who believe and hope the Commonwealth ought to be a force for great – a neighborhood of nations functioning towards human rights and justice.

That the Sri Lankan government would then become the chair of the Commonwealth for the subsequent two years is even a lot more disturbing.  A regime embroiled in an increasingly desperate and dishonest campaign to delay and deny the serious evidence of war crimes &#8211 and the growing international determination to call them to account – is in no position to defend the core values of the Commonwealth.

At this critical time for the Commonwealth attention will focus increasingly on the function of the Commonwealth Secretary Basic, Kamalesh Sharma.

Several will be looking to him to give the type of leadership which can strengthen the Commonwealth’s part in encouraging human rights, justice and an end to impunity.

He can make certain that this issue is confronted. Indeed many would argue he has a clear duty to do that.  If the Commonwealth drifts blindly into enabling itself to be headed by a regime accused of such appalling war crimes and crimes against humanity it would be catastrophic.  But I see no signs so far that Mr Sharma has any intention whatsoever of acting to prevent that taking place.  I hope I am wrong.

There is a curious Commonwealth process which offers for the Secretary Basic to exercising his “good offices” to resolve this sort of scenario ahead of severe action is taken.  It is suggested that a two month period be permitted for that.  Mr Sharma has been formally working out his “good offices” for significantly far more than two months now.  And in that time items in Sri Lanka have got worse, not far better.  Repression of Tamils in the north has enhanced.  Tamil newspapers have been violently attacked.  A journalist from the Sunday Leader – whose founding editor was assassinated four years ago – has also been shot.

Now violently ultra-nationalist groups led by intense Buddhist monks  &#8211 tacitly endorsed by the President’s brother, the Defence Secretary Gotabaya Rajapaksa &#8211 have launched attacks on minority Muslims.  The country’s judiciary is in crisis following the politically motivated impeachment of the country’s Chief Justice.

Sri Lanka is quickly sinking into a despotic morass – it is increasingly seen as a pariah state.

On Friday Secretary-Common Kamalesh Sharma will report on the question of Sri Lanka’s hosting of CHOGM to the members of the Commonwealth Ministerial Action Group (CMAG) committee.

He owes it not just to the future of the Commonwealth, but also to its values of truth and justice – to ensure that CMAG discusses taking CHOGM away from Sri Lanka.

On the webpage of the commonwealth…

&#8230we – the citizens of the commonwealth – are invited to place a comment or a query to Mr Sharma, by sending a message, with ‘Ask Sharma’ in the subject line, to this address:

[email protected] 

I recommend that as a lot of of us as achievable do that over the next 24 hours. Let’s make certain that today we ask him – politely and respectfully – what he intends to do about Sri Lanka and CHOGM.   And if he believes that a regime accused of such terrible war crimes – and probably to be embroiled ever far more seriously in such allegations more than the next two years – is truly match to lead the Commonwealth.

The calls from around the world are growing.  Final week 900 Commonwealth lawyers meeting in South Africa named for Sri Lanka to be suspended from the Councils of the Commonwealth due to its breaches of the rule of law and of the independence of the judiciary, as well as the gross harassment of members of the legal profession.

That contact has now been endorsed by the Law Society of South Africa and echoed by the International Bar Association.

The tide is turning – the calls for justice increasing.  The Commonwealth need to not be left behind.

*Callum Macrae &#8211  director, “No Fire Zone: The Killing Fields of Sri Lanka.”

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On The Not So All-natural Rise Of Electrical energy Prices

Kath Noble

Kath Noble

One of the many conspiracy theories that has emerged with regard to the anti-Muslim campaign of the Bodu Bala Sena and others is that it is an attempt by the Government to distract people from other concerns, primarily the state of the economy.

If so, it isn’t working. Last week’s increase in electricity tariffs hasn’t been overlooked by anybody in Sri Lanka.

However, the Government has succeeded in convincing a fair share of the electorate that it isn’t really its fault. Keheliya Rambukwella summed up its argument at the regular media briefing on Thursday. He explained that the tariff increase was unfortunate but unavoidable, since ‘no administration can subsidise utilities forever’.

This sounds reasonable, but it isn’t actually true.

The concept of ‘breaking even’ doesn’t make sense when discussing a public enterprise. The CEB is not a company. We have come to talk of its ‘losses’, but this is to accept the neo-liberal logic that the Government claims to reject. The Ministries of Health and Education also spend more than they earn, but we don’t consider them to be ‘indebted’.

In that sense, the Opposition is right in pointing out that the Government is neo-liberal, as its economic affairs spokesman Harsha de Silva did in response to the hike. Of course he should have said ‘also neo-liberal’, since the credentials of the UNP as the vanguard of neo-liberalism in Sri Lanka are unquestionable, thanks to Ranil Wickremasinghe. Unfortunately, he combined that accurate observation with a totally misguided suggestion as to what to do about it, saying that if the economy is in so much trouble, what is needed is austerity.

Even the IMF is having second thoughts about ‘cuts’ as a response to a downturn, as its advice to the UK just days ago shows, with that country on the verge of an unprecedented ‘triple dip recession’.

Austerity isn’t the same as tackling waste and corruption. There is a difference between ensuring that expenditure is productive and targeting an overall reduction in expenditure.

In the same way, there is a difference between targeting subsidies so that the right people benefit and reducing the level of subsidies.

This is not to suggest that there is no problem with the amount that the Government spends on the CEB. It comes to 0.8% of GDP, which is an awful lot in comparison with the 1.9% that it allocates for education and the 1.3% that it gives to health.

Efforts should certainly be made to reduce this amount.

In terms of costs, Tilak Siyambalapitiya has produced a very succinct analysis (‘Talk sense about electricity costs and prices’, The Island, March 6th). He says that the approved cost of Rs. 2.56 for distributing a unit of electricity, which includes the cost of investment and maintenance of the distribution network and the supply of electricity, including metering and billing, is comparable with international norms, but could be brought down by 1% per year in real terms. A similar conclusion is reached for the transmission of a unit of electricity, with an approved cost of Rs. 0.73. He makes the same assumption as Keheliya Rambukwella that expenditure should be met by income to conclude that a unit of electricity has to be generated for Rs. 10.74, taking into account 12% losses and a total income of Rs. 15.50 per unit (10.74 = 0.88 x [15.50 – 2.56 – 0.73]), which is the case only for the CEB owned hydro and coal power stations.

An equally helpful discussion of prices is needed. The Rs. 15.50 per unit charged by the CEB is an average, and the way in which the burden should be shared is not obvious.

In response to the hike, everybody from bakers to the manufacturers of bathroom tiles have said that they will have to increase the prices of their products to compensate. This has to be taken into account in deciding who should pay how much.

Unfortunately, this is not going to happen by itself.

The Government carefully avoids debate of ‘zero-sum games’. It doesn’t want to admit that it makes choices between different groups in society, since that would mean alienating somebody. It prefers us to believe that all situations are ‘win-win’ or at least ‘lose-lose’.

This is equally true of taxation, and we should remember that the 0.8% of GDP that the Government spends on the CEB is only a problem because the share of taxation is so low and falling.

We may assume that the reason the Government has still not published the report of its Presidential Commission on Taxation, submitted to Mahinda Rajapaksa way back in 2010, is that it doesn’t want to upset people who really ought to be paying more. It thinks that it can get away with collecting almost everything from taxes on goods and services, rather than taxes on incomes, which is very bad news for people with low or no incomes.

High income earners not only pay relatively little in taxes on goods and services, they also pay relatively little for electricity.

The JVP raised another important point with regard to the electricity tariff hike. Its spokesman asked why the Public Utilities Commission bothered to hold a ‘consultation’ when it paid absolutely no attention to the opinions of anybody who participated.

Its report makes amusing reading. An unfortunate employee clearly wasted a very long time summarising the suggestions of the 275 people who either sent a written submission or made a presentation at the public hearing. Every single one of them is marked ‘no’ or ‘no comment’. Even proposals to ‘reduce corruption in the CEB’ are ruled out.

Given that the public has to pay for the opportunity to express their ideas, this is more than a little disappointing.

However, it is hardly surprising.

The Public Utilities Commission was established by the administration of Ranil Wickremasinghe, as part of its effort to privatise the CEB.

By now, everybody knows that this is a policy that has failed in many countries.

Even the Government has accepted that the private sector cannot help with electricity. At the media briefing, Keheliya Rambukwella also confirmed that it would be progressively reducing its purchases from the private sector, in favour of CEB owned power stations. If only it had worked this out earlier!

Also, it doesn’t seem to have understood why, since it is cheerfully pursuing exactly the same policy of privatisation in even less appropriate sectors of the economy.

Most extraordinarily, last week it was reported that the Government is to sign agreements with companies interested in investing in medical equipment such as MRI and CT scanners to be installed in public hospitals. The Secretary to the Ministry of Health was careful to explain that these services would continue to be free at the point of use – the Government will pay the owners of the machines according to the number of patients treated. How on earth they can’t see that this will end up in the Government spending more than if it had bought the machines itself is a mystery.

It may not be long before the Government thinks that the country’s health needs can just as well be met in private hospitals, in much the same way as it is so eager to have private universities cater to its education needs.

A little more attention to the state of the economy is therefore most certainly needed.

That doesn’t mean that the Bodu Bala Sena and others can be neglected, since they present a very serious immediate danger to society. However, what could very easily be ignored are the rest of the conspiracy theories that surround the anti-Muslim campaign. Far more likely than it being the work of Norway or Israel or India or the United States or any other country is that Sri Lankans have created this problem all by themselves. In any case, nobody else is going to solve it.

*Kath Noble’s column may be accessed via She may be contacted at [email protected]

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‘Long War, Cold Peace’ – The Unfinished Story Of An Unfinished Conflict

Lasanda Kurukulasuriya

Lasanda Kurukulasuriya

Dayan Jayatilleka’s Long War, Cold Peace – Conflict and Crisis in Sri Lanka’ appears at a moment in history when Sri Lanka stands at a crossroads.The war is over but there is yet a crisis of reconciliation and a crisis of state to be resolved, and so a stable peace still eludes us. These are the issues that Jayatilleka primarily worries about in his new book. It runs into several sections and sub sections on the historical record of how we came to be where we are.

The first aspect of the crisis of reconciliation is located, as it has been by many others, in the need to forge an overarching national identity that includes all communities. A less obvious aspect of the crisis that the author identifies is what he calls “the crisis of post war consciousness and discourse.”

“Those who call for a just peace refuse to admit that it was a just war and therefore face a crisis of domestic legitimacy. Those who maintain that it was a just war fail to call for a just peace, a peace with justice for the Tamil community.


The Tamils for their part have failed to make a clean break from their recent past of support or sympathy for secessionism and terrorism.There is no post war discourse which combines a strong position in defence of the war with a strong drive for a sustainable peace on a new basis of a fairly redrawn ethnic compact. This is the crisis of post war consciousness and discourse.”

It is in this important area that the book makes its main contribution — one of its objectives, by the author’s own admission in the preface, being to provoke the debate and discussion that is needed. ‘Long war, cold peace’goes headlong into the narrative without detaining the reader with the niceties of a foreword or intro written by some other scholar etc. If the book comes across as having been produced in a hurry, it is because it was.

The author and publisher (Vijitha Yapa) were keen to “send the manuscript to the press in time for the March 2013 session of the UN Human Rights Council and the discussion on the event.”

The book combines documentary, analysis and opinion (at times all rolled into one) drawing on the author’s multifaceted experience as a political scientist, academic and diplomat. He was also briefly a minister of the ill-fated North East Provincial Council (NEPC) formed in 1988 under EPRLF’s Varadharajah Perumal. Chapter three(‘Conflict and Negotiations’) that deals with the formation of the NEPC and the reasons for its failure is one of the book’s most detailed and nuanced sections. This is no doubt owing to the author’s degree of proximity to and involvement in the events chronicled.

Starting from the genesis of Tamil separatist violence this section traces the trajectory of the Eelam Left, the shifting balance of power between its constituents, the LTTE’s rise to pre eminence,the bloody serial massacres tha teliminated its rivals, the Indo Lanka Peace Accord of July 1987, the developments leading up to the outbreak of war between the Indian Peace Keeping Force (IPKF) and the LTTE in Oct 1987, the formation of the NEPC and the factors leading to its eventual collapse.

The seemingly intractable interplay of forces at different levels – inter-state as well as intra-state, is made comprehensible,aided by reference to the “unchronicled and undocumented processes that were going on at that time.”

‘Long war, cold peace’ does not pretend to be a complete historical account of the war, and its narrative does not proceed in a straight line. While it deals withthe important landmark events and issues(the Eelam wars, July 1983, the Indo Lanka Accord, the Ceasefire Agreement, the P-TOMs, the military victory over the Tigers, post war politics, the international dimension) the book’s interest lies more in the author’s analytical approach and ability to place things in perspective.

There is an ethical dimension to the discussion that runs through it like a sub text, and this is where the book’s appeal would lie for those with a philosophical turn of mind. The author’s encyclopedic familiarity with political theory,conflict situations and armed struggles elsewhere in the world allows him to make comparisons at every point (Columbia’s FARC, Central America’s FMLN and URNG, the MNLF in the Philippines, SPLA in Southern Sudan, the PLO and the IRA).This constant cross-referencing helps the reader to understand the particularities of Sri Lanka’s crisis and its manifestations. It also helps to separate criticisms that are valid from those that are not.

In the latter part of the book that deals with the international dimension, Jayatilleka refers to the ongoing discourse on war crimes and says “the assertion that the endgame that actually took place needs to be investigated as a war crime” is baseless.The reasons he gives, briefly are, firstly, the Tigers were a fascist force that had to be decimated. Secondly the Sri Lankan forces had to operate according to a tightening timetable not of their own choosing. Thirdly at no time were civilians wittingly targeted as a matter of policy, nor were they boxed in and deprived of an exit by the state.
In no way does this argument amount to a dismissal of human rights as “a Western invention or booby trap.” Though there are constant attempts to use human rights to undermine national sovereignty, Jayatilleka pleads that the answer is not to shun human rights but to protect them ourselves.

It is imperative to realise that the international pressures “are a symptom and byproduct of something that has gone wrong in our external relations and our ability to communicate with the world.” The only real antidote against these pressures he argues is to have “strong, credible, NATIONAL institutions and mechanisms.”The author offers pointers as to how, in his opinion, the crisis of reconciliation can be resolved. Central to that project is his belief in the 13th Amendment and the urgent need for devolution of power.

If this book has an ‘unfinished’ feel to it, this is probably not unrelated to the fact that the conflict itself remains ‘unfinished’. Having been rushed to press, the manuscript’s main weakness is an element of repetition, duly apologised for in a note by the author. Some sections have been drawn from his previous publications. This creates a certain unevenness in the text, as the reader has to constantly shift gear so to speak, adjusting to varying levels of intensity of analysis and slightly different stylistic approaches adopted in different sections.

However, consistency of philosophical approach is maintained throughout and this gives the work a binding coherence.’Long war, cold peace’ may be a bumpy ride, but worth it for the reader who, at the end of the journey,will arrive at a better understanding of the most urgent issues of our time.

*This article is first appeared in Sunday Times Sri Lanka

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Let’s Not Do This: A Wee Note To Dr Jayatileka And Mr Seneviratne

An excellent piece in the New York Times today talks about ‘Monks Gone Bad’, describing a corrupt and violent Sangha that uses hate speech and abuse against minorities and is helmed by leaders who resemble fatuous politicians and not the ‘birds of the wing’ that the Buddha wanted his mendicant followers to be. I am not here to point out the contradictions between Buddhism as taught and Buddhism as practiced, the ingloriousness of Buddhist praxis nowadays is evident for all to see. I just wanted to point out that at every instance in that article where I saw Myanmar, I could have easily inserted Sri Lanka. For every instance where I read about 969 in the news, I can insert ‘Bodu Bala Sena’. About the only words that do not require replacing are ‘anti-Muslim’, ‘minority’ and ‘hate’.


As we all know, the police, together with the Bodu Bala Sena soon disbursed the vigil, arresting some, manhandling others, and collecting the names and pictures of most of the attendees.

The Bodu Bala Sena and its kindred run amok in Sri Lanka, like bullies in a school playground, and with not much more in the way of finesse. They hurl offensive invective towards religious minorities, and their words have resulted in quite a few violent incidents against Muslims ,and at least one against Christians, re-opening wounds in the country that are still struggling to heal after the 30 year war. They seem to operate in a space where Sri Lanka has not just lost so many lives, its economic development, and so much of its natural beauty to a long, long war. In order, perhaps, to call their attention to this, a peaceful vigil was held outside the headquarters of the Bodu Bala Sena. As we all know, the police, together with the Bodu Bala Sena soon disbursed the vigil, arresting some, manhandling others, and collecting the names and pictures of most of the attendees. Not only this, the Facebook page of the Bodu Bala Sena decided to ‘name and shame’ these attendees, causing their supporters to enact the most disgraceful bout of name-calling, verbal harassment and racist trolling that I have ever seen on social media.

One of the ‘points of order’ from the Bodu Bala Sena, its supporters and some of the media who covered the incident, was that the legitimacy of the vigil was in question because the attendees did not represent the Buddhist population, that many Muslims, Christians and Hindus were present. On Facebook, attendees are called out as ‘demalek’ ‘muslimayek’ ‘jathiyak nathe’. Indeed, an attendee tweeted that he overheard someone saying that the vigil was convened due to a ‘conspiracy of Muslims and Catholics’. So much for a critical understanding of religious history- perhaps the speaker would be better served from devoting his time to education rather than racist troublemaking! To each his own, however.
It is altogether more worrying thing that this misrepresentation of the attendees was not only picked up by the media, but that it was also the feature of an article by Malinda Seneviratne, writing in the Colombo Telegraph. The good gentleman, from his considerable experience, no doubt, is able to discern a Buddhist from a non-Buddhist, and therefore writes an entirely unnecessary article that serves only to distance himself from standing with those who attended the vigil. In response, Dr Dayan Jayatileka – who is experiencing some changes to his tune- quite rightly pointed out the flaws in Mr Seneviratne’s argument, but did it in a manner that entirely calls attention to his own accomplishments and ‘stake’ in the manner. The riposte from Mr Seneviratne was then, to accuse the good Doctor of ‘throwing his CV’ at him. I ask you, gentlemen, is this really the response to what is happening in Sri Lanka? The actions of the Bodu Bala Sena, and the complicity of the government in them are grotesque enough without the debate being reduced to puerile attacks on each other’s logic.

If you have a voice that can be heard and that has gravitas, and you both have the great privilege of this, why not turn it more fully toward more constructive dialogue? Why not ask that the rights of those who attended the vigil be defended? Countless women- because the body of the woman is so carelessly mangled in these cases- are facing vile, misogynistic abuse via Facebook from the supporters of the Bodu Bala Sena. These men direct all their perverted, violent fantasies at these girls who really do not have much in the way of legal succour. After all, the AG has instructed victims of social media attack to file complaints with the police. Yes, the very same police who put the kybosh in the vigil. Why not direct more energy into rousing the non-English speaking Buddhists to speak out against the Bodu Bala Sena with less articles in places like the Telegraph which are read by the diaspora and the English speakers? Yes, the handicap at the vigil was that there were many who attended who were ‘English speaking’- but that does not make them any less Sri Lankan, any less Buddhist, any less angry, or any less valid in their protesting attacks on minorities. Give out your voice in solidarity with each other, with those who will question the validity of the Bodu Bala Sena, and in solidarity with what must be a better tomorrow.

*Anupama Ranawana is a wishful academic and a practicing activist. She can be reached for comment via Twitter @MsAMR25

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Constructing An Anti-Islamic Bridge To America

“Neither a man nor a crowd nor a nation can be trusted to act humanely or to think sanely under the influence of a great fear” – Bertrand Russell (Unpopular Essays)

The malignant police response to the peaceful vigil organised by the Facebook group, ‘Buddhists Questioning Bodu Bala Sena’ proved one fact beyond doubt – the BBS is a protected species, protected by the Rajapaksas. According to video footage, the police acted as if they were the private army of the BBS, threatening and harassing the participants of the vigil. Clearly the police were under orders to display a zero-tolerance towards these non-violent protestors – just as they were under orders to employ a laissez-faire demeanour towards the mob attacking Fashion Bug.

The BBS will be above the law, so long as it does the Rajapaksas’ work.

The toxic conduct of the BBS can ignite an anti-Muslim Black July, jeopardise Colombo’s relations with the Islamic world and inflict a new war on Sri Lanka. Given these deadly potentialities, the order to protect and facilitate the BBS (and its offshoots) would have had to come from the very top. Gotabhaya Rajapaksa might be the Godfather of the BBS, but he could not have extended consistent patronage to an organisation trying to incite a Buddhist-Muslim conflict without the approval of his brother, the President.


According to video footage, the police acted as if they were the private army of the BBS

Ethnic overdetermination died with the Tiger. The Siblings need a new (ethno-religious) overdetermination to prevent their Sinhala base from focusing on socio-economic issues (such as the electricity hike which will have a punitive impact on the poor/middle classes while shielding the rich). Fear of an ‘Islamic threat’ can reduce the Sinhala masses into a state of infantile compliance and make them respond to iniquitous economic-shocks with resignation rather than anger.

What about the possible loss of Islamic support, internationally? Perhaps the question should be approached from a different angle. The Rajapaksas need Islamic support because they are having problems with the West on democracy/human rights/accountability issues. If the West discards these concerns and welcomes the Rajapaksas into its fold,Colombowould not need Islamic allies.

Then there is the Magnitsky Act.

Last week, the Obama Administration imposed a travel-cum-asset ban on 12 Russian officials accused of rights violations under the Magnitsky Act. The EU plans to enact its own Magnitsky Act. Imposing generalised sanctions on a country for the crimes of its leaders amounts to collective punishment; it is unjust and ineffective – because the costs are borne not by the leaders but by the people. Laws such as the Magnitsky Act can localise punitive measures to miscreant-leaders/officials and ensure that ordinary people do not have to pay for the sins of their rulers.

Both Gotabhaya and Basil Rajapaksa are US citizens. They cannot but have properties and bank accounts in their adopted country. When President Rajapaksa needs medical help, his preferred option is the US, not China or Russia. The mere thought of the Magnitsky Act being applied against Lankan leaders/officials would thus be a nightmare for all three Siblings. Such a development may take years, but the Rajapaksas would want to take preventive measures early on, given what is at stake for them personally.

The Rajapaksas do not want to become Asian Chavezes. If there is an international model they might want to emulate it is of those Third World despots who were/are welcome in the West, despite innumerable tyrannical deeds.

How to build bridges to the West without abandoning the despotic measures necessary to maintain familial rule – that would be the Rajapaksa Gordian Knot.

One method is image-laundering. Since the Rajapaksa diplomatic and propaganda apparatuses are not up to the task of creating an Orwellian counter-reality, the job is being outsourced to Two American lobbying firms: the Majority Group and the Thompson Advisory Group (TAG). The TAG had only one reported client in 2012; its annual reported income was a measly US$ 80,000[i];Sri Lanka will pay this nonentity US$ 66,600 per month! The Majority Group seems so tiny that it does not have to disclose its lobbying details (firms with an annual income less than US$ 10,000 are exempt);Sri Lanka will pay this firm US$ 50,000 per month!

The urgent Rajapaksa need to mend fences with Washington might also explain another curious development: the BBS’s sudden American visit.

The BBS’s interest in sprucing-up its image is understandable. But why commence that image-remaking effort in theUS, a country with a Christian-majority, the home base of Evangelical churches the BBS loves to hate?

The BBS in America

The Rajapaksas continue to target their opponents/critics; the Uthayan paper was attacked, again, and the Sirisa TV was threatened, again. They have no intention of implementing the democratising recommendations of their own LLRC. They seem to be intent on either postponing the Northern provincial election or winning it by force.

They want to do all this without jeopardising the Commonwealth Summit. And they must escape the Magnitsky Act.

During the Cold War decades, the adoption of neo-liberal economics and anti-left politics sufficed for anyThird Worlddespot to become the darling of the West. Currently, a country which is anti-democratic can win Western favour only if it is seen as a target of ‘Islamic terrorism’.

Immediately after the horrendous Bostonbombing, a website notorious for rightwing insanities carried an article[ii] which blamed an Iran-Al Qaeda combine and mentioned Sri Lanka as a conduit state. According to the article’s unnamed source, Iran’s Quds Forces are collaborating with “Hezbollah and elements of al-Qaida with links to individuals in Sri Lanka and Bangladesh. He said that under Quds Force guidance, Hezbollah recruited Sunni terrorists allied with al-Qaida factions in Sri Lanka and Bangladesh who then entered the US for terrorist activities”[iii].

Given the schisms within Islam (which cause far more murderous violence than anti-Americanism), a nexus between the Shia Iran/Hezbollah and the Sunni Al Qaeda is as impossible as Mahayanism being welcomed inSri Lankaby the BBS. But this is the sort of insane conspiracy theory which is beloved by fanatics of every religion.

And such myths are used to justify the targeting of ethnic/religious/racial ‘Other’ as the anti-Semites did with the ‘Protocols of the Elders of Zion’ hoax.

One can easily imagine a meeting of minds between the purveyors of such delusions in the US and their saffron-robed Lankan counterparts.

The Obama administration does not subscribe to the myth of an anti-Islam civilisational conflict, but a future Republican administration (fortunately an unlikely possibility) might. Islamophobia is a powerful politico-ideological current within the Republican Party. Republican Islamophobes believe that “Islamic Sharia Law is creeping into American courts; the Department of Justice has come under the sway of the Muslim Brotherhood; and the President’s engagement ring includes secret writing that indicates Muslim loyalties…. in August delegates at the Republican National Convention voted to include a plank in their platform affirming their opposition to Sharia law” (Mother Jones – 3.1.2013). The Republican Party therefore would be far more receptive to Rajapaksa overtures, if the Siblings can portray themselves as warriors battling the ‘Islamic Threat’.

Is this the message the BBS is expected to convey to the Republican right, at the grassroots level, during its American sojourn?[iv]


[ii] The author of the article is Reza Kahlili, a self proclaimed CIA spy who in 2010 claimed that Iran “will attack Israel, European capitals, and the Persian Gulf region at the same time, then they will hide in a bunker (until a religious prophesy is fulfilled)…and kill the rest of the non-believers” (Washhington Post – 7.12.2010).Iran manifestly did not.

[iii] The World Net Daily is an ultra-right website infamous for its promotion of such delusions as the ‘Birther story’.

[iv] The BBS monks may have been deployed at least once previously on an unofficial diplomatic mission. Sometime in 2011, Rev. Galagoda-Atte Gnanasara Thero led a delegation to Norway. According to the CEO of the BBS, a purpose of the visit was to meet some of the hardline Tamil Diaspora groups. Why should Rev. Gnanasara et al, who relentlessly attack Tamil moderates, go all the way to Norway to meet pro-Tiger Tamils?

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Complete Text Of The Petition: Propriety Of Conduct Of Chairman, Bribery Commission In Question

The Commission to Investigate Allegations of Bribery or Corruption is required to carry out a key task. The elimination of corruption and impropriety in public office by using the legal powers given to it by law. It has an investigative arm and a prosecution arm which give it serious muscle by law.

Jagath Balapatabendi

Jagath Balapatabendi

However, several political commentators and legal experts contacted by The Colombo Telegraph, effectively emphasized that in order for such a Commission to achieve its desired objective of eliminating corruption, it is necessary for the Commission to be free of political interference. Such freedom is absent, after the 18th Amendment to the Constitution, which repealed the safeguards created by the 17th Amendment. At the moment, all appointment to key judicial and public offices is made at the sole whim of the Executive President (Mahinda Rajapaksa). There is a ‘Parliamentary Council’ created to give the President its views on the suitability of nominees, which has no teeth and can make no binding decision or veto. It is widely condemned as a mere cosmetic constitutional device of no functional use.

In this situation, the integrity and reliability of holders of the highest offices is often called in question. Appointed by political patronage to the Rajapaksa Regime, many key public and judicial officers blatantly engage in various types of conduct which are against international norms of integrity and propriety. According to a key political commentator spoken to by The Colombo Telegraph, they do so, secure in the knowledge that the Rajapaksa Regime will protect them, as long as they remain faithful and do the regime’s bidding.

Serious concerns have been raised in recent times that the Bribery Commission is now being abused to intimidate and harass political opponents and falling out of grace with the Rajapaksa Regime.

In this background, the latest scandal is the revelation that retired Supreme Court Judge D. Jagath De S. Balapatabendi who as Chairman of the Bribery Commission is required to be independent of involvements or interests in relation to private sector companies, has acted as an arbitrator in a commercial dispute. The propriety of his functioning simultaneously as an arbitrator while being Chairman, Bribery Commission has been challenged, in a petition to the High Court of Colombo on the grounds that it is contrary to public policy.

In Case No. HC (Civil) WP 64/2013/ARB, the Petitioner (Delmege Forsyth & Co. Ltd.), seeks to have an award made on 20th February 2013 by a private arbitral tribunal presided over by Rtd. Justice D. J. De S. Balapatabendi after hearings conducted while holding the office of Chairman, Bribery Commission set aside. It is urged that the award is perverse and requires to be set aside as being contrary to public policy.

Here is the full text of the Petition, which is self-explanatory:





No. 133/8, Gothami Road





No. 101, Vinayalankara Mawatha

Colombo 10.


                        AND NOW

In the matter of an Application to set aside Arbitral Awards in terms of Section 32 of the Arbitration Act No. 11 of 1995

DELMEGE FORSYTH & CO. LTD., with which Company DELMEGE DISTRIBUTORS (PVT) LTD., is now amalgamated with,

and of No. 101, Vinayalankara Mawatha

Colombo 10.


H.C. (Civil) WP Case No. 64/2013/ARB                                           Vs.


No. 133/8, Gothami Road



On this 5th day of April 2013

The Petition of the Respondent-Petitioner abovenamed appearing by Yamuna Balasuriya, Attorney-at-Law, practising under the name, style and firm of V. W. Kularatne Associates and her Professional Assistant, Vijayalakshmi Deepani Niroshini Wijesekera, its Attorneys-at-Law, states as follows:

1. The Respondent-Petitioner abovenamed (hereinafter sometimes referred to as the “Petitioner”) was a Company duly incorporated under the laws of Sri Lanka and has its Office at the aforementioned address, and on 13th June 2012 the Delmege Distributors (Pvt) Ltd., the Respondent in the Arbitration referred to herein was amalgamated with Delmege Forsyth & Co. Ltd., at the same aforesaid address, within the jurisdiction of Your Honour’s Court. The management control and majority Shareholdings of  Delmege Forsyth & Co. Ltd. changed in or about June 2011.

A true copy of the Certificate of Amalgamation issued by the Registrar General of Companies dated 13th June 2012 is annexed hereto marked “P1”, pleaded as part and parcel hereof

2. The Claimant-Respondent abovenamed (hereinafter sometimes referred to as the “Respondent”) is a Company duly incorporated under the laws of Sri Lanka and has its Office at the aforementioned address, within the jurisdiction of Your Honour’s Court.

3. On or about 10th May 2007 a Memorandum of Understanding was entered into between the Respondent and the Petitioner, and in pursuant thereto on or about 28th May 2007 an Agreement was entered into between the Respondent and the Petitioner.

True copies of the said Memorandum of  Understanding dated 10th May 2007 and the said Agreement dated 28th May 2007 are annexed hereto marked “P2” and “P3”, respectively, pleaded as part and parcel hereof


(a)  Under and in terms of the aforesaid Memorandum of Understanding [P2] and Agreement [P3] the Petitioner advanced to the Respondent a Loan of Rs. 20 Mn., of which Rs. 2 Mn., was advanced on 11th May 2007 upon the execution of the Memorandum of Understanding [P2], and the balance Rs. 18 Mn., was advanced on 28th May 2007 upon the execution of the said Agreement [P3], and the Respondent signed a Promissory Note dated 28th May 2007 promising to pay on demand the said Rs. 20 Mn., to the Petitioner.

A true copy of the said Promissory Note dated 28th May 2007 is annexed hereto marked “P4”, pleaded as part and parcel hereof

(b)  It is evident that the Petitioner had advanced by way of Loans a substantial sum of Rs. 20 Mn., as had been required by the Respondent, obviously in circumstances of financial predicament, which the Respondent had been in.

5. Under and in terms of the said Memorandum of Understanding [P2] and Agreement [P3]

(a)          The Respondent appointed the Petitioner as the exclusive Licensee and Distributor of the products under the “Doctor Baby” Brand Name, claimed to have been owned by the Respondent.

(b)         For the aforesaid Brand Name, the Petitioner was to pay to the Respondent a Royalty Fee of Rupees One Million Five Hundred Thousand (Rs. 1,500,000/-) per month or Ten Percent (10%) of the Net Sales Price, whichever is higher, in respect of each Month.

(c)          The aforesaid Royalty Fee payable per Month was to be set-off as part repayments of the aforesaid Loan of Rupees Twenty Million (Rs. 20 Mn.) with interest thereon calculated at the market rate of interest to be determined by the Bank of the Petitioner being applied on the diminishing balance, after the recoupment of the Monthly Royalty Fee.


(a)  In terms of Clause 3(1) of the aforesaid Agreement [P3], the aforesaid Loan was to be re-paid with interest thereon calculated at the market rate of interest to be determined by the Bank of the Petitioner, which rate of interest had been confirmed to be 19% p.a., as evidenced by the confirmation Statement dated 29th February 2008 of the Respondent [P5].

(b)  The said confirmation dated 29th February 2008 of the Respondent [P5] further confirmed the debt of Rs. 24,111,947/- as at 29th February 2008 by the Respondent to the Petitioner, with no debt, whatsoever, due to the Respondent from the Petitioner as at that date 29th February 2008.

A true copy of the said confirmation Statement dated 29th February 2008 is annexed hereto marked “P5”, pleaded as part and parcel hereof


(a)  Though the Agreement [P3] was entered into on 28th May 2007, due to practicalities, the actual operations of the arrangements contemplated under the said Agreement [P3] had not immediately commenced, and had commenced only subsequently.

(b)   Among the reasons for the frustration of such commencement of operations immediately after entering into Agreement [P3] on 28th May 2007, had been;

(i)     the inability on the part of the Respondent to have readily made available the products for distribution and sales by the Petitioner, inter-alia, due to the default of payments by them to their respective Suppliers of the products, and

(ii)   also due to the absence of the requisite approvals therefor, which had to be obtained and provided by the Respondent from the Cosmetics, Devices & Drugs Regulatory Authority.


(a)   In such circumstances, as had been requested by the Respondent, the following further Loan Advances had been made by the Petitioner to the Respondent;

10th December 2007    –           Rs. 1,500,000/-

26th March 2008          –           Rs. 1,700,000/-

25th June 2008             –           Rs.    750,000/-

Rs. 3,950,000/-

(b)  The Statement [P5] dated 29th February 2008 given by the Respondent had confirmed that the Respondent owed the Petitioner Rs. 24,411,947/- as at 29th February 2008, having acknowledged the payment of Rs. 1,500,000/- on 10th December 2007, then described as Royalty, that too, only in the Month of December 2007, and not before; but later acknowledged by the Respondent on 25th June 2008 vide [P6] as a Loan as referred to at 8(a) hereinabove.

(c) Consequently in such circumstances, the Petitioner and Respondent by Letter dated 25th June 2008 [P6] had further jointly agreed as follows;

(i)           for the Petitioner to make a minimum Royalty payment of Rs. 700,000/- per Month to the Respondent, until 10% of the actual Sales exceeded Rs. 700,000/- per Month, without making any recoupment from the aforesaid Loans.

(ii)         that the Petitioner would recover from the Respondent monies on the aforesaid Loans of Rs. 20,000,000/- and Rs. 3,950,000/- , including the aforesaid payment made in December 2007, which had previously been described as Royalty and later treated as a Loan as aforesaid, from Royalties in excess of Rs. 700,000/- per Month.

(iii)       that a total of Rs. 8,739,251/- (i.e. Rs. 206,137/- + Rs. 4,199,781/- + Rs. 4,333,333/-) was  due to the Petitioner from the Respondent as at 30th June 2008, in addition to the aforesaid Loans of Rs. 23,950,000/-, and that nothing was due to the Respondent from the Petitioner  as at 30th June 2008.

(iv)       the said Letter dated 25th June 2008 [P6] jointly signed by the Petitioner and Respondent constituted an amendment to the Agreement [P3] dated 28th May 2007.

(v)         accordingly the minimum Royalty payable of Rs. 1,500,000/- per Month as per Agreement [P3] dated 28th May 2007 had been abandoned by the aforesaid joint Letter dated 25th June 2008 [P6] stipulating a new minimum Royalty of Rs. 700,000/- per Month to be paid by the Petitioner to the Respondent, without any recoupment against the aforesaid Loans, and anything in excess of Rs, 700,000/- per Month up to 10%, as Royalty on the total sales, to be recouped as re-payments against the aforesaid Loans to the Petitioner.

      A true copy of the said Letter dated 25th June 2008 is annexed hereto marked “P6”, pleaded as part and parcel hereof

(d)  It is evident from the foregoing that the then prevalent Sales of the said “Doctor Baby” products of the Respondent had not been adequate enough to recoup the aforesaid Loans advanced by the Petitioner to the Respondent, as had been required by the Respondent to be recouped from the aforesaid future Royalties on the said Sales of the said “Doctor Baby” products of the Respondent, as had been contemplated in the Agreement [P3].


(a)  Thereafter several disputes had arisen between the Petitioner and the Respondent, resulting in the Petitioner terminating the aforesaid Agreement [P3], read together with joint Letter dated 25th June 2010  [P6], with effect from 30th June 2010 by the Petitioner’s Letter dated 31st March 2010 [P7], in terms of Clause 6(6) of the said Agreement [P3].

(b)  The said termination of  the Agreement [P3], read together with joint Letter dated 25th June 2010  [P6],  being within a period of 5 years from the date of the said Agreement [P3] dated 28th May 2007, the following proviso of Clause 6(6) of the said Agreement [P3] came into force and operation;

“Provided if the Agreement is so terminated before the expiry of a period of Five years from the date hereof YCC shall refund all monies remaining in its hands out of the said sum of Rs.20,000,000/- to Delmege.”

(c)  The said Agreement [P3] dated 28th May 2007 contained the following Clause 6(6):

“6(6) Delmege shall as any time during the currency of this Agreement have the right of terminating this Agreement by giving YCC Ninety (90) days written notice of such termination and upon termination or sooner determination of this Agreement, Delmege shall immediately cease the use of the Brand Name, unless it has purchased the same hereunder from YCC.

Provided if the Agreement is so terminated before the expiry of a period of Five years from the date hereof YCC shall refund all monies remaining in its hands out of the said sum of Rs.20,000,000/- to Delmege.” (Emphasis added)

(d)  Thus, under and in terms of the said Clause 6(6), the Petitioner terminated the said Agreement [P3] dated 28th May 2007, read together with joint Letter dated 25th June 2010  [P6], with effect from 30th June 2010 i.e. after the effluxion of a period of 3 years and one month, which was before the expiry of a period of 5 years from the date of said Agreement [P3], whereupon the aforesaid proviso in Clause 6(6) came into force and operation.

A true copy of the Petitioner’s Letter dated 31st March 2010 terminating the said Agreement is annexed hereto marked “P7”, pleaded as part and parcel hereof

10. The said Agreement [P3] dated 28th May 2007 contained the following further Clauses:

(a)    Clause 4(2)

“At the termination of this Agreement by efflux of time or the sooner determination thereof;

(a)     any Royalty Fee remaining unsettled as aforesaid shall be paid and settled by Delmege to and on demand by YCC; and

(b)     any, Royalty Fee paid in excess of the required amount remaining with YCC shall be refunded by YCC to Delmege on demand together with the aforesaid interest thereon; “

(b)  Clause 4(4)

“At the termination this Agreement by efflux of time or the sooner determination thereof, Delmege may put the said Promissory Note in suit to recover any sums of money from and out of the Upfront Payment remaining unpaid by YCC hereunder and, if all such monies due have been paid and settled by YCC, then the said Promissory Note shall be returned to YCC by Delmege.”

(c)    Clause 7(5)

“The termination of this Agreement by afflux of time or the sooner determination thereof as aforesaid shall not affect the rights of either of the parties hereto from claiming and recovering from the other of them all dues and properties that may have become payable or recoverable by the date of each termination or sooner determination. “

11. (a)  Nevertheless, by Letter dated 10th June 2010, the Respondent, acting through Mahinda Ellepola, Attorney-at-Law, referred the matter for Arbitration, nominating Dudley A. Karunaratne, Retired High Court Judge, as the Sole Arbitrator, and giving 30 day’s notice to the Petitioner to nominate the Petitioner’s Arbitrator, if the Petitioner does not agree to a Sole Arbitrator.

eto marked “P8”, pleaded as part and parcel hereof

(b)  Consequently, the Petitioner sent Letter of Demand dated 2nd July 2010 to the Respondent, claiming a sum of Rs. 24,045,280/44 from the Respondent.

      A true copy of the said Letter of Demand dated 2nd July 2010 is annexed hereto marked “P9”, pleaded as part and parcel hereof

(c)  Thereafter, the Petitioner by Letter dated 8th July 2010 addressed to the aforesaid Mahinda Ellepola, Attorney-at-Law for the Respondent, denied the allegations in the aforesaid Letter dated 10th June 2010 [P8] of the said Attorney-at-Law, as baseless and malicious, and stated that the Respondent had failed to duly comply with its obligations under the said Agreement [P3)], and reiterated its demand for the payment by the Respondent of Rs. 24,045,280/44 made by the aforesaid Letter of Demand dated 2nd July 2010 [P9], and subject thereto, nominated Kushan D’ Alwis, Attorney-at-Law, as the Petitioner’s Arbitrator.

A true copy of the said Letter dated 8th July 2010 is annexed hereto marked “P10”, pleaded as part and parcel hereof


(a)  Consequently, in terms of Section 6(3) of the Arbitration Act No. 11 of 1995, the retired Supreme Court Judge, D.J. de Silva Balapatabendi had been appointed, as an additional Arbitrator to act as the Chairman of the Arbitral Tribunal, as evidenced by Letter dated 4th August 2010 received from the Sri Lanka National Arbitration Centre.

A true copy of the said Letter dated 4th August 2010 is annexed hereto marked “P11”, pleaded as part and parcel hereof

(b)  Accordingly, Arbitral Proceedings commenced at the Sri Lanka National Arbitration Centre, Colombo 2, within the jurisdiction  of Your Honour’s Court.

(c)  As at the date of the aforesaid appointment, as the Chairman Arbitrator, D.J. de Silva Balapatabendi had retired on or about 17th May 2010, as a Supreme Court Judge.

(d)  Subsequently however, the said  D.J. de Silva Balapatabendi had been appointed on or about 13th May 2011, as a Member of the Commission to Investigate Allegations of Bribery or Corruption in terms of Act No. 19 of 1994, and had been appointed as Chairman of the said Commission.

(e)  In terms of Section 18 of the Commission to Investigate Allegations of Bribery or Corruption Act No. 19 of 1994, the said Chairman of the Commission,  D.J. de Silva Balapatabendi was deemed to be a ‘public servant’, within the meaning of the Penal Code, which at Section 19 thereof defined a ‘public servant’.

13. (a) The Petitioner is advised that in the foregoing circumstances, the said Chairman of the Arbitral Tribunal, D.J. de Silva Balapatabendi having assumed Office, as the Chairman and Commission Member of the Commission to Investigate Allegations of Bribery or Corruption, became a ‘public servant’, as aforesaid, exercising executive and quasi-judicial power, and was thus and thereby ipso facto disqualified from functioning, as Chairman of a private Arbitral Tribunal, involving commercial disputes between private parties, and receiving payments therefor from the private parties.

(b)  Unlike other ‘public servants’, Supreme Court Judges in Sri Lanka retire at the age of 65 years with 90% of the salary, allowances and other perquisites, so that such persons are not compelled to seek post retirement employment.

(c)  Nevertheless, in this instance in terms of the Commission to Investigate Allegations of Bribery or Corruption Act No. 19 of 1994, retired Supreme Court Judges are appointed as Commission Members of the Commission to Investigate Allegations of Bribery or Corruption, with further lucrative allowances and perquisites.

14. (a)  In the foregoing circumstances, the Petitioner is advised, that the Arbitral Tribunal ipso facto became improperly constituted and functus, with the appointment of the Chairman of the Arbitral Tribunal, D.J. de Silva Balapatabendi, as the Chairman and Member of the Commission to Investigate Allegations of Bribery or Corruption.

(b)  As a consequence, the Arbitral Tribunal ipso facto becoming improperly constituted and functus as aforesaid on or about the said 13th May 2011, thus and thereby the Arbitral Awards made on 20th February 2013 by the said improperly constituted and functus Arbitral Tribunal were ipso facto ab-initio null and void and of no force or avail in law.

(c)  The Petitioner ill-advisedly continuing to be a party in such Arbitration Proceedings, did not however or in any manner, whatsoever or howsoever, cure the aforesaid impropriety and the fact that the Arbitral Tribunal ipso facto became functus from around 13th May 2011 as aforesaid.

(d) It was the duty and obligation cast upon the said Chairman of the Arbitral Tribunal, D.J. de Silva Balapatabendi, a retired Supreme Court Judge, to have withdrawn from such Arbitral Tribunal immediately upon assuming Office, as Chairman and Commission Member of the Commission to Investigate Allegations of Bribery or Corruption.

15. (a)  It was highly scandalous and of serious odium for the Chairman of the Commission to Investigate Allegations of Bribery or Corruption, exercising executive and quasi-judicial power to investigate and prosecute offences of bribery and corruption, to have involved himself to have chaired private disputes settlements, leaving himself exposed to be compromised by private parties, who make payment for his such services, as Chairman of a private Arbitral Tribunal.

(b)  The ‘public perception’, which is vitally important of the independence of the Commission to Investigate Allegations of Bribery or Corruption, in the foregoing circumstances is susceptible to be seriously put in jeopardy.

(c)  The foregoing was in serious conflict with the Public Policy of Sri Lanka, warranting the prompt setting aside, as ipso facto ab-initio null and void, the purported Arbitral Awards made on 20th February 2013 by the said improperly constituted and functus Arbitral Tribunal.

(d)  Sri Lanka had ratified the UN Convention Against Corruption on 31st March 2004, which encompassed both the public and private sectors, whereby Sri Lanka stands obliged to duly observe, perform and fulfill the duties and obligations on its part under the UN Convention Against Corruption; more so it is imperative on the part of the Commission to Investigate Allegations of Bribery or Corruption to  respect and conform to the duties and obligations under the UN Convention Against Corruption.

16. (a)  Regardless of the foregoing, the said Arbitral Tribunal, chaired by D.J. de Silva Balapatabendi, Chairman of the Commission to Investigate Allegations of Bribery or Corruption, had continued to conduct Arbitration Proceedings, having previously entertained the Claim of the Respondent dated 31st August 2010.

A certified copy of said Claim dated 31st August 2010  is annexed hereto marked “P12”, pleaded as part and parcel hereof

(b)  The Petitioner, as was obliged, responded by the Statement of Defence dated 8th October 2010, including its aforesaid Claim of Rs. 24,045,280/44 made by its aforesaid Letter dated 2nd July 2010 [P9] against the Respondent.

A certified copy of the said Statement of Defence dated 8th October 2010 is annexed hereto marked “P13”, pleaded as part and parcel hereof

18. (a)  The aforesaid Arbitral Tribunal as had been notified by Letter dated 4th August 2010 [P11] had commenced Arbitration Proceedings, with the Statement of Claim dated 31st August 2010 [P12] having been tendered, and had proceeded to sit on or about 11 days up to 30th March 2011, at which point of time the Inquiry had commenced with proceedings having been had on two days.

(b)  Thereafter, the  aforesaid improperly constituted and functus Arbitral Tribunal had regardlessly proceeded to continue to conduct the said Arbitration Proceedings, with the Inquiry being  continued on 20th May 2011, after the Chairman of the Arbitral Tribunal, D.J. de Silva Balapatabendi had assumed Office on or about 13th May 2011, as a Member and the Chairman of the Commission to Investigate Allegations of Bribery or Corruption, as aforesaid.

(c) Thus, the improperly constituted and functus Arbitral Tribunal had sat on or about 18 days thereafter conducting the said Inquiry, recording evidence, receiving Written Submissions, hearing Oral Submissions, and  consequently had made Awards on 20th February 2013, whilst the Chairman of the Arbitral Tribunal, D.J. de Silva Balapatabendi, was at the very same time, also the Chairman of the Commission to Investigate Allegations of Bribery or Corruption.

Certified copies of a bundle of Documents consisting of all papers filed before the Arbitral Tribunal, including recorded evidence, oral and written submissions, are annexed hereto at the end, compendiously marked “P16”, pleaded as part and parcel hereof

(d)  The Petitioner very respectfully reserves the right to tender any further relevant Documents, which would be material to assist Your Honour’s Court to adjudicate upon this matter.

(e) (i)   Though the Respondent had held out, more particularly, as per Documents marked

P2 dated 10.5.2007

                                                P3 dated 28.5.2007

                                                P4 dated 28.5.2007

                                                P5 dated 29.2.2008

                                                P6 dated 25.6.2008

                                                P8 dated 10.6.2010

                                                P11 dated 4.8.2010

                                                P12 dated 31.8.2010

that the Respondent was a Public Limited Liability Company without describing itself as a Private Limited Liability Company as mandatorily required in terms of Section 6 of the Companies Act No. 7 of 2007, which came into force on 3.5.2007, the Petitioner in endeavouring to obtain the Annual Accounts of the Respondent from the Registrar of Companies recently discovered that the Respondent was a Private Limited Liability Company, without describing itself correctly, in violation of the said mandatory requirement under Section 6 of the Companies Act No. 7 of 2007.

(ii)  In the circumstances, the Petitioner having been unable to obtain copies of Annual Accounts of the Respondent, respectfully moves for an Order of Your Honour’s Court that the Petitioner be permitted to obtain copies of same from the Registrar of Companies and to tender the same to Your Honour’s Court for the proper adjudication of this matter.

(f)    On the other hand, the Petitioner had correctly described itself as mandated, as a Private Limited Company under and in terms of Section 6 of the Companies Act No. 7 of 2007

18. (a)  The Chairman of the Arbitral Tribunal, D.J. de Silva Balapatabendi, who was also the Chairman of the   Commission to Investigate Allegations of Bribery or Corruption, with the Respondent’s Arbitrator, Dudley Karunaratne agreeing, had made a phenomenal baseless Award in favour of the Respondent, tantamounting  to conjecture, without having taken any cognizance of the past actual financials of the Respondent, and amounting in total to Rs. 145.5 Mn., (Rs. 55.5 Mn., + Rs. 90 Mn.), having also questionably ignored the interest payable by the Respondent on the substantial aforesaid Loans amounting to Rs. 23,950,000/-, which had been advanced to the Respondent by the Petitioner, as per the aforesaid Agreement [P3], read with joint Letter dated 25th June 2008 [P6], as morefully set out hereinbelow.

(i)                 A Royalty payment of Rs. 1.5 Mn., per month from the date of Agreement [P3] of 28th May 2007 up to the date of termination of the Agreement [P3] on 30th June 2010 i.e. for 37 months, totaling Rs. 55.5 Mn., less the 3 Loans advanced of Rs. 3.95 Mn., referred to at paragraph 8 hereinbefore; without having taken into account the interest of 19% p.a. payable on such Loans as set out hereinbefore, and also intriguingly having chosen to ignore that the Respondent and Petitioner had, in fact, agreed by Letter dated 25th June 2008 [P6], to amend the said Agreement [P3] dated 28th May 2007 and that the Respondent had confirmed having owed monies to the Petitioner  as at 30th June 2008, as set out at paragraph 8 hereinbefore.

(ii)               In addition to the above, a further payment of damages purportedly based on the Royalty payments lost by the Respondent of Rs. 1.5 Mn., per month for another future 5 years i.e. for 60 months, making a total of Rs. 90 Mn., from which the aforesaid original Loan of Rs. 20 Mn., paid in May 2007 upon signing of Agreement [P3] had been deducted, that too, questionably without having taken into account the interest payable of 19% p.a. on such Loan as morefully set out hereinbefore; and furthermore without having examined the Respondent’s actual financials for a relevant period before the Petitioner entered into Agreement [P3] in May 2007 with the Respondent, and without having taken  cognizance of the cogent fact that the Agreement [P3] stood amended by the joint Letter dated 25th June 2008 [P6].

(iii)             Intriguingly, the foregoing interest payable of 19% p.a. had been omitted, notwithstanding the fact that the Petitioner’s Arbitrator, Kushan D’ Alwis in his dissenting Award had provided for such 19% p.a. interest payable by the Respondent to the Petitioner on the aforesaid Loans, which therefore the Chairman of the Arbitral Tribunal, D.J. de Silva Balapatabendi, and Respondent’s Arbitrator, Dudley Karunaratne would have been well and truly aware of.

(b)  On the other hand, the Petitioner’s Arbitrator, Kushan D’ Alwis, Attorney-at-Law, dissenting with the foregoing phenomenal Award based on conjecture, had written a separate Order, awarding the Respondent in contrast Rs. 6.04 Mn.; that too, without having taken cognizance of the cogent fact that Agreement [P3] stood amended by the joint Letter dated 25th June 2008 [P6] and that the Respondent had thereby confirmed that the Respondent owed monies to the Petitioner as at 30th June 2008.

Certified copies of the aforesaid Award and the said dissenting Award are annexed hereto marked “P14(a)” and “P14(b)”, respectively,

             together with Letter dated 4th April 2013 of Dissanayake Amaratunga Associates, Attorneys-at-Law annexed hereto marked “P15” confirming that they had not received Certified Copies of the aforesaid Awards  dated 20th February 2013, even though the Proceedings before the  Arbitral Tribunal of 20th February 2013 – vide [P16] had recorded thus in contravention of Section 25 (4) of Arbitration Act No. 11 of 1995

    “The Registrar of the Arbitration Centre is directed to send certified copies of the Award and the Dissenting Order to the parties concerned by the registered post”

pleaded as part and parcel hereof

(c)  (i)      The Agreement [P3] dated 28th May 2007 in proviso at Clause 6(6) had specifically stipulated thus, which was applicable in this instant case:

Provided if the Agreement is so terminated before the expiry of a period of Five years from the date hereof YCC shall refund all monies remaining in its hands out of the said sum of Rs.20,000,000/- to Delmege.”

(ii)     The Petitioner in its Statement of Defence [P13] dated 8th October 2010 had stated its Claim of Rs. 24,045,280/44 as had been demanded by its Letter dated 2nd July 2010 [P9] from the Respondent, with the Respondent having given the Petitioner a Promissory Note dated 28th May 2007 [P4].

(iii)    Clause 2 (4) of the Agreement [P3] dated 28th May 2007 is given below:

“2(4)   within a time period of five (05) years of signing this Agreement, agrees to sell outright and absolutely assign the Brand Name to Delmege in due form of Law for the price or consideration of United States Dollars Two Million (Rs. 2,000,000/-), if Delmege has notified YCC in writing of its intention to so purchase the Brand Name such notice to reach YCC at least fourteen (14) days prior to the intended date of purchase, it being declared and understood that if such notice is not received by YCC as aforesaid, YCC shall have the right to refuse to so sell the Brand Name to Delmege.”

The foregoing is in contravention of the Exchange Control Act, thereby raising the issue that Agreement [P3] is an illegal contract, and thus and thereby would be repugnant of and in conflict with Public Policy.

19. Being aggrieved with the said purported Arbitral Awards made on 20th February 2013 by the aforesaid improperly constituted and functus Arbitral Tribunal, the Petitioner very respectfully invokes the jurisdiction of Your Honour’s Court, and moves to have the said purported Arbitral Awards set aside, on the following, among other grounds, that may be urged by the Counsel for the Petitioner at the Hearing of this Application.

(a)    The Chairman of the Arbitral Tribunal, D.J. de Silva Balapatabendi became disqualified from being a Member of the Arbitral Tribunal and Chairman thereof, upon assuming the public office of a quasi-judicial nature on or about 13th May 2011, as a Member and Chairman of the Commission to Investigate Allegations of Bribery or Corruption, thereby ipso facto disqualifying him to have continuing to be a Chairman of the Arbitral Tribunal.

(b)   Thus and thereby on or about 13th May 2011 the foregoing rendered the Arbitral Tribunal to ipso facto become improperly constituted and functus, and whereby the aforesaid Awards made on 20th February 2013 to be ab-initio, null and void and of no force or avail in law.

(c)    The foregoing Arbitral Proceedings, including the aforesaid purported Arbitral Awards are thus and thereby scandalous and in serious conflict with the Public Policy of Sri Lanka, causing grave public odium.

(d)   The purported Awards are contrary to the covenants in the Agreement [P3], dated 28th May 2007, read together with the joint Letter dated 28th June 2008 [P6] between the Respondent and the Petitioner.

(e)    The foregoing purported Awards are contrary to the Laws of Sri Lanka and are in conflict with Public Policy of Sri Lanka.

(f)    The said purported Awards contain decisions on matters not falling within the purview of the Terms of Reference.

(g)    The said purported Awards deal with disputes not contemplated by and not falling within the submissions to Arbitration and also contain matters beyond the scope of submission to Arbitration.

(h)   The foregoing purported Awards had been made in the absence of and without any examination of the actual financials of the Respondent.

(i)     The foregoing purported Awards had gravely failed to take cognizance of the fact that the Agreement [P3], which stood amended as aforesaid and the consequent arrangements tantamounted to an ‘unfair contract’.

20. (a)  If the interim relief sought for herein is not granted, irreparable loss and damage and irremediable mischief would be caused to the Petitioner.

(b)  The Petitioner reserves the right to support for interim relief at an appropriate stage.

21. The Petitioner has not previously invoked the jurisdiction of Your Honour’s Court in respect of this matter.

22. The Affidavit of the Group Managing Director of Delmege Forsyth & Co. Ltd., with which Company, Delmege Distributors (Pvt) Ltd., is now amalgamated, is annexed hereto in support of the averments herein contained.

WHEREFORE the Petitioner very respectfully prays that Your Honour’s Court be pleased to:

(a)                set aside the Arbitral Awards delivered on 20th February 2013,

(b)               grant interim relief staying the operation and enforcement of the Arbitral Awards delivered on 20th February 2013, until the hearing and final determination of this Application,

(c)                make an Order declaring that the Petitioner is entitled to obtain certified copies of the Annual Accounts of the Respondent from the Registrar of Companies to be tendered to Your Honour’s Court for the adjudication of this matter

(d)               grant costs, and

(e)                grant such other and further reliefs as Your Honour’s Court shall seem meet

Settled by:

Viran Corea, Attorney-at-Law

M.A. Sumanthiran, Attorney-at-Law

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Foreign Affairs

Extreme World: Is Sweden as Clean as it Seems

Ceybank Asset Management (CAM), Sri Lanka’s largest unit trust fund manager, has launched an open ended gilt-edged fund aiming to attract small investors especially in rural areas, officials said.

The ‘Ceybank Surakum’ fund will invest in government Treasury bills and bonds and other government-backed securities but not in equities and aim to give a return higher than interest rates on bank deposits which have been falling.
Chitra Sathkumara, chief executive of CAM, said their initial target is to raise at least two billion rupees

“This will give small investors a better choice,” he told a news conference.

“In Sri Lanka most people invest a part of their money in savings accounts and fixed deposits but interest rates on savings accounts are falling while the cost of living is increasing, and people get poorer.”

This had prompted some investors to search for high interest yielding but risky products and lose money in financial scams, he said.

“Many investors lost their life saving trying to get super returns. The Surakum fund aims to earn returns above savings accounts while ensuring safety. We aim to bridge the gap between savers and investors through this fund.”

The minimum investment in the fund is 10,000 rupees and each unit 10 rupees.

The Ceybank Surakum fund will pay two dividends a year in January and July, with the first dividend being paid in July 2011.

Dividends from investments are tax free, the investments can be encashed at the prevailing market price and investors can switching their money among other funds managed by CAM.

The fund will be marketed with the help of the branch network of the state-owned Bank of Ceylon, which has a 43.4 percent stake in CAM.

Other shareholders are state-owned Sri Lanka Insurance, Carson Cumberbatch & Co. and Unit Trust of India, said K Hewage, chairman of Ceybank Asset Management.

Proposals in the government’s 2011 budget announced last week exempting unit trusts from certain taxes and relaxing foreign exchange controls to allow foreigners to invest in the funds will help promote the industry, he said.
The budget also made income earned by unit trusts from listed stocks and bonds free from income tax.