Expropriation To Be Referred For Arbitration
Lanka Tractors, one of the companies listed to be acquired by the government under the new Act introduced recently, says it will refer the matter for arbitration at the International Centre for the Settlement of Investment Disputes in Washington, USA.
The company has written to the Secretary to the Treasury Dr P. B. Jayasundera, saying moves to take possession of the property is illegal, unlawful and contrary to international agreements.
Two properties belonging to Lanka Tractors Limited have been included in Schedule II of the Revival of Underperforming Enterprises and Underutilized Assets Act that was recently passed by the Parliament recently.
Lanka Tractors insists that its two properties were not “alienated” or “granted” by the government, but belonged to a public company.
It also said that a controlling interest in, and management of, the public company known as Lanka Tractors Limited, was purchased by a consortium of foreign and local investors and the sale had been described by the government as having been conducted in “the most transparent and competitive manner”. Lanka Tractors said that the purported expropriation of the properties described in the schedule constitutes an infringement of the terms of the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Democratic Socialist Republic of Sri Lanka for the Promotion and Protection of Investments, signed on 13 February 1980 and ratified on 18 December 1980 (Treaty Series No. 14 (1981)), and entitles the investors from the United Kingdom to refer the matter for arbitration by the International Centre for the Settlement of Investment Disputes, in Washington D.C., U.S.A.
It said that in terms of Article 157 of the Constitution, this Agreement has the force of law in Sri Lanka, and its provisions may not be contravened by any written law or by executive or administrative action except in the interests of national security.