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Introduction - Expedited Arbitration

MODERN Arbitration is an effective consensual method of dispute resolution gaining currency over litigation in the field of commerce specially in the arena of International commerce.

Globalized commerce and dominance of transnational Companies called for an universally accepted method of dispute resolution mechanisms, decisions of which could be enforced in any country in the world.

The development of the United Nations sponsored Model Law on International commercial Arbitration, though the UNCITRAL in 1985 and the adoption of New York convention on enforcement Arbitration Awards in 1985, few years created a commercial legal structures by which disputes in transnational commerce could be resolved.

Sri Lanka adopted a modern Arbitration Law by Act No. 11 of 1995. Sri Lankan Law was influenced by UNCITRAL Model Law on Arbitration and more specifically the draft Swedish Law on International Commercial Arbitration which has now been adopted.

Swedish experts assisted the Sri Lankan Institute of Commercial Law and Practice (ICLP) and the relevant authorities to draft the Modern Arbitration Law No. 11 of 1995 and become the first country in South Asia to adopt a Modern Arbitration Law.

The Commercial Community in Sri Lanka also took the initial step by setting up the first Institutional Arbitration Center, ICLP Arbitration Center and adopted a separate set of rules of procedure to conduct both national and International Arbitrations according to accepted international norms.

The Center, in order to promote solidarity with other international centers of Arbitration entered into several Memorandum of Understanding with Arbitration Centers in India, Malaysia, Singapore, London and Stockholm.

The ICLP Arbitration Center functions as a non profit institution and successfully launched a Diploma Course in International Commercial Arbitration in 2003.

All these efforts to develop a modern arbitration culture have so far only met with partial success. Whilst arbitration became a valid dispute resolution process specially in the field of international commercial dispute resolution, the concept did not permeate the arbitration activities in the outstations or become a speedier, less costly and less formal dispute resolution process as originally intended.

Arbitration became as protracted as litigation and former judicial officials who formed the bulk of the Arbitrators was extremely reluctant to part with the earlier litigation practices and learn and adopt modern user friendly arbitration procedures. Majority of arbitration awards were challenged before the Colombo High Court on flimsy grounds, thus defeating the very purpose of arbitration.

It is in order to resolve some of these new challenges, that the ICLP in early 2006 introduced the procedure of expedited arbitrations. Under the new expedited rules, a request for expedited arbitration could be included in the Arbitration Clause itself or subsequently made when making the application to the Center.

The sole arbitrator appointed with consensus of the parties is the preferred Arbitration tribunal in the expedited process where the dispute could be resolved by mediation or on the basis of the documentation only, wherein the Arbitration Tribunal is bound to follow the fast track procedure.

The fees of Arbitrators are limited in relation to the amount of the claim and most importantly, the Arbitration should normally be concluded within three months of an application.

- S. S. WIJERATNE

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Questions and Answers

Cable TV station

QUESTION: I am a subscriber to a Cable TV station with its office in Colombo 5. Recently this company switched telecasting from analog to digital transmission, for which we subscribers had to pay Rs. 6,900 in addition to an enhanced monthly rental of Rs. 875. They used to telecast BBC programme but no longer do so. They also used to telecast Test and Limited Overs Cricket ‘live’ on Star Sports but now it is telecast on another channel.

According to them, if we are to view this now we have to upgrade our subscription from a basic package to a ‘premium’ package at an additional cost of Rs. 650.

I wish to know whether it is legal for this cable TV provider to take away certain channels that we were hitherto enjoying and including it in the premium package thereby forcing viewers to go for the more expensive package, which I feel is a total violation of our rights. Please advise.

- A. J. PEREIRA, Colombo 5.

ANSWER: From the description you have given, it is necessary to read the agreement entered between you and the service provider. If there is no provision in the agreement to change the programme are at the discretion of the service provider, you can seek relief for reach of contract. You can make a complaint regarding this matter to the Consumer Protection Authority at the following address: 1st and 2nd floor, CWE Secretarial Building, 27, Vauxhall Street, Colombo 2.

Tel. No. 2445897/2399148.

email: caaoffice@sltnet.lk

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How can a company name be changed?

QUESTION: My father owns a company under his name. He now wishes me to join his company as he wants to retire and be at home. I want to find out whether I can change the name of the company. If so, what is the procedure?

- P. GOMEZ, MUTWAL

ANSWER: The company name can be changed:

* By Special Resolution

* Prior written approval of the Registrar.

Name change must be filed with Registrar within 10 working days.

Within 20 working days of name change, the company shall give public notice (Gazette and 1 newspaper of any language) of the name, etc.

Name change includes change from private to public or listed or vice-versa.

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Who should sign an annual report?

QUESTION: As per the new Companies Act No. 7 of 2007 who should sign the Annual Report? I await your kind reply.

- G. LIYANAGE, Colombo 6.

ANSWER: The annual report could be signed on behalf of the Board by -

(i) two directors of the company or if the company has only one director, by that director; and

(ii) the Secretary of the company.

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What is a promissory note?

QUESTION: I have friend who has taken a loan on a Promissory Note. I have no idea of what a Promissory Note is. As such please let me know - what is a Promissory Note?

- K. RIZANA, Modera.

ANSWER: A Promissory Note is another form of a loan contract. It is in fact a ‘promise to pay’ where one party agrees to pay a particular sum of money to another either with or without interest. The repayment could take place either on demand or on a particular date.

If the borrower goes into default under a Promissory Note, the lender has the right to institute legal action against the borrower for the amount specified in the Promissory Note. Promissory Notes are governed by the provisions of the Bills of Exchange Ordinance No. 25 of 1927.

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Payment of bonus

QUESTION: I am employed in the mercantile sector for the last 22 years. I joined the firm on 1st of November. Now I want to give my resignation on 1st of October 2007 giving one months’ notice so that I have completed 22 years. As such, I will be leaving the firm at the end of October 2007.

I want to know whether I will be entitled to the bonus which will be paid during December 2007?

Please be good enough to reply at your earliest.

- N. NIRMALA, Dehiwela.

ANSWER: Bonus is not a statutory due. You have stated that your employer normally pays bonus to employees during December 2007. Some employers pay bonus to employees at the end of the year and it is paid only if they are in employment at the time bonus is paid. Some employers pay on a pro rata basis if the employee ceases to be an employee prior to December.

Your question is not clear. However, since you are leaving in October, your employer may not pay you the bonus unless it has been a practice of the employer to pay bonus to employees leaving before December. There are two types of bonus - namely,

* Profit bonus.
* Customary bonus.

You have not informed us the type of bonus paid by your employer.

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Remedy available to obtain amount deducted from gratituity?

QUESTION: I have resigned from employment after 20 years of service as an Executive. There are thirty five employees working in this Company. The management of the company has deducted Rs. 25,000 from my gratuity stating that I have misappropriated funds.

What is the remedy available to me to obtain the sum of Rs. 25,000.

-MRS. JEAN PIETERSZ, Moratuwa

ANSWER: According to Section 13 of the Payment of Gratuity Act No. 12 of 1983, any workman to whom gratuity is payable under Part II of the Act and whose services have been terminated for reasons of fraud, misappropriation of funds of the employer, wilfull damage to the property of the employer or causing the loss of goods, articles or property of the employer shall forfeit such gratuity to the extent of the damage or loss caused by him.

The Labour Tribunal has the jurisdiction to go into the question whether the forfeiture of gratituity has been correctly made.

You have no remedy as you have resigned and your services have not been terminated by your employer for reasons of misappropriation of funds.

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Arbitration clause

QUESTION: Can the jurisdiction of the court be ousted by the Arbitration Clause? Please reply through your Daily News Legal Aid Page?

-MARK PEREIRA, Nawala.

ANSWER: Arbitration is a special process of consensual adjudication provided for in the Arbitration Act No. 11 of 1995. Under Section 5 of the Arbitration Act when the parties enter into a contract with an Arbitration Clause, the jurisdiction of the court is ousted.

For your easy reference we quote below Section 5 of the Arbitration Act:-

“Where a party to an arbitration agreement institutes legal proceedings in a court against another party to such agreement in respect of a matter agreed to be submitted for arbitration under such agreement, the Court shall have no jurisdiction to hear and determine such matter if the other party objects to the court exercising jurisdiction in respect of such matter.”

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Banker’s duty of secrecy

QUESTION: I have a family friend who is working in a certain Bank. I hope to obtain a loan from this Bank. I want to keep this matter a secret. Can the particular employee of the bank keep this matter as a secret?

-ANURUDDHA, Mahara

ANSWER: One of the most important and well established rules of banking law is that a bank must observe strict confidentiality about its customer’s account. The general relationship between a bank and its customer is that of debtor and creditor but there is no duty of confidentiality in law between a normal debtor and creditor. The bank’s duty arises out of the special relationship between it and the customer. A new entrant to the staff of a bank is invariably required to give an undertaking in his or her service agreement to strictly observe confidentiality about the affairs of customers. Indeed, quite apart from law, confidentiality is a jealously guarded tradition among bankers. Bank staff must appreciate that the duty is not merely to be discreet but to secretive - a duty which is far wider and higher than a duty to exercise discretion. Confidentiality is fundamental to the bank-customer relationship.

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How to get passport for my grand mother who is a senior citizen

QUESTION: My grand mother is now 80 years old, born in Negombo. We are living abroad and we like to take her for a visit abroad. She does not have a birth certificate. She is unable to get her Birth Certificate as the Registrar of Births says her birth has not been registered.

I understand that without the Birth Certificate you cannot obtain a Passport. Is this correct? Please help me. I am awaiting reply through your valuable Legal page.

- M. PETER - Negombo.

ANSWER: You can obtain a passport for your grand mother who is a Senior Citizen without her Birth Certificate.

The procedure is you have to fill the Passport Application Form with five coloured passport size photographs and submit the same to the Department of Immigration and Emigration, Punchi Borella with the following documents:-

(a) National Identity Card (with photocopy) if she possess one

(b) Probable Age Certificate issued by the Medical Officer

(d) If your grand mother’s children were born in Sri Lanka, copies of their Birth Certificates.

(e) Marriage Certificate.

(f) If your grand mother has sisters/brothers, copies of their Birth Certificates.

(g) Affidavit stating that your grand mother have no Birth Certificate.

If you submit the Passport Application Form with the above mentioned documents to the Department of Immigration & Emigration, they will issue you with a Passport since your grand mother is a Senior Citizen. Otherwise the Birth Certificate is a necessary document to obtain a Passport.

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Testamentary case

QUESTION: I am a legally adopted girl of my parents. My father met with an accident and died on the spot a month ago without leaving a last will.

I want to know whether, as a legally adopted girl. I have the right to own his property. If so what shall I do. Please advise me.

- NADEEKA, Nuwara Eliya.

ANSWER: If you are a legally adopted girl, you have the right to ask half share of your father’s share of his property under the Common Law. Your mother will be entitled to the other half share of your father’s property.

The Civil Procedure Code, Section 525 states that

“When any person shall die in Sri Lanka without leaving a will, it shall be the duty of the widow, widower, or next of kin of such person, if such person shall have left property in Sri Lanka amounting to or exceeding in value five hundred thousand rupees, within one month of the date of his death to report such death to the District Court of he district in which he shall have so died, and at the same time to make oath or affirmation or produce an affidavit verifying the time and place of such death and stating if such is the fact, that the intestate has left property within the jurisdiction of that or any other, and in that event what Court, and the nature and value of such property.”

Under these provisions you have a legal right to ask half share of your father’s property.

In order to obtain the same, you have to file a testamentary case in the District Court where the land is situated.

If you need further information or assistance you can visit our Legal Aid Centers established islandwide or you can call over at our Head Office at No. 129, High Court Complex, Hulftsdorp Street, Colombo 12.

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Registration of lease agreement

QUESTION: One of my friends have decided to enter into a Lease Agreement with the owner (the Lessor). However, the owner informed her that there is no need to register the Lease Agreement. Is this true? My friend would like to know the legality in registering the said document?

-SANJU, Mahara

ANSWER: If there is a Lease Agreement, it should be registered. In the event of a dispute between the parties, a registered Lease Agreement will have a validity over an unregistered Lease Agreement. If the owner refuses to do so, you have to be very careful as he may have intentions of cheating you.

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38th Legal Aid Centre of Legal Aid Commission at Dambulla

The 38th Legal Aid Centre of the Legal Aid Commission will be opened at Dambulla today by LAC Chairman S. S. Wijeratne, Director-General, Justice Hector S Yapa and Dambulla Magistrate, H. P. G. Nimal Ranaweera. The Centre would cover the police station areas of Dambulla, Naula, Laggala, Beligamuwa, Padeniya, Galewala and Sigiriya and the Divisional Secretariats of Dambulla, Naula, Laggala, Beligamuwa, Pallepola and Galewala. Ms. Menaka Damayanthi Kumari, AAL will be the Legal Officer in charge of this Centre.

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