News
Re-acquisition of Kotte land: British investor takes Lanka to ICSID
View(s):A British investor has filed action against the Sri Lanka Government at the International Centre for the Settlement of Investment Disputes (ICSID) over the re-acquisition of a land close to the Parliament complex in Kotte, earlier given to construct a hotel . The case has been filed by the investor, Raymond Eyre and his company Montrose Developments.
The plot of land, located on the banks of the Diyawanna Oya adjacent to ‘Diyatha Uyana’ in Rajagiriya, had been purchased in 2010 by Mr Eyre through Montrose Developments, which is registered in Sri Lanka. The Government, however, had reacquired the land not long after on the grounds of requiring it for a public purpose in order to carry out a flood prevention programme for Parliament and the surrounding areas.
Attorney General Jayantha Jayasuriya has been named as the respondent in this case to represent the Sri Lankan Government. The investor had filed the case in August, last year, seeking compensation. Written submissions have already been considered before the ICSID tribunal, where the Sri Lankan State had been represented by Toby Landau QC, a barrister at Essex Court Chambers in London, alongside former Deputy Solicitor General Janak De Silva and State Counsel Indula Ratnayake.
Meanwhile, Global Arbitration Review (GAR) reports that a tribunal chaired by Singapore-based American arbitrator Lucy Reed and including the UK’s Julian Lew QC and France’s Brigitte Stern is hearing the claim. The claim has been brought under the UK-Sri Lanka bilateral investment treaty.
According to GAR, Montrose had bought the land in question in 2010 and subsequently transferred it to a Singaporean entity which is 99% owned by Mr. Eyre.
GAR further reports that Mr. Eyre had planned to build and operate an international hotel on the land, which is also close to a number of embassies and high-end residential and commercial developments. But in September 2011, a vast area of the land was flooded – a development Eyre blamed on dredging work carried out by a Government agency responsible for urban development in and around the lake.
According to Mr. Eyre, the damage was not irreparable. However, instead of taking steps to mend it, the Sri Lankan Government issued him with a compulsory acquisition order. Mr. Eyre has begun local proceedings to obtain compensation but says the process was delayed, leaving him with no choice but to initiate ICSID proceedings. He also claims the compensation he was awarded at the end of the local proceedings was vastly inadequate and did not reflect the market value of the expropriated project.
He is appealing the amount in the local courts at the same time as pursuing the ICSID case. The amount of damages sought is unknown. Mr. Eyre alleges he had retained a number of international professional consultants in relation to the development of his hotel and had obtained interest from both banks and well-known hotel operators.
Based out of Washington D.C. in the US, the ICSID is regarded as the world’s leading international investment dispute settlement body.
Sri Lanka has faced two other ICSID cases, which ended in 1990 and 2002.