News
Court restrains SLTDA from cancelling deal with resort company
The Colombo District Court has issued an enjoining order against the Sri Lanka Tourism Development Authority (SLTDA), preventing it from cancelling a lease agreement with a company that has accused the Authority’s chairperson of Conflict of Interest in taking the decision.
Lanka Reality Leisure (Pvt) Ltd., in its petition to court, claimed that a company owned by the SLTDA Chairperson’s husband, Wild Coast Lodge (Pvt.) Ltd., owned a property adjoining its own property and that in discussions with her she had indicated her unhappiness that they would develop the property, and also indicated that she wanted to give their property to another party. They claimed this was a Conflict of Interest on her part.
The lease agreement had been signed over a land taken on a 99-year lease by the company to construct a tourism development project.
The order issued by Colombo District Judge Amali Ranaweera is valid for two weeks and notice has been issued to the SLTDA to be present in court on June 30.
Lanka Reality Leisure (Pvt) Ltd. (formerly known as Ascot Leisure (Pvt) Ltd.) had entered into an agreement with the SLTDA to lease out a seven acre plot of land in the Palatupana area in Hambantota to build a tourist resort targeting the Yala National Park.
The plaintiff company has made an initial investment of more than Rs 29 million. The company stated that it also fulfilled its yearly lease obligations on time.
As per the agreement, the company began construction of a 30-room resort. Unexpected events including the Easter Sunday attacks resulted in delays to the project. Though the lease agreement provides for an extension in such instances, the SLTDA had arbitrarily cancelled the agreement, the company said.
The company told the court that it had already spent about Rs 48 million on the development project and had raised a further Rs 600 million needed to complete the project through the sale of its shares.
Lanka Reality Leisure (Pvt) Ltd. stated that a company belonging to the husband of the present SLTDA chairperson was constructing its own tourism development project on an adjoining land. As such, it believes that the SLTDA moved to terminate the agreement with malicious intent.
Taking into consideration the arguments presented by Ali Sabry, P.C. and Attorney-at-Law Nalin Alwis, who appeared on behalf of the plaintiff company, Colombo District Judge Amali Ranaweera issued the enjoining order and further ordered the plaintiff to deposit Rs 25,000 as a damage claim.