By Madhusha Thavapalakumar
The state-owned Colombo International Arbitration Centre (CIAC), which is located at the World Trade Centre (WTC) has a large sum of outstanding rent payments to be made to the WTC, The Sunday Morning Business reliably learns.
The CIAC, which was established by the former Government to assist foreign investors in solving disputes they might have with their local counterpart, has been occupying an office space at the WTC since May 2015, recording very little business over the years, according to sources.
As the CIAC falls under the purview of the Ministry of Justice, we spoke to Ministry of Justice Secretary M.M.P.K. Mayadunne who confirmed that the Ministry has outstanding rent payments to be made to the WTC, but disclosed neither the figures nor the period for which the rentals have not been settled.
“We are taking measures to settle these payments to the WTC. We have spoken to them and arrived at a mutual stance. We will make the payments in the coming months,” Mayadunne stated.
Nevertheless, according to state sources, the CIAC had not been paying rent even under the former Government and the rental due is in millions of rupees.
Before going to print we contacted Pravir Samarasinghe, CEO of Overseas Realty (Ceylon) PLC, which owns and manages the WTC, but he said he was in a meeting and asked us to contact him later.
Minister of Justice Ali Sabry recently stated that the Ministry will be moving to the WTC temporarily for a period of two years starting from next year at a cost of more than Rs. 400 million.
Meanwhile, commenting on the CIAC bringing in very little business over the years and being empty for the most part of the year, Mayadunne added that it is being utilised as a project office by the Ministry of Justice and occasionally as an arbitration centre.
Mayadunne noted that it is not ideal for a government to operate an arbitration centre and therefore, the Ministry appointed a committee to look for a private sector company to manage the CIAC.
“We received a few proposals from the private sector to manage the CIAC. We will come up with a mechanism to bring the most out of the CIAC within the next three months,” he added.
Since its inception, the CIAC had been almost inactive in terms of arbitration, thereby failing to make any profit. As a result, the Sri Lankan Government has had to rely on the Singapore International Arbitration Centre to solve the issues that arise from Sri Lanka’s international agreements and from its bilateral relationships in general, even though the Singapore International Arbitration Centre is extremely costly and sometimes, the Government has to also send local officials to the centre at the Government’s expense when solving issues.
Nevertheless, in March this year, the Cabinet approved a proposal made by the Ministry of Justice to do a complete revamp of the CIAC with the aim of making it a profit-making state institution for the Sri Lankan Government.
The Cabinet proposal also noted that the CIAC will be formally incorporated into all international agreements Sri Lanka enters in the future, including the Sri Lanka-Thailand Free Trade Agreement (FTA) and the Economic and Technology Co-operation Agreement (ETCA).
Speaking to us in March this year, then Ministry Secretary J.J. Rathnasiri stated that the second biggest reason for reviving the CIAC is the Colombo Port City project.
“Sri Lanka should have its own international arbitration centre, especially to solve the issues that might arise from the Port City,” he added.
Rathnasiri noted that the Ministry would make changes to the existing five-member team at the CIAC and will also appoint a President’s Counsel, and the centre will be managed in a manner where arbitration business would come to the Sri Lanka National Arbitration Centre (SLNAC). After the revamping, it is hoped that the SLNAC will be able to earn a minimum of Rs. 80,000 per day.
An international arbitration centre is an institution that directs the arbitration arrangements of a country that arise from international agreements and relationships with other countries. The centre provides space for meetings and discussions between two parties where lawyers and negotiators from both sides are present.
As the CIAC falls under the purview of the Ministry of Justice, we spoke to Ministry of Justice Secretary M.M.P.K. Mayadunne who confirmed that the Ministry has outstanding rent payments to be made to the WTC, but disclosed neither the figures nor the period for which the rentals have not been settled.
“We are taking measures to settle these payments to the WTC. We have spoken to them and arrived at a mutual stance. We will make the payments in the coming months,” Mayadunne stated.
Nevertheless, according to state sources, the CIAC had not been paying rent even under the former Government and the rental due is in millions of rupees.
Before going to print we contacted Pravir Samarasinghe, CEO of Overseas Realty (Ceylon) PLC, which owns and manages the WTC, but he said he was in a meeting and asked us to contact him later.
Minister of Justice Ali Sabry recently stated that the Ministry will be moving to the WTC temporarily for a period of two years starting from next year at a cost of more than Rs. 400 million.
Meanwhile, commenting on the CIAC bringing in very little business over the years and being empty for the most part of the year, Mayadunne added that it is being utilised as a project office by the Ministry of Justice and occasionally as an arbitration centre.
Mayadunne noted that it is not ideal for a government to operate an arbitration centre and therefore, the Ministry appointed a committee to look for a private sector company to manage the CIAC.
“We received a few proposals from the private sector to manage the CIAC. We will come up with a mechanism to bring the most out of the CIAC within the next three months,” he added.
Since its inception, the CIAC had been almost inactive in terms of arbitration, thereby failing to make any profit. As a result, the Sri Lankan Government has had to rely on the Singapore International Arbitration Centre to solve the issues that arise from Sri Lanka’s international agreements and from its bilateral relationships in general, even though the Singapore International Arbitration Centre is extremely costly and sometimes, the Government has to also send local officials to the centre at the Government’s expense when solving issues.
Nevertheless, in March this year, the Cabinet approved a proposal made by the Ministry of Justice to do a complete revamp of the CIAC with the aim of making it a profit-making state institution for the Sri Lankan Government.
The Cabinet proposal also noted that the CIAC will be formally incorporated into all international agreements Sri Lanka enters in the future, including the Sri Lanka-Thailand Free Trade Agreement (FTA) and the Economic and Technology Co-operation Agreement (ETCA).
Speaking to us in March this year, then Ministry Secretary J.J. Rathnasiri stated that the second biggest reason for reviving the CIAC is the Colombo Port City project.
“Sri Lanka should have its own international arbitration centre, especially to solve the issues that might arise from the Port City,” he added.
Rathnasiri noted that the Ministry would make changes to the existing five-member team at the CIAC and will also appoint a President’s Counsel, and the centre will be managed in a manner where arbitration business would come to the Sri Lanka National Arbitration Centre (SLNAC). After the revamping, it is hoped that the SLNAC will be able to earn a minimum of Rs. 80,000 per day.
An international arbitration centre is an institution that directs the arbitration arrangements of a country that arise from international agreements and relationships with other countries. The centre provides space for meetings and discussions between two parties where lawyers and negotiators from both sides are present.