• Proposed settlement seeks resolution to long-standing dispute
• Gamage to consider Govt.’s offer in factory expropriation case

The Government has agreed to pay Rs. 2 billion as an interim payment to former MP Daya Gamage as part of a settlement proposed by the Court of Appeal to compensate for the expropriation of the Sevanagala Sugar Factory and its lands in 2011.

Appearing on behalf of the Secretary to the Ministry of Finance, Economic Stabilisation, and National Policies, the Attorney General’s Department on 20 March 2023, in the Writ Application bearing No.536/2023, submitted to the two-Judge bench of the Court of Appeal comprising Court of Appeal President Justice Bandula Karunarathna and Justice B. Sasi Mahendran that a settlement had been proposed by the Government, through which Rs. 2 billion would be paid to Petitioner Gamage as an interim payment for the expropriation of the Sevanagala Sugar Factory and its lands.

In terms of the settlement proposed by the Government, Gamage will be required to withdraw the pending arbitration before the International Chamber of Commerce (ICC).

The counsel appearing on behalf of the Petitioner submitted to the court that he would require instructions from his client regarding the settlement proposed, further informing the court that a meeting had been scheduled to be held on 25 March between the parties for the purpose of finalising this settlement.

Accordingly, the matter was fixed to be mentioned on 5 April to inform the court of the decision of the parties regarding the proposed settlement.

Although The Sunday Morning Business reached out to Gamage, he declined to comment on the grounds that the matter was still before the Court of Appeal.

In 2002, the Public Enterprises Reform Commission called for proposals for the sale of 90% of the shares of Sevanagala Sugar Industries Ltd. Thereafter, the bid made by Daya Apparel Export Ltd. – part of the Daya Group of Companies – amounting to Rs. 550 million was accepted. 

However, on 9 November 2011, the Government passed into law the Revival of Underperforming Enterprises or Underutilised Assets Act No.43 of 2011, wherein the fixed assets of Sevanagala Sugar Industries were deemed as underutilised and therefore expropriated in terms of the provisions of the act.

Previously, a Compensation Tribunal had been appointed under Section 5(1) of the said act which had decided to offer Sevanagala Sugar Industries owned by Gamage a sum of Rs. 791 million as compensation. 

However, such compensation was deemed to be grossly inadequate by the former MP.