District Court issues notice on interim injunction against sale of Hilton Hotel

Nihal Sri Ameresekere has instituted action in the District Court of Colombo against Treasury Secretary Dr. R.H.S. Samaratunga and C. Ramachandra, Competent Authority of Hotel Developers (Lanka) Plc, the owning company of the Hilton Colombo Hotel. 

District Court judge R. Rathnayake fixed 7 August as the next date. Considering the urgency of this matter, should the defendants submit statement of objections, the Court would consider fixing an earlier date for the interim injunction inquiry. 

The complaint has asked for the following reliefs:

a) Declare that the plaintiff and his nominees are entitled to representation on the Board of Directors of Hotel Developers (Lanka) Plc as undertaken by the 1st Defendant in the agreements marked P2(a), P2(b), P2(c) and P2(d) and Addendum thereto marked P2(e);

b) Grant an enjoining order restraining the first  defendant his servants, agents and whomsoever holding under or through him and his successors in office from taking any steps whatsoever or causing any steps whatsoever to be taken for the sale, transfer or alienation in any manner whatsoever of any shares of Hotel Developers (Lanka) Plc (HDL) to any person whomsoever prior to the fulfillment of the obligations in favour of the plaintiff as contained in agreements marked P2(a), P2(b), P2(c) and P2(d) and Addendum thereto marked P2(e), pending the hearing and determination of the plaintiff’s application for an interim injunction;

c) Grant an interim injunction restraining the first defendant, his servants, agents and whomsoever holding under or through him or his successors in office from taking any steps whatsoever or causing any steps whatsoever to be taken for the sale or transfer or alienation in any manner whatsoever of any shares of Hotel Developers (Lanka) Plc (HDL) to any person whomsoever prior to the fulfilment of the obligations in favour of the plaintiff as contained in the agreements marked P2(a), P2(b), P2(c) and P2(d) and Addendum thereto marked P2(e), pending the hearing and determination of the action;

d) Grant a permanent injunction restraining the First Defendant his servants, agents and whomsoever holding under or through him or his successors in office from taking any steps whatsoever or causing any steps whatsoever to be taken for the sale or transfer or alienation in any manner whatsoever of any shares of Hotel Developers (Lanka) Plc (HDL) to any person whomsoever prior to the fulfilment of the obligations in favour of the Plaintiff as contained in the agreements marked P2(a), P2(b), P2(c) and P2(d) and Addendum thereto marked P2(e);

The plaint stated: “The Second Defendant is the Competent Authority for HDL appointed under and in terms of Section 3 of the Revival of Underperforming Enterprises or Underutilized Assets Act No. 43 of 2011 and has been made a party hereto for purposes of notice only.”

K. Kanag-Isvaran, President’s Counsel, together with Lakshmanan Jayekumar, Attorney-at-Law, instructed by Bushra Hashim, Attorney-at-Law, appeared for the Plaintiff, and the District Judge of Colombo, R. Ratnayake, Esqr. made the following order on 31 August  2018.

On behalf of the Plaintiff, President’s Counsel Kanag-Isvaran, together with. Lakshmanan Jayekumar, Attorney-at-Law, instructed by Bushra Hashim, Attorney-at-Law make submissions.

The plaint has further disclosed that a Fundamental Rights Application has been made in the Supreme Court, citing the District Court Action filed against the State, claiming rightfully and lawfully due sovereign commitments and entitlements of the plaintiff from the Government, and demonstrating that the plaintiff has been unequally treated, even in the face of decrees ordered and entered into by the Commercial High Court. 

Before this application could be supported, the Deputy Solicitor General had submitted to the Supreme Court that the settlement of the matter was to be effected shortly.   

For full disclosure, the complaint has further stated that cases had been filed against ministers Kabir Hashim, Dr. Sarath Amunugama, Mangala Samaraweera, the Secretary to the Treasury, the Attorney General and the Bank of Ceylon, claiming damages from each for causes of action stated in those cases and that Court had already issued summons on them. 

The Fundamental Rights Application discloses that President Maithripala Sirisena on 12 January 2018 had directed Public Enterprise Development Minister Kabir Hashim and Finance and Mass Media Minister Mangala Samaraweera to take immediate action to fulfil the sovereign obligations and commitments of the Government, as per the agreements based upon which decrees had been ordered and entered into by the Commercial High Court. 

Consequently, Hotel Developers (Lanka) Plc had been transferred on 13 May 2018 by gazette by President Maithripala Sirisena to the Ministry of Finance and Mass Media.

Ameresekere’s lawyers have put the Attorney General on Notice of Contempt of Court for obstruction of justice by certain persons for interfering and meddling in decrees ordered and entered into by the Commercial High Court.