Commercial High Court issues enjoining order against RDA

On or around the 11th September 2018, Canowin Hotels & Spas (Pvt) Ltd instituted action against the Road Development Authority (RDA) seeking for damages worth Rs. 2 billion and seeking for interim relief to restrain the Road Development Authority from unlawfully terminating the agreements entered in respect of the rest area on the Southern Express Highway which is patronized by the general public on a day-to-day basis.

Canowin Hotels & Spasthrough its plaint set out that the Canowin Hotels & Spas is a fully owned subsidiary of Sri Lanka Insurance Corporation and was incorporated exclusively for the purposes of developing and managing the rest area and the petrol sheds termed ‘Canowin Arcade’ which is on the Southern Expressway.

Canowin Hotels & Spas through its plaint had further set out that the RDA, who is the defendant had leased out a total extent of 3.5732 hectares of land through three separate lease agreements for period of 99 years and 30 years to Canowin Hotels & Spas on which the ‘Canowin Arcade’ had been constructed. Furthermore, the Canowin Hotels & Spas had set out that the Canowin Hotels & Spas had expended monies, which was infused through the plaintiff’s parent entity, Sri Lanka Insurance Corporation which has exceeded a sum of Rs.800 million in respect of this rest area.

Canowin Hotels & Spas further set out through its plaint, that the Canowin Hotels & Spas having obtained permission from the RDA proceeded to sublet areas of Canowin Arcade to third parties to set up business outlets/shops in order to engage in business activities including Cargills Food City and several other outlets.

In these circumstances, Canowin Hotels & Spas had alleged that the defendant had on or around 6th February 2018 without any basis written to Canowin Hotels & Spas and informed Canowin Hotels & Spas to take steps in respect of an alleged stray dog nuisance without any time period, alleging that Canowin Hotels & Spas is violating the agreement entered between the Canowin Hotels & Spas and the RDA. Thereafter, within a span of 2 days Canowin Hotels & Spas had received a further letter giving notice of termination without giving any time to rectify.

The Canowin Hotels & Spas through the Plaint also set out that, even though the Canowin Hotels & Spas had attempted to amicably discuss with the RDA, owing to the Defendant continuously changing its positions, all discussions failed. Furthermore, the Canowin Hotels & Spas demonstrated to its Plaint that if the RDA is permitted to unlawfully terminate these agreements in respect of the rest area and petrol sheds and proceed to suspend the operations of the rest area, serious harm would be caused to the general public who patronize the rest area on a day-to-day basis, the employees of the plaintiff, the entities who have set up business outlet/shops in the rest area and also their employees.

High Court Judge M. Ahsan R. Marikar on 11th September 2018, being satisfied with the plaintiff’s case had issued an enjoining order restraining the defendant from acting on the notices of termination in respect of service area and petrol sheds and notices of interim injunctions and summons returnable on the RDA restraining the RDA from acting on the notices of termination.

The plaintiff was represented by President’s Counsel Dr. Harsha Cabral, Nishan Premathiratne, Janith Fernando, appearing on the instructions of Messrs. Julius & Creasy, Attorneys at Law.

When this matter was called on the 25thseptember 2018, RDA filed proxy and the case is fixed for the 13th November 2018 for RDA to file its objections and answers.