SRI LANKA Law and Practice Contributed by: Amrit Rajapakse, Law Chambers of Amrit Rajapakse
the corporate veil. Sri Lanka has not recognised the group of companies doctrine and does not have a Contracts (Rights of Third Parties) Act. Under Section 21 of the Act, the high court may order a third party to the arbitration agreement to appear before court for examination or to produce a docu - ment or do anything required by the arbitral tribu - nal, where such party had earlier refused or failed to respond to a summons by the arbitral tribunal or to do such thing. Section 13 of the Act authorises the arbitral tribunal to order interim measures of protection needed “to protect or secure the claim which forms the subject matter of the dispute”. The types of relief that can be awarded are not further elaborated in the Act. Section 13 (1) provides that such an order may in exceptional cases be made ex parte. The arbitral tri - bunal may also require the party seeking interim relief to deposit security. 6. Preliminary and Interim Relief 6.1 Types of Relief Under Section 13 (2), a party may apply to the high court to enforce an order of an arbitral tribunal requir - ing the taking of interim measures. 6.2 Role of Courts In Sri Lanka, the courts play a role in preliminary or interim relief in arbitral proceedings in two circum - stances. Firstly, under Section 13 (2) of the Act, a party may apply to the high court to enforce an order of an arbitral tribunal requiring the taking of interim meas - ures. Secondly, pursuant to the Court of Appeal deci - sion in Baksons Textile Industries Ltd v Hybro Indus- tries Ltd (1997), a party may apply directly to court to obtain interim relief to maintain the status quo until such time as a final order resolving any dispute or an interim order is made by an arbitral tribunal. There are no express legal provisions or reported judgments that recognise the courts’ power to grant interim relief in aid of foreign-seated arbitrations.
The Act does not allow the use of emergency arbitra - tors. The draft Arbitration Act of 2022 (see 2.2 Chang- es to National Law ) recognises emergency arbitrators. 6.3 Security for Costs Under Section 13 (1) of the Act, an arbitral tribunal may require a party seeking interim relief to provide security to the party ordered to take such measures for any expense, loss or damage that may be caused by reason of such interim relief. Section 29 of the Act provides that the arbitral tribunal may order the par - ties to deposit security for the payment of the arbitral tribunal’s compensation. Apart from these provisions, there is no provision in the Act authorising the arbitral tribunal to order security for a party’s own costs. The court may order security where a party seeks to adjourn an application to recognise or enforce a for - eign arbitral award pending the outcome of challenge proceedings brought before the courts of the seat of arbitration. Section 17 of the Act provides that the parties are free to agree on the procedure to be followed by the arbitral tribunal, subject to any mandatory provisions of the Act. This allows the parties to agree on a set of institutional or ad hoc arbitration rules. 7.2 Procedural Steps The Act does not set out any particular procedural steps that are required by law. Instead, as noted in 7.1 Governing Rules , the parties are given autonomy to agree on the procedural rules. However, the Act prescribes certain overarching prin - ciples that will have to be observed by the parties and the arbitral tribunal in formulating the arbitral proce - dure. Under Section 15 (1), an arbitral tribunal has a duty to deal with any dispute submitted to it in an impartial, practical and expeditious manner. Section 15 (2) requires an arbitral tribunal to afford all parties an opportunity of presenting their respective cases in writing or orally and to examine all documents and other material furnished to it by the other parties or 7. Procedure 7.1 Governing Rules
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