Appeal Court stays contempt of court proceedings against Directors of Agalawatte Plantations

Tuesday, 24 January 2017 00:30 -     - {{hitsCtrl.values.hits}}

In the latest development of the continuing legal battle between Mackwoods Teas Ltd. which is part of the Mackwoods Group of Companies owned by the Nonis Family and Agalawatte Plantations PLC the Court of Appeal on 20 January 2017 issued an interim order staying Contempt of Court proceedings against Agalawatte Plantations PLC and five of its Directors in respect of case No. SPL 176/16 filed in the District Court of Nuwara Eliya. The District Court Case has been instituted by Mackwoods Teas Ltd. in respect of the Labukelle Tea Centre.

Agalawatte Plantations PLC and its Directors were represented in the Court of Appeal by Dr. Harsha Cabral P.C. with Nishan Premathiratne, Nadun Wijayasriwardena and Yasith Hirimburegama on the instructions of Sanath Wijewardena Attorney-at-Law.

The Petitioners by their Petition dated 19 January 2017 came before the Court of Appeal on the basis that the issuance of the contempt summons and charge sheets against the Directors and the Agalawatte requiring them to be present before the District Court of Nuwara Eliya to Answer Charges of Contempt on the purported violation of Enjoining Orders on 24 January 2017, was in the first instance bad in law and that none of the charges levelled against the Petitioners formed grounds sufficient enough to constitute an offense of Contempt of Court. 

Furthermore, the Petitioners interalai in their Petition drew the attention of the Court of Appeal to certain flaws and defects in the contempt application filed by Mackwoods Tea before the District Court and owing to same the Permanent Judge of the District Court of Nuwara Eliya ought to not have issued summons for contempt.

On hearing the submissions made on behalf of the Petitioner the Court of Appeal being convinced made a finding that the issue of Contempt summons can be impeached if there is no justification and granted an interim order staying the contempt proceedings against Agalawatta Plantations PLC and its Directors until the case was heard and determined before the Court of Appeal. Thus the Directors of Agalawatte PLC are not required to appear before the District Court on Monday.

The litigation between Agalawatte PLC and Mackwoods came to being in light of the recent sale of the majority shareholding of 60.8% of Agalawatte Plantations PLC to the Browns group for a transaction value of Rs. 304 million.

In this background the new management of Agalawatte Plantations PLC upon obtaining control of the company had moved to terminate a sublease of the Labokele Tea Centre granted by Agalawatte to Mackwoods on the basis that Mackwoods had over a period of time failed to pay lease rentals in respect of the said property. Then Mackwoods Teas had moved to initiate action before the District Court of Nuwara Eliya on 1 December 2016 and obtain two enjoining orders preventing Agalawatta PLC from interfering with their possession of the premises. Agalawatte PLC had however represented to the District Court that it had obtained peaceful possession prior to the Enjoining Orders where these matters are to be inquired into on 24 January 2016 before the District Court of Nuwara Eliya.