Mackwoods files fresh case seeking orders against Agalawatte and Browns

As part of the legal battle between Chris Nonis’s Mackwoods and Agalawate Plantations, on 1 June Mackwoods filed a fresh case SPL 201/2017 in the District Court of Nuwara Eliya seeking exparte enjoining orders against Agalawatte Plc and Browns Capital Plc in respect to the cash cow asset Labukelle Tea Center. 

These enjoining orders were sought to prevent Agalawatte from selling tea products at the subject property and to prevent Agalawatte taking any steps in respect of alienating this tea centre to a third party. Through a plaint dated 1 June 2017, Mackwoods named Agalawatte Plantations Plc, APL Tea Ltd. and Browns Capital Plc as defendants. 

Mackwoods, who was represented in Court by President’s Counsels Shavindra Fernando and Upul Jayasooriya with Sandamal Rajapakse, Madubashana Ariyadasa and I. Kannangaram on the instructions of Kalum Kumarasinghe sought to support the case for the exparte enjoining orders. However, without being formally noticed in a surprising turn of events Agalawatte moved to object to the enjoining orders through their legal team which appeared in the Nuwara Eliya District Court. The team comprised Counsel Nishan Premathiratne, who appeared with Gamini Senanayake, Nadun Wijayasriwardene and Yasith Hirimburegama, on the instructions of Nilma Hettiarachchi, seeking to object to the enjoining orders.

Mackwoods through President’s Counsel Jayasuriya submitted that Agalawatte selling tea products at the Labukelle premises was a violation of the lease agreement through which the subject property had been subleased to Mackwoods by Agalawate. 

Furthermore, it stated that there was an imminent threat that Agalwatte would proceed to alienate the subject tea centre to a third party as already shares of Agalwatte have been sold by Browns to Damro.

Further, the attention of Court was informed that the logo of Browns appeared on the packaging of certain Agalawatte tea products, thus there was an imminent threat that Agalawatte was in the process of alienating the management and control of the Labookele Tea Centre to Browns Capital Plc. In reply and objecting to the enjoining orders, Counsel Premathiratne for Agalwatte made several submissions. 

The Nuwara Eliya District Judge Nilmini Ferdinandez, having considered the extensive submissions of the Counsels appearing for Mackwoods and Agalawatte till early evening, refused to grant either of the enjoining orders of Mackwoods which sought to prevent Agalawatte from selling tea products at the subject tea centre and alienating the subject tea centre to a third party. The judge proceeded to only issue notices of interim injunction and summons on the defendants and the matter was re-fixed for 30 June.

This case was filed in the backdrop of the two previous cases filed by Mackwoods and Taprospa Resorts Ltd. (a subsidiary of Mackwoods), which is already before the Nuwara Eliya District Court. In these cases the Civil Appellate High Court of Kandy, by an order dated 4 May 2017, has also dismissed two appeal cases filed by Mackwoods preferred against Agalawatte Plantations Plc.

The litigation between Agalawatte and Mackwoods commenced in the wake of the recent majority share sale of 60.8% of the shares in Agalawatte by Nonis’s Mackwoods to the Browns Group for a sum of Rs. 304 million. 

Thereafter in two separate yet connected deals, the Damro Group of companies acquired 45.1% stake in Pussellawa Plantations Plc for Rs. 4.7 billion and the said controlling stake in Agalawatte Plantations Plc for Rs. 275 million.