Court extends order restraining SLTDA from cancelling Lanka Realty Leisure lease

• Written submissions in relation to inquiry of enjoining order to be filed by 13 July 
• SLTDA files Statement of Objections; says only petitioner hadn’t started any construction 
• Says Cabinet, SLTDA Board approved lease of existing land for new foreign investor; termination was after AG’s advice

The Colombo District Court yesterday extended the enjoining order against the Sri Lanka Tourism Development Authority (SLTDA), preventing it from cancelling a lease agreement with Lanka Realty Leisure Ltd. for a resort in Yala.

The extension of the enjoining order till 13 July was issued by Colombo District Judge Amali Ranaweera after the previous order, valid for two weeks, was to lapse yesterday.  The Court also directed that written submissions in relation to the inquiry of the enjoining order to be filed by 13 July 2020.

The Plaintiff Lanka Reality Leisure Ltd., (formerly known as Ascot Leisure Ltd.) had entered into an agreement with the SLTDA to lease out a seven acre plot of land on a 99-year lease in the Palatupana area in Hambantota to build a tourist resort targeting the Yala National Park.

The Petitioners allege that a company owned by SLTDA Chairperson Kimarli Fernando’s husband, Wild Coast Tented Lodge Ltd., owned a property adjoining its own property and that there is a move to give this land to another party. 

They claimed this was a Conflict of Interest on her part.

The defendant in the case, SLTDA, filed a Statement of Objection yesterday in which it was disclosed that within the Yala National Park, the ‘Yala (Palatupana) Wildlife Tourism Zone’ has been identified by the Government by several Cabinet decisions taken in September 2012 and March 2013.

The lands relevant to the said Cabinet Memorandum and Cabinet decisions were originally State lands and were subsequently vested with the Ceylon Tourism Board by a Vesting Order under Section 4 of the Tourism Development Act No 14 of 1968, all of which rights are now with the Defendant according to law.

The Defendant stated that under the Vesting Order, SLTDA is entitled to alienate the Lands, including by way of a Lease, under conditions provided for under the Act and also empowered to cancel a lease and re-vest the Land with the Authority.

The Defendant stated that the Cabinet by its above said decisions identified investors for the purpose of allotting Leaseholds in the Yala (Palatupana) Wildlife Tourism Zone such as (a) Uga Resorts Ltd. Uga - An Exclusive Safari Lodge (b) Forbes and Walker Ltd. (MJF Holdings Ltd.) – Safari Lodge at Yala (c) R & R Pleasure Ltd. (d) Senok Trade Combine Ltd. – Safari Hotel Yala and (e) Ascot Leisure Ltd. – Large Luxury Canvas Tents (Plaintiff).

Court was informed that the first two Lessees a) Uga Resorts Ltd. and (b) Wild Coast Tented Lodge have been in operation since 2015 and 2017, respectively. The Defendant states that SLTDA Chairperson Fernando’s husband is a stakeholder of Wild Coast Tented Lodge.

Two other lessees - R&R Pleasure Ltd. will have completed 75% of the project work by 1 September 2020 while Senok Trade Combine Ltd. has completed 45% of the work and has been granted an extension up till August 2020.

The Defendant states that the Plaintiff is the only Lessee who has made no construction whatsoever, not applied for any extensions whatsoever, nor been granted any extensions, and is in absolute default of the Obligations of the Lease Agreement.

The Minister in charge of Tourism by Cabinet Memorandum dated 18 July 2019, setting out the background of the Lease and the failures of the Plaintiff, proposed to Lease out the said Land to One Nature Ltd., a foreign investor, and Cabinet approval was granted for this on 6 August 2019, and the Board of the Defendant on 4 October 2019 took a Board Decision on the specific nature of the Lease to be granted to the new investor One Nature.

The Defendants have asked for and received advice from the Attorney General, and taken the prudent course of action, and that the lease has been duly and properly terminated and/or cancelled and the Plaintiff is in wrongful occupation of the said premises.

The Defendant pleaded that the Plaintiff maliciously, fraudulently, and wrongfully made the allegation and misrepresented to Court that the decision to terminate arose due to a conflict of interest in the Chairperson, in that her husband has an interest in one of the Hotels above, which is fully functional. 

The Defendant reiterated that the Chairperson was appointed only after the decisions to terminate were taken and communicated to the Plaintiff. Hence, the Plaintiff’s allegation against the Chairperson of the Defendant therefore is mischievous and devoid of clean hands for collateral purposes. 

The Defendant specifically pleaded that the Defendant Board and the Ministry of Tourism does not have faith in the Plaintiff, and does not desire for the Plaintiff to be in possession of this Land. 

The Defendant also pleaded that it is the policy of this Government to instill proper discipline and not permit defaulters from continuing with any project and this policy is across the boards. 

President’s Counsel Romesh de Siva with Harith de Mel appeared for the Defendant instructed by Sanath Wijewardane.

President’s Counsel Ali Sabry and Attorney-at-Law Nalin Alwis, appeared on behalf of the plaintiff company.