Judiciary with respect

to Business Law
By Dilanga Lankathilaka
Introduction
 The judiciary in Sri Lanka plays a crucial role in upholding and
enforcing business law, ensuring the fair and impartial resolution
of business disputes and promoting a favorable environment for
commerce and investment.

 The judiciary's independence, integrity, and effective functioning

are critical for ensuring the rule of law, promoting business
confidence, and facilitating a fair and predictable business
environment in Sri Lanka. By upholding and interpreting business
law, the judiciary contributes to the growth, stability, and
development of the business sector in the country.
Structure of the Judiciary

 The judiciary in Sri Lanka is independent and separate from the

executive and legislative branches of the government.

 The highest court in Sri Lanka is the Supreme Court, followed by

the Court of Appeal.

 The judiciary also includes various subordinate courts, such as

District Courts, Magistrate Courts, and specialized courts.
Commercial High Court
 In 2017, Sri Lanka established the Commercial High Court to expedite the
resolution of commercial disputes.
 The Commercial High Court operates under the Judicature Act and the
Commercial High Court specializes in hearing and deciding cases related
to commercial matters, including business contracts, commercial fraud,
company law, intellectual property, and insolvency matters.
 The establishment of this specialized court aims to provide a more
efficient and effective resolution of commercial disputes.
 The Commercial High Court was established in Sri Lanka to specifically
handle commercial disputes.
 The court follows the rules and procedures prescribed in the Civil
Procedure Code and the Commercial High Court Rules.
Sources Pertaining to
Commercial Matters
 Judicial Precedents
 Judicial precedents, also known as case law, play a significant role in
the development and interpretation of business law in Sri Lanka.
 Courts rely on previous decisions and legal principles established
through case law to guide their judgments and provide consistency in
the application of business law.
 Precedents set by higher courts, especially the Supreme Court, have
binding authority on lower courts.
Sources Pertaining to
Commercial Matters
 Civil Procedure Code (CPC)
 The Civil Procedure Code provides the procedural rules and
guidelines for civil litigation in Sri Lanka, including the adjudication of
business disputes.
 It governs various aspects such as the filing of pleadings, service of
summons, evidence, trial procedure, and judgment.
 The CPC outlines the general framework for civil proceedings and is
applicable to business disputes heard in the civil courts.
Sources Pertaining to
Commercial Matters
 Companies Act No. 7 of 2007
 The Companies Act is the primary legislation governing the
establishment, regulation, and dissolution of companies in Sri Lanka.
 It contains provisions related to company formation, management,
corporate governance, shares, directors' duties and liabilities, and
shareholder rights.
 Business disputes involving corporate matters, such as shareholder
disputes or issues related to the management and administration of
companies, may be adjudicated based on the Companies Act.
Sources Pertaining to
Commercial Matters
 Intellectual Property Laws
 Intellectual property disputes in Sri Lanka are resolved based on specific acts
related to intellectual property rights, including:
 Intellectual Property Act No. 36 of 2003: This act provides provisions for the
protection of copyrights, trademarks, patents, industrial designs, and layout
designs of integrated circuits.
 Trademarks Act No. 17 of 1986: It governs the registration, use, and protection
of trademarks in Sri Lanka.
 Patents Act No. 19 of 1979: This act deals with the protection of inventions
and the grant of patents.
Sources Pertaining to
Commercial Matters
 Contracts and Commercial Law
 The Sri Lankan legal system recognizes and enforces contracts and
commercial agreements.
 The general principles of contract law, including offer, acceptance,
consideration, and breach, are governed by the Roman-Dutch law principles
adopted in Sri Lanka.
 The Sale of Goods Act, the Bills of Exchange Act, and the Partnership Act are
among the relevant statutes that provide specific provisions for commercial
transactions.
 The judiciary plays a crucial role in interpreting and applying these laws to
resolve contract disputes and commercial litigation.
Sources Pertaining to
Commercial Matters
 Insolvency Act No. 24 of 1989
 The Insolvency Act governs insolvency proceedings, debt recovery,
liquidation, and corporate restructuring in Sri Lanka.
 It provides provisions for the resolution of insolvency-related
disputes, including the appointment of liquidators, distribution of
assets, and discharge of debts.
 Business disputes involving insolvency and bankruptcy matters are
adjudicated based on the Insolvency Act.
Sources Pertaining to
Commercial Matters
 Arbitration Act No. 11 of 1995
 The Arbitration Act provides a legal framework for domestic and
international arbitration in Sri Lanka.
 It sets out the rules and procedures for conducting arbitrations,
enforcement of arbitral awards, and the power of courts to intervene
in arbitration proceedings.
 Business disputes that are resolved through arbitration are
adjudicated based on the provisions of the Arbitration Act.
Adjudication of Business
Disputes
 The judiciary is responsible for adjudicating business disputes
and ensuring the application of business law in Sri Lanka.
 Business disputes may involve contract disputes, intellectual
property rights, corporate governance issues, commercial
transactions, employment disputes, contracts, company law,
intellectual property, insolvency, and other business-related
matters.
 The courts interpret and apply relevant statutes, case law, and
legal principles to resolve business disputes.
Adjudication of Business
Disputes
 Jurisdiction
 Business disputes in Sri Lanka are primarily adjudicated by the civil
courts, including the District Courts and the Commercial High Court.
 The Commercial High Court, established to handle commercial
disputes, has specialized jurisdiction over various business-related
matters.
 Filing a Case
 The process typically begins with the filing of a complaint or a claim
at the relevant court.
 The plaintiff, usually the aggrieved party, submits a written
statement outlining the details of the dispute, the relief sought, and
supporting evidence.
Adjudication of Business
Disputes
 Pleadings and Statements
 The defendant, upon receipt of the complaint, files a written response,
known as a statement of defense, addressing the allegations and
presenting their position.
 Both parties may submit additional documents, such as contracts,
invoices, or correspondence, to support their claims.
 Hearing and Evidence
 The court schedules hearings where both parties present their arguments
and provide evidence in support of their respective positions.
 Evidence may include witness testimony, expert opinions, documents, or
other relevant materials.
 The court evaluates the evidence presented and assesses its admissibility
and relevance.
Adjudication of Business
Disputes
Examination and Cross-Examination
 During the hearing, the parties or their legal representatives have the
opportunity to examine and cross-examine witnesses.
 This process allows for the clarification of facts and the testing of
evidence presented by the opposing party.

 Judgment and Remedies

 After considering the arguments, evidence, and legal principles, the
court issues a judgment or a ruling.
 The judgment may grant remedies, such as monetary compensation,
specific performance, injunctions, or other appropriate relief based on
the merits of the case.
 The judgment is binding on the parties involved in the dispute.
Adjudication of Business
Disputes
 Appeals
 Parties dissatisfied with the judgment of the lower court have the right to appeal
to a higher court.
 The Court of Appeal hears appeals from District Courts and the Supreme Court
handles appeals from the Court of Appeal.
 Appellate courts review the lower court's decision and may affirm, modify, or
reverse the judgment based on the facts and legal arguments presented.
 Alternative Dispute Resolution (ADR)
 Apart from litigation, parties involved in business disputes can opt for alternative
dispute resolution methods such as arbitration or mediation.
 Arbitration involves the resolution of disputes by one or more arbitrators, whose
decision is legally binding on the parties.
 Mediation, on the other hand, involves a neutral mediator assisting the parties in
reaching a mutually agreeable settlement.
Challenges and Reforms

 The judiciary in Sri Lanka faces challenges such as case backlog, delays in
the resolution of disputes, and limited resources.

 Efforts are being made to address these challenges through judicial

reforms, including the introduction of technology in court proceedings,
increasing judicial capacity, and enhancing court administration.

 The establishment of specialized courts, such as the Commercial High

Court, is part of ongoing efforts to streamline and expedite the resolution of
business disputes.