SLNAC principal partner & sponsors with BASL to hold the National Law Conference -2021!

Sri Lanka National Arbitration Centre acted as the principal partner for the successfully concluded National Law Conference of 2021 organized by the Bar Association of Sri Lanka. The Conference marked Sri Lanka’s first ever hybrid National Law Conference and was held from the 12th and 13th of February at Galadari, Colombo. This year the Conference focused on the theme of ‘Futurism’ inspired by the Italian art students’ movement of 1920s in an effort to envision the future of the legal profession and guide the law accordingly. SLNAC observes the selection of the theme to have been instrumental in making the Conference a huge success. Kicking off at a time the country is grappling with a pandemic, the Conference spoke on timely and dynamic topics with the participation of many legal and non-legal professionals.

Excerpts from some of the sessions are as follows.

Quarantine Laws and Workplace Best practices vis-à-vis Health and Safety.

Headed by Police Spokesman DIG Ajith Rohona (attorney-at-law), the session brought to light the legal framework surrounding quarantine laws that were subjected to much controversy during the lockdown period. He educated the audience on the relevant laws that govern the country when a pandemic hits. The main statutory instruments are the Constitution of 1978, the Contagious Diseases Ordinance No. 8 of 1866, Penal Code No. 3 of 1833, Quarantine and Prevention of Diseases (QPD) Ordinance No. 3 of 1897, The Prevention of Mosquito Breeding Act No. 11 of 2007 and the Police Ordinance No. 16 of 1865. Under the QPD Ordinance, people in Sri Lanka can be isolated and restrictions can be imposed on a number of people allowed in a dwelling and the persons who are landing in Sri Lanka. The DIG recalled how with the spread of Covid-19 among civilians in the first instance, the Director General of Health Services via gazette notification No. 2168/6, March 25th 2020, declared the whole of Sri Lanka was as a ‘diseased locality’. It initially existed for seven days, then it was extended and the entire country is still considered a ‘diseased locality’.

Pertaining to authority on imposition of curfew, under the Quarantine Regulation Gazette of 1925, the power to impose curfew is conferred on the proper authority, which was the Director General of Health Services (DG of HS) in this instance. He can lawfully delegate this power to the Inspector General of Police under Section 37. While the manner in which government adopted measures during the pandemic is amenable to judicial review, quoting the opinion of the Attorney General, Rohana emphasized how the measures implemented were deemed necessary to prevent and control the spread of Covid-19. Thus, he stressed how the restriction of fundamental rights of the country’s citizens by imposing curfew were mandated on the grounds of interest to national security and public order. He also highlighted the effort taken by the regularities to tackle fake news and to impose punishment and sanctions on those who engaged in these under the existing laws.

The DIG concluded by stating how the existing laws were not sufficient to deal with the challenging circumstances Covid-19 brought forth and it highlighted the need to update the existing laws, change the current infrastructure and attitudes and mind-set of people.

Speaking on best practices to be adopted in the workplace pertaining to the health and safety of the workforce, Mr. Deepthi Lokuarachchi stated how with Covid-19 workplaces are facing an unprecedented worker safety crisis. Ensuring occupational health and safety are dependent on the enactment of legislation and regular inspection of the compliance of regulations within the workplace. Presently the main statute that governs this is the Factories Ordinance No. 45 of 1942. Highlighting some of its flaws, Mr. Lokuarachchi stressed how is does not have sufficient provisions to cover physchosocial factors such as work pressure, work-related stress, work-related fear for contamination of infections and trauma that can cause impairment to workers. He highlighted how these issues were brought to the forefront with the onset of Covid-19. Therefore, it is of urgent need to include these areas to the exiting statutory framework.

He also spoke on workmen compensation and insurance related to issues which were subjected to much attention with many employees being laid off during the pandemic. Under the Workmen Compensation Ordinance No. 19 of 1934, if a worker died in a workplace accident, the compensation his family will receive is only Rs. 550 000. This is not sufficient if he had any children of his own. Further, the calculation of compensation should be amended to also include psychological losses.

In relation to the impact of Covid-19, Mr. Lokuarachchi stated how whether this is covered under workmen compensation differs in accordance to the circumstances of the situation. Further, he highlighted how work place practices that had to be adopted with the onset of the pandemic like working from home, flexible work hours, tele-working and shift-swapping, if mandated by law would enable better protection to the workers.

Arbitration Law Enforcement, Ease of Business and Company Law

Dr. Harsha Cabral, one of the leading arbitrators in Sri Lanka shared his thoughts on the present context pertaining to Alternative Dispute Resolution Forms in Sri Lanka. “The ADR forms are Mediation, Conciliation and Commercial Arbitration. There were many ideas that were in mind when the Arbitration Act was introduced, however they are not a reality today.” He continued to state how if compared with foreign arbitration a stark difference can be seen in Sri Lanka. Foreign arbitrators are more committed and more disciplined and have impressive control during the proceedings. “We must take the blame for this. If we look at the Arbitration Centres in Malaysia, Australia, Dubai, Singapore, Hong Kong and London we can learn more. The manpower needs to improve. They are not successful due to superior laws. Their discipline and the thinking have contributed to their success. In comparison to foreign arbitrations ours is a joke”; he expressed. Currently, it takes six months or one year to complete an arbitration proceeding rendering the whole motive to resort to ADR being to make it simpler and speedier than litigation futile. According to Dr. Cabral a systematic change is not needed but in thinking there must be a shift. The confidence must be brought to the business community on ADR. However, he noted how a healthier approach is seen among younger lawyers and hence he is hopeful for a better future.

Sharing his thoughts on the procedural aspects, Mr. Sujeewa Samaraweera who is the Chairman of the Sri Lanka National Arbitration Centre spoke next. “Looking at ADR from a businessman’s perspective, their need is to work speedily. They need security, confidentiality and protection when pursuing a form of ADR. We must cater to these requirements. Internationally Sri Lanka is ranked quite low in ease of business and we need rectify this in order to support the running of businesses within the country and to attract more investments. For this, One-Stop-Shops need to be established throughout the country and our culture and mind-set need to change. Our business should move away from regulation and move towards facilitation. If we look at countries like Australia and Malaysia it is evident how they have a more friendly and encouraging approach towards both local and foreign enterprises. Sri Lankan customary laws cannot continue to be in existence, our laws must be updated and modernised and the new normal situation must be catered to in order to solve these problems”, he stated.

Many new business opportunities are opening up within the South Asian region. According to Samaraweera it is important to focus on labour laws and a better relationship could be built between employer and employee where they have a friendlier relationship that is conducive to carry out business better. When attracting new investments, the nation’s interest should be at play and not private interest. Further, arbitration should not only be limited to lawyers, but industrial experts with knowledge in business should also be encouraged more to sit as arbitrators since outside perspective in arbitration is crucial.

It is also essential that arbitration stops being a mere pastime for practitioners and its potential in helping the private sector must be understood expressed the panellist. Breakdown of relationships in business is normal; ADR should facilitate a mean in which such breakdowns can be solved swiftly so that business can be carried out at the former rate.

At the end of his speech he stated how from next month all arbitration proceedings would be conducted digitally.

Miss. Rajitha Jayasuriya, Director, Corporate Affairs Group Legal MAS Holdings, brought her insight to the session from the perspective of an in-house counsel. “We prefer foreign arbitration seats like Singapore, New York or U.K. since parties can have speedier resolutions through them”, she commented. Further, she added how when drafting commercial transactions the lack of empathy for business issues is evident and that it should be developed. When legal agreements are drafted they must be drafted in simple terms avoiding heavy legal jargon so that a layman can easily read it and understand. Equity, Fairness and Simplicity are the three main elements that must be included within a commercial transaction.

Miss. Jayasuriya also stressed how more One-Stop-Shops must be created to attract more investment. Currently, investors should submit to many regulatory institutions and ministries, which discourages investments. The investment approval process must be made simpler and speedier creating a climate where contracts can be promoted in a manner that can be commercially facilitated.

The Conference Chairman Mr. Hiran de Alwis who is an arbitrator himself also added his thoughts to the panel. According to him our existing laws are more than sufficient to drive the needed change, hence, what is required is a change in attitude and mind-set. Foreign scholars and practitioners have touted our Electronic Transaction Act as one of the best in the world. Therefore, what is required is effective enforcement of the existing laws. At present one of the pertinent issues is the time taken to conclude our arbitration proceedings and time taken to enforce the award. He stated how parties need not wait long, but how they can get a judgement and a decree by subjecting the arbitral award to the Commercial High Court. This shortcut exists within the laws at present. Therefore it is evident that the mechanism exists, but there are delays in enforcement. According to him better use must be made of the existing laws.

Debating on De Alwis’s points Mr. Nihau Fernando PC, another arbitrator argued how people will not change their mind-set simply by being instructed to do so. According to him existing rules too must be changed to facilitate a change in attitude and mind-set. Rules in arbitration proceedings can be changed to ensure a timeline is agreed upon before initiation and rules followed international arbitration proceedings can be adopted within the Sri Lankan context too.

Additional thoughts that were shared in the session by Miss. Himali Urugodawatte, Director (Legal)- Industrial Relations, BOI, also brought light to several other issues Sri Lanka is facing at present. Currently, the country is ranked quite low in many categories that are essential to attract more investments and increase more business opportunities. In Ease of doing business rankings, Sri Lanka is ranked 99th, Procedure to obtain a construction permit; ranked 66th (very restrictive), Protection of taxes; 142nd, Trading across borders; 96th, Enforcing contracts; 164th. If we look at our regional countries like Singapore, Malaysia and Hong Kong they are way ahead of us. Therefore, all panellists agreed how we need to ensure we increase our rankings in these particular rankings.

Accordingly, the session concluded with everyone agreeing on the immediate need for the digitalization of registries and reforms to be implemented to ensure businesses can be registered faster. In countries like New Zealand a business can be registered within half a day and Sri Lanka needs to adopt these to the existing procedures. More automated systems need to be put in place and regulatory bodies should shift to online platforms in providing their services in order to cater to facilitate ease of doing business.

Defamation in Cyber Space

This session focused on a developing area in Delict Law that is gaining much popularity due to the increased use of social media by countries worldwide. Experts debated on the possibilities on whether the existing laws can be effectively utilised to tackle this defamation in cyber space.

Sharing his thoughts on the laws applicable to tackle Defamation in Sri Lanka Dr. Rohan Edirisinghe stated how the common law in the country is able to tackle this if effectively utilised by judges. The current law that governs Defamation in Sri Lanka is the Roman Dutch Law (RDL). It is the common law in the country. In the opinion of Dr. Edirisinghe the RDL is far superior to English law when dealing with new technology. “Often in practice we forget what Common Law is and it is judge-made law. This means that over a period of time judges look at principles and look at how it can be adapted in Sri Lanka. In practice RDL remains untapped in its potential, it is undervalued and underutilized”, he stated. Common law is lead by the legal community in contrast to legislature, which is brought forth by politicians. Hence, in order to meet new requirements like defamation in cyber space, resorting to common law might be the better option according to him. He brought the attention to significant case law where RDL was utilised to tackle defamation in cyber space and even violation of privacy rights in foreign jurisdictions that practice RDL at present. In cases like the ‘Dutch Reformed Church v. Sooknunan’, ‘Heroldt v Wills’ defamatory material published on Facebook was considered to be wrongful conduct. In the case of ‘Le Roux v Dey’ RDL was used by the court to deal with defamation. The Constitutional Court in its appeal upheld both charges of defamation and infringement of dignity by the application of existing RDL principles. Thus, Edirisinghe commented how similarly ‘Actio Injuriarum’ can be utilised within Sri Lanka too to handle defamation. He stated how right to privacy is a part of this action and therefore, how a bill of rights that guarantees the right to privacy is not essential for judges to determine on cases like this. If common law is utilised it is more than sufficient. He noted how the action of ‘Actio Injuriarum’ is quite broad in its scope and hence can encapsulate anything that affects human dignity within it.

Looking at the Sri Lankan context however it was observed how the consequence of the famous ‘Priyani Soyza v Arsakularatne’ was to freeze the RDL making it impossible to carry it forward. Noting the judgement by Justice Dheeraratne Dr. Edirisinghe commented how he does not seem to appreciate distinction between common law and statute law and how judges can develop common law by extending its application, giving them the discretion to make law under certain conditions. This however was applied in the ‘Kodeswaran v AG” judgement by Lord Diplock. Mr. Edirisinghe observed how if offences like defamation in cyber space are to be effectively addressed, Lord Diplock’s approach to common law is more suitable. He concluded by stating that it is important for current judges to recognize the conceptual superiority and the greater adaptability of RDL.

Miss. Ashwini Natesan, a reputed legal researcher and scholar brought insight onto how legally a case for defamation in cyber space can be filed and how it can succeed. She framed her discussion on three questions namely ‘Where to sue?’, ‘Who to sue?’ and ‘Geo-Blocking’. Since cyber space is beyond the confines of jurisdiction, hence where the case be filed is always doubtful. It is difficult to have a particular location where the damage has occurred. In the case of ‘Berezovsky v Forbes’ a Russian man who got defamed by a US owned magazine went and filed his defamation charge in UK succeeded. The plaintiff was able to successfully prove that he had a reputation to maintain in UK, which was damaged. Hence, it is evident how in instances where defamation has happened online if the plaintiff is able to prove that he his reputation was damaged in the jurisdiction in which he files the case, it can succeed. Further, the question of how can something posted online without a physical copy be considered a publication was answered in ‘Dow Jones v. Gutnik’, which held how the instance the post is downloaded, it is considered a publication. Therefore, even if the Internet Server is in a different country, the defamation charge can be filed in the country it is downloaded provided there is substantial harm caused. However, Natesan also stated how this could pose a problem, since every time something is downloaded it is a new publication, which could result to a new cause of action each time. She stated how in US this is not the practice, while in UK and Australia they are considered a new publication each time.

The next issue that comes up in relation to defamation is who to sue. Most times anonymous people post on social media making it difficult to identify who made the publication. In instances where it is difficult to identify, the intermediary, who is the platform of social media, must disclose the identity of the person. They have a duty to disclose since they facilitate the publication. The service provider cannot be held liable, and this is often called the ‘safe harbour proviso’. In the case of ‘Blunt v. Tilly’ the same was upheld. Thus, there is a big responsibility on intermediaries.

Adding his remarks at the end, BASL President Mr. Kalinga Indatissa P.C. shared how certain remarks and comments made by the legal professionals on social media have become a factor that tarnishes the respect and dignity the professions demands. He stated how issues like this need to be addressed and they will have to look at charging a certain penalty from professionals who engage in such conduct to tackle it. Answering questions from the participants on as to what qualifies as defamation and what does not, he stated how ‘any publication made about a natural or juridical person constitute a defamation if it can be proven to be untrue and a substantial damage was caused due to it’.

Sports Law/ Contract/ Betting/ TV Rights and Sponsorship

This session revolved around the malpractices that exist with sports gaining huge popularity as a medium of entertainment in recent times and how laws apply to tackle them. Experts in the field of TV rights and Sports law like Mr. Dinal Phillips P.C. and Mr. Sumathi Dharmawardhana P.C. shared their knowledge on this subject area. Match fixing and spot fixing, which are common practices in Cricket; a highly popular and lucrative sport especially in the South Asian region were also addressed. Cases of Mohommad Azrudhdhin who was an Indian cricketer and Mervyn Westfield who was an English cricketer were spoken about and the consequences they had to face due to match fixing were shared with participants.

The session also had Sri Lanka’s much loved and respected cricket player Mr. Kumar Sangakkara sharing his insights on what the future of cricket is and the areas that needs to be addressed within the sport. He stated that one of the most important discussions that have been at the forefront is the future of test cricket in terms of balancing its interest with franchise cricket. The ICC is not an independent body and it is made up of membership of home boards, hence its interest lies in maintain their health and in balancing their interests with growth of international cricket. Top quality international players have taken early retirement; have had clashes with the board regarding availability to play in franchise cricket due to its growing popularity and becoming a highly lucrative form of sport. Hence, agreements are now made to balance out players’ interests and ambitions of the home board. Conflicts have arisen often which are now increasingly being addressed successfully. Contracts in terms of international cricketers are structured correctly in Sangakkara’s view. The national contract takes precedence over any contract they sign in terms of franchise cricket. A specific no objection certificate is required to engage in franchise cricket by players. They are in force even after retirement. One of the focus points in future will be the to solve issues proactively. This should not be looked at only in regards to financial security of players but allowing for successful players to retain much longer in international cricket. It is the only way in which money will continue to come in. A central TV Rights fund is a good way forward, which has been proposed so that players will have preference and no conflict in playing for their country.

He further stressed how it difficult to note a spot-fixer. Match-fixings are fairly easier. However, he said that ICC and its anti-corruption and security unit has connections and they monitor not only players but also their bookies and their agents. They have records of illegal bookies on file and if players are in a particular hotel, their phone calls and movements and who their guests are monitored. They do their very best to prevent these from happening which is a new initiative. ICC tries to build their trust with the player so that reporting of it is done in a confidential manner. However, such malpractices are difficult to be completely eradicated, he stated.

lectronic Commerce and the Law

Dr. Kanag-Isvaran PC sharing his viewpoints on e-commerce stated how online contracts form an essential part of e-commerce. Accordingly, though goods displayed in a shop is considered as an ‘invitation to treat’, the description of a good in a web site cannot be considered as an offer. The potential buyer in fact makes the offer by asking for a product displayed online from the seller and he has the discretion to accept or reject it. The seller can accept the offer by delivery of the good or service or by confirming the order through email. This is considered to be an electronic transaction.

According to the PC, the Electronic Transactions Act No. 19 of 2006, amended in 2017 constitutes sufficient provisions to tackle new developments within e-commerce. It defines ‘Invitation to make offers’ and ‘legal recognition of electronic signatures’, recognizes electronic contracts and also gives effect to the United Nations Convention on the use of electronic communications in international contracts. However, in the practice of e-commerce geographical and political borders are always crossed and hence choice of law for Internet disputes is an issue that needs to be addressed. This has not been sufficiently addressed even by developed nations at present. To solve this issue, the PC suggests the inclusion of a jurisdiction clause when contracts are made online that includes the law the court should apply and the forum to adjudicate on the matter.

e-commerce also poses problems in taxations, since when delivered physically goods are often subjected to rules on tariffs and customs duties. Further, at present a tax is not charged for services that are bought online like downloading software. Therefore, tax systems should provide clear, predictable and transparent obligations pertaining to goods and services under e-commerce and they must be charged neutrally without imposing an extra burden on goods or services subjected to traditional commerce.

In concluding remarks the PC stressed how in order to meet the rapid growth of e-commerce as a trade practice, and to accommodate to the changes it demands, Sri Lanka must be willing to relinquish some measures of sovereignty in exchange for the benefits of e-commerce and not allow for national laws or local regulations to obstruct this thriving trade practice.

Future of the Profession, Limited Liability Partnerships, Ethics, Electronic Transaction Act Applicability, Digital Documentation

Mr. Aritha Wickramanayake Precedent Partner – Nithya Patners shared his thought on the future of the legal profession quite extensively. According to him the distinction between law and other areas are getting blurred with time, others constantly adopt their curriculum to changing times while this is slow within the legal profession. “We no longer claim exclusivity or knowledge in areas like tax law. Corporate law could be the next area to experience this,” he said. Hence, growth must be facilitated in new areas or other professions will fill the void and they will hold control over these.

Additionally, legal education must adapt with changing times or our areas of expertise will shrink further. “We have turned a blind eye to unauthorized practice of law”, he commented. Moreover, the development of technology will result in further unavoidable consequences. Large groups of lawyers will be redundant; lawyers will not be able to prevent non-lawyers or foreign lawyers from delivering legal services reserved to Sri Lankan lawyers. The growing impact of machine learning and AI has resulted this. Most legal services are accessible at a click of a button and no legal training is required to draft certain documents or carry out registrations. Layman can now do most agreements. Online drafts are superior to those made by out-dated lawyers. These areas of practice are fast disappearing due to those who have no legal training but have the initiative to scrape publicly available information online. Nothing can be done to stop this. There are solutions to this challenge to which the profession must prepare for. Many legal functions like legal research and reviews can be done by easily available software. Multi-national clients urge to use such software. Firms now have a technology or IT department so that the business can be retained within them. Sri Lanka too need to adapt this, they need to invest in technology.

The responses we can have are many. A logical place to begin is revisiting our profession’s rules and changing them to fit the modern world.

Mr. Wickramanayake also shared his viewpoints in relation to Limited liability partnerships and noted how they are not at the top of a practitioner’s list of priorities. The real issue to confront is what the profession intends to do about the growing tend of legal services that are being provided through limited liability companies. Even though there are advanced jurisdictions that have permitted limited liability partnerships or even the possibility of practicing law through companies this has serious implications for the profession. Permitting practice of law in the corporate world will fundamentally change the nature of legal practice, one that delivers personal service to a commoditized product. It will transform the perception of a lawyer and his standing in society. Greater concern lies in identifying actual beneficiaries of practice. Any person with the financial means can form a big company, employ a group of lawyers at a low salary and earn profits off of it. Its implications are dangerous. Further, the country is hoping for better times with Port City, however if non-lawyers and non-nationals are given leeway to offer legal services, through companies, all the benefits can be siphoned off. Even those engaged in court work should look at this pertinent issue. Any group of police officers or prison officers could set up a company employing lawyers on a salary and monopolize the bail work in the magistrate court and take the profit. Therefore, this possibility should not be ignored. Someone with an entrepreneurial mind will come up with this and once a precedent is set difficult to go back.

The practice where lawyers are not permitted to engage in multi-disciplinary work should change. Clients are no longer happy with just advice but require integrated advice that addresses the overall problem. Several accounting firms have grabbed this opportunity and provide legal advice through their firms. Other professional firms are not bound by the rules of legal profession or our ethics. Therefore, an unlevelled playing field is created in comparison to lawyers.

To address these it is the opinion of Mr. Wickramasinghe that we need to revisit our Ethics Code and change it to suit the modern time. Out-dated rules of advertising are not relevant anymore. Legal services are now globalized hence advertising should be promoted. It must not be prohibited exclusively, exceptions must be allowed. Greater clarity should be provided so that compliance is made more practical.

In relation to digital law, Mr. Jayantha Fernando explained how there are international standards that we need to be mindful of when adapting our legal system. In order for Sri Lanka to stay relevant our existing laws should be changed in relation to international best practices. In different domains of digital law, standards have emerged with consensus and in some others without it. On digital trade and commerce there has been consensus unlike in areas of cyber security and cyber crime. Certain countries follow the UNCITRAL model law on e-commerce. Extremely technology oriented prescriptive legislation has been adopted by India, while countries like Singapore and Sri Lanka has adopted technologically neutral legislation so that it is easier to adapt to developments. The problem of no harmonisation or uniformity existing pertaining to e-commerce affected its growth. No mutual recognition of adopting electronic signatures existed and this became a barrier to growth of international trade in digital space. The solution that came through was the United Nations Electronic Communications Convention. There is lack of awareness on its potential. Sri Lanka was the first country to adopt it. It provided for cross border B2B transactions to be facilitated by those who have ratified this Convention. This has now become the gold standard to carry out legislative practices in this area. Many countries are now increasingly adopting this.

Sri Lanka’s Electronic Transaction Act was modelled on UNCITRAL’s model of the same, and now it includes features of the above Convention. We have ratified the Convention in 2015, which came into effect in 2017. However domestic practices in the subject have remained unchanged which is a huge concern. Fernando stressed how we must look at new opportunities that have been created by this. Due to Covid-19 this has become very relevant. Digital contracts without human contact has been recognised in law with ability to human intervention to make corrections. They came about in 2017, which must be looked at in future. Electronic signatures for definitions in law has been modernised, a neutral formula has been adopted, and any sign of digital certification is now considered legally valid. Any method that fulfils in identifying a party is now considered sufficient provided it is reliable for the requirement.

Sri Lanka can now facilitate cross border electronic transactions, because electronic signature and certification is now accepted. A Task Force co-chairs the governance of electronic signature domain area. The BOC, now caters to this, where large numbers of inter-bank settlements have taken place using digital certificates. Sri Lanka used that standard and generated our own foolproof certificate in 2020. However, its update is slow in other fields where digital certificates are in frequent use like in Customs Department. In the Stock Market internal functions are all automated, while outside transactions outside are done manually. Mapping was done to see whether this is in line with the Electronic Transactions Act and it is evident how this needs more updating. In conclusion, the recent changes to the Electronic Transaction Act lead together with provisions to the UN Electronic Communications Convention provide an ultimate certainty for digital transactions in Sri Lanka and electronic signatures are recognised for cross border trade and commerce. Fast track admissibility is seen to these modern developments. Hence, the ground is set for Sri Lanka to leap forward as a hub for digital commerce in future.