PARLIAMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA

ARBITRATION

ACT,NO 11OF 1995

Printed on the order of government

Publish as a supplement to part II of the Gazette of the Democratic Socialist Republic of Sri Lanka of June 30, 1995

Arbitration. Act, No. 11 of 1995

[Certified on 30th June, 1995]

L.D.—0,10/93.

AN ACT TO PROVIDE FOR THE CONDUCT OF arbitration PRO­CEEDINGS; TO GIVE EFFECT TO THE CONVENTION ON THE RE­COGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS;TO REPEAL TI'E arbitration or;.imance chapter 93) AND CERTAIN SECTIONS OF THE civil procedure CljliS (chapi-ek 101) ; AND TO PROVIDE FOR MATTERS CONNECTED THERl-WITH OR INCIDENTAL THERETO.

WHEREAS it is necessary to make comprehensive legal provision for the conduct of arbitration proceedings and the enforcement of awards made thereunder:

AND WHEREAS it is necessary to make legal provision to give effect to the principles of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958;

BE It therefore enacted by the Parliament of the Democratic Socialist Republic of Sri Lanka as follows :—

1.  This Act may be cited as the Arbitration Act, No. 11 of 1995 and shall come into operation on such date as the Minister may appoint by Order published in the Gazette (hereinafter referred to as the "appointed date").

PART I

Preliminary

2. (1) The provisions of this Act shall, subject to the provisions of section 48, apply to all arbitration proceedings commenced in Sri Lanka after the appointed date, whether the arbitration ag'reemsnt in pursuance of which such arbitration proceedin-gs are commenced, was entered into before or after the appointed date.

(2) V/'here arbitration proceed hifs were commenced prior to the appointed date, the law in force prior to the appointed date, shall, unless the parties otherwise agree, apply to such arbitration proceedings.

(3) Where the State is a party to an arbitration agreement (whether in right of the Republic or in any other capacity) the State shall be bound by the previsions of this Act.

PART II

Arbitration Agreemenet

3. (1) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

(2) An arbitration agreement shall be in writing. An agreement .shall be deemed to be in writing if it is contained in a document signed by the porties or in an exchange of letters, telexes, telegrams o.c other means of telecommunica­tion which provide a record of the agreement.

4. Any dispute which the parties have agreed to submit to arbitration under an arbitration agreement may be determined by arbitration unless the matter in respect of which the arbitration agreement L entered into is contrary to public policy or, is not capable of determination by arbitration.

5. Where a party to an arbitration agreement institutes legal proceedings in a court against another party to such agreement in respect of a rratter agreed to be submitted for arbitration under such agreement, the Court shall have no jurisdiction 10 hear and determine such matter if the other party objects to the court exercising jurisdiction in respect of such matter.

PARTIII

Composition 01 The Arbitral Tribunal

6. (1) The parties shall be free to determine the number of arbitrators of an arbitral 'ribun;-.! subject to the provisions r of subsection (3) of this ssccion.

(2) Where no such determination is made, the number of sarbitrators hall be three.

(3) Where the parties appoint rn even number of arbitrators, arbitrators sappointed shall jointly appoint an additional arbitrator who shall act as Chairman.

7. (1) The parties shall be free to agree on a procedure for appointing the arbitrators, subject to the provisions of this act.

(2) In the absence of such agreement—

(a) in an arbitration with a sole arbitrator tf the parties are unable tr agree on the arbitrator, that arbitral r shall be appointed, on the application of a party by the High Court;

(b) hi an arbitration with thres arbitrators, each paity shall appoint one arbitrator, and the two arbitrators thus appointed shall appoint the third arbitrator ; if a party fails to appoint the arbitrator within sixty days of recepit of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator wi'hin sl::ty days of their appoint­ment, the api'ointn.ent shall be mads, upon the application of a party, by the High Court.

(3) Where, under an appointment procedure agreed upon by the parties—

(a) a party fails to act as required under such procedure ;

or

(b) the parties, or the arbitrators, are unable to reach an agreement required of them under suc-i procedure; or

(c) a third party, including an institution, fails to perform any function assigned to such third party under such procedure,

any party may apply to the High Court to take necessary measures towards the appointment of the arbitrator cr arbitrators.

(4) The High Court shall in appointing an arbitrator, have due regard to any qualifications required of an arbitrator under the 'agreement between the parties and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator.

8. (1) The mandate of an arbitrator shall terminate if such arbitrator becomes unable tj perform the functions of that ollice or for any other reason fails to act without undue delay, or dies, or withdraws from office or the parties agree on the termination.

(2) Where an arbitrator unduly delays in discharging the duties of his office the High Court may upon the application of a party, remove such arOitralor and appoint another arbitrator in his place :

Provided however that where the parties have so agreed, such removal and appointment shall be made by an arbitral institution.

(3) Where the mandate of an arbitrator is terminated, pro­ceedings shall not be had de-novo unless the parties otherwise agree.

8. Where the mandate of an arbitrator terminates under section 8, a substitute arbitrator shall be appointed in the manner applicable to the ;.ppoinui"ient of the arbitrator whose mandate has terminated.

10. (1) Where a person is requested to accept appoint­ment as an arbitrator, he &hall lire" disclose any circums­tances likely to give rise to justinable doubts as to his impartiality or independence, and shall, from the time of his appointment and throughout zhe arbitral proceedings, disclose without delay any circur glances referred to in this subsection to all the parties and to the other arbitrators, unlc&s they have already been so informed by the arbitrator.

(2) An arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality or independence. A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, i.nly for reasons of which he- becomes aware after the appointment was made.

(3) A party who seeks to chalknge an arbitrator shall, unless the parties have d'.'cided that the "decision shall be taken by some other person, first do so before the arbitral tribunal, wilinn thirty days of his becoming aware of the cirmumstanccs which pive rise to doubts about the arbitrators' impartiality or independence.

(4) Where a party who makes; an application to an arbitral tribunal under this secticn, is dissatisfied with the order of the tribunal on s'uch application, he may within thirty days of the receipt of the decision, appeal from that order to the High Court.

PART IV

Jurisdiction Of The Arbitral Tribunal

11 . (1) An Arbitral tribunal may rule on its jurisdiction includ i ng any que s tion, with respect to the existence or validity o f the arbitrat i on agreem e nt or as tu whether such ag'-eement is contrary to p ubli c policy or h i incapable of being p e r f ormed ; but any party t'j the arbi t ral proceedings may app l y lo the High Court fo r a det e rmination of any sucii que s tion.

(2) Where an application has been made to the High Court under s ubsection (1) the arbitral tribunal may continue the arbitral proceedings pending the deter m ination of such question by the High Court .

12. An arbitration agreement which forms part of another agreement shall be deemed to constitute a separate agreement when ruling upon the validity of that arbitration agreement for the purpose of determining the jurisdiction of the arbitral tribunal.

13. (1) An arbitral tribunal may, at the request of a

party, order any other party to take such interim measures as it may consider necessary to protect or secure the claim which forms the subject matter of the dispute. The arbitral tribunal may also order the party making such request to provide the party ordered to take such interim measures, with security for any expense, loss or damage that may be caused in taking such interim measures :

Provided however that:, other than in exceptional cases no such order shall be made except after hearing the other parties.

(2) An order of an arbitral tribunal requiring Ihe taking of interim measures may be enforced by the High Court, on an application made therefor, by the party requ e sting the takir-g of such interim measures.

(3) An applicatio n to the High Court, under subsect i on (2), for the enforcement of interim measures, shall b e deemed not to be incompatible with section 5 or the arbitra ­ tion agreement or a waiver of the agreement .

14. (1) It shall not be incompatible with arbitration proceedings for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or any other procedure at any time during the arbitral proceeding s to encourage settlement

(2) If, during arbitral proceedings the partie s settle the dispute, the arbitra l tribunal shall if requested by t he parties, record the settlement in the form of an arb i tral award on agreed terms.

, (3) An arbitral award on agreed terms shall be made in accordance with section 25 and shall state that it is an arbitral award on agreed terms.

(4) An arbitral award on agreed terms has the same status and ef fect as any other arbitral award made in respect of the dispute.

PART V

Conduct OF Arbitration Proceedings

15 . (1) An arbitral tribunal shall deal with any dispute submitted to it for arbitration in an impartial, pr&cticai and expeditious manner.

(2) An arbitral tribunal shall afford all the parties an opportunity, of presenting their respective cas s in writing or orally and to examine all documents and other ma ierial furnished to it by the other partie s or any other person. The arbitral tribunal may, at th 3 request of a party, have an oral hearing before determining any question before it.

. (3) An arbitral tribunal may, notwithstandin g the failure of a party without reasonable cause, to appear before it, or to comply with any order made by it, continus the arbi t ral proc e edings and de t ermine the di s pute on the material av a ilable to it.

(4) Parties may, introduce new pray e rs for relief provided that such prayers for relie f i'all within the scope of the arbi. ration agreement and it i s not inappropriate to accept them having regard to the point o f time at which th y are introduced and to other circumstances. During the con.'se of such proceeding s , ei'her pa r ty may, on like conditions, amend or sup p lement prayers for r ;l ie f introduced ea ;'li er and rely on new circumstances in support o f their respsctive cases.

6. (1) The parties to an arbitration proceeding shall befree to agree on the place of arbitration. Fail ng such agree ment, the place of arbitration shall be determined by the : arbitral tribuna l having regard to the circumstances of the case, including the convenience of the parties.

(2) Notwuhytanding the provisions of subsection (1) providing for the place of arbitration, the arbitral .ribunal may, unless otherwiseagreed upon by the parties, I'neel at any place il consider s appropriate ior con s ultation among its members, f o r hearing witnesses , experts 01 me p a rties, or for inspection of goods, other property or dtci.n.ents.

17. Subject to the provisions of this Act, the parties shallbe free to agree on i-.e pro c edure to be lodowed by t he ar b itral tribunal in conducting the proceedings. The power conferred upon the arbitral tdbunal sha.11 include the power to de ermine the admissibility, relevance, and weight of any evidence.

An arbitrtion shall be deemed to have been commenced if-

(a) a dispute to whi c h the relevant ment appl i es has arisen ; and

(b) a party to the agreement—

(i)  has rece i ved from another party to the agreem e nt a notice requiring that party to refer, or to concur in the reference of, the dispute to arbitration : or

(ii) has rec ei ved from another party to the agreement a notice requiring that party to appo i n t an arbitral tribunal or to join or concur i n or approve the appointment of, an arbitral tribunal in relation to the dispute.

19. (1) Unless a contrary intent i on is expressed in the arbitration agreement, any decision made in the course of arbitral proceeding s , by a major i ty cf the arbitrators and failing a majority, the dec-sion of the arbitrator appoin'. by the othe r arb i trators, or where in terms of the arbitration agreement or this Act, there is a Chairman, the decision of such Chairman, shall be binding.

(2) Where there is a Chairman of an arbitral tribunal, the Chairman shall have the power to admin i ster the conduct of the arbit r al proceedings.

20. (1) Any party to an arbitration agreement having obtained the pr.or c o nsent in writing of the arbitral tribunal may apply to the High Court t'! or summons requiring a person to att e nd for examination before the tribunal and to produce the tr i bunal any document or thing specified in the summons.

(2) A person shall rot b e compelled under any summons issued in accordance w i th subsection (1) to answer any quest i on or produce any document or thing which that person could not be compelled to answer or produce at the trial in an action before court.

21. (1) Unless otherwis e agreed upon by the parties, where any person not a party to the arbitration agreement—

( a ) refuses or fails to attend before the arb i tral tribunal for examinati o n when required under summons or by the arbjfral tribunal to do so ;

(b) appearing as a witness before the arb i tral tribunal—

(i) refuses or fails to take an oath or make an affirmation or affidavit when required by the arbitral tribunal t o do so ; or

(ii) refuses or fails to answer a question that the witness is required by the arb i tral tribunal to answer ; or

(iii) refuses or f ails to produce a document that he is required under summons or by the arbitral tribunal to produce ; or

(c) refuses or fails to do any other thing which the arbitral tribunal may require.

the High Court may order the defaulter to appear before the Court (f or examination or to produce to the Court the relevant document or thing or to do any relevant thin " if a party to the arbitra ti on proceedings makes an application to Court in that behalf.

(2) No such applicat i on shall be made except after notice to the other p a rties and with the prior sanction or consent of the arbitral tribunal and no order shall be made under subsection (1), unless the court after hearing the defaulter considers that it is necessary in the circums ­ tances to make such order.

(3) Where the court makes an order under subsection (1) it shall, in additio n make an order for the transmission to the arbitral tribunal of—

(a) a record of any evidence given pursuant to an order made under subsection (1) ;

(b) any document or thing produced pursuant to an order under subsection (1) or a copy of any suc h document ; or

(c) particulars of anything done pursuant to an urder under subsection (1) and any such evidence, docu­ment or thing s hall be deemed to have been given ^ produced or done, as the case may be, in the course of the arbitration proceeding.

22. (1) Unless other w ise agreed upon by the parties, evidence be f ore the arbitral tribunal may be g iven orally, in writing or by affidavit.

(2) Unless otherwi s e agreed upon by the parties, an ar­bitral tribunal may administer an oath or aff i rmation or take an affidavit for the purposes of proceedings under the agreement.

(3 ) Unless otherwise agreed upon by the parties, an arbi­tral tribunal in conducting proceedings in pursuance of an arbitration agreement shall not be bound by the provisions of the Evidence Ordinance.

23 . Unl e ss otherwise agreed in writing by the part i es to the arbitration agr e ement, a party to an arbitration agreement—

(a) may appear before the arbitral tribunal personally or, where the party is a body of per s ons, whether corporate or i i n I ncorporate, by an officer , employee or agent of that body ; and

24 . (1) Arbitral tribunal shall decide the dispute in accordance with s uch rules of law as are cho s en by the parties as applicable to the substance of the di s pute. Any designation of the law or legal system of a given State shall be construed, unle s s oth e rwise expres se d, as referring to the substantive law of that State and not to its cor.t'lict of laws rules.

(2) Failing any designation by the parties to any arbitra­tion a g ree m ent, 1h e arbitral tribunal shall apply th e law det e rmined by the conflict of law s rules which it con­siders applicable.

(3) The provisions of subsections (1) and (2) shall apply only to the extent agr e ed to by ths parties.

(4) The arbitral tribunal shall decide according to con­siderations of general ju s tice and fairness or trade m ages only if the partie s have expressly authorised it to do so.

PART VI Awards

25. (1) The award shall be made in writing and shall be signed by the arbitrators constituting the arbitral tr i bu­nal. In arbitral proceedings with more Aan one arbitrator, the signatures of the majority of the members o f the arbi­tral tribunal shall suffice, provided that the rea s on for any omitted signature is stated.

(2) The award shall state the reasons upon which it is based, unless the partie s have agreed that no reasons are to be given or the award is an award on agreed terms under section 14.

(3) The award s hall sta'e i ts date and p l ace of arbitra­tion as determ i ned in accordance with section 16. The award s hall be deemed to have b-en made at that place.

(4) After the award is made, a copy signed by the arbi­trators constituting tha arbitral tribunal in accordance with subsection (1) of this section shall be delivered to each party.

26. Subject to the provisions of Part VII of this Act, the award made by the arbitral tribuna l shall be final and binding on the parties to the arbitration agreement.

27. (1) Within fourteen days of receipt of the award,unless another period of tim 3 has been agreed upon by the partie s , whether at the request of the arbitral tribunal or otherwise—

(a) a party, with notice to the other party, may request the arbitral tribunal—

. (i) to correct in the award any errors in computa­tion, any clerical or typographical errors or omissions or any errors of a similar nature ; or

.(ii) to modify the award where a part of the award is upon a matter not re ' erred to arbitration, provid e d su ch part can be separated from the other part and rio-s not a ffect the decision on the matter referred ;

(b) if so a g reed upon by the parties , a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a speci fi c point or part of the award

(2) If the arbitral tribunal considers the request to be justified, it shall make the correction, modification or give the interpretation within fourtecn days of the receipt of the request, or such longer p eriod as the parties may agree to, at the request of the arbitral tribunal. The interpreta ­ tion shall form part of the award.

(3) The arbitral tribunal may correct any error of the type referred to in sub-paragraph (i) of paragraph (o) o f s ubsection (1) of this section, on its own motion within fourteen days of the date of the award.

(4) Unless otherwise agreed upon by the parties, a party, with notice to the other party, may request the arbitral tri­bunal within fourteen days of receipt o f the award to make an additional award as to claims presented in the arbitral proceedings but omitted from the award. If the arbitral tri­bunal after hearing the other parties, co nsi d e rs the to be justified, it shall make the additional award within thirty day s of conclusion of the hearing.

(5) The provisions of section 26 shall apply to a correc ­ tion, modification or interpretation of the award or to an additional award.

28. Unless o t herwise agreed upon by the parties where an arbitral tribunal makes an award for the payment of m oney ( whether on a claim for a liquidated or unliquidated amount), the arbitral tribunal may in the award, order in­terest, at the rate agreed upon between the parties in the arbitration agreement or in the absence of any s uch agree ­m ent, at the legal interest prevailing at the time of making the arbitral award, to be paid on the principal sum award e d, from the date of commencement o f arbitral proceedings to the date of the award, in addition to any interest a warded on such principal sum for any psriod prior to the institution of arbitral proceedings, with further interest at the aforesaid rate on the aggregate sum so awarded from the date of the award to the date of payment or such ear­lier date as the arbitral tribuna l thinks fit.

29. (1) The partie s shall be jointly and severally liable f or the payment of reasonable compemation to the arbitra­tor s constituting the arbitral tribunal for their work and disbursements :

Provided however that when the arbitral tribunal declares In its award that it has no jurisdiction to decide thr dispute, the party who did rot reauest the arbitration shall be liable for such payment only if there are exceptional circums ­ tances which warrant such payment by him.

(2) The final eward shall order the payment of compensation to each of the arbitrators cons t ituting che arbitral trio'mal in such Mim, and within such period, as may be speci f ied in the award, with legal interest on each such sum c a lc u lated with enect i'rom the date of expiration of a period ct one month from . the date on which the award was delivered.

(3) The arbitral tribunal may order the payment of deposit of security by the parties, for the payment of the compensat i on of the arbitrators constitut i ng the arbitral tribun a l, in such sum and within such period as may be specified in the order. Separate deposits of security may be ordered in respect of 3 a ch prayer f or relief.

(4) Where a party fails to pay his sh a re of the deposit of security ordered by th e arb i tr a l tribunal within tha period s pecified in the order for payment of deposit o f security, the other party or parties may pay the whole of the deposit of security ordered.

(5) Where none of the parties pay the deposit o f securily ordered by tha arbitral tribunal, within the period specified in the order for the payment of the deposit of security, the arb i tral tribunal may termi n ate the arbitral proceedings.

(6) The arbitrators constituting the arbitral tribunal may, during the course of arbitral proceedings, draw on such deposit or security, for the purpos e of meeting their expenses.

30 . An arbitral tribunal shall not withhold delivering its award pending the payment o f the compensation paya ­ ble t o the arbitrators constituting the arbitral tribunal.

PART VII

Application To courts relating To awards (includuw recognition AND enforcement OF foreign awards)

31, (1) A party to an arbitration agreement pursuan to which an a rbitral award is m a de may, within one year afte r th e exp i ry of fo urt e "n day s of th e making of tha award, apply to the High Court for the enforcement t h e award .

(2) An ^p lication to enforc e the award shall be acco m panied by—

( a) the origin a l of the a ward or a duly certified copy o f such award ; and

(b) th e original arbitration agreement under which the a w a i\ i purports t o have b e en m ade or a duly certi fi ed copy of such agr e ement.

For the purp o ses of this subsectk-n a copy of an award or of the arbitra t ion agreeme nt shall be dee m ed to have been duly certified if—

(i) it purports to have been certified by the arbitral tribunal or, by a member of that tribunal, and it has n et' been shown to the Court that it was not in fact so certi fi ed ; or

(ii) it has been otherwise certified to the satisfaction of the court.

(3) If a docuiment or part of a document produced under subsection (2) is written in a l angua g e other than the official language of the court or other than in English, thsre shall be produced with the docu me nt a translation in such officiyi langua g e, ur in the Engl is h language, of that docum e nt or that part, as the case may be, certified to be a c orrec t translation.

(4) For th y purpose s of subsection (3), a translation shall be certified by an official or a sworn translator or by a diplomalic a consular rigent in Sri Lanka of the country in which the award was made or otherwise to the satisfaction of the Court.

(5) A document produced to the court in accordance with this seeuon may upon its pr o duction be received by the Court as sufficient evidence of the matters to which it relates.

(6) Where an application is made under subsection (1) of this section a n d there i? no applicatic-.n for the setting aside of such award under s ection 32 or the court sees no cause to refu s e the recognition and en f orcem e nt of such award under the provisions contained in sections 33 and 34 of this Act, it sh e 'll on a day of which no t ice shall be given to the part i es, pr o ceed to me th e award ond give judgment according to the award. Upon the judgment so given a decree sh a ll be en

32. (1) An arbitral award made in an arbiration held s et ti ng in sri Lanka may be set a side by the High Court, on applicati made therefor, within sixty days of the trai award-

(a) where t he party m aking t he ap p lication fumishea proof that—

(i) a party to the arbitration agreement was undfr .s ome incapac i ty or Ihe said agreement is not valid under the law which the parties have subjected it or, failing any indication on tliat question , under the law of Sri Lanka ; or

(ii) the party making the application was not given " proper notic e of the appointment of an arbitrator or of the arbitral proceedings or was otherwi s e unabJe to pr e sent his case ; or

(iii) me award dea l- with » dispu t e not contemp l at ­ ed by or not falling within the terms of the submission to arbitration, or contain s decisions on matter s beyond the scope of the submission tc arbitration :

Provided however that, if the decison on matters submitted to arbitration can be s eparated fr o m those not so submitted, only that part of the award which contain s decisions on matters not submitted to •a rbitration may be set aside ; or

(iv) t he compositi o n of the arbitral tribunal or the a rbitral procedure was not in accordanc e with the agreement of the parties, unless such agreement was in con fl ict with the provisions of this Act, or, in the absence of ?uc h agreem e nt, wa & not in accordance with the provisions of Act ; or

(b) where The High Court find s that—

(i) the subject matter of The disp u te is not capabl e of settlement by a rbitrati o n under the law of Sri Lanka ; or

(ii) the arbitr a l award is in conflict with the public p o licy of Sri Lanka.

(2) Where n application is ma'-le to s et aside an award, the Hi g h Court may order that an.v money made payable by the award srirJl be brought in'io Court or otherwise secured pe uu ;ng the dctenninatic.n of the application.

33. A foreign arbitral award irrespective of the country In which it was made. s h all sub.-cct to the provi s ion s of section 34 be recognised as binding and, upon application by a par t y under sec t ion 31 to tha High Court, be enforc e d by filing the award in acc o rdance with the provisions of that secti o n.

34. (1) Recognition or enforcement of a foreign arbitral award, ureapective of the - country in which it was made, may be refu s ed only—

(a) on the objection of the party against whom it i s invoked, if that p :; rty f u rn ;ah es to the C o urt where recogn i tion or enforcemeni is s o ught, proof that—

(i) a pa r ty to the c.rbitraiion agreement was under so m e incapacity, or t he said agreement is n o t valid under the law to which the p a rties have sub j ected it, or failing any indication as to the law to which the parties have subjected such agr e ement, under the law of the country where ihe award was made ; or

(ii) t h e party aga i n s t whom th e award is invoke d was not given proper notice of the appoint­m e nt of an arbit r ator or of the arbitr a l proceeding or was otherwise unable to present his case ; or

(iii) the award deal with the dispute not contem­pla t ed by or not f ul l ing within the terms of the submissi o n to arbitration, or it contains decisions on matters leyond the scope of th e submission to arbitration :

Provided, however that, it the decision on matters submitted to arbitration can be separated from tho s e not s o submitted, fha". part of the award which contain s a decision on matters mbmittcd to arbitration, may be reco g nised and enforced ; or

(iv) he compositicr, of the arbitral tribunal or the arbitral procedur e was not in accordan c e with the agreemen t of the parties or, in the absence of such agreem e nt, was not in accordance with the law o f the country where the arbitration took place ; or

(v) ths award has not -t become binding on the

par t ies or has bee n set aside or suspended by a court o f the country in which, or under the law of which, that award was made ; or

(b) i f the Court find s that—

(i) the subject - m a tter of the dispute is not capa b le of settlement by a rbitration under the law 01 Sri Lanka ; or

(ii) the recognition or enforcement of the a ward would be con t rary to the public policy of S r i Lanka.

(2) If an application f o r s ettin g aside 01 suspension of an award has been made to a court on the ground referred to in sub-paragraph (v) of paragraph (a) of subsection (1) of this section, the court wher e recognition or enforcement is sought may, if it considers it proper, adjourn its dedsi'jn and may also, on the application of the party claiming recognition or enforcement of the award, order t h e other party to provide appropriate security.

35. (1) Where applications filed in court to enforce an award and to set aside an award are pending, the court shall consolidate the applications.

(2) Where an application to set aside the award under section 32 has been refused, the court shall not permit a party to an arbitration to object to the enforcement of the award on any of the ground s specified in section 34.

36. (1.) The High Court may order the staying of an application to set aside an award for such period as it may consider necessary to enable the arbitral tribunal t o resume arbitral proceedings or to take such measures as may be necessary to eliminate the grounds for invalidating ths award.

(2) No order shall be made by the High Court under sub­section (1) unless—

(a) all the parties to the arbitration request the making o f such order ; or

(b) one of the parties to such arbitration requests the making of such order and the Court is satisfied that there are grounds f or invalidating the award .

37. (1) Subject to subsection (2) of this section , no

appeal or revision shall lie in respect of any order, judgment or decree of the High Court in the exercise of its jurisdic­tion under Ac t except from an order, judgment or decree of the High Court under this Part of this Act.

(2) An appeal s hall lie from an order, judgment or decree of the High Court referred to in subsection (1) to the Supreme Court only on a que s tion of law and with the l eave of the Supreme Court first obtained.

(3) The Supreme Court may in the exercise of its juris­diction under subsection (2) of this section affirm, reverse or vary the order, judgment or decree of the High Court, subject to the provisions of this Act.

(4) The parties to an arbitration agreement may agree in writing (hereina f ter referred to as an " exc l usion agreement") to exclude any right to appeal in relation to an award .

38. (1) The Supreme Court shall not in any event grant leave to appeal under subsection (2) of section 37 if there is in force an exclusion agreement between the parties to the arbitration agreement in relation to the award appealed against.

(2) An exclusion agreement may be expressed so as to relate to a particular award, to awards under a particular aribitration agreement or to any other description o f awards, whether arising out of the same arbitration agreement or not.

(3) An agreement may be an exclusion agreement for the purposes of this rection whether it is entered into be f ore or after the appointed date and whether it forms part of an arbitration agreement or not.

39. (1) It shall be an implied term of the arbitration agreement that in the event of a dispute arisin g to which the agreement applies , il shall be the duty of the claimant to exercise due diligence in the prosecution of a cla ; m.

(2) Where there has been undue delay by a claimant in inst'tuting or pro secuting a claim pursuant to an arbitration agreement , i.hen, on the application of any party to the dispute, th e arbitral trbunal may make an order terminating the ar b itration proceedings.

(3) The arbitral tr'bunal shal l not make an order under subsection (2) unless i t is satisfied—

(a) that the delay ha.s b e en intentional or inord i nate ; or

(b) that the delay will give rise to a substantial risk of it not being possible to have a fair determination a " the issues in the arbitration proceedin g s or i s such as is likely to cause or to have caused serious prejudice to the other parties to the arbitration proceedings either as between themselves and the clamant or between each other or between them and a third party.

(4) A party aggriev ed by any order of the arbitral tri b unal made on an application under subsection (2) may appeal to th e High Ciiurt.

PART VIII

Proceedings Before The High Court

40. (1) Every applicat i on to the High Court under the provisions of this Act, whether by way of appeal or other­w i se, s hall be by way of petition and affidavit and al l parties to the arbitration oth e r than the petitioner or pe t iti o ners shall be named as respondents to such petition and shall be given notice of the same.

(2) Upon the petition and affidavit being presented to the court it shall by order appoint a day for the determi-raticn of the matter of the petition and grant the parties named as respondents to the petition a date to state their objections, if any, in writing supported by affidavit, and making available a copy thereof to the petitioners.

(3) In proceedings before the High Court evidence s ha ll be given by affidavit. But where the court think it right so to do, it may take evidence viva voce in addition to evidence by affidavit.

(4) The High Court shall deal with every application under subsection (1) and deliver its determination thereon as expeditiously as posaible.

41. Where a judgment is given according to an award and a decree entered under provisions of section

it may be enforced in the same manner as a decree entered under the provisions of the Civi l Procedure Code (Chapter 1 0 1) and accordingly the provisions o f tnat Code relating to the execution of decrees shall, mut a tis mutandis, apply to, such enforcement.

42. Where under this Act notice or summons is required or permitted to be served on any person, the notice or tummons may be served in or out of Sri Lanka—

( a ) by sending it by registered post addressed to that person to be served at the usual or last known place of residence or business of that person ;(b) if there is no appearance by that person on the date stated therein, by serving it personally on him through the Fiscal ; and

(c) if that person deliberately avoids accepting the notice or summons, by substituted service

( in accordance with the prov i sions 01 t h e Civil Procedure Code (Chapter 101).

The Supreme Court may make rules with respect

(a) any application or appeal made to any Court under this Act and the costs of such

into and out of the Court i n satisfaction of a claim to which the arbitration agreements apply and the investment of such money ;

44. In calculating the period of prescription for the purpose of pny action, the period that elapsed between the commencement of an arbitration a n d its completion, or termination as the case may be, shall be excluded.

PART IX

GENERAL PROVISIONS AS TO ARBITRATION

45. An arbitrator shall not be liable for negligence in respect of anything done or omitted to

be done by him in the capacity of arbitrator but shall be liable for fraud in respect of anything done or omitted to be done in that capacity.

46 . (1) Unless a contrary intention is expressed in the arbitration agreement, where a party to an arbitration agreement dies, the agreement shall not be discharged and the mandate of the arbitrators constituting the arbitral tribunal shall not be revoked by the death of that party ;

but the agreement shall be enforceable by or against the legal representative of the estate of the deceased.

(2) N othing in subsection (1) shall be taken to affect the operation of any enactment or rule of law by virtue of which a right of action is extinguished by the death of a person.

47. (1) The Arbitration Ord i nance (Chapter 9 8) is hereby repealed.

(2) Sections 693 to 698 of the Civil Procedure Code (Chapter 101) are hereby repealed.

48 . For the avoidance of doubts, it is hereby declared that nothing in this Act shall apply to arbitral proceeding s conducted under the Industrial Disputes Act or any other law, other than the Board o f Investment of Sri Lanka Law, No. 4 of 1978, making special provi s ion for arbi t ration.

49 . In the event of any inconsistncy between the Sinhala and Tamil texts of this Act, the Sinhala text shall prevai l

50. (1) In this Act, unless the context otherwise

requires—

" Arbitration Agreement " means an agreement by the parties to submit to arbitration all or certain dis ­ putes which have arisen or which may arise between them in respect of a denned legal relationship , whether contractual or not ;

" arbitration " means any arbitration whether or not administered by a permanent arbitral institution

"arbitral tribunal" means a panel of one or more arbitrators ;

" award " means a decision of the arbitral tribunal on the substance of the disput

" foreign arbitral award " means an award made in an arbitration conducted outside Sri Lanka ;

" High Court " means the High Court of Sri Lanka, ho l den in the judicial zone of Colombo or holden in such other zone, as may be, designa t ed by the Minister with the concurrence of the Chief Justice, by Order published in the Gazette ;

" l e gal interest " means interest at the rate specified i n an Order made under section 192 o f the Civil Proc e dure Code and for the time being in force.

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