IN THE HIGH COURT OF THE WESTERN PROVINCE SITTING IN

COLOMBO IN THE EXERCISEOF ITS CIVIL JURISDICTION

In the matter of an Application for the

appointment of an Arbitrator under and in
terms of section 7(3) of the Arbitration Act
No.11 of 1995.

General Manager,
Provincial Road Development Authority
(Western Province)
No. 59, St. Sebastian Hill,
Colombo 12.
Petitioner

Case No. : CHC 323/2025/ARB

Vs.
Managing Partner,
Nethma Construction,
No.505/U, Halbarawa Garden, Thalahena,
Malabe.
Respondent

Before : Amali Ranaweera, Judge of the High Court Judge

Decide on : 22.08.2025

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 Order
The Petitioner in petition dated 14th October 2024, made this application in terms
of section 7(3) of the Arbitration Act No.11 of 1995. The Petitioner sought for an
order appointing an Arbitrator as set out in the notice dated 07.08.2024 marked as
P4 in terms of section 7(3) of the Arbitration Act and to issue notice of this
application to the Respondent.

Factual background of this application;

The Petitioner the Chairman, Provisional Road Development Authority (WP)

entered into construction project bearing No. PRDA/WP/NW/KURU/04 which
comprised of six contract agreements with the Respondent Nethma Constructions
in respect of speeding and compacting dense Aggregate Base Course (A.B.C.) for
Heepitiya-Bambaragahakanda Road. Contract agreements are marked as P1(a) to
P1(f) to the petition. Dispute arising between the parties in connection to the
supplying, spreading and compacting ABC at Heepitiya-Bambaragahakanda road
and Katupilagolla junction-DelvitaUdaharombawa road. In sub paragraphs (a) to
(o) in the petition described the dispute arose between the parties. The General
Conditions of the Contract agreements are governed by the ICTAD publication No.
ICTAD/SBD/03. As per the clause 14.2 of the General conditions, the parties
referred their disputes for adjudication. After an inquiry, the Adjudicator on
11.07.2024 decided the matter in favour of the Respondent. The report of the
adjudicator has been marked as P3.

Being dissatisfied with the decision of the Adjudicator, the Petitioner informed the
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Respondent that they referred the dispute for arbitration. The notice of arbitration
dated 07.08.2024 has been marked as P4. By P4 notice the Petitioner nominated
three Arbitrators and requested the Respondent to select one as the Sole Arbitrator
to hear and determine the dispute. In terms of clause 14.2 of the general condition
P5, the Respondent failed to appoint an Arbitrator as of the date. Thereafter the
Petitioner came before this Court to appoint an Arbitrator to hear and determine the
dispute/differences sets out in P4 letter.

The Respondent appeared before this Court after the notice of this case was duly
served on them. In statement of objection dated 02.06.2025, the Respondent
generally denied entire averments in the petition of the Petitioner and mainly
challenged the jurisdiction of this Court to entertain this application of the
Petitioner. It was argued that the notice of the arbitration is in violation of clause
14.2 of the ICTAD condition.

Does the agreement X3a consist of an agreement to arbitrate?

The first and foremost thing that this Court needs to determine is the jurisdiction to
entertain the application of the Petitioner. The Petitioner came before this Court to
appoint a Sole Arbitrator as per the agreement entered by the parties. The
Petitioner made this application in terms of section 7(3) of the Arbitration Act
no.11 of 1995. In terms of section 3 of the Arbitration Act there should be an
arbitration agreement between the parties which may be in the form of an
arbitration clause in a contract or in the form of a separate agreement. The term
‘Arbitration Agreement’ has been interpreted in the section 50 of the Act. It

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defines the term arbitration agreement as an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may arise between
them in respect of a defined legal relationship, whether contractual or not.
Therefore to refer any dispute/differences arisen out of the agreement/contract, by
party who is dissatisfied or non breach, there should be an arbitration agreement
between them. At this stage this Court needs to consider whether the parties were
mutually agreed for such arbitration agreement had between these two parties in
the present case to refer their dispute for arbitration. In terms of section 4 of the
Arbitration Act No.11 of 1995 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 is entered into is
contrary to public policy or, is not capable of determination by Arbitration. This
obligation stands unless the matter covered by the arbitration agreement is contrary
to public policy or is not capable of determination by arbitration, as outlined in
section 4 of the Arbitration Act, No. 11 of 1995. The Petitioner came before this
Court on P1 and P7 documents. The Respondent admitted the said agreements. In
addition, it is an admitted fact that the parties are governed by the ICTAD
rules. At page 48 under clause 14.0 of P7 cited the ‘Resolution of Disputes’.
Under clause 14.1 firstly, the parties’ need to attempt to resolve their disputes by
way of adjudication in accordance with the adjudication procedure set out in clause
14.2 of the ICTAD rules. Clause 14.1 states the procedure for adjudication.
Admittedly parties have gone before the adjudicator and the decision of the
adjudicator had been marked as P3. In sub bullet 8 of clause 14.2 stated thus;

‘The Adjudicator shall not act as an Arbitrator. The decision of the Adjudicator
shall be deemed final and binding on the parties if neither party refers the

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 dispute to arbitration in accordance with Sub-Clause 14.3 within twenty eight
(28) days of the Adjudicator’s determination’

Document P3 further prove that after hearing from both parties, the learned
Adjudicator has given his determination. The said determination is dated
11.07.2024. In terms of the above mentioned clause if a party is dissatisfied with
the determination of the Adjudicator within 28 days of such decision it should be
referred for arbitration. The objection of the Respondent is for the notice P4
saying that it was received after lapse of the said period. P4 is dated 07.08.2024.
The said letter is issued within the period of 28 days as per in clause 14.2.
According to the Respondent, they received the said letter on the 09.08.2024 i.e
after a lapse of two days. No proof of evidence was submitted by the Respondent
to establish the date of the receiving of P4 letter. Reply letter of the Respondent is
dated 27.08.2024 (P5). In P5 letter the Respondent admitted that they received the
P4 notice. However in the said letter the Respondent did not state that they
received the P4 letter after the lapse of 28 days. If the Respondent objected saying
that the matter be referring to the arbitration is in violation of clause 14.2, they
should have at the very first instance taken such jurisdictional objection in terms of
section 11 of the Act. Section 11 of the Arbitration Act speaks with the
determination of jurisdiction by the arbitral tribunal or the High Court. It
recognizes the principle of "competence-competence," allowing the arbitral
tribunal to rule on its own jurisdiction, and also allows parties to challenge before
the High Court. Section 11 of the Arbitration Act reproduced below;

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 ‘11. (1) An Arbitral tribunal may rule on its jurisdiction including any question,
with respect to the existence or validity of the arbitration agreement or as to
whether such agreement is contrary to public policy or is incapable of being
performed; but any party to the arbitral proceedings may apply to the High
Court for a determination of any such question.

(2) Where an application has been made to the High Court under
subsection (1) the arbitral tribunal may continue the arbitral proceedings
pending the determination of such question by the High Court.’

Sub section 1 of section11 of the Act specifies the grounds on which a party
challenges the jurisdiction arbitral tribunal. Those grounds are;

- existence or validity of the arbitration agreement.

- such agreement is contrary to public policy.

- is incapable of being performed.

If the Respondent challenged the competence of the arbitral tribunal under any of
those grounds they should have filed an application before the High Court under
section 11(2) of the Act.

Clause 14.3 in P7 mentions the Arbitration procedure. When the Petitioner is

dissatisfied with the decision of the Adjudicator, at a next available stage the
Petitioner is able to go for arbitration. That is the procedure adopted by the

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Petitioner, by giving the notice of arbitration to the Respondent. According to
section 6 of the Arbitration Act No.11 of 1995 parties are free to determine the
number of Arbitrators in an arbitral tribunal. Section 6 of the Act is reproduced
as follows;
‘6.(1) The parties shall be free to determine the number of arbitrators of an
arbitral tribunal subject to the provisions of subsection (3) of this section.
(2) Where no such determination is made, the number of arbitrators shall be
three.
(3) Where the parties appoint an even number of arbitrators, the arbitrators so
appointed shall jointly appoint an additional arbitrator who shall act as
Chairman.’

The parties may determine the number of Arbitrators via the Arbitration
Agreement. Where the Arbitration Agreement does not provide for this, the
number of Arbitrators shall be three. There is no provision as to who shall not
be an Arbitrator given in the Act. The parties may determine the number of
Arbitrators via the Arbitration Agreement. The general practice is for an
arbitral tribunal to consist of either one or three Arbitrators. At this stage the
parties agreed to constitute the arbitral tribunal in terms of the ICTAD rule.
Clause 14.3 further states the composition of the arbitral tribunal and the
selection procedure of the tribunal. It stated thus;

Composition of the Arbitral Tribunal:

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 ‘The arbitral tribunal shall consist of a sole arbitrator who shall be appointed
in the manner provided as follows;

Selection Procedure;

The party desiring arbitration shall nominate three arbitrators out of which one to
be selected by the other party within 21 days of the receipt of such nomination. If
the other party does not select one to serve as Arbitrator within the stipulated
period then the Arbitrator shall be appointed in accordance with the Arbitration
Act No. 11 of 1995, or any amendments thereof.

Section 7 of the Arbitration Act referred to appointment of Arbitrators. The said

section reproduced as follows;

‘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 if the parties are unable to agree on
the arbitrators, that arbitrators shall be appointed, on the application of a party
by the High Court;

(b) in an arbitration with three arbitrators, such party shall appoint one
arbitrator, and the two arbitrators thus appointed shall appoint the third
arbitrators; if a party fails to appoint the arbitrator within sixty days of receipt
of a request to do so from the other party, or if the two arbitrators fail to agree

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 on the third arbitrator within sixty days of their appointment, the appointment
shall be made 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 such 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 o the High
Court to take necessary measures towards the appointment of the arbitrator or
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 consideration as are likely to secure the appointment of an
independent and impartial arbitrator.

In the case of Merchant Bank of Sri Lanka Ltd. Vs. D.V. D. A.

Tillekeratne (2001) B.A.L.R. 71 the Supreme Court held that “party autonomy is
a fundamental principle of Arbitration Law and this is given effect to by the
legislation in Section 7(1) of the Arbitration Act.”

Section 7(1) allows the parties to agree on a procedure for the appointment of
Arbitrators and the remaining sections of that section set out the procedure for the
appointment of an Arbitrator where the parties have not agreed upon any procedure
or the agreed procedure fails for some reason or other. Section 7 further provides
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that if, under any agreed appointment procedure, a party fails to act, the parties or
arbitrators cannot reach the required agreement, or a third party fails to perform its
function, any party may apply to the High Court to take necessary measures for the
appointment of Arbitrator/s.

When appointing an Arbitrator, the High Court must consider any qualifications
agreed upon by the parties and ensure the appointment of an independent and
impartiality of Arbitrator. While Section 7 sets out mechanisms for Court
intervention if parties fail to appoint Arbitrators within the prescribed framework,
it does not expressly stipulate a time limit for making an application to the High
Court after the initial 60-day period has lapsed. This legislative silence raises an
important procedural question: whether an application for the appointment of
Arbitrators can be made at any time, or whether an implied limitation applies. Our
Apex Courts have addressed similar issues of statutory silence regarding time
limits in other contexts. Where the Arbitration Act or procedural rules are silent,
Courts have consistently applied the principle that applications must be made
within a “reasonable time,” guided by case Law and general procedural principles.
(vide: Mahaweli Authority of Sri Lanka v. United Agency Construction (Pvt.)
Ltd. (2002) 1 SLR 8 and Tea Small Factories Ltd. v. Weragoda and Another
(1994) 3 SLR 353)

In the instant case parties have, in fact, mutually agreed, in the Conditions of
Contract on a procedure for the appointment of an Arbitrator in terms of Clause
14.2 thereof and that fact was common ground between the parties. As per the said

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clause the Petitioner nominated three names of persons for to function as the Sole
Arbitrator. After receiving such notice the Respondent did not select a sole
Arbitrator from the nominated names or either not made any objection for any of
the nominates. When the Respondent fails to act as required by the clause 14.3 of
the agreement the Petitioner acting in terms of section 7 made this application to
this Court.

Whether there are any justifiable grounds to refuse to persons nominated as

Arbitrators in letter P4?

In P4 notice it is stated that the Petitioner nominates the three Arbitrators and
further requested from the Respondent to confirm one of the said nominated
Arbitrators for this dispute within 21 days of receipt of the said notice. The notice
was dated 07.08.2024. The three names nominated by the Petitioner are;

1. Mr. Senaka de Saram, AAL

2. MrPulasthiRupasinghe AAL

3. Mr. Migara Doss, AAL

All these nominees are Attorneys at law nominated as a suitable person to be the
sole Arbitrator to conduct the arbitral proceedings. It was informed to the
Respondent to select a Sole Arbitrator within no more than 21 days of the date of
receipt of the notice. In P5 reply letter, the Respondent did not specifically state
their objections for any of the nominated Arbitrators of the Petitioner. Yet in P5
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letter the Respondent has nominated Mr. Tharindu Rajakaruna Attorney at Law as
the sole Arbitrator. This shows that the Respondents indirectly admitted the
competence of the arbitral tribunal. On the other hand, both parties were of the
view that the best Arbitrator is to resolve their dispute is an attorney at Law. When
the parties failed to adhere with the procedure sets out in clause 14.3 of P7 and if
they are unable to reach for an agreement of an Arbitrator, the Petitioner made the
application in hand to this Court in terms of section 7(3)of the Arbitration Act
No.11 of 1995 as amended and sought permission of Court to appoint an Arbitrator
to resolve their dispute. Notably the Respondent did not seek from this Court to
consider appointing the nominated Arbitrator by them in letter P5. Thereby this
Court is unable to consider the suitability of the nominated arbitrator by the
Respondent.

When appointing an Arbitrator, one has to consider their independence,

impartiality, qualifications, experience, availability, and willingness to serve, as
well as any specific requirements outlined in the arbitration agreement or
applicable rules. Arbitration agreement generally gives parties an opportunity to
agree on the appointment of the arbitral tribunal. In notice P4, the Petitioner
nominated three names as Arbitrators and called for confirmation from the
Respondent to choose one person as a Sole Arbitrator. The parties may by
agreement require that an Arbitrator shall have particular qualifications given the
nature of the dispute.

The next question the Court needs to determine is whether the nominees given by

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the Petitioner are independent and impartial. When there is no agreement between
the Petitioner and the Respondent regarding the appointment of arbitrator the High
Court has the power to appoint a suitable Arbitrator under Section 7(3) of the Act.
When appointing an Arbitrator the Court needs to consider qualifications and the
impartiality or independence of the nominee. The concepts “independent” and
“impartial” seem almost similar. Independence generally relates to relationships,
i.e. whether an Arbitrator is professionally or personally related to one of the
parties, or has a familial or business connection to or with that party. It is not
related to the state of mind of the Arbitrator. On the other hand impartiality
relates to a state of mind whether it is reasonable to believe that the Arbitrator will
favour one party over the other. This only can be proved through facts. No
justifiable doubts or information have been disclosed by the Respondent for the
aforesaid three nominees.

The Arbitration Act section 10(1) requires Arbitrators to disclose any

circumstances likely to give rise to doubts as to his impartiality or independence
from the time of his appointment to the conclusion of the arbitral proceedings. Not
only the opposing party but the party who made the appointment can challenge the
Arbitrators appointed if he later becomes aware of circumstances which give rise
to justifiable doubts as to the Arbitrators impartiality or independence. Such a
challenge has to be done before the tribunal within 30 days of him becoming aware
of the facts and may appeal to the High Court from the order of the tribunal. The
requirements of independence and impartiality are fundamental.

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They even did not challenge the educational or professional qualifications of the
said nominees. None of nominees given by the Petitioner was objected by the
Respondent. In the arbitration clause in the agreement, there is no agreement
between the parties as to the particular qualifications given to the nature of the
dispute. Additionally, qualifications of these Arbitrators were not challenged
before this Court. Capability or suitability of them was also not challenged. No
suitable person/s has been nominated by the Respondent. In those grounds this
Court is not in a position to reject any of the names nominated in P4 letter.

In those circumstances when the parties could not agree to a Sole Arbitrator, and
when there are no objections for any of the nominees given by the Petitioner, this
Court decide to appoint the first nominated name Mr. Senaka De Saram Attorney
at Law as the Sole Arbitrator to hear and determine the dispute referred for
arbitration in P4 notice.

Amali Ranaweera

Judge of the Commercial High Court

Colombo.
22.08.2025

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