The International Court of Arbitration of the ICC has dismissed a damages claim filed by the developer of the stalled Bambalapitiya Flats redevelopment and ordered the firm to pay a total of $484,000 in costs.
In an award dated Nov. 2, 2025, the sole arbitrator, Prof. Bernard Hanotiau, rejected the developer’s allegations of unlawful termination and confirmed that the National Housing Development Authority (NHDA) acted within its contractual rights.
The NHDA had signed a public–private partnership agreement on May 18, 2017, with a consortium comprising UTI Global Projects Ltd. of Singapore and City Square Projects Ltd. for a $300 million redevelopment of the Bambalapitiya Flats. Under Clause H of the agreement — based on Cabinet Decision No. CP/17/0450/736/009 — the developer was required to bring $10 million into Sri Lanka within four to six weeks of signing. The clause stated that failure to remit the funds would render the agreement null and void.
On March 15, 2019, the NHDA declared the agreement null and void and terminated it after the developer failed to transfer the required investment. The developer later initiated arbitration, initially seeking specific performance or damages, before abandoning the specific performance claim and pursuing only damages.
The arbitrator held that Clause H was binding and that the developer had failed to meet the funding requirement even beyond the stipulated period. As a result, the agreement had lapsed automatically, and the NHDA’s termination was lawful.
Prof. Hanotiau ordered the developer to pay $434,500 in arbitration costs and reimburse the NHDA $50,000 for part of its legal expenses.
Counsel for the former developer were Shivan Cooray and Hasitha Gamage, instructed by Sarravanan Neelakandan Law Associates.
Counsel for the NHDA were Uditha Egalahewa, PC, N.K. Ashokbharan, and Miyuru Egalahewa, instructed by Chandrakumar de Silva.
