Justice prevails over alleged fraud and corruption
Industry Appeals to the President Dissanayake to Revoke Award of illegitimate re-insurance Contracts
A permanent injunction essentially forbidding illegitimate foreign entities not registered locally, and as insurance brokers, from offering any insurance related services in the country has been issued by the District Judge Colombo, Sandun Vithana . The complainant in this case, Strategic Insurance Brokers (Sib) sought an enjoining order against JB Boda and Co of Singapore from holding itself out as an insurance broker. The matter of the enjoining order was taken up on 17th January.
Romesh de Silva PC, and Chanaka de Silva PC appearing for the complainant Sib, made submissions before court stating the defendant Company had been making bids for major tenders on insurance related matters. The plaint filed states that the defendant had been awarded tenders illegitimately, including by the state statutory bodies such as the National Insurance Trust Fund.
Consequent to the aforementioned enjoining order, and the recommendation of the Procurement Appeals Board against the procurement entity over the irregular fraudulent award, the then Cabinet of minsters reversed the decision and awarded to IRCSL registered insurance broker Sib the tender, Sib having made the most responsive bid.
The defendant company appealed the decision to the Civil Appellate High Court. The stay order obtained by the Company was reinstated when the Civil Appellate High Court judgment dismissed JB Boda’s appeal against the aforementioned interim orders. Supreme court did not grant leave to proceed on the appeal.
The District and High Court judgements effectively prevented flyby-night foreign brokering companies from holding out as brokers, thereby qualifying for local bids, or being awarded State tenders.
The Civil Appellate High Court of Colombo has ruled against J B Boda, a Singapore based brokering Company, in what insurance industry watchers see as a landmark judgment. JB Boda asserted in Court that it was entitled’’ to function as a broker in Sri Lanka though not duly registered as a brokering concern, as required by law.
The Civil Appellate High Court judge Sampath B. Abeyakoon ruled against the foreign broker and the Judgement effectively makes operative the District Court interim injunction issued in 2018, preventing this Company from functioning as a broker in the Insurance industry in Sri Lanka. It effectively bars the Singapore based concern from holding out as a broker, or engaging in any broking activities in the insurance industry in this country — and consequently from participating in any bids for local tenders.
A significant similar concern has emerged again regarding the recent awarding of a tender by the National Insurance Trust Fund (NITF) for reinsurance cover concerning strikes, riots, civil commotion, and terrorism. Strategic Insurance Brokers (Pvt.) Limited, a well-established insurance brokerage firm in Sri Lanka, has lodged a formal objection against this decision, highlighting serious legal and procedural violations.
According to the appeal, the communications presented to the Cabinet seem to lack vital information regarding the awardee Tysers’ eligibility, and compliance with Sri Lankan law. There are indications that essential details may have been misrepresented or withheld from decision-makers, igniting suspicions of potential misconduct
Following their appeal, the Strategic Insurance Brokers have requested His Excellency Anura Kumara Dissanayake, the President of Sri Lanka and Minister of Finance, to reconsider the Cabinet’s decision regarding the NITF tender. In doing so, they are urging the government to:
– Direct the Cabinet of Ministers to revisit the unlawful awarding of the tender to Tysers Insurance Brokers.
– Revoke the decision made on December 23, 2024, to ensure adherence to the law.
– Instruct the NITF to halt any contractual agreements with Tysers, pending a thorough review of the situation.
The firm highlights that allowing a foreign unregistered entity to operate in a crucial sector such as insurance could undermine domestic companies and the rights of local professionals. The call for accountability reverberates through the industry, with concerns that public trust is at stake.
As this matter unfolds, all eyes will be on the Cabinet’s next steps, and whether the government will prioritize compliance with local laws and support the domestic insurance market, insurance industry sources said.
The judgment effectively confirms that every person who acts as a broker for reinsurance also, should register with the Insurance Regulatory Commission of Sri Lanka under terms of the relevant Act, and a recognized Brokers Association, and be incorporated as a company under the Companies Act of Sri Lanka. The submissions of JB Boda that the above requirements are not required to be met by foreign entities providing reinsurance related brokering services have not been accepted by the courts.
