• Arbitration dismisses developer’s damages claim in long-running PPP dispute
• Tribunal upholds NHDA’s 2019 termination of agreement as lawful
• Sole arbitrator holds that PPP agreement had become null and void

The International Court of Arbitration of the International Chamber of Commerce (ICC) by its award dated 2 November 2025 has dismissed the claims for damages submitted by the previous developer of the Bambalapitiya Flats redevelopment project and awarded the National Housing Development Authority (NHDA) costs amounting to $ 484,500.

On 18 May 2017, the NHDA entered into a Public-Private Partnership (PPP) agreement with the previous developer of the Bambalapitiya Flats redevelopment project, which was a consortium comprising UTI Global Projects Ltd. of Singapore and City Square Projects Ltd. 

The entire project was estimated to cost around $ 300 million.

Clause ‘H’ of the PPP Agreement provided that as per the Cabinet Decision No. CP/17/0450/736/009 of 14 March 2017, the NHDA could go ahead with the signing of the agreement with the developer “on the condition that within 4-6 weeks of signing the agreement,” the developer would “bring $ 10 million to the country, failing which the agreement will become null and void”.

Accordingly, on 15 March 2019 the NHDA informed the former developer that, due to their failure to comply with the condition imposed by Clause ‘H’ of the PPP agreement requiring them to remit $ 10 million to Sri Lanka within 4-6 weeks, the agreement was null and void and therefore a decision had been made to terminate the agreement.

In response, the former developer instituted arbitral proceedings before the International Court of Arbitration of the ICC, alleging that the NHDA had unlawfully terminated the PPP agreement and that the agreement remained valid and in force, adding that the NHDA had materially breached the agreement by attempting to terminate it.

The developer had initially sought an award from the sole arbitrator Prof. Bernard Hanotiau, directing the NHDA to perform its obligations under the PPP agreement, or, in the alternative, directing the NHDA to pay damages to them to compensate for the work already performed under the agreement as well as damages for the losses they had suffered as a result of the alleged unlawful termination of the agreement. 

However, once, arbitral proceedings commenced, the developer abandoned their claim for specific performance and maintained only their claim for damages.

The sole arbitrator in his award held that Clause ‘H’ of the PPP agreement was binding on the developer who had failed to remit $ 10 million to Sri Lanka within the 4–6-week time limit imposed therein or even after the compulsory time period. 

Accordingly, the sole arbitrator held that the PPP agreement had become null and void as a result of the developer’s failure to comply with the condition precedent in Clause ‘H’ and therefore the termination of the PPP agreement by the NHDA was lawful.

The sole arbitrator ordered the former developer to bear the full amount of the cost of arbitration which amounted to $ 434,500 and further ordered them to reimburse the NHDA $ 50,000 as part of its legal costs and expenses.

Attorneys-at-Law Shivan Cooray and Hasitha Gamage appeared on the instructions of Sarravanan Neelakandan Law Associates for the former developer.

Uditha Egalahewa, PC, Attorney-at-Law N.K. Ashokbharan, and Miyuru Egalahewa appeared on the instructions of Chandrakumar de Silva for the NHDA.