IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA Dehigaspe Patabendige Nishantha Nanayakkara, No. 34/1, First Lane, Egodawatta Road, Boralesgamuwa.

Petitioner SC APPEAL NO: SC/CHC/APPEAL/26/2003 CHC CASE NO: HC/CIVIL/01/2000(2)

Vs.

1. Ceylon MKN Eco Power (Pvt) Ltd., No. 202, Moratuwa Road, Piliyandala.

2. Yukinori Kyuma, No. 11A, Queen’s Terrace, Colombo 03.

3. Norika Kyuma, No. 11A, Queen’s Terrace, Colombo 03. Respondents AND NOW BETWEEN Dehigaspe Patabendige Nishantha Nanayakkara, No. 34/1, First Lane, Egodawatta Road, Boralesgamuwa.

Petitioner-Appellant Vs.

1. Ceylon MKN Eco Power (Pvt) Ltd., No. 202, Moratuwa Road, Piliyandala.

2. Yukinori Kyuma, No. 11A, Queen’s Terrace, Colombo 03.

3. Norika Kyuma, No. 11A, Queen’s Terrace, Colombo 03.

Respondent-Respondents Before: Hon. Justice Priyantha Jayawardena, P.C.

Hon. Justice Kumuduni Wickremasinghe Hon. Justice Mahinda Samayawardhena Counsel: Geoffrey Alagaratnam, P.C., with Anura Ranawaka and Lasantha Garusinghe for the Petitioner-Appellant.

Laknath Seneviratne for the Respondent-Respondents.

Argued on: 14.07.2021 Written submissions:

by the Petitioner-Appellant on 13.06.2011 and 12.08.2021.

by the Respondent-Respondents on 05.05.2011 and

15.09.2021.

Decided on: 28.02.2024 Samayawardhena, J.

Background The petitioner-appellant filed this application in the Commercial High Court under sections 210 (oppression) and 211 (mismanagement) of the repealed Companies Act, No. 17 of 1982, (which are analogous respectively to sections 224 and 225 of the new Companies Act, No. 7 of 2007) on the basis that the affairs of the 1^st respondent company are being conducted in a manner oppressive to the petitioner as a minority shareholder and prejudicial to the interests of the company. The petitioner sought the following reliefs in the prayer to the petition before the Commercial High Court:

(a) An order regulating the conduct of the affairs of the 1^st respondent company in future in such a manner as the Court may decide as to protect the 1^st respondent company and its minority shareholders including the petitioner.

(b) An order directing the 2nd and 3rd respondents not to remove the petitioner from the office of director of the 1st respondent company.

(c) An order directing the petitioner be permitted to carry out the functions of the Chief Executive Officer of the 1^st respondent company.

(d) An order directing that the petitioner be a joint signatory to all Bank Accounts of the 1st respondent company.

(e) An order directing the 2nd and 3rd respondents not to do any act to diminish or suppress the petitioner’s shareholding in the 1st respondent company.

Upon completion of the pleadings, the parties agreed that the main inquiry/substantive application could be disposed of on written submissions. After both parties filed written submissions, the Commercial High Court by order dated 07.05.2003 dismissed the application of the petitioner with costs on the basis that it is not the conduct of the 2^nd and 3^rd respondents but “the conduct of the petitioner [that] is oppressive and detrimental to the 1^st respondent company.” Being dissatisfied with the order, the petitioner filed this appeal. The gravamen of the argument of learned President’s Counsel for the petitioner before this Court is that the petitioner must succeed in this appeal on oppression and mismanagement particularly in view of the shareholders agreement marked X11.

The 1^st respondent company was incorporated under the Companies Act on 20.03.1998 to carry on the business of generating hydro power to be supplied to the national grid and related services (X1). The petitioner, a Sri Lankan national with a PhD in electrical engineering, holds a 20% share in the 1^st respondent company, while the 2^nd respondent, a Japanese national and the investor, holds 80% of the share capital in the same company. Both were directors at the time of the incorporation of the company. As seen from the minutes of the first board meeting marked X26(a) held on t