Sanicoch Group of Companies vs Kala Traders (Pvt.) Limited – SC CHC APPEAL NO.08/2010-2015

In the case between Sanicoch Group of Companies (of England, U.K.) and Kala Traders (Pvt.) Limited (of Colombo, Sri Lanka), the court addressed whether an ex-parte judgment, previously upheld by the High Court upon refusal to set aside a default judgment, could be vacated on the basis of extreme circumstances affecting the defendant under Section 86(2) of the Civil Procedure Code. The court determined that the extraordinary events, including a missing director, kidnapping, and death threats leading to company mismanagement, constituted reasonable grounds to justify relief from default. The reasoning established a liberal and subjective interpretation of “reasonable grounds” for setting aside ex-parte judgments, relying on Sections 86(2) and 87(3) of the Civil Procedure Code. The prior High