Diamond Shipping Services (Pvt.) Ltd. v. Sri Lanka Ports Authority & Shirani Wanniarachchci – CA NO. 127/2009-2009

In the case between Diamond Shipping Services (Pvt.) Ltd. and Sri Lanka Ports Authority (including Shirani Wanniarachchci, Director [Finance]), the court addressed whether the Sri Lanka Ports Authority lawfully imposed and recovered a 15% penalty for late payments of stevedoring and port charges from the Petitioner—a ships’ agent—under Act No. 51 of 1979. The court held that, although the legislation did not expressly prohibit the imposition of penalties, neither the Act nor its regulations specifically authorized or provided for such a substantial penalty rate. The findings established that the penalty imposed was unreasonable and disproportionate, especially regarding three specific invoices where the penalty was billed after the principal debt had already been cleared. The court reaffir