SC reopens case on foreign broker’s eligibility for NITF tender

Colombo, Dec. 3 (Daily Mirror) - A legal fight over whether an international broker can take part in Sri Lanka’s reinsurance procurement has taken a fresh turn after the Supreme Court cleared the path for the District Court to decide the matter independently.

The dispute began when the National Insurance Trust Fund (NITF), the State body responsible for providing compulsory Strike, Riot and Civil Commotion (SRCC) insurance for all local insurance companies, prepared to reinsure its exposure with foreign reinsurers.

Since the NITF must transfer part of this risk abroad, it called for tenders from brokers to arrange the reinsurance. 

Tysers Insurance Brokers Limited, a UK-based firm, submitted a bid and was selected for 2024/25. But Strategic Insurance Brokers (Pvt) Ltd, which is a locally registered broker objected to this. Their argument was that under the Regulation of Insurance Industry Act, No. 43 of 2000, specifically Sections 79 and 114, anyone acting as an insurance or reinsurance intermediary must be registered in Sri Lanka. Tysers was not registered. Strategic said that it meant Tysers had no legal right to bid, assist the NITF or participate in any brokering activity linked to Sri Lankan insurance risks.

Strategic filed a declaratory action before the District Court seeking a ruling that Tysers cannot function as a broker in Sri Lanka without registration. They also obtained an enjoining order - a temporary court order preventing Tysers from acting as a broker effectively in the tender until the case was decided.

Tysers asked the District Court to vacate that order, but the District Court refused. This meant the temporary block remained in force, effectively stopping Tysers from operating as a broker in the NITF reinsurance process.

Tysers then appealed to the Civil Appellate High Court. The Attorney General also appeared, representing the NITF. The High Court took a different view of the law. By relying heavily on Parliamentary debates (Hansard) and recent amendments, the court concluded that the 2000 Act does not apply to this type of transaction - when NITF buys reinsurance from foreign insurers. 

On that basis, the High Court vacated the enjoining order but however, allowed the DC main matter to proceed.

Strategic appealed to the Supreme Court. During the hearing, Strategic agreed not to challenge the High Court’s decision to lift the enjoining order. But they asked the Supreme Court for a direction that the District Court must decide the interim injunction afresh, without treating the High Court’s reasoning as binding. All the parties and the Supreme Court accepted this request and issued a clear order:

“The District Court is directed to independently decide the application for interim injunction without being prejudiced by any observations or findings made by the High Court when reversing the enjoining order issued by the District Court.”

This effectively resets the case. The High Court’s interpretation that the Act does not apply to the NITF reinsurance situation, no longer controls the District Court.

The dispute has now returned to its core question: Can a foreign broker who is not registered in Sri Lanka legally take part in reinsurance tenders connected to Sri Lankan insurance risks?

The interim injunction inquiry will now resume before the District Court, with both parties preparing to argue the issue afresh. 

In addition to the above, Strategic Insurance Brokers (Pvt) Ltd has also filed a private plaint before the Fort Magistrate’s Court against Tysers, alleging corruption and irregularities connected to the tender process. A complaint has similarly been lodged before the Commission to Investigate Allegations of Bribery or Corruption. 

In the Fort Magistrate’s Court proceedings, Counsel Hafeel Farisz appeared for Strategic. Tysers was represented in court through an authorised representative, and the Magistrate released the respondent on a surety bail of Rs. 2.5 million. The case is scheduled to be called again on 03 December 2025. 

In addition to the District Court and criminal proceedings, Strategic has also filed a writ application against the NITF, which remains pending.

In a notable policy shift following these legal challenges, the NITF has now issued the tender document for the 2025/2026 reinsurance tender explicitly stating that brokers who are not registered in Sri Lanka will not be permitted to participate in the reinsurance procurement process with foreign reinsurers.

President’s Counsel Eraj De Silva, together with Attorneys-at-Law Daminda Wijeratne and Zul Luthufi, instructed by Dimuthu Kuruppuarachchi, appeared for Strategic Insurance Brokers (Pvt) Ltd. President’s Counsel Avindra Rodrigo, assisted by Attorneys-at-Law Kasuni Jayaweera and Christina Hettiarachchi, instructed by F.J. & G. de Seram, appeared for Tysers Insurance Brokers Limited. Additional Solicitor General Sumathi Dharmawardena, PC, appeared on behalf of the National Insurance Trust Fund (NITF).