‘SriLankan wins right to run its own duty free operation’



Ruwan Fernando, Judge of the Commercial High Court, Colombo, on June 23, 2017, refused the Interim Injunctions sought by DFP Canada Ltd against SriLankan Airlines Ltd. The Court also dissolved the enjoining orders previously issued, a SriLankan press release said.


It adds - ‘DFP Canada Ltd (DFP) filed action claiming that DFP was the actual company behind the highly controversial "Phoenix Duty Free Services" ("Phoenix") and that DFP had a ‘right of first refusal and right to match an offer’ under the Supply and Concessionaire Agreement granted to Phoenix Duty Free Services in 2012 in violation of standard tender procedures of SriLankan Airlines. The Report of the Board of Inquiry headed by Mr. J.C.Weliamuna, PC heavily criticised the awarding of duty free supply and concessionaire contract to Phoenix violating the procedures of the Company and this transaction is currently being investigated by the law enforcement authorities.


‘SriLankan Airlines did not extend the contract with Phoenix upon expiry at the end of its five years’ term as the airline wanted to explore the best available options to improve the commercial returns to the Company through on-board duty free sales programme. This decision of the Company was also consistent with the findings of the Report of the Board of Inquiry headed J.C Weliamuna, PC which were highly critical on the process of awarding this on-board duty free sales contract to Phoenix. The Airline decided to operate its own on board duty free programme as they did prior to 2012 as no duty free service provider submitted any bid for the tender carried out by the Airline to appoint a duty free services supplier.


‘The Plaintiff alleged that SriLankan had breached the said agreement when it decided to operate its own on board duty free programme. DFP had obtained ex parte enjoining orders from the Court compelling SriLankan Airlines to continue obtaining such services from Phoenix until disputes as to the said rights are resolved through arbitration. SriLankan Airlines has denied that DFP has such rights.


‘One reason given by SriLankan Airlines is that it has an inherent right to do its own duty-free operations after the contract ended.


‘The Court inter-alia held that on that basis no injunction ought to be granted.


‘The Commercial High Court in its order, recognised that SriLankan Airlines doing its own duty-free operations is not a violation of any rights claimed by DFP.


Romesh de Silva PC with Harith De Mel, Attorney at Law instructed by Julius & Creasy appeared for the Plaintiff DFP Canada Ltd.


Anil Tittawella PC with Milinda Jayatilaka Attorney at Law instructed by Srimal Weerakkody Attorney at Law appeared for SriLankan Airlines


‘SriLankan Airlines has commenced its own on-board duty free programme from 28th June 2017 with a wide variety of luxurious items for sale on board the aircraft. The Airline invites its passengers to patronise this unparalleled service on board and enjoy amazing discounts and deals offered exclusively.


- SriLankan Airlines


 
 
 
 
 
 
 
 
 
 
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