IN THE MATTER OF AN ARBITRATION

UNDER THE LCIA ARBITRATION RULES 2014

LCIA CASE NO. 204816

HOUSING AND CONSTRUCTION LANKA (PRIVATE) LTD.

Claimant

- and -

BOARD OF INVESTMENT OF SRI LANKA

Respondent

JOINT REPORT BY EXPERTS

Professor Slobodan Djordjević

Ms Amara Sirimana Beling
Mr D M C Bandara

19 August 2022
 Table of contents

Section
1. Introduction 3
2. The impact of changes in the terrain 6
3. The Parties’ actions concerning flood protection measures 7
4. CEA’s letter dated 13 September 2013 8

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1. Introduction

1.1 General

1.1.1 This joint statement is prepared by Professor Slobodan Djordjević (SD), Ms

Amara Sirimana Beling (ASB) and Mr D M C Bandara (DCMB) in respect
of LCIA Case No. 204816 in the London Court of International Arbitration.
The parties to the proceedings are:
a) Housing and Construction Lanka (Private) Limited (the “Claimant” or
“HCL”); and
b) Board of Investment of Sri Lanka (“Respondent”, or “BOI”).
1.1.2 SD has been retained by AKS Partners and Wilmer Cutler Pickering Hale and
Dorr LLP, acting on behalf of the Claimant. SD has prepared an expert report
dated 12 August 2022 (SD’s Report).
1.1.3 ASB and DMCB have been retained by the Respondent. ASB and DMCB
have prepared a report dated 10 August 2022 (ASB’s Report) and a report
dated 12 August 2022 (DMCB’s Report), respectively.
1.1.4 The Experts met to discuss, on a without prejudice basis, matters related to
their instructions. In this joint statement, the Experts have been instructed to
set forth areas of agreement and disagreement.
1.1.5 The terms used in this statement are given the meaning as defined commonly
in the expert reports or within this statement.

1.2 Background

1.2.1 The background to this matter is set out in SD’s Report, ASB’s Report and
DMCB’s Report which are available to the Tribunal.
1.2.2 The arbitration arises out of the construction and development of a large-scale
residential and industrial township in the Western Province of Sri Lanka by
HCL. HCL has commenced this arbitration to recover the losses arising out
of breaches on the part of BOI.

1.3 Scope and structure of this joint statement

1.3.1 This joint statement has been prepared jointly by the Experts in order to
identify clearly to the Tribunal the areas in which the Experts have reached
agreement, and the areas that remain in disagreement. The remainder of this
joint statement is structured as follows:
a) Section 2 identifies areas of agreement and disagreement regarding the
impact of changes in the terrain,

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b) Section 3 identifies areas of agreement and disagreement regarding the
Parties’ actions concerning flood protection measures.
c) Section 4 identifies areas of agreement and disagreement regarding the
CEA’s letter dated 13 September 2013.

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 The Experts confirm that the declarations they set out at SD’s Report, ASB’s
Report and DMCB’s report, respectively, continue to apply.

________________ ___________________
Slobodan Djordjević Amara Sirimana Beling D M C Bandara
19 August 2022 19 August 2022 19 August 2022

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2. The impact of changes in the terrain

2.1 Matters agreed by the Experts

2.1.1 Nil

2.2 Matters not agreed by the Experts

The Experts disagree on the issue of the impact of changes in the terrain.
ASB considers that the location proposed for installation of sewage treatment
plant being prone to flooding was aggravated due to changes made to natural
topography due to haphazard land cutting/filling operations undertaken by
HCL.
SD considers that BOI’s evidence on terrain changes is unconvincing, and
from that evidence it cannot be deduced what alterations actually were made,
and it cannot be concluded that they exacerbated the impact of flood in the
Phase One of the real estate project.

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3. The Parties’ actions concerning flood protection measures

3.1 Matters agreed by the Experts

3.1.1 Nil

3.2 Matters not agreed by the Experts

3.2.1 The Experts disagree on the issue of rip rap as a flood protection measure.
DMCB considers that BOI has taken reasonable efforts to protect the low
laying area by providing rip rap for the filled area.
SD considers that rip rap is not a measure for flood protection but a measure
for protection from erosion, and therefore a riprap would not have been
sufficient to protect the low-lying areas in Phase One from flooding.

3.2.2 The Experts disagree on the issue of the Parties’ action concerning the flood
protection bund.
ASB considers that, to prevent flooding, construction of flood protection bund
was proposed and CEA approval was sought.
SD considers that the flood protection bund (if built) would have protected
the low-lying areas in Phase One in the sense that total flood damage would
have been significantly reduced by the construction of the flood protection
bund.

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4. CEA’s letter dated 13 September 2013

4.1 Matters agreed by the Experts

4.1.1 The Experts agree that Central Environmental Authority’s (CEA’s) decision
from their 13 September 2013 letter did not recommend the proposal for
construction of flood protection bund and required a flood mitigation measure
for the entire Mawak Oya basin.

4.2 Matters not agreed by the Experts

4.2.1 The Experts disagree on the issue of CEA’s requirement in their 13 September
2013 letter.
ASB considers that CEA’s requirement for a flood mitigation measure to the
entire Mawak Oya basin is beyond the mandate of the BOI. In addition,
DMCB considers that BOI has fulfilled obligations with due diligence and
that CEA raised broader aspects beyond the scope of BOI.
SD considers that it was reasonable to expect BOI to develop a revised
proposal for flood mitigation that would address CEA’s concerns, because
the CEA’s decision was not an outright rejection of the bund, but a request
for a better justified, more comprehensive proposal, which could include the
bund.

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