Rescue, Rehabilitation and Insolvency (Corporate and Personal) Act 2026 · As enacted · Part X · Compromises
272. Eff ect of compromise
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
A compromise is approved by the creditors or a class of creditors where at a meeting of the creditors or that class of creditors convened and held in accordance with the
Fifth Schedule, the compromise is approved by a resolution adopted in accordance with that Schedule.
A compromise approved by the creditors or a class of creditors of a company, and by either the company, the liquidator (if the company is in liquidation), or an administrator (if the company is in administration), in accordance with this Part is binding on –
the company; and
all creditors or all creditors of that class, as the case may be.
On an application to the court by a person referred to in subsection (1) of section 270, the court may order that a compromise, if approved, shall release from liability one or more persons, including related companies and directors of the company, that are sufficiently connected with the compromise.
In deciding whether or not a person is sufficiently connected with the compromise for the purposes of subsection (3), the court shall have regard to –
Rescue, Rehabilitation and Insolvency
whether or not the proposed release is an integral part of the compromise;
whether or not the person is contributing under the compromise; and
whether or not, in the absence of a release, the person would have an indemnity claim against the company if called on.
Where a resolution proposing a compromise is put to the vote of more than one class of creditors, it shall be presumed, unless the contrary is expressly stated in the resolution, that the approval of the compromise is conditional on the approval of the compromise by every other class voting on the resolution.
The proponent shall, in such manner and within such period as may be prescribed, give written notice of the numerical results of the voting to –
each known creditor;
the company;
any receiver;
any administrator;
any liquidator; and
the Registrar.
An approved compromise becomes effective upon the giving of notice to the Registrar in accordance with subsection (6).
Part XI
Micro Small Medium Enterprise (MSME) Company Debt Restructuring Arrangements
Part XII
Part XIII
Part XIV