Rescue, Rehabilitation and Insolvency (Corporate and Personal) Act 2026 · As enacted · Part XI · Micro Small Medium Enterprise (MSME) Company Debt Restructuring Arrangements
288. Challenge to MSME Company Debt Restructuring Arrangement
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 creditor who is bound by a MSME Company
Debt Restructuring Arrangement may apply to the court to object to a court order confirming the coming into effect of the Arrangement.
A creditor’s application to object to a MSME Company
Debt Restructuring Arrangement under subsection (1) shall be based on one or more of the following grounds, that :-
the company is not a MSME debtor, or the company being a MSME debtor, does not meet the eligibility criteria in section 278;
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the MSME Company Debt Restructuring
Arrangement does not comply with the mandatory provisions specified in section 279;
the making and confirmation of the MSME
Company Debt Restructuring Arrangement has not complied with the procedural requirements of this Part;
the MSME debtor has made a material false representation or omission in making its statement of financial affairs, or on supplying any accompanying information; or
the MSME Company Debt Restructuring
Arrangement causes unfair prejudice to the interests of the creditor.
A creditor’s application to court to object to a MSME
Company Debt Restructuring Arrangement shall be made within the period of twenty eight days beginning with the day on which the MSME Company Debt Restructuring
Arrangement comes into effect.
A creditor shall provide written notice to the
MSME debtor and the personal insolvency administrator, of an application to object to a MSME Company Debt
Restructuring Arrangement, including the grounds on which the application is based.
Where on an application under this section the court is satisfied as to any of the grounds specified in subsection (2), the court may do either or all of the following :-
make an order directing that the MSME Company
Debt Restructuring Arrangement shall not apply to the creditor who made the application to court, where to do so would not unfairly prejudice any other creditor;
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direct the personal insolvency administrator to seek a decision from creditors as to whether they approve a revised proposal; or
make an order cancelling the MSME Company
Debt Restructuring Arrangement in respect of any other included debt or creditor.
Where a court has made an order under subsection (5), the court may require the MSME debtor to pay any interest, fees or charges that accrued in respect of an included debt during the period in which the MSME Company Debt
Restructuring Arrangement was in effect.
Where a court has made an order under paragraph (c) of subsection (5) with the effect of cancelling the Debt
Restructuring Arrangement in respect of all included debts and all creditors, the court shall also make an order establishing a temporary Moratorium on creditor remedies, which shall endure for a period of twenty one days. This temporary Moratorium shall have the same effect as a Debt
Protection Moratorium under section 287.
In any case where a court makes an order under subsections (5) or (6), the court shall notify the MSME debtor and the personal insolvency administrator, the
Official Receiver, and any creditors to whom the order under subsection (5) applies.
Where a court gives notice to the Official Receiver under subsection (8), the Official Receiver shall, within a period of fourteen days, and in such manner as may be prescribed –
give public notice of the court order;
send a copy of such notice to the Registrar and the Authority; and
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give written notice to any affected creditor of the court order made under subsection (5), and any requirements made under subsection (6).
Part XII
Part XIII
Part XIV