Rescue, Rehabilitation and Insolvency (Corporate and Personal) Act 2026 · As enacted · Part IV · Debt Restructuring Arrangements
52. Creditor Approval of Debt Restructuring Arrangements
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
The personal insolvency proposer shall facilitate and chair the Debt Restructuring Arrangement negotiation meeting.
Subject to the provisions of this Part and as may be prescribed, the following paragraphs of the Fifth Schedule shall apply to the following matters regarding the holding of a meeting referred to in this section: -
Rescue, Rehabilitation and Insolvency
proxies;
chairperson;
quorum;
adjourned meetings;
miscellaneous matter.
At the negotiation meeting, the creditors may —
conduct such examination of the debtor as is reasonable to clarify the debtor’s financial circumstances;
adjourn the meeting for a maximum period of seven days to allow further investigation of the debtor’s affairs, by passing a resolution of a majority of creditors in value;
accept the proposal, by passing a resolution, in accordance with subsection (3) or (4), that sets out the final terms of the Debt Restructuring
Arrangement;
with the consent of the debtor, modify or amend the proposal, by passing a resolution, in accordance with subsection (3) or (4), that sets out the final terms of the Debt Restructuring
Arrangement;
appoint the personal insolvency proposer as personal insolvency administrator of the Debt
Restructuring Arrangement, or appoint another person, firm or body who -
is willing to act as personal insolvency administrator; and
has consented in writing to the appointment and has not withdrawn the consent at the time of appointment;
Rescue, Rehabilitation and Insolvency
with the consent of the debtor, include such terms in the Debt Restructuring Arrangement with respect to the supervision of the affairs of the debtor as they may deem advisable.
A proposal is approved where the claims of those creditors voting in favour of the proposal represent a majority in value of the claims of all creditors entitled to vote.
Where the proposal includes terms modifying or limiting the rights of secured creditors, in a manner specified in section 48 or otherwise, the proposal is approved where the claims of those secured creditors voting in favour of the proposal represent more than two thirds of the value of the claims of secured creditors entitled to vote.
Where the proposal includes terms modifying or limiting the rights of lessors or owners of goods under an agreement, including a hire-purchase agreement, by means of which a debtor is using or has possession of goods, in a manner specified in section 48 or otherwise, the proposal is approved where the claims of such lessors and owners voting in favour of the proposal represent more than two thirds of the value of the claims of such creditors entitled to vote.
The relevant secured creditor may not vote on the proposal, where the proposal —
does not include terms modifying or limiting the rights of a secured creditor; or
provides for the sale or disposal of an asset subject to security for the benefit of a secured creditor :
Provided however, if the debtor has made a declaration under section 47a of the Mortgage Act (Chapter 89), such secured creditor may participate as an unsecured creditor to the extent of the unsecured portion of the debt.
Rescue, Rehabilitation and Insolvency
The relevant creditor may not vote on the proposal, where the proposal —
does not include terms modifying or limiting the rights of a creditor under a hire purchase agreement; or
provides for the sale or disposal of the asset subject to the hire purchase agreement, for the benefit of the creditor.
A creditor who, having been duly notified, does not-
attend the negotiation meeting;
cast a postal vote; or
cast an electronic mail vote, shall be deemed to have voted in favour of the proposal for a Debt Restructuring Arrangement.
Where no creditor votes, the proposed Debt
Restructuring Arrangement shall be deemed to have been approved under this section.
For the avoidance of doubt, a creditor who, having been given notice in accordance with the provisions of this
Part, does not-
submit a creditor’s claim form under section 57;
attend the negotiation meeting under this section;
or
cast a vote opposing the proposal under this section,
Rescue, Rehabilitation and Insolvency shall not be entitled to bring an application to object to a court order confirming the coming into effect of the Arrangement under section 57.
Where the creditors at a negotiation meeting do not accept the proposal -
the personal insolvency proposer shall endorse the proposal “not accepted by creditors” and return it to the Official Receiver; and
the Debt Restructuring Arrangement procedure shall terminate.
Part V
Debt Rehabilitation Orders
Part VI
Part VII
Personal Insolvency Register
Part VIII
Part IX
Part X
Compromises
Part XI
Micro Small Medium Enterprise (MSME) Company Debt Restructuring Arrangements
Part XII
Part XIII
Part XIV