Rescue, Rehabilitation and Insolvency (Corporate and Personal) Act 2026 · As enacted · Part IV · Debt Restructuring Arrangements
55. Eff ect of Court Confi rmation 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
A Debt Restructuring Arrangement that is approved by the court is binding on all the creditors who hold included debts and are affected by the terms of the Arrangement.
The court order confirming the coming into effect of the Debt Restructuring Arrangement shall be conclusive as to the validity of the Arrangement.
Following the court order confirming the coming into effect of the Debt Restructuring Arrangement, the
Arrangement remains in effect according to its terms until —
it is completed in accordance with such terms and section 60; or
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it is terminated under section 59.
While a Debt Restructuring Arrangement is in effect, a creditor to whom the debtor owes an included debt-
shall not take any actions to recover or enforce the debt; and
in particular, shall not take any actions to-
contact a debtor regarding payment of an included debt, otherwise than at the request of the debtor or the personal insolvency administrator, or in accordance with the terms of the Arrangement;
initiate or continue any legal proceedings against the debtor in relation to an included debt;
collect, secure, recover or demand payment of an included debt;
execute or enforce a judgment or an order of a court or tribunal, subject to subsection (8)
against the debtor;
obtain a warrant;
recover goods in the possession of the debtor otherwise than in accordance with the terms of the Arrangement;
obtain possession of a premises in which the debtor is residing under a tenancy agreement into which the debtor has entered with the relevant creditor, unless the requirements of subsection (6) are met;
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unless where the terms of the Arrangement provide otherwise, take any of the actions in this subsection against another person who is jointly liable with the debtor to whom the
Debt Restructuring Arrangement relates;
unless where the terms of the Arrangement provide otherwise, take any of the actions in this subsection against another person who has guaranteed the debts of the debtor to whom the Debt Restructuring Arrangement relates;
instruct an agent to take any of the actions mentioned in paragraphs (i), (ii), (iii), (iv), (v), (vi), (vii), (viii) or (ix).
While a Debt Restructuring Arrangement is in effect, a court may exceptionally give permission for a creditor to take a step listed in subsection (4), where the court considers that-
exceptional circumstances mean that it is reasonable to allow the creditor to take the step;
and
the step will not-
cause undue detriment to the debtor to whom the Arrangement relates;
unfairly prejudice any other creditor; or
significantly undermine the objectives of the
Arrangement.
While a Debt Restructuring Arrangement is in effect in respect of a debtor, a court may exceptionally give permission for an owner of a premises in which the debtor is residing under a tenancy agreement to obtain possession of the premises, only if-Rescue, Rehabilitation and Insolvency
the duration of the tenancy contract has expired during the course of the Debt Restructuring
Arrangement;
the debtor owes arrears of rent to relevant creditor of an amount of more than three months of rent;
and the court considers that it is more likely than not that the debtor will be unable to maintain ongoing rent payments over the course of the
Arrangement; or
an application of an owner to obtain possession of the premises is based on grounds other than the debtor’s non-payment of rent.
Nothing in this section shall affect a creditor’s entitlement to the benefit of any execution or other legal process or distress against a debtor or property of the debtor, where the execution or other legal process or distress was completed at least one hundred and eighty days before the court order confirming the coming into effect of the Debt
Restructuring Arrangement, where-
an execution against movable or immovable property is completed by seizure, by the entry into possession of a receiver, appointee or a person charged with execution, and a sale completed;
and
an attachment of a debt is completed by satisfaction of the debt.
While the Debt Restructuring Arrangement is in effect, a supplier of any essential goods or services shall not –
refuse to supply goods or services to a debtor, by reason of the debtor’s default in paying charges due for goods or services in relation to a period before the coming into effect of the
Arrangement;
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make it a condition of the supply of goods or services to a debtor, that payment be made of outstanding charges due for goods or services in relation to a period before the coming into effect of the Arrangement; or
rely on an insolvency-related term of the agreement for the supply of goods or services, except with the prior, written consent of the personal insolvency administrator.
The personal insolvency administrator may give consent under paragraph (c) of subsection (8), where it is satisfied that the reliance on the insolvency-related term is necessary to put the Debt Restructuring Arrangement into effect and to serve the objectives of the Debt Restructuring
Arrangement as specified in section 44.
The personal insolvency administrator is not liable in damages for declining to give consent under paragraph (c)
of subsection (8).
A Debt Restructuring Arrangement does not prevent the commencement or continuation of any criminal proceedings against a debtor.
Any action taken contrary to this section shall be null and void.
Where a person has acquired an interest in property or any other right under a transaction with a creditor, which right arose from an action taken by a creditor or creditor’s agent which was contrary to this section, the nullity of that action shall not prejudice the rights of that person, where that person dealt with the creditor in good faith and for value.
Where a Debt Restructuring Arrangement does not include terms modifying or limiting the rights of a secured creditor, nothing in this section shall affect the right of a secured creditor to enforce its security.
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Where a Debt Restructuring Arrangement includes terms modifying or limiting the rights of a secured creditor, in a manner specified in section 48 or otherwise, a secured creditor may only enforce its security in accordance with the terms of the Arrangement.
Where a Debt Restructuring Arrangement does not include terms modifying or limiting the rights of a creditor under a hire purchase agreement, nothing in this section shall affect the rights of a creditor under a hire purchase agreement, to enforce its property rights under such agreement.
Where the Arrangement 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, a lessor or owner may only enforce its property rights under such agreement in accordance with the terms of the Arrangement.
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