Legal market overview in Sri Lanka

The broader Sri Lankan economy has had a difficult year, with the country’s notable tourism sector halted by the Covid-19 pandemic, and lockdowns having negative effects. This decline in foreign income, and therefore the Central Bank of Sri Lanka’s foreign currency reserves, caused difficulties, with at one point reserves dropping to covering less than two months of imports, triggering a state of emergency and shortages of imported items and bans on the import of goods including cars, cooking oil and spices; a proposed government policy of making all farming in the country organic (including a ban on the import of chemical fertilizers) was a casualty of this turbulence and concerns about the effect of that on the production of . After the resignation of W. D. Lakshman, Ajith Nivard Cabraal returned as governor of the central bank.The government is increasingly focusing on the renewable energy sector and there has been a lot of activity in the pharmaceuticals. Businesses are having to adapt to the pandemic and embrace technology. Firms are concentrating even more so on their online presence. The country is now entering into an era of digital transformation and the government is looking at several initiatives in the fintech sector. As a result of these difficulties distressed financing is now coming to the fore. Lenders are having to enter into new arrangements with local borrowers to deal with the deferral of repayments, with debt recovery work not helped by a court system that is relatively slow and mostly dealing with time-critical cases.Numerous domestic firms continue to enjoy a good working relationship with several key international law firms. There are a number of excellent local firms such as Nithya Partners, Julius & Creasy,  D. L. & F. De Saram  and F. J. & G. De Saram that are well-equipped to handle a wide range of complex work. For IP work  LegalBase and Sudath Perera Associates continue to excel. There are a number of other first-rate local firms such as Neelakandan & Neelakandan (formerly Murugesu & Neelakandan), Tiruchelvam AssociatesJohn Wilson Partners and Varners.