How the BASL Five-Member Committee Legalised the Criminality of Its Chairperson
A Crisis of Trust in Sri Lanka's Legal Profession
The Bar Association of Sri Lanka (BASL), the premier professional body representing the nation's lawyers, found itself embroiled in one of the most damaging controversies in its history in 2024. At the centre of the storm stood BASL President Kaushalya Nawaratne PC, accused of misappropriating funds from the Japan International Cooperation Agency (JICA) meant for an anti-corruption initiative. The appointment of a five-member committee of eminent President's Counsel to investigate the matter was expected to restore confidence. Instead, it has raised even more troubling questions about whether the committee effectively "legalised" criminality by treating serious financial irregularities as mere administrative lapses.
The Allegations: What Happened to the JICA Funds?
JICA reportedly allocated Rs. 21 million to BASL for a project titled "Data Collection Survey to Promote Transparent and Competitive Business Climate in Sri Lanka – Anti-Corruption Component" . The allegations were stark: five BASL members, including President Nawaratne and Deputy President Nalinda Indatissa PC, allegedly pocketed Rs. 19 million of this sum . The most concerning aspect was that Nawaratne allegedly signed an agreement with JICA purportedly on behalf of BASL but without the organisation's knowledge or approval from the Executive Committee or Bar Council .
When the matter came to light in May 2024, a group of ten President's Counsel and over 80 attorneys-at-law demanded a thorough investigation . The Bar Council responded by appointing a five-member committee of inquiry.
The Committee and Its Findings
The five-member committee comprised Faisz Musthapha PC (Chairman), Dr. K. Kanag-Isvaran PC, Ikram Mohamed PC, Rienzie Arseculeratne PC, and Geoffrey Alagaratnam PC . After eight sittings starting 29 May 2024, they produced a 48-page report .
The committee's findings were damning in their description but remarkably lenient in their conclusions:
Lack of Transparency: The committee found that the contractual process and selection of resource persons for payment "lacked transparency" and were "handled almost entirely by Kaushalya Nawaratne" .
Breach of Trust: Nawaratne was found to have "failed to act with transparency in relation to the contract" and had thus "violated the trust reposed in him as the President of the BASL" .
Failure of Oversight: Deputy President Nalinda Indatissa PC "failed to exercise any meaningful oversight expected of the Deputy President" .
Retrospective Repayment: Nawaratne had repaid Rs. 6 million via a personal cheque on 29 April, while Indatissa refused to accept a cheque for Rs. 3 million on 4 April .
Where the Committee Failed: Legalising Criminality
The fundamental criticism of the committee's approach is that it treated what amounts to potential criminal conduct as a matter of professional impropriety. Several critical questions remain unanswered:
1. Was This Criminal Misappropriation Under Sri Lankan Law?
Section 386 of the Sri Lankan Penal Code defines criminal misappropriation as occurring when a person "dishonestly misappropriates or converts to his own use any movable property" . The key ingredients are a mental element of dishonesty and an act of misappropriation .
Similarly, Section 388 defines criminal breach of trust as occurring when a person "being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property" . The Supreme Court has consistently held that an attorney who misappropriates client funds is guilty of criminal breach of trust .
The JICA funds were entrusted to BASL for a specific purpose: conducting an anti-corruption survey and workshops. When Nawaratne allegedly pocketed Rs. 19 million of the Rs. 21 million, this appears to fall squarely within the definition of criminal breach of trust. He was entrusted with the property (the funds) as BASL President and had dominion over it . The alleged misappropriation was dishonest because it involved using funds for purposes other than those for which they were granted .
Yet the committee made no finding of misappropriation, merely of "lack of transparency." As Nawaratne himself noted in his resignation letter, the committee "totally cleared me of any misappropriation" and "totally cleared me of making any wrongful appointments of research assistants" . The only "wrongdoing" identified was failing to disclose the contract to the Bar Council promptly .
2. Why Was This Not Referred to Police?
If the committee had found evidence of misappropriation, Sri Lankan law would have required reporting to police. The Supreme Court has established that "criminal breach of trust by a lawyer in the discharge of his professional duty must inevitably call for a custodial sentence of a deterrent nature" . Such offences are not merely professional misconduct; they are crimes.
The committee's decision not to refer the matter to police, despite evidence that substantial sums were handled without transparency and that the President himself was the primary beneficiary, effectively shielded Nawaratne and others from criminal liability. By treating the matter as an internal disciplinary issue, the committee "legalised" what may have been criminal conduct.
3. Did Professional Misconduct Standards Require Stricter Action?
Even if one accepts the committee's finding that no criminal offence occurred, the professional standards for attorneys in Sri Lanka are exacting. The Supreme Court has held that "deceitful conduct involving a breach of confidence which is grave in character" makes an attorney amenable to disciplinary jurisdiction .
The Judicature Act provides for removal or suspension where an attorney has been guilty of "deceit, malpractice, crime or offence" . The Supreme Court has struck off attorneys for misappropriating client funds even without criminal conviction . The committee's recommendation that Nawaratne resign was the minimum possible action, far short of reporting him to the Supreme Court for professional misconduct proceedings.
Civil Society Demands for Criminal Investigation
Civil activists and members of the legal profession have demanded that the five committee members themselves face investigation for covering up a crime. Under Sri Lankan law, any person who, knowing that an offence has been committed, intentionally omits to give information to the authorities may be liable for abetment or for being an accessory after the fact.
The legal basis for these demands rests on several grounds:
Duty to Report: The committee members, as President's Counsel, are officers of the court with a duty to uphold the law. If they had reasonable grounds to believe criminal conduct occurred, failing to report it constitutes a breach of that duty.
Professional Misconduct: By treating potential criminal conduct as mere administrative irregularity, the committee members may have engaged in professional misconduct themselves, as they failed to maintain the standards of integrity expected of President's Counsel.
Public Interest: The JICA funds were public money meant for anti-corruption work. The alleged misappropriation is therefore a matter of significant public interest requiring criminal investigation.
A Profound Failure of Professional Accountability
The five-member committee's handling of the BASL-JICA scandal represents a profound failure of professional accountability. By treating what may have been criminal misappropriation as a matter of administrative oversight, the committee effectively "legalised" the alleged criminality of its chairperson, Kaushalya Nawaratne PC.
The committee's findings—that Nawaratne lacked transparency, violated trust, and handled the entire process himself—were sufficiently serious to warrant referral to police. Instead, the committee merely recommended his resignation . Nawaratne eventually resigned on 14 September 2024, claiming he was the victim of a "pre-organised, sponsored, malicious campaign" .
The deeper question is whether a profession can police itself when its most senior members are implicated in serious wrongdoing. The BASL, which exists to promote justice and integrity in the legal system, appears to have fallen short of its own ideals. Civil society's demands for investigation of both the alleged misappropriation and the committee's cover-up reflect a legitimate concern that the legal profession has protected its own at the expense of justice and public trust.
The full truth about the JICA funds—what happened to Rs. 19 million, why it was not reported to the police, and why five Presidents' Counsel failed to uphold their professional obligations—remains an unfinished story that demands independent investigation. The committee, led by Faisz Musthapha PC and including Dr. K. Kanag-Isvaran PC, Ikram Mohamed PC, Rienzie Arseculeratne PC, and Geoffrey Alagaratnam PC must be investigated by the Bribery and Corruption Commission for covering up the criminality of the lawyer