The Court of Appeal of Sri Lanka has held that deductions for NAT tax under Greek law are repugnant to the content and policy of Sri Lankan law.1

The plaintiff seaman instituted an action in rem in the High Court of Colombo, claiming that during the period he worked as a seaman on board the vessel Hellenic Champion, owned by the defendant Hellenic Lines Ltd. of Piraeus, Greece, the defendants deducted a sum of 29,000 drachmas from December 1975 to April 1980 on an “illegal and unwarranted” tax called NAT, which was leviable only against Greek seamen and not against Sri Lankan seamen; and he claimed a refund. The defendants averred that the relationship between the parties was governed by Greek law as the proper law, that NAT deductions were legal deductions, and that the law authorizing such deductions applied to all seamen working on board Greek ships.

The trial judge allowed the claim for the refund of the NAT deductions on the basis:

At the hearing of the defendants’ appeal from the High Court’s decision, it was agreed that according to Greek law NAT deductions have to be made from all seamen who work on board Greek ships, irrespective of their nationality. There being no disagreement as to the amount deducted, the only question for decision was whether the Sri Lankan courts, under the Sri Lanka lex fori, would not enforce the Greek law as being expropriatory in nature as against the non-Greek plaintiff.

On this question, foreign law is a question of fact which must be specifically pleaded by the party relying upon it and proved to the court.2 The defendants called expert evidence of a Greek Attorney at Law, whose evidence stood uncontradicted and was as follows. NAT is a Governmental Institution. It may be freely translated in English as Maritime Pension Fund. Seamen, officers and crew contribute to this fund, as well as the shipowners and the Greek Government. The seamen and the shipowner contribute to the fund by percentage which nowadays is 8% of their salaries for the seamen and 11% for the shipowner. According to Greek law, NAT tax is deducted from the salary of every seaman who serves on board a Greek flag vessel, whether his nationality is Greek or otherwise.3 The purpose of the NAT fund is to pay a pension to a Greek seaman when he has a certain number of years of service or has attained a certain age, e.g., a minimum of 10 years of sea service and the age of 50 years under certain circumstances. The pension is available only to Greek seamen who are Greek citizens. Deductions on account of NAT tax from foreign seamen are never returned to them.4 It was therefore evident that, though