The Supreme Court said in its ruling that four of the clauses in the post-Tsunami Operational Management Structure (P-TOMS) are suspended until Sept. 12 when the case would be taken up for hearing again.
Among the four clauses termed illegal are the ones on locating the regional fund headquarters in Kilinochchi, the northern headquarters of the Tamil Tigers and the operations of the regional fund.
The former main ally of Sri Lanka's ruling coalition JVP or the People's Liberation Front filed action in the Supreme Court early this month, claiming their fundamental rights had been violated by the President Chandrika Kumaratunga's decision to enter the deal with the Liberation Tigers of Tamil Eelam (LTTE) rebels.
The court, however, has ruled that the Sri Lankan President was legally empowered to enter the deal with the Tigers and the rest of the clauses are legal.
The JVP, protesting against the post-Tsunami Operational Management Structure entered by the Sri Lanka government with the LTTE on June 24, walked out of President Chandrika Kumaratunga's government, reducing the Kumaratunga administration to a parliamentary minority.
The JVP, which may be to take the ruling as a triumph, claimed that P-TOMS impinged on the country's sovereignty and dubbed the mechanism as one which would confer legitimacy to a terrorist group.