Sri Lanka Orders $1B in Compensation for Damages from Loss of X-Press Pearl
The Supreme Court of Sri Lanka issued a sweeping condemnation of the events surrounding the fire aboard the containership X-Press Pearl in May 2021 and the resulting environmental damage. The court ordered $1 billion in compensation to be paid by the shipping companies and their agents, while also ordering investigations into the government’s handling of the casualty.
The case was initiated by the fishing community, which filed petitions citing the extensive environmental damage and loss of their livelihood. After reviewing extensive reports, the court agreed, calling the casualty “the worst marine chemical catastrophe in recorded history in the Indian Ocean.” They cite the release of 25 tons of nitric acid, 70 billion plastic nurdles, and other hazardous chemicals from the loss of the vessel, which was carrying 1,500 containers. It also cites the numerous dead turtles, dolphins, and whales that washed ashore.
In a 361-page judgment released today, July 24, the court finds the shipping companies and their agents “conceded” the casualty resulted in significant environmental harm. However, it says the non-state respondents in the case “did not present their own qualification of the loss caused in financial terms.”
The five-member court set the loss at $1 billion and is giving the owner, charterer, and agent one year to pay the compensation. The first installment of $250 million is due by September 23. They have six months to make the second installment of $500 million, and the final payment of $250 million is due within one year of the ruling. All the money will be deposited in court-administered funds for compensation to the fishing community and environmental remediation.
A key part of the court’s ruling was based on its finding that in an attempt to gain entry to the port of Colombo, the master of the X-Press Pearl, the vessel’s operator, and its agents “intentionally suppressed and withheld from the Harbor Master of the Colombo Port, truthful, timely, comprehensive, and accurate information regarding the situation that evolved over a period of time.” The court confirmed the reports in the media that a container transporting nitric acid was leaking after the ship departed Jebel Ali, but the X-Press Pearl was refused entry into the ports of Hamad and Hazira before arriving in Colombo. Further, the court ruled that the shipping companies “violated international law” by failing to notify Sri Lanka about the extent of the problem aboard the vessel.
The court, however, was equally critical of former government officials. According to the reports, it found the Attorney General’s Department “acted arbitrarily, irrationally, and unliterally by failing to take criminal action under environmental law.” Sri Lanka has pursued criminal charges against the master, chief engineer, and chief officer, but the Attorney General’s Department chose to pursue civil litigation in a Singaporean court against the vessel’s owner and charterer, which the court termed “unjust, irrational, and arbitrary.”
The Attorney General’s Department issued orders to initiate, within three months, a formal investigation into the handling of the disaster and report back to the court. This is to be led by the Criminal Investigation Department, and they are instructed to also look for indications of bribery or other wrongdoing. It is to look at all parts of the government, including the ministries and the Attorney General’s Department.
The court is establishing a Compensation Commission headed by its chief justice. The Secretary of the Ministry of Environment is instructed to form the Marine and Coastal Environmental Restoration Commission, and both commissions are instructed to appoint independent experts.
Sri Lanka’s Marine Environment Protection Authority (MEPA) previously estimated damages related to the loss of the X-Press Pearl at $6.4 billion. The legal cases are expected to continue for years.