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Sri Lanka's Compensation for X-Press Pearl Disaster Rises to $8M

X-Press Pearl burned out off Colombo
Sri Lankan Navy file image

Published Oct 1, 2023 11:49 PM by The Maritime Executive

Sri Lanka has confirmed receiving further compensation for pollution from the lost container ship X-Press Pearl, which burned and sunk off Colombo in 2021. Speaking to local media over the weekend, Sri Lankan Minister of Justice Wijeyadasa Rajapakshe said the interim payment made by the vessel’s insurers would help to cover beach cleanup activities and compensate fishermen affected by the disaster.

“Sri Lanka Treasury has received $890,000 and 16 million Sri Lankan rupees (around $49,200 dollars) as interim payment for costs incurred by the Maritime Environment Protection Authority (MEPA) and for the affected fisherfolks,” the Minister said.

Since the disaster happened, Sri Lanka has received payments totaling $7.85 million. Its government received the first payment of $3.6 million in July 2021. Another $1.75 million followed in January 2022, and a third payment of $2.5 million arrived in September.

Sri Lanka initially filed for a compensation claim of $40 million shortly after the vessel sank off Colombo in June 2021. However, a 40-member expert committee convened by MEPA put the price of the environmental disaster at $6.4 billion in an interim report early this year.

On April 25, Sri Lanka announced that it had formally filed legal action before Singapore’s International Commercial Courts (SICC) to claim compensation for the massive environmental damage. At the time of the disaster, X-Press Pearl was registered in Singapore and operated by the container line X-Press Feeders.

The choice of filing suit in Singapore was controversial, as a Singaporean court could limit the total liability of the shipowner to the value of the vessel, about $14 million. If the suit had been filed in Sri Lankan courts, national environmental-protection laws would have applied, and the potential damage claim could have been higher.

In July, a nine-member Sri Lankan delegation led by the Attorney General held meetings in Singapore with lawyers representing X-Press Pearl’s owners and insurers. The discussions centered on compensation claims and expedient removal of the fore section of the vessel’s wreck, which is still submerged offshore Sri Lanka.

X-Press Pearl was carrying 1,486 containers when it caught fire, with eighty-one of those containers labeled hazardous. Some of the cargo included nitric acid, which is blamed as a possible factor for the fire. Over 50 billion plastic pellets that were also onboard leaked, contributing to what has come to be known as the worst marine plastic pollution event in the world.