Lanka Bunkering Services (Pvt) Ltd (LBS) has filed action in the District Court of Colombo in December 2008 demanding close to US$1 million from John Keells Holdings (JKH) and Lanka Marine Services (LMS) for loss and damage caused by the illegal, unlawful, wrongful and fraudulent acts and/or omissions and more particularly, by contriving to prevent LBS from delivering 59,229.133 metric tons to ships lying within the Port of Colombo on the basis of the Common User Facility (CUF) Agreement. The action filed by LBS came as a result of the July 2008 Supreme Court judgment which found the privatization of LMS and the CUF Agreement to be illegal.
According to papers filed in Court, LBS is asking specifically for a sum of US$935,873.53 with interest at 21% from 8 August 2004 on the sum to date of decree and legal interest on the decretal sum until the date of payment in full.
The Sunday Times FT reported in December 2008 that LBS had sent a letter of demand to JKH and LMS in November 2008, seeking the above sum after the company was prevented from delivering the marine fuel on board the 'SERIFOS' to ships in the Port of Colombo. It also quoted LBS Managing Director Mohamed Reza as saying that he would give JKH and LMS a period of two weeks to respond to the letter of demand before seeking relief in Court.
LBS is alleging that LMS and/or JKH had contrived to prevent them from delivering marine fuel to ships lying within the port of Colombo by compelling the Sri Lanka Ports Authority (SLPA) to invoke the terms of a CUF Agreement entered into between the government, the Ceylon Petroleum Corporation (CPC), the SLPA and LMS, at the behest of LMS and JKH wherein the SLPA had agreed to compel all organizations engaged in bunkering operations to use the CUF and to deliver the said marine fuels to ships within the port of Colombo.
Moreover, a substantial number of marine fuel deliveries had been made in the Colombo port subsequent to the CUF agreement being entered into, and neither the SLPA, nor any other state institution, had prevented or sought to prevent the deliveries.
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