News
High Court stops payments for harmful Chinese fertiliser; shipment to be turned away
The State-owned Ceylon Fertiliser Company (CFC) has obtained an enjoining order from the Commercial High Court against Qingdao Biotech Group Co. Ltd., its local agent and the People’s Bank, preventing the bank from making any payment under a Letter of Credit (LC) opened in favour of the Chinese company.
The company had entered into a contract with the CFC for the supply of organic fertiliser. Commercial High Court Judge K. Priyantha Fernando’s enjoining order also restrained the Chinese company and its local agent Chelina Capital Corporation Pvt. Lid from receiving any payment under the LC.
The Attorney General’s Department informed court that even though the Chinese company was required to ship sterile organic fertiliser under the contract, it had admitted in its shipping advice that the consignment may contain microorganisms. The National Plant Quarantine Service (NPQS) had tested the sample sent and had confirmed the presence of organisms, including certain types of harmful bacteria.
The consignment is a partial shipment that was procured through a tender process initiated by the State Ministry of Agriculture. It is worth more than a billion rupees.
Additional Solicitor General Susantha Balapatabendi, PC, appeared with Deputy Solicitor General Nirmalan Wigneswaran, State Counsel Sehan Soyza and Dr. Charuka Ekanayake for the Ceylon Fertiliser Company.
Agriculture Minister Mahindananda Aluthgamage said the court order had been obtained to prevent the People’s Bank from releasing funds in terms of the LC as according to the agreement, Qingdao had requested 75 percent of payment to be made.
Meanwhile, the NPQS has informed the Colombo Port Harbour Master that the Chinese company’s fertiliser shipment, which is believed to be on its way to Sri Lanka, does not meet the country’s specifications.
Harbour Master K.M.N.P. Silva told the Sunday Times yesterday that since the NPQS had confirmed that it had not cleared the fertiliser stocks, there was no need for him to issue a separate order barring the fertiliser vessel from docking and unloading its cargo at the Colombo Port.
Minister Aluthgamage said the company’s fertiliser shipment did not meet the specifications mentioned in the tender as confirmed by the NPQS. “They must have the necessary documents and reports. We will only accept fertiliser stocks that meet the tender specifications,” he said.
On October 14, the vessel carrying the fertiliser stock was sailing along the Strait of Malacca in the direction of Sri Lanka, the Harbour Master said.