Lanka Bunkering Services (Pvt) Ltd (LBS) is demanding close to US$1 million from John Keells Holdings (JKH) and Lanka Marine Services (LMS) for loss and damage caused due to them due to ‘illegal, unlawful, wrongful and fraudulent acts and/or omissions’.
The letter of demand sent last week by Julius & Creasy on behalf of LBS to JKH and LMS states that the two companies contrived to prevent the Plaintiff (Lanka Bunkering) from delivering a quantity of 58,229,133 metric tons of marine fuel brought on board the 'SERIFOS' ships lying within the Port of Colombo, supposedly on the basis of a purported Common User Facility (CUF) Agreement which has now been struck down as illegal by the Supreme Court in its July 2008 judgment.
LBS is demanding a payment of US$935,873.53 together with interest at 21% from 8 August 2004 to date of payment in full. LBS says action will be filed in the District Court of Colombo in respect of the claim unless JKH and LMS respond within a period of two weeks from the date of receipt of the letter. Managing Director of LBS Mohamed Reza said on Wednesday he still has not heard from JKH but expects the company to respond within the given timeframe. He said he was confident that if the matter ends up in Court, his company has a strong case going forward.
LBS chartered a motor tanker named 'SERIFOS', in pursuance of its state-sanctioned and state-licenced bunkering operations, to transport 58,229.133 metric tons of marine fuel to Sri Lanka, purchased at a cost of approximately US$9 million. LBS explained it was their intention to transfer the marine fuel and provide bunkering services to ships lying in the port, using smaller tankers owned by another subsidiary of Sri Lanka Shipping Co. Ltd. However, 'SERIFOS' was denied a berth after arrival off the port of Colombo on or around 8 July 2004 and was also prevented from making any bunker deliveries or transfers to other vessels.
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 Common User Facility (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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