The Supreme Court of Sri Lanka this week refused leave to proceed on the oil hedging cases on the basis of a time bar.
The cases which were filed by former PERC Chairman Nihal Sri Ameresekere in May 2009 challenged the validity of the hedging agreements signed between the Ceylon Petroleum Corporation and five banks, Standard Chartered Bank, Citibank, Deutsche Bank, Commercial Bank and People’s Bank.
In his petitions, Mr. Ameresekere had stated that the agreements amounted to wagering and were unlawful and that Standard Chartered Bank had initiated the questionable deals which resulted in a contingent commitment with continuing interest on the CPC to make payments up to US$800 million, eroding the country’s foreign exchange reserves.
The bench, comprising Supreme Court Justices G. Amaratunga, Saleem Marsoof and K. Sripavan, stated that Mr. Ameresekere should have filed his cases one month from January 27, 2009 when previous cases filed over the hedging issue were terminated. Mr. Ameresekere maintained in Court this week that he had only filed his cases in May 2009 abter getting to know that illegal remittances had been made by Standard Chartered Bank, proved by letters filed in Court from the Controller of Exchange.
He stated that regardless of specific directions given in December 2008 by the Monetary Board of the Central Bank (CB), Standard Chartered remitted a sum exceeding US$100 million between December 2008 and April 2009. Mr. Ameresekere added that Commercial Bank had also remitted US$7.7 million.
In his petitions, Mr. Ameresekere further stated that Standard Chartered Bank had induced public officers to enter in the deals by taking public officials, including former CPC Chairman Asantha De Mel, on foreign trips.
Speaking to the Business Times this week, Minister of Petroleum Industries Susil Premajayantha said that currently, there are two arbitration cases pending in London and another high court case filed by the three foreign banks. The Attorney General’s Department is assisting the CPC legal division in defending these cases. Furthermore, Mr. Premajayantha said lawyers from the UK have also been retained to provide advice. |
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