Fertiliser dispute: Colombo court extends ban on payment to Chinese company

Tensions between Sri Lanka and China over a shipment of rejected fertiliser continued to simmer as the Commercial High Court on Friday extended an interim order preventing the payment to China’s Qingdao Seawin Biotech Group Co. Ltd

Nov 20, 2021
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Tensions between Sri Lanka and China over a shipment of rejected fertiliser continued to simmer as the Commercial High Court on Friday extended an interim order preventing the payment to China’s Qingdao Seawin Biotech Group Co. Ltd. for allegedly supplying contaminated fertiliser. The High Court extended the order preventing the People’s Bank from making the payment against the Letters of Credit for the stock of organic fertiliser by Qingdao Seawin Biotech Group Co. Ltd, newsfirst.lk said. The order has been extended to the 30th of November.

A local representative of the Chinese company had filed a written objection in the Colombo Commercial High Court on Friday regarding this case.

China has already blacklisted the People’s Bank over the dispute with Sri Lanka and has also advised Chinese companies not to do business with the bank.

The ban on payment follows a dispute over contaminated fertiliser which Sri Lanka refused to accept from the Chinese company.

The Sri Lankan government has refused to pay for the fertiliser until a fresh stock is shipped to the country.

The Economic and Commercial Office of the Chinese Embassy in Colombo later said it has backlisted the People’s Bank of Sri Lanka for defaulting on payments according to the Letter of Credit (L/C) and the contracts between the two parties.

China accused the People’s Bank of Sri Lanka of causing huge losses to Chinese enterprises in international trade with Sri Lanka.

“The Office solemnly reminds all Chinese enterprises to strengthen risk control and avoid accepting L/C issued by People’s Bank of Sri Lanka in international trade with Sri Lanka,” the Chinese Embassy said. The decision has also been submitted to the Ministry of Commerce of China.

Organic Fertilizer samples from China’s Qingdao Seawin Biotech Group Co., Ltd. tested for the presence of harmful pathogens, not once, but twice in tests carried out by Sri Lanka’s National Plant Quarantine Service. The agriculture ministry not only rejected the Chinese Fertilizer but also went to the extent of issuing an order to deny entry to the ship carrying the consignment from entering Sri Lankan ports.

However, the Hippo Spirit ship carrying 20,000 metric tons of the rejected Chinese organic fertiliser remains near Sri Lankan waters.

Meanwhile, the agriculture ministry has decided to provide all fertilisers required for paddy cultivation to farmers in every district from November 25. Accordingly,  Agriculture Minister Mahindananda Aluthgamage has asked ministry officials to formulate a formal program to distribute organic fertiliser, bio liquid fertiliser and nano nitrogen fertiliser to the farmers through the Agrarian Service Centers.

Meanwhile, taking advantage of the dispute with China, India has smartly stepped in and another 100,000 liters of nano nitrogen fertiliser will be airlifted from India to Sri Lanka next week, according to the ministry. 

(SAM)