The Colombo High Commercial Court dissolved the order restraining the payment of the letter of credit to the Chinese company that shipped a disputed batch of organic fertilizers to Sri Lanka because all parties had agreed to a settlement.
The court was due to make its decision on whether to extend or revoke the interim order when the petition filed by Colombo Commercial Fertilizers Ltd. was examined before the judge of the High Commercial Court Pradeep Hettiarachchi.
The Ceylon Fertilizer Company (CFC) had previously obtained two injunctions from the Colombo High Commercial Court against Seawin Biotech, its local agent and the State People’s Bank, preventing payment of the letter of credit.
The first court ruling against the Chinese company in question was obtained on October 23, preventing the People’s Bank from making any payments under an open letter of credit in favor of the Chinese company.
In previous proceedings, Additional General Counsel Susantha Balapatabendi, who appeared on behalf of the CFC, told the court that Chinese company Qingdao Seawin Biotech Group Co., Ltd. billion rupees which were purchased through a tender process launched by the Ministry of Agriculture.
Although the said Chinese company was required to ship sterile organic fertilizers under the tender contract, it admitted in its shipping notice that the shipment could contain microorganisms, he said. further declared in court.
The National Plant Quarantine Services (NPQS), which tested the sample sent to them, had confirmed the presence of organisms, including certain types of harmful bacteria, the additional attorney general said, adding that, in this context, the Chinese firm in question had not fulfilled the accepted conditions of the offer.
Under the terms of the contracts, payment for the controversial shipment of organic fertilizers was to be made by means of a letter of credit issued through the People’s Bank.
however, on December 14, the Sri Lankan government announced that it had decided to pay the Chinese fertilizer company $ 6.7 million, on the advice of the prosecution.
According to Agriculture Minister Mahindananda Aluthgamage, the payment includes the $ 5 million cash deposit placed by the company.
The minister added that the China-based Qingdao Seawin Biotech Group has been asked to re-manufacture the fertilizer to meet the required standards.