The Supreme Court of Sri Lanka recently made an important ruling, ordering the owner and related parties of the “X-Press Pearl” to pay US$1 billion in compensation for the environmental damage caused to the Sri Lankan marine environment in the 2021 sinking of the ship.
The Singaporean container ship was on a voyage from Jebel Ali when a container on board leaked nitric acid. After being refused berthing by Hamad Port and Hazira Port, the X-Press Pearl arrived at Colombo Port on May 19, 2021, still carrying the leaking container. On May 20, 2021, a fire broke out on the ship, which was eventually destroyed and sank off the coast of Sri Lanka on June 2, 2021.
The judgment stated: “The accident caused unprecedented damage to Sri Lanka’s marine environment, resulting in significant losses and damage to this unparalleled treasure trove of marine ecosystems – including serious damage to the marine ecological environment, flora and fauna and coral reefs.” According to court documents, the marine pollution caused by the accident included 46,960 bags of low-density and high-density polyethylene loaded in 20 containers, and at least 70 billion to 75 billion plastic particles leaked into the western coastal areas of Sri Lanka.
“This marine environmental disaster constitutes the largest recorded marine plastic spill in the world and carried its debris, especially the micro-plastics including tangible items referred to as ‘nurdles’, along the Western, Southern and Northern coastlines of the country,” the judgement said.
The court found that, in an attempt to enter the Port of Colombo, the captain, operator, and local agent of the “X-Press Pearl” “intentionally concealed and refused to provide the Harbour Master of the Port of Colombo with true, timely, comprehensive, and accurate information regarding the development of the ship’s leakage situation and the actual circumstances when the ship entered Sri Lankan territorial waters”.
While the defendants in the case include a number of Sri Lankan state agencies, compensation payments are limited to “non-state parties” known as the “X-Press Pearl Group”, primarily the vessel’s owners, charterers and agents: owner EOS Shipping Pte Ltd, bareboat charterer Killiney Shipping Pte Ltd, time charterer Sea Consortium Pte Ltd and local agent Sea Consortium Lanka (Pvt Ltd).
The court ruled that the “X-Press Pearl Group”, as the sole polluter in this case, must pay $1 billion in compensation. The first installment of $250 million must be paid before September 23, 2025, the other $500 million must be paid within six months of the judgment, and the final $250 million must be paid within one year. The compensation will be deposited into a new fund, the “X-Press Pearl Compensation and Environmental Restoration Protection Fund”, which will be managed by the Minister of Finance.
X-Press Feeders, a subsidiary of Sea Consortium, which operates the container ship, said in response to the ruling: “As the former operator of the container ship X-Press Pearl, X-Press Feeders is extremely disappointed with the judgment of the Sri Lankan Supreme Court regarding the vessel accident. We are reviewing the 361-page judgment with our legal advisors and insurers, and are communicating with other relevant stakeholders, including the International Group of P&I Clubs, to properly evaluate our next steps.”