Court extends order preventing payment to Chinese Fertilizer Company

COLOMBO (News 1st); A Sri Lankan Court has extended an order preventing the payment to Qingdao Seawin Biotech Group Co., Ltd. for a Chinese Organic Fertilizer Ship to Sri Lanka.

The order was extended to the 19th of November 2021, on Friday (5).

Local authorities earlier secured the order to prevent the payment, after laboratory tests proved the presence of a pathogen, twice, in fertilizer samples.

Thereafter, the People’s Bank of Sri Lanka was blacklisted by the Economic and Commercial Office of the Chinese Embassy in Sri Lanka for failing to make the payment according to the Letter of Credit and the contracts between two parties.

However, People’s Bank said that is it bound by an enjoining order issued by the Commercial High Courts of Sri Lanka with regard to the trade transaction in question, which precludes the bank from processing the payment.

People’s Bank also said that the temporary delay in processing the said payment pertaining to the LC is solely due to the bank’s obligation to be bound by the legal directions of the country, as a responsible corporate citizen.

It added that once the legal barriers in effect are removed, the LC payment will be effected promptly a per the usual trade practices.

Organic Fertilizer samples from China’s Qingdao Seawin Biotech Group Co., Ltd. tested for the presence of harmful pathogens, not once, by twice in tests carried out by Sri Lanka’s National Plant Quarantine Service.

Sri Lanka’s 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.

Against this backdrop, Sri Lanka’s State Fertilizer Companies obtained an Enjoining Order against the Chinese company, Qingdao Seawin Biotech, its local agent, and the People’s Bank.

The order has prevented the People’s Bank from making any payment under a Letter of Credit opened in favour of the Qingdao Seawin Biotech Group Company Ltd.

On the 17th of September Sri Lanka’s Minister of Agriculture confirmed for the first time that a microorganism identified as ‘Erwinia’ was discovered in samples brought down to Sri Lanka from Qingdao Seawin Biotech Group Co., Ltd.

On September 29th, Sri Lanka’s Agriculture Minister Mahindananda Aluthgamage announced the suspension of organic fertilizer imports from China.

This was after Director-General of Agriculture Dr. Ajantha De Silva on 28th September confirmed that Harmful Bacteria was detected in a fresh sample (2nd batch) of Chinese Organic Fertilizer.

It was after these developments that the Ceylon Fertilizer Company Limited had got a court order to block payment to Qingdao Seawin Biotech over the shipment of organic fertilizer which was contaminated.