Qingdao protest rejected samples in Singapore

COLOMBO (News 1st); The Hippo Spirit Vessel was the most recently discussed topic involving ties between Sri Lanka and China.

The Hippo Spirit ship carrying Chinese organic fertilizer that was rejected by Sri Lanka reached Singapore on Friday (10) morning.

The Deputy General Manager of China's Qingdao Seawin Biotech Group Co., Ltd, Anna Song said fertilizer samples from the Hippo Spirit were directed to the laboratory of SGS Switzerland in Singapore.

The Hippo Spirit carrying the rejected Chinese fertilizer left Sri Lankan waters on the 4th of December, after more than 70 days of moving around the country.

The purpose of the Hippo Spirit heading to Singapore was to test samples and to go for arbitration.

China's Qingdao Seawin Biotech Group Co., Ltd has demanded 8 million US dollars in compensation from Sri Lanka including production and shipping costs.

They have argued that Sri Lanka had violated the deal to purchase organic fertilizer.

The compensation has been sought from Colombo Commercial Fertilizers Ltd. through the Arbitration Centre in Singapore.

Why did the Chinese ship go to Singapore for arbitration?

Agriculture minister Mahindananda Aluthgamage said this was because of an error in the agreement.

Who is at fault?

The agriculture minister said he had instructed the ministry secretary to insert a clause in the agreement stating that any arbitration would take place in Sri Lanka, however, that instruction had not been followed.

Out of the two agreements signed to purchase fertilizer, the agreement signed with Colombo Commercial Fertilizers Ltd says that any arbitration must be settled in Singapore.

China's Qingdao Seawin Biotech Group Co., Ltd says that Sri Lanka must pay arbitration costs and also pay interest on the 8 million US dollar compensation.

The ministers and officials who are at fault will have to settle the compensation using the funds of the people.

The agriculture minister and the attorney general had earlier agreed to increase the deposit made to the Chinese company from $ 5 million to US $ 8 million, and to pay 75 percent of the amount mentioned in the Letter of Credit issued by the People's Bank.

But the situation now is different.

China's Qingdao Seawin Biotech Group Co., Ltd., that sent the fertilizer has continued to issue warnings over the conduct of Sri Lanka and its banks.

In a statement issued on Thursday (09), the company said Sri Lanka could be abandoned by the international community and blacklisted by international traders.

The Chinese company told News1st it has complained to the UN's Food and Agriculture Organization and the International Plant Protection Convention seeking their intervention into this problem.

Incidentally, Sri Lanka had to to pay millions of rupees in compensation for violating the Oil Hedging Deal in 2009.

Ultimately, it is the innocent people who will have to bear the brunt of these losses..