Written by Zulfick Farzan
14 Dec, 2021 | 4:50 pm
COLOMBO (News 1st); Sri Lanka’s Agriculture Ministry said that the country’s Attorney General had advised solving the Chinese fertilizer issue by entering into commercial terms that can be agreed by both parties.
It said that a commercial issue had arisen when enacting the agreement that was reached by Colombo Commercial Fertilizers Ltd & Ceylon Fertilizer Company Ltd with China’s Qingdao Seawin Biotech Group Co., Ltd.
A statement noted that based on the Attorney General’s advice, the Justice Ministry and the Agriculture Ministry presented two Cabinet Papers at Monday’s (13) cabinet meeting, and the Cabinet had empowered the respective authorities to act on the advice of the Attorney General.
It added that China’s Qingdao Seawin Biotech Group Co., Ltd. had consented to the return of the consignment of organic fertilizer, subject to the conditions in the agreement and as per the LOC, whiles retaining the already agreed upon bond as security.
China’s Qingdao Seawin Biotech Group Co., Ltd has sought compensation of 8 million US dollars over its organic fertilizer deal with Sri Lanka.
The compensation has been sought from Colombo Commercial Fertilizers Ltd. through an arbitration center in Singapore.
The Chinese company says that Sri Lanka violated the agreement with regard to the purchasing of the Chinese Organic Fertilizer.
The Bulk Carrier – Hippo Spirit:
The Hippo Spirit is carrying tonnes of rejected Chinese Fertilizer from Qingdao Seawin Biotech Group Co., Ltd to Sri Lanka.
Earlier, it was reported that the Hippo Spirit, the ship carrying Chinese Organic Fertilizer, did not return to China after the first samples were rejected by Sri Lanka.
Instead, the Hippo Spirit had sailed to Singapore and altered its course back to Sri Lanka, without returning to China.
On the 22nd of September, the Hippo Spirit ship carrying 20,000 metric tonnes of organic fertilizer left for Colombo from China’s Qingdao Port.
But the ship was diverted to Singapore after harmful bacteria was detected in the samples of this fertilizer shipment.
The Hippo Spirit ship that didn’t return to China had left Singapore declaring it would be heading to the Colombo Port.
Data available online showed the Hippo Spirit ship in Hambantota on the 24th of October 2021 under the name Seiyo Explorer.
The Hippo Spirit and the Seiyo Explorer both share the same IMO number, and therefore it can be confirmed the Hippo Spirit is the Seioy Explorer.
The IMO Ship Identification Number is a unique seven-digit number that remains unchanged through a vessel’s lifetime and is linked to its hull, regardless of any changes of names, flags, or owners.
After almost two months of sailing in Sri Lankan waters, the Hippo Spirit set sail for Singapore in early December.
On the 17th of September Sri Lanka’s Minister of Agriculture confirmed that a microorganism identified as ‘Erwinia’ was discovered in samples brought down ‘unofficially’ to Sri Lanka and tested.
The supplier was the same, 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.
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.
The Colombo Commerical High Court had issued the order on October 22nd, against the Qingdao Seawin Biotech, its local agent, and the People’s Bank.
Blacklisting People’s Bank :
The People’s Bank of Sri Lanka was then 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 the 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.
Letter of Demand:
On the 7th of November Qingdao Seawin Biotech Group Co., Ltd., the Chinese Organic Fertilizer Manufacturer sent a Letter of Demand to the National Plant Quarantine Service.
The Letter of Demand seen Exclusively by News 1st notes that Qingdao Seawin Biotech Group Co., Ltd., has suffered significant loss and damage in a sum of US$ 8 Million and continues to suffer further loss and damage due to loss of reputation and goodwill as well as existing and potential business, due to the negligent conduct of the National Plant Quarantine Service.
The LOD noted that the NPQS make a payment of US$ 8 Million within 3 days from the date hereof for the loss and damage caused to Qingdao Seawin Biotech Group Co., Ltd.
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