By Sam Samarakoon –

Sam Samarakoon

The X-Press Pearl incident has caused significant environmental damage and economic losses in Sri Lanka, with an estimated $6.4 billion in damages. As Sri Lanka considers its options for filing a compensation claim, the question arises as to which jurisdiction is the most suitable to file an action. Let’s explore the implications of filing the claims in Singapore and Sri Lanka.

The Sri Lanka cabinet has decided to file an action in Singapore to claim damages from the ship’s owners and operators. The decision was based on the advice of the Attorney General’s Department, which is now highly contrastive. 

Filing an action in Singapore

The X-Press Pearl vessel is registered in Singapore, which means that Singapore has jurisdiction over the vessel. Singapore is also an internationally recognised maritime hub with an advanced judicial system that can handle complex maritime matters. This makes it a suitable location for Sri Lanka to claim damages. Singapore has a reputation for being a fair and neutral jurisdiction with an independent judiciary that can deliver impartial judgments. Therefore, it would be an ideal location for Sri Lanka to seek compensation for the severe environmental damage and economic losses caused by the X-Press Pearl incident.

However, there is a potential issue with the damages amount. The $6.4 billion claim may exceed the limits of liability under the 1976 Convention on Limitation of Liability for Maritime Claims (LLMC). The LLMC sets a maximum limit of liability based on the size of the vessel, and in this case, the X-Press Pearl vessel’s limit of liability is around $14 million. This may not be enough to cover the damages claimed by Sri Lanka.

Conversely, if one chooses to litigate in Singapore instead of Sri Lanka, the cost of the litigation may increase due to various factors. Firstly, hiring Singapore lawyers can be more expensive than hiring Sri Lankan lawyers. Additionally, the cost of taking all the witnesses to Singapore for the trial can add to the overall cost of the litigation. These factors can escalate the cost of litigation in Singapore compared to litigating in Sri Lanka.

Sri Lanka may argue that it has more jurisdiction over the incident as it occurred within its territorial waters and affected the marine resources and the livelihoods of its people.

Filing Action in Sri Lanka

The X-Press Pearl incident occurred within Sri Lanka’s jurisdiction, and the damages affected its marine resources and livelihoods. Therefore, Sri Lanka has more jurisdiction over the case than Singapore or the UK. Sri Lanka has more evidence and witnesses to prove its damages and losses in its own courts than in foreign courts. Furthermore, Sri Lanka has more legal provisions and precedents to claim compensation for environmental damages under its own laws than under international laws.

Sri Lanka has a comprehensive legal framework to prevent and control marine pollution and to hold polluters liable for the environmental damage they cause. The Marine Pollution Prevention Act No. 35 of 2008 is the main legislation that implements Sri Lanka’s obligations under various international conventions on marine pollution. The Act makes polluters strictly liable for the costs of clean-up and compensation for environmental damage and also imposes civil and criminal penalties for pollution offences. The Act gives the Director General of Merchant Shipping the authority to take preventive and remedial measures in case of pollution incidents and to cooperate with other states and organisations in addressing marine pollution. The Act applies to all ships, whether Sri Lankan or foreign-flagged, that operate in Sri Lankan waters or cause pollution to Sri Lanka’s marine environment. Therefore, the Act is a key legal instrument for ensuring that those responsible for the X-Press Pearl incident are held accountable and liable for the environmental damage caused by the fire and sinking of the ship.

Besides the Marine Pollution Prevention Act, Sri Lanka’s maritime law and admiralty law also provides for the regulation and adjudication of matters relating to shipping, navigation, commerce and marine resources. Maritime law is based on a combination of domestic statutes, common law principles and international conventions that Sri Lanka has ratified or acceded to. Admiralty law is a branch of maritime law that deals with the jurisdiction and procedure of courts in maritime disputes. The Admiralty Jurisdiction Act No. 40 of 1983 gives the High Court of Sri Lanka admiralty jurisdiction over all claims arising out of any maritime lien or charge on any ship or its cargo or freight, as well as any claim for damage done by any ship or its cargo or freight. The High Court can also enforce any foreign judgment or arbitration award relating to any such claim.

Sri Lanka has experience in handling environmental damage claims in the matter of the MV Princess of the Stars, a Cyprus-flagged cargo ship that ran aground on a coral reef in Hikkaduwa National Park in Sri Lanka on June 21, 2011. The ship carried 60,000 metric tons of rock phosphate and 700 metric tons of fuel oil. The grounding caused extensive damage to the coral reef, which is one of the three marine national parks in Sri Lanka and has a high degree of biodiversity. 

The matter was settled by a consent decree entered by the U.S. District Court for the District of Hawaii on March 27, 2013, whereby the ship owners agreed to pay $7.5 million for the design, implementation, monitoring and oversight of natural resource restoration projects for coral reef habitat and associated resources, as well as past assessment costs incurred by the natural resource trustees. The trustees included the State of Hawaii, the U.S. Department of Commerce (represented by NOAA) and the U.S. Department of the Interior (represented by USFWS). The settlement was based on the application of various international conventions on marine pollution and liability, such as the Civil Liability Convention (CLC) 1969, the Fund Convention 1971, the Bunker Oil Pollution Damage Convention 2001 and the Nairobi International Convention on the Removal of Wrecks 2007

This case set a legal precedent for Sri Lanka to claim compensation for environmental damages caused by maritime incidents.

Filing the claim in Sri Lanka will also ensure that the damages claimed to reflect the actual loss suffered by Sri Lanka. Sri Lanka’s courts can award damages based on the actual loss suffered by the claimant without being limited by the LLMC or Singapore Convention on Limitation of Liability for Maritime Claims (SLLMC). This means that Sri Lanka can claim the full amount of damages without any restrictions.

Moreover, Sri Lanka has more support from its local population, civil society, and environmental groups. The X-Press Pearl incident has had a significant impact on the country’s environment and livelihoods, and Sri Lankans are demanding that those responsible be held accountable. Filing the claim in Sri Lanka will ensure that the country’s people are involved in the legal process and that their voices are heard.

In conclusion: Sri Lanka has more jurisdiction, evidence, and legal provisions to support its compensation claim and has experience in handling environmental damage claims. Filing the claim in Sri Lanka will ensure that justice is served, and Sri Lanka will receive compensation for the severe environmental damage and economic losses caused by the X-Press Pearl incident.

However, Sri Lanka needs to consider the enforceability of any judgment delivered in its own courts, especially if the defendants have a business presence in Singapore or London. If the defendants have assets in foreign jurisdictions, it may be challenging to enforce a judgment delivered by Sri Lanka’s courts. Therefore, Sri Lanka needs to evaluate the potential challenges of enforcing any judgment delivered in its own courts.

The X-Press Pearl incident highlights the importance of having clear legal frameworks and mechanisms to address maritime incidents that cause environmental damage and economic losses. Maritime accidents can have severe consequences for the environment and the livelihoods of people who depend on it. Therefore, it is essential to have legal frameworks that enable affected countries to seek compensation for damages caused by maritime incidents and hold those responsible accountable.

In conclusion, the X-Press Pearl incident has caused significant environmental damage and economic losses in Sri Lanka. While both Singapore and Sri Lanka have their advantages and disadvantages in filing a compensation claim for damages caused by the incident, Sri Lanka is the most suitable jurisdiction to claim damages. Sri Lanka has more jurisdiction, evidence, legal provisions, and precedents to support its compensation claim and has experience in handling environmental damage claims. Filing the claim in Sri Lanka will ensure that justice is served, and Sri Lanka will receive compensation for the severe environmental damage and economic losses caused by the X-Press Pearl incident. Nonetheless, Sri Lanka needs to evaluate the potential challenges of enforcing any judgment delivered in its own courts and consider whether filing the claim in Singapore may offer more certainty in terms of enforcement. Sri Lanka should consider this option carefully while ensuring that justice is served and the country’s people are involved in the legal process.

*Sam Samarakoon, Attorney-at-law (SL), Barrister & Solicitor (VIC) in Australia and Retired High Court Judge in the Western Province of Sri Lanka.