A court in Sri Lanka has extended an interim order preventing the People's Bank of Sri Lanka (PBSL) from making a US$4.9 million payment under a letter of credit (L/C) for a cargo of organic fertiliser from Chinese exporter, Qingdao Seawin Biotech (QSB).

The economic and commercial office of the Chinese Embassy in Sri Lanka responded by blacklisting PBSL over its inability to pay out on the L/C while local bankers expressed doubts over whether that office has the authority to blacklist the Sri Lankan bank (DC World News, 1 November 2021).

Extended order

The commercial high court has extended the interim order preventing PBSL making payment under the L/C to QSB to 30th November.

The local representative of QSB has responded to the extension by filing a written objection to the order with the court.

Background

Samples of the fertiliser have been tested twice by Sri Lanka's National Plant Quarantine Service, which confirmed the presence of organisms, including certain types of harmful bacteria in the cargo.

The economic and commercial office however says the Sri Lankan side refused a third party test and therefore PBSL should be blacklisted.

Sri Lanka's agriculture ministry has issued an order barring the ship carrying the cargo from entering Sri Lankan ports. But the ship, the Hippo Spirit, reportedly remains near Sri Lankan waters.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.