The People’s Bank of Sri Lanka says it has paid USD 6.9 million to the China-based fertilizer company, Qingdao Seawin Biotech Group Co., Ltd for the losses caused due to Sri Lanka rejecting two of its shipments.
The decision was taken after the Colombo Commercial High Court dissolved the enjoining order preventing the payment on Letter of Credit to Qingdao Seawin Biotech Group Co., Ltd.
On Monday (03), the enjoining order in question was dismissed as all parties had agreed for a settlement to ship a new stock of standardized fertilizer despite two previous shipments being rejected by Sri Lanka.
In September 2021, the Government suspended the importation of organic fertilizer from Qingdao Seawin Biotech Group Co., Ltd.
At the time, Minister of Agriculture Mahindananda Aluthgamage said the decision had been taken after tests on samples of the fertilizer had identified harmful bacteria.
Following this, the Government also rejected a new consignment of the fertilizer that was en route from China, denying entry for the transporting vessel to Sri Lanka.
As a result, in October, the People’s Bank of Sri Lanka was blacklisted by the Economic and Commercial Office of the Chinese Embassy in Colombo.
The Embassy said the bank was blacklisted for failing to make the payment according to the Letter of Credit (LOC) and contracts between the two parties causing huge losses to Chinese companies in international trade in Sri Lanka.
Thereafter in December, the Government announced that it has decided to pay US$ 6.7 million to Qingdao Seawin Biotech Group Co., Ltd for its rejected products.
Minister of Agriculture Mahindananda Aluthgamage said the payment includes the deposit of US$ 5 million that was placed by the Chinese firm.
He added that the Chinese company has been requested to remanufacture the fertilizer to comply with the required standards of the Sri Lanka Standards Institute (SLSI). (NewsWire)