By: Ovindi Vishmika
September 24, Colombo (LNW): When Sri Lanka’s Supreme Court in July ordered Singapore-based shipping company X-Press Feeders to pay US$1 billion in damages for the catastrophic sinking of the MV X-Press Pearl, it marked one of the most significant environmental rulings in the country’s history. The 2021 disaster saw tonnes of plastic pellets, lead ingots, and hazardous chemicals spill into the ocean after a nitric acid leak caused a devastating fire onboard the vessel.
The decision was celebrated domestically as a victory for communities and ecosystems devastated by the disaster. Yet, just weeks before the first US$250 million tranche of compensation was due, X-Press Feeders publicly announced it would refuse to pay. Its Chief Executive Officer, Shmuel Yoskovitz, defended the stance on the grounds that honoring the judgment would “set a dangerous precedent” and undermine the principle of limitation of liability, a cornerstone of maritime law.
This open rejection not only raises questions of corporate accountability but also spotlights a complex legal puzzle: What happens when a sovereign court’s decision collides with international legal boundaries?
Jurisdiction Meets International Boundaries
The jurisdictional reach of a national court is powerful within its own borders but limited beyond them. In Sri Lanka, the Supreme Court is the highest authority, and its rulings carry unquestionable weight for those present within the country. X-Press Feeders, however, is domiciled in Singapore and operates globally, meaning the Colombo ruling cannot automatically bind the company abroad.
The case exemplifies the tension between territorial jurisdiction and the realities of cross-border commerce. Sri Lanka can validly claim jurisdiction because the damage occurred in its waters, but enforcing this ruling outside Sri Lanka is another matter altogether.
Adding to the complexity, London’s Admiralty Court last year capped X-Press Feeders’ liability at £19 million (US$25 million) under international maritime conventions, while Sri Lanka’s ruling seeks an initial US$1 billion with further damages possible. The clash of outcomes demonstrates how different jurisdictions can produce vastly divergent legal obligations, leaving victims caught in the middle.
Pathways for Enforcement
The refusal leaves Sri Lanka with several possible,though challenging,legal avenues. So, what options does Sri Lanka have when its highest court’s decision is flatly rejected?
First, Colombo could attempt to enforce the judgment in Singapore or other countries where X-Press Feeders has assets. But without a reciprocity treaty between Sri Lanka and Singapore, the courts there are under no obligation to recognise the ruling. In fact, Singapore may resist on the grounds that Sri Lanka’s order conflicts with the Convention on Limitation of Liability for Maritime Claims, a global framework designed to shield shipowners from unlimited financial exposure.
Second, Sri Lanka could seek diplomatic engagement. This approach would elevate the matter to a state-to-state level, pressing Singapore to encourage its company to negotiate a settlement. It is here that Sri Lanka could frame the case not only as a financial dispute but also as a matter of environmental justice.
Third, there is the option of international arbitration or tribunals. The United Nations Convention on the Law of the Sea (UNCLOS) obliges states to protect the marine environment, and Sri Lanka could bring a claim before the International Tribunal for the Law of the Sea (ITLOS).
However, arbitration requires the consent of both parties, which may not be forthcoming from X-Press Feeders or Singapore.
Finally, Sri Lanka may turn to domestic criminal law as leverage. Already, the ship’s Russian captain has been barred from leaving Sri Lanka for more than four years. The Supreme Court has directed police and prosecutors to initiate criminal proceedings for non-compliance if responsible individuals are present in the country. Yet such measures are limited to those physically within Sri Lanka and do not touch the corporate entity itself.
Stakeholders in the Crossfire
The fallout extends beyond courtrooms and diplomatic corridors.For fisherfolk and coastal communities, the incident was devastating. Fishing bans imposed after the spill crippled livelihoods for months, and while cleanup operations have cleared visible plastic, long-term ecological damage remains. For them, the Supreme Court’s ruling symbolises long-awaited recognition of their suffering.
Environmental advocates caution that the damage is far from over. Hemantha Withanage of the Centre for Environmental Justice notes that while the coastline appears free of debris today, “the effects of the pollution will be felt for a long time.” Calls for comprehensive monitoring of marine ecosystems continue to grow.
Meanwhile, the global shipping industry views the ruling with alarm. If Sri Lanka’s approach were replicated elsewhere, shipowners could face crippling liabilities far beyond convention limits. The fear is that insurance premiums would skyrocket, raising shipping costs worldwide and ultimately burdening consumers.
International Pressure and the UN’s Role
Sri Lanka’s challenge is not only to seek justice domestically but also to mobilise the international community. The recent intervention by the United Nations office in Colombo expressed “deep concern” over X-Press Feeders’ refusal to comply, urging the company to recognise the magnitude of the harm caused to communities and ecosystems.
Such interventions highlight a possible avenue for Sri Lanka: to rally global opinion and cast the dispute as a test of corporate accountability in an era of increasing environmental disasters. By drawing in multilateral actors and framing the issue as a climate justice and sustainable oceans concern, Sri Lanka may be able to pressure Singapore and the company into reaching a settlement.
What Comes Next?
The Supreme Court’s judgment is clear, but its enforcement is uncertain. With no treaty framework to compel compliance abroad, Sri Lanka’s best hope may lie in diplomatic negotiations, international advocacy, and selective legal actions in foreign courts where the company holds assets.
Still, the refusal by X-Press Feeders exposes a sobering reality: even the highest courts of sovereign nations can struggle to hold multinational corporations accountable when jurisdictional boundaries intervene. For Sri Lanka, this is more than a legal dispute; it is a battle to ensure that corporate negligence does not escape justice simply because of geography.
For Sri Lanka, the path forward lies in a combination of law, diplomacy, and international advocacy. As the hearing scheduled for September 25 unfolds, the world will watch closely to see whether Sri Lanka can transform a domestic court ruling into a binding international outcome — or whether the MV X-Press Pearl becomes another reminder of the difficulties small states face in holding global corporations accountable.
