Chinese firm sues Sri Lanka in dispute over $49.7m deal

A ship loaded with 20,000 tons of fertilizer from Shandong-based producer Seawin Biotech meant for export to Sri Lanka is on its way back after failing to reach any constructive agreement with Sri Lanka, despite relentless efforts to solve the dispute, sources close to the matter told the Global Times on Tuesday.

The ship is to arrive in Singapore, where the company has launched an international arbitration procedure to settle a growing dispute over fertilizer export contract to Sri Lanka, according to the sources. The dispute, which started in early November, centers on Sri Lankan officials’ rejection of the Chinese fertilizers, citing what Chinese sources call shady claims of quality issues. Another arbitration procedure will soon take place in Colombo, Sri Lanka, which together with the contract to be arbitrated in Singapore, is totally worth $49.7 million.

New information obtained by the Global Times and interviews with sources and officials showed that Sri Lankan officials backtracked on the deals and lacked any sincerity in solving the issues, even after the Chinese company sought third-party certificates to prove the quality of its products, which resulted in the launching by the company of the arbitration procedure in Singapore.

“A notice of arbitration has been issued to Sri Lanka about the international arbitration in Singapore, and the arbitration procedure has been initiated,” a source close to the company told the Global Times on Tuesday.

In a statement to the Global Times, the company stated that the bidding involving the dispute over imported fertilizer from China was dubious and shady, and it involved breaking business rules and hiding the truth from the public.