A team of legal experts headed by Attorney General Mohan Peiris left for London today to represent the Ceylon Petroleum Corporation (CPC) at the London Commercial High Court where the US$ 261 million hedging deal is taken up for arbitration on Monday, AG’s Department source said.
The Standard Chartered Bank (STB) filed a case in 2008 in the London High Court challenging the CPC’s refusal to compensation following unilateral abrogation of the hedging deal.
However, the CPC abrogated the hedging deal following the Supreme Court ruling that the deal was ultra-vires to the Constitution
Other two banks went for arbitration in Singapore and the proceedings of arbitration continued for 13 days in November last year. The decision is expected in April, the source added.
After the abrogation of the hedging deal the two foreign banks, CITI Bank and Deutsche Bank had invoked arbitration demanding US$ 94 million and US$ 64 million respectively while the CITI Bank demanded US$ 94 million through its case filed in London.
The source on condition of anonymity told Daily Mirror that there had been a basic flaw in the agreement that benefited only the banks.
“The current agreement which was rejected by the Supreme Court has misled the Sri Lankan Government. Yes, we must pay the banks if there was a legally correct agreement. Our argument at the arbitration is based on the illegality of the agreement. (Sandun A. Jayasekera)