Colombo, 24 July 2025 — In a landmark
Supreme Court ruling on marine environmental pollution in Sri Lanka, the
operators of the MV X-Press Pearl — the worst maritime disaster in the
country’s history — have been ordered to pay an initial USD 1 billion in
compensation. This historic judgment marks a turning point in South Asia’s
approach to environmental accountability, marine protection, and polluter
liability.
🔥 The X-Press Pearl
Environmental Disaster: What Happened?
In May 2021, the MV X-Press Pearl,
a Singapore-registered container ship, caught fire and sank off the coast of Colombo,
Sri Lanka, unleashing a torrent of hazardous chemicals, nitric acid, oil, and
plastic pellets (nurdles) into the Indian Ocean. The burning and eventual
sinking of the ship caused catastrophic marine pollution, affecting over 20,000
fisherfolk, wiping out marine ecosystems, and contaminating Sri Lanka’s western
coastline.
This incident became a national
crisis — and now, a global case study in environmental law enforcement and maritime
disaster compensation.
⚖️ Supreme Court of Sri Lanka
Delivers Unprecedented Environmental Justice
In a judgment, a five-judge
Divisional Bench of the Supreme Court ruled that the ship’s owner, charterer,
and local agent — collectively called the “X-Press Pearl Group” — are jointly
and severally liable. The Court applied the Polluter Pays Principle (PPP) and
declared that negligence or lack thereof was no defence to environmental harm.
✅ Key Judgment Highlights:
- USD 1
billion is a minimum, initial compensation figure.
- More
payments may follow after further damage verification.
- All
payments must go to the Sri Lankan Treasury, to be held in a dedicated
trust.
📅 Payment Schedule: USD 1
Billion Compensation Plan
The Supreme Court outlined a
clear and binding payment timeline:
- By 23
September 2025: Minimum USD 250 million
- Within
6 months: Additional USD 500 million
- Before
24 July 2026: Final USD 250 million
All funds must be credited to the
newly established “X-Press Pearl Compensation and Environment Restoration and
Protection Fund”, which will be split equally between:
- A Compensation
Fund for affected individuals and institutions
- An Environment
Restoration & Protection Fund for clean-up and ecological recovery
🛑 Absolute Liability
& Polluter Pays Principle Reinforced
The Court made it clear: polluters
cannot escape responsibility. Even without proven negligence, the environmental
damage caused by the X-Press Pearl sinking invokes strict, absolute liability
under international and Sri Lankan environmental law.
The judgment cited key Indian
environmental cases — including Vellore Citizens Welfare Forum and M.C.
Mehta v. Kamal Nath — to justify applying the Polluter Pays Principle,
which obligates offenders to pay for both human losses and environmental
restoration.
👨⚖️ Government
Accountability: MEPA & Attorney General Faulted
The Supreme Court did not spare Sri
Lankan state actors. It ruled that:
- The former
Chairperson of MEPA violated Article 12(1) of the Constitution by failing
to fulfill legal obligations.
- The Attorney
General made an “unreasonable and irrational” decision by filing suit in
Singapore rather than initiating legal action in Sri Lanka’s Admiralty
High Court.
This sets a critical precedent: state
negligence in environmental crises can also attract constitutional liability.
🏛️ Two New Oversight
Bodies: Ensuring Transparent Compensation & Restoration
To manage the USD 1 billion in
environmental damages, the Court created two institutions:
1. X-Press Pearl Compensation
Commission
- Chaired
by Retired Supreme Court Justice E.A.G.R. Amarasekera
- Will
assess, verify, and recommend compensation amounts to victims and
institutions
- Includes
public officials, environmental experts, economists, and legal
professionals
- Supervised
by the Auditor General of Sri Lanka
2. Marine & Coastal
Environment Restoration and Protection Committee
- Chaired
by the Secretary of the Environment Ministry
- Will
oversee ecosystem recovery, marine cleanup, and conservation projects
Both entities must submit bimonthly
reports to the Supreme Court and remain accountable throughout the process.
🎣 Fisherfolk Compensation
Comes First
The Court prioritized Sri Lanka’s
fishing communities, the most visibly affected group. An estimated 19,920
claims were filed, and while the ship’s insurer — the London P&I Club — had
paid a portion (LKR 720 million), most victims remain uncompensated for years
of lost income due to the extended fishing ban within a 20-nautical-mile radius.
🔍 What’s Next: Ongoing
Oversight and Investigations
The Supreme Court will revisit
the case on 25 September 2025 to:
- Confirm
receipt of the USD 250 million initial payment
- Review
progress by the Commission and Committee
- Evaluate
enforcement of all directions
It also instructed CIABOC
(Commission to Investigate Bribery or Corruption) to properly probe potential
corruption linked to the disaster — citing poor follow-through on earlier
leads.
🌍 Why This Judgment
Matters: Legal Milestone for Global Maritime Accountability
This is Sri Lanka’s largest-ever
judicial award for environmental damages, and among the top compensation
rulings in South Asia’s maritime history. It strengthens:
- Environmental
governance in Sri Lanka
- Maritime
accountability under international law
- Legal
enforcement of the Polluter Pays Principle
- Victim-first,
transparent disaster recovery models
It also reaffirms that Sri
Lanka’s courts are the rightful forum for resolving high-value environmental
claims, rejecting the default push to litigate overseas.
📝 Final Thoughts
This case is far more than a
court ruling — it’s a redefinition of accountability, justice, and national
sovereignty. Sri Lanka didn’t just win compensation; it demanded respect,
transparency, and lasting recovery. The X-Press Pearl is now a symbol —
not only of ecological devastation, but of a small island nation’s powerful
stand for environmental justice.
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