When the controversial oil hedging cases filed by public interest activist, Nihal Sri Ameresekere, came up before the Supreme Court on Monday, Attorney General, Mohan Peiris PC, moved for a short date, submitting to court that he needs time to examine voluminous documents he had received from the parties.
Faiz Musthapha PC, appearing for Deutsche Bank submitted to court, that his client's arbitration before the International Centre for Settlement of Investment Disputes (ICSID) is being heard from July 26 to 30, 2010, and moved that the Supreme Court cases be fixed for a date thereafter. But with the Attorney General and Mr Ameresekere opposing, the cases were re-fixed for support, after the court vacation, on May 11.
Mr Musthapha submitted to court that in view of Deutsche Bank's application before ICSID, the Supreme Court had no jurisdiction to hear the matter, a view that was refuted by Mr Ameresekere who said there is no such ouster of the jurisdiction of the Supreme Court.
The Ceylon Petroleum Corporation in its statement filed in court through the Attorney General had stated that these transactions are illegal, ultra-vires, and/or unauthorized, and that the banks have misrepresented the true nature of these transactions, and that these transactions are null and void and/or unenforceable against the Corporation.
In addition to arbitration proceedings by Deutsche Bank, Citibank has initiated arbitration proceedings in the London Court of Arbitration and Standard Chartered Bank has instituted legal action in the High Court of United Kingdom. The Corporation has also entered into similar transactions with People’s Bank and Commercial Bank of Ceylon.
The Attorney General is defending these foreign litigations.
Petitioner Ameresekere's stance is that these are betting / wagering deals, which are illegal contracts and unlawful under Sri Lankan and English Law, and are not enforceable. The CPC owes billions of rupees to a group of foreign and local banks on oil hedging deals.