Arbitration

Oct 26, 2010 (LBO) – Arbitration proceedings of disputed oil derivative contracts between Sri Lanka’s state-run run Ceylon Petroleum Corporation (CPC) and Citibank will start in Singapore on November 01, a top official said. Sri Lanka has disputed oil derivative contracts sold to the CPC by Citibank, Standard Chartered, Deutsche Bank and two Sri Lankan banks; state-run People’s Bank and privately owned Commercial Bank of Ceylon. The three foreign banks have initiate separate actions.

Standard Chartered had filed proceedings in London while Deutsche Bank has filed a case against Sri Lanka at International Centre for Settlement of Investment Disputes (ICSID) alleging violation of a bi-lateral investment protection treaty.

Attorney general Mohan Peiris said arbitration proceedings in Singapore will start on November 01 and take about 10 days.

“Prospects are good,” Peiris said confidently. “We’ve been mis-sold (the derivatives) by the banks.”

Peiris himself will be attending the proceedings along with other officials connected with the oil derivative purchases.

The total claimed from CPC by the five banks is 418 million US dollars, according to earlier official statements.

Citibank had sold contrac