Oil Talks

Nov 04, 2012 (LBO) – Sri Lanka is negotiating with Standard Chartered Bank to reduce a 180 million US dollar award made by a British court over an oil derivative sold to state-run Ceylon Petroleum Corporation, a media report said. Sri Lanka’s The Sunday Times newspaper quote d Attorney General Palitha Fernando as saying that discussions were on between CPC and Standard Chartered to reduce the payment to 60 million US dollars.

CPC was ordered to pay 161 million US dollars by a British court over two oil derivative contracts bought in 2008. The report said 20 million US dollars in interest also has to be paid.

In turn, Sri Lanka’s central bank has fined Standard Chartered Bank over a foreign exchange transaction.

Last week an arbitration panel at the International Centre for Settlement of Investment Disputes (ICSID) in Washington ruled against the CPC in a 60 million US dollar case brought by Deutsche Bank on another oil derivative purchased at the same time.

Sri Lanka also has to pay 7 million dollars in interest, the report said.

“The only alternative now is to get the award annulled,” The Sunday Times quoted Fernando as saying.

“However we have asked an opinion from the British lawyers