Sri Lanka oil derivative case takes new turn

Jan 13, 2008 (LBO) – Public interest litigants who petitioned Sri Lanka’s Supreme Court to halt payments on oil derivatives have said they are willing to terminate their cases, if court orders are not carried out, lawyers said. But court had responded saying that the exercise was about judicial review of executive action through a fundamental rights application and the executive cannot interfere with the checks and balances in the constitution.

If there are difficulties in carrying out an order a variation must be sought along with material proof, court has told lawyers.

Though CPC had halted payments, the payments by banks to their counterparties on the derivatives had not been halted.

Supreme Court halted payments on oil derivatives sold by several commercial banks to state-run Ceylon Petroleum Corporation (CPC) and also order the government to bring down petrol prices on a formula.

But petrol prices were not brought down by the government.

The two petitioners told court they are willing to move to terminate proceedings on the principle that due respect for court orders are of utmost importance, lawyers said.

Petroleum distributor Laufgs, and an opposition parliamentarian, a Buddhist monk and a corruption watchdog filed two separate cases.

The next court hearing is on January 27. Payments by CPC to banks on oil derivatives were only halted until the final decision of the court.

Government counsel told court that Sri Lanka’s cabinet of minister had taken cognizance of the court order but had decided to give the benefit to a wider section of society.