In a landmark judgement, the Supreme Court (SC) yesterday ordered the non-state parties involved in the X-Press Pearl disaster to make an initial payment of USD 1 billion within one year as compensation for damages.

The SC further ordered that such payments be paid to the Secretary to the Treasury.

A five-judge bench of the SC comprising Chief Justice Murdu Fernando, Justice Yasantha Kodagoda, Justice Shiran Gooneratne, Justice Achala Wengappuli and Justice Priyantha Fernando also ordered a Compensation Commission be set up under the Chairmanship of retired SC Justice Gamini Amarasekera.

 The SC also ruled that former State Minister for Urban Development and Coast Conservation Nalaka Godahewa had failed to adopt supervisory measures and thereby violated the Fundamental Rights of the citizens.

X-Press Pearl verdict–key points:

1. USD 1 billion compensation ordered

The Supreme Court directed the owning and operating companies of the MV X-Press Pearl vessel to pay USD 1 billion as compensation for the massive environmental and economic damage caused by the 2021 maritime disaster.

2. Worst marine disaster in the Indian Ocean

The Court acknowledged the incident as the worst marine chemical catastrophe in recorded history for the Indian Ocean, noting that over 70 billion plastic nurdles and toxic substances

polluted Sri Lanka’s waters and coasts.

3. Violation of fundamental rights

The Court ruled that the failure of state authorities to act effectively and timely infringed upon the fundamental rights of citizens under Articles 12(1) and 14(1)(g) of the Constitution, including the right to engage in lawful occupation (fishing).

4. State negligence and inaction

The judgment pointed to gross negligence and inaction by the Marine Environment Protection Authority (MEPA), the Harbour Master, and other key state officials. It specifically named then State Minister of Urban Development Nalaka Godahewa among those who failed in their duties to protect the public and the environment.

5. Polluter pays principle upheld

The Court upheld the “polluter pays” principle, holding the vessel’s owners, charterers, and agents liable for compensating both the environmental degradation and socio-economic losses caused by their negligence.

6. Commission to oversee compensation

A high-level commission will be appointed to oversee how the US$1 billion is distributed, with specific focus on affected fishing communities and restoration of marine ecosystems.

7. Call for legal and institutional reforms

The Court recommended regulatory reforms to strengthen environmental protection laws, implement international maritime safety conventions, and ensure rapid response mechanisms for future incidents.

by AJA Abeynayake ✍️