X-Press Feeders Rejects US$1 Billion Damages for X-Press Pearl Disaster in Sri Lanka

Singapore Firm Declines Court-Ordered Payment

X-Press Feeders, a Singapore-based shipping company, announced on Tuesday, September 23, 2025, its refusal to pay US$1 billion in court-ordered damages to Sri Lanka. The payment was mandated by the Sri Lankan Supreme Court for the catastrophic environmental damage caused by the sinking of the MV X-Press Pearl in 2021. The court had ordered an initial tranche of US$250 million to be paid by the same day, with the full US$1 billion due within a year, alongside provisions for 'other and further payments' in the future.

Shmuel Yoskovitz, CEO of X-Press Feeders, stated that paying the damages would have 'wide-ranging implications on global shipping' and 'set a dangerous precedent'. He emphasized that the company's decision is rooted in the principle of limitation of liability, which forms the basis of maritime trade, and criticized the 'open-ended' nature of the penalty.

Background to the Environmental Catastrophe

The MV X-Press Pearl, a container ship operated by X-Press Feeders, caught fire off the coast of Colombo, Sri Lanka, in May 2021. The fire, believed to have been caused by a nitric acid leak, raged for nearly two weeks before the vessel sank in June 2021.

The ship's cargo included 81 containers of hazardous goods, such as nitric acid and lead ingots, along with hundreds of tonnes of plastic pellets, known as nurdles. Prior to reaching Sri Lankan waters, ports in Qatar and India had reportedly refused permission to offload the leaking nitric acid.

The disaster resulted in what has been described as Sri Lanka's worst marine ecological catastrophe. The environmental impact was severe:

• Tonnes of microplastic granules inundated an 80-kilometer stretch of beach along Sri Lanka's western coast.
• Fishing activities were prohibited for months, significantly impacting the livelihoods of thousands of local families.
• Numerous marine species, including turtles, dolphins, and whales, were found dead, with many exhibiting burn markings.
• The spill also included hazardous chemicals and an oil slick, further contaminating coastal habitats.

Legal Standoff and International Implications

Sri Lanka's Supreme Court issued its landmark judgment in July 2025, holding the vessel's owners, operators, and local agents jointly and severally liable for the environmental and economic damage. The ruling was seen as a significant step in applying the 'polluter pays' principle.

X-Press Feeders, however, maintains that it has already spent over US$170 million on wreck removal, environmental remediation, and compensation to affected fishermen. The company has sought to limit its liability, obtaining an order from London's Admiralty Court in July 2023, capping its responsibility at £19 million (approximately US$25 million), a decision that Sri Lanka has challenged.

The company's CEO, Shmuel Yoskovitz, stated, 'We are not paying because the whole base of maritime trade is based on the limitation of liability. This judgment undermines this limitation of liability.' He added that 'Any payment towards the judgment could set a dangerous precedent for how maritime incidents will be resolved in the future.' The United Nations office in Sri Lanka has expressed 'serious alarm' over X-Press Feeders' decision, calling for greater corporate accountability.

The ongoing dispute highlights a complex legal battle between national jurisdiction and international maritime conventions, with a pre-trial hearing in the Singapore International Commercial Court expected in May 2026.