Supreme Court delivers landmark judgment in MV X-Press Pearl disaster, orders USD 1 billion compensation and blasts failures by authorities
In a landmark ruling, the Supreme Court of Sri Lanka has issued a comprehensive judgment on the MV X-Press Pearl maritime disaster, holding the vessel’s owners and operators jointly and severally liable for Sri Lanka’s worst marine environmental catastrophe, and ordering an initial compensation payment of USD 1 billion.
The judgment, delivered in response to a series of consolidated fundamental rights petitions filed by several including Centre for Environmental Justice (CEJ) and Colombo Archbishop Malcolm Cardinal Ranjith, also exposed grave lapses by state institutions and officials, and directed sweeping legal and institutional reforms, continuing judicial oversight, and criminal investigations into those responsible.
A preventable environmental catastrophe
The Singapore-flagged MV X-Press Pearl, carrying dangerous cargo including nitric acid, caught fire off the coast of Colombo in May 2021. The disaster, worsened by a failure to report a chemical leak and a delayed response, led to the release of toxic substances and plastic pellets, killing marine life and devastating coastal ecosystems. The vessel eventually sank on 2 June 2021.
Shipping company found liable
The Court found that the X-Press Pearl group—including the owners, operators, and local agents—acted with gross negligence, deceit, and suppression of critical information that could have averted the disaster. Their failure to disclose the nitric acid leak and concealment of the cargo hold’s condition deprived Sri Lankan authorities of critical time to act.
The Court ruled that their conduct violated international maritime norms under MARPOL and SOLAS, and even amounted to cheating under criminal law. Citing the “Polluter Pays Principle,” the Court declared their liability as absolute and non-negotiable.
They were ordered to pay USD 1 billion in compensation to the Sri Lankan Treasury, with a minimum USD 250 million due by 23 September 2025. Further instalments will follow once actual damages are assessed.
State failures and fundamental rights violations
While the Court recognised that some state agencies, such as the Harbour Master and the Director General of Merchant Shipping, acted lawfully under difficult circumstances, it delivered scathing findings against other state actors:
- The Marine Environment Protection Authority (MEPA) and its former Chairperson Dharshani Lahandapura were found to have failed in their statutory duties, issuing vague and ineffective directives and not convening the Board when required.
- State Minister Dr Nalaka Godahewa failed to constitute the legally mandated Marine Environment Council or provide proper oversight.
- The Attorney General was faulted for failing to indict the ship’s owners/operators and for filing the compensation case in Singapore instead of Sri Lanka—decisions the Court labelled irrational and not in the country’s best interest.
The Court held that these actions violated the fundamental rights of petitioners and the people of Sri Lanka under Article 12(1) of the Constitution.
Court-mandated institutional overhaul
The Court ordered the establishment of three key mechanisms to oversee compensation and environmental recovery:
- MV X-Press Pearl Compensation Commission
- Marine and Coastal Environment Restoration Committee
- Compensation and Restoration Fund, to be managed by the Treasury
Additionally, the Attorney General was directed to conclude criminal investigations within three months and report quarterly to the Court. A gap analysis of maritime laws and a national framework for environmental accountability were also ordered.
CIABOC to investigate corruption
In a significant move, the Bribery Commission (CIABOC) was instructed to launch a fresh investigation into corruption allegations linked to the disaster, based on concerns raised in Parliament. Interim reports must be filed every three months.
Continuing oversight
The Court adopted a “continuing mandamus” approach, keeping the case open to monitor compliance. The matter will be mentioned again on 25 September 2025.
