Supreme Court has directed the Attorney General to explore legal action against a foreign shipping company accused of misappropriating compensation payments related to the MV X-Press Pearl maritime disaster, following the company’s refusal to comply with a court-ordered US$1 billion damages payment.

In July, the Supreme Court ordered the Singapore-headquartered X-Press Feeders to pay an ‘initial’ US$1 billion within one year as compensation for what has been described as Sri Lanka’s worst marine pollution disaster. The first tranche of US$250 million was due on 23 September. The court also reserved the right to direct “such other and further payments” in the future.

However, X-Press Feeders chief executive Shmuel Yoskovitz has publicly rejected the judgment, saying the company will not make the payment. In an interview with AFP, Yoskovitz said paying would have “wide-ranging implications on global shipping” and would “set a dangerous precedent.”

“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 said, warning that any compliance could reshape how maritime incidents are resolved globally.

The MV X-Press Pearl, a Singapore-registered container ship, sank off the Colombo Port in June 2021 after a fire—believed to have been caused by a nitric acid leak—that raged for nearly two weeks. The ship was carrying 81 containers of hazardous cargo, including acids, lead ingots, and hundreds of tonnes of plastic pellets.

Ports in Qatar and India had earlier refused to allow the vessel to offload the leaking acid before it entered Sri Lankan waters. After the sinking, tonnes of microplastic granules washed ashore along an 80 km stretch of Sri Lanka’s western coastline, forcing months-long fishing bans and devastating coastal livelihoods.