The court today ordered that the payment not be made to the Chinese company until 19th November when the case will be heard again.
China recently blacklisted the People’s Bank over the dispute with Sri Lanka and has also advised Chinese companies not to do business with the bank.
The ban followed a dispute over contaminated fertilizer which Sri Lanka refused to accept from a Chinese company.
The Sri Lankan Government has refused to pay for the fertilizer until a fresh stock is shipped to the country.
The Economic and Commercial Office of the Embassy of the People’s Republic of China in Sri Lanka said it had backlisted the People’s Bank of Sri Lanka for defaulting on payments according to the Letter of Credit (L/C) and the contacts between two parties.
People’s Bank said it has already communicated to the relevant authorities at the Chinese Embassy that the bank is bound by an enjoining order issued by the Western Province Commercial High Courts of Sri Lanka with regard to the trade transaction in question, which precludes the bank from processing of the payment.
People’s Bank said that once the legal barriers in effect are removed, the LC payment will be effected promptly as per the usual trade practices. (Colombo Gazette)