An open letter to the Attorney General, Mr.
Palitha Fernando
| by Nihal Sri
Ameresekere
(November 06, 2012, Colombo, Sri Lanka
Guardian) Please accept my congratulations and best wishes on your appointment.
I was quite perturbed upon reading a news report in The Sunday Times of yesterday, quoting
you to have stated that talks were on going between Ceylon Petroleum
Corporation and Standard Chartered Bank, to reduce the payment to US $ 60 Mn.,
(Rs. 7.8 Bn.). The report stated that the payment owed to Standard Chartered
Bank is US $ 160 Mn., plus US $ 20 Mn., as interest.
The report
further stated attributing to you, that since talks were going on there was no
need to make an Appeal to a British Court. Such announcement now is different to
what was reported by Reuters on 27th July 2012, that you were
looking at the possibilities of appealing in the House of Lords, with Minister
Petroleum Industries, Susil Premajayantha, also quoted to have confirmed the
same. The said dismissed Appeal was
against the UK High Court Order of 11th July 2011.
I am indeed intrigued by the foregoing, in that, the
Controller of Exchange by Order dated 16th March 2011 had imposed a
fine of Rs. 27.57 Bn., for alleged violation of the Exchange Control Act, as
disclosed in the Court of Appeal Writ Application No. 409/2011 vide - para 67 thereof, filed on 16th
June 2011 by Standard Chartered Bank against the Controller of Exchange, which Application
is pending. This fine at the
prevalent rate of exchange of US $ 1 = Rs. 130/- amounts to US $ 212.1 Mn., which is much greater than the aforesaid
Claim of US $ 180 Mn.
Upon two public
interest Applications SC (FR) Nos. 404 & 481/2009 made by me, having been per-incuriam dismissed on 11th
May 2010 on misleading submissions on
‘time bar’ made by Counsel, including your predecessor in Office, Mohan Peiris,
P.C., in a series of Books I published abroad, I published a Book which was
globally released in June 2011, exclusively
on these purported Oil Hedging Deals in Sri Lanka titled – ‘Derivative / Hedging Deals by Citibank,
Standard Chartered Bank, Deutsche Bank, with Sri Lanka Government's Petroleum
Corporation - Dubious & Illegal ?’ vide www.consultants 21.com/publications.
The Citibank Claims arbitrated upon by the London Court of International Arbitration,
holding proceedings in Singapore, was lost by the Citibank, as per Order dated
31st July 2011, notwithstanding the aforesaid Order dated 11th
July 2011 of the UK High Court, having
been tendered therein.
Over the last
weekend, it was reported that the Deutsche Bank Claim of US $ 60 Mn. + Interest
against the Government was awarded in favour of the Deutsche Bank in Arbitration
proceedings before the International Centre for Settlement of Investment
Disputes (ICSID), under the Treaty between Sri Lanka and Germany concerning the
Promotion and Reciprocal Protection of Investments,
passed into law on 18th February 2003 by a 2/3rd majority
in Parliament, in terms of Article 157 of the Constitution.
I am at a loss
to understand, as to how this happened, since the said Treaty covers Investments,
specifically defined such as equity, debt and service and investment contracts,
and, inter-alia, includes a claim for
money or claim to performance having economic value, whereas to my
understanding, no such economic value was received by the Ceylon Petroleum Corporation or the Government.
As you are
aware, under ICSID Rules, in terms of Article 52, the Award is final and
binding, which is limited to Corrections in terms of Article 56 or to Supplementary
Decisions in terms of Article 57 to decide on any question which had been omitted to be decided in the Award.
The foregoing
commits very large scales of monies of national economic proportions. It is beyond comprehension, as to why your
predecessor in Office, Mohan Peiris P.C., opposed my Applications to invoke the
jurisdiction of the Supreme Court of Sri Lanka, to have prevented the foregoing
foreign legal proceedings, through anti-suit injunctions, as had been prayed
for.
It is even more baffling, as to how the stance of illegality of the said transactions was
taken by him, whilst at the same time those involved in the perpetration of
such illegality had not been taken to task and arraigned before the law, and some of them had even been taken
overseas to give evidence, whilst they admittedly
had been previously compromised, through foreign jaunts sponsored by the
said Banks !
Costs of
defending foreign legal proceedings are not disclosed to the public, but based
upon an answer given in Parliament by Minister of Petroleum Industries, Susil
Premajayantha in August 2012, I reckon the same to be in the region of Rs. 500
Mn. Is this not indeed catastrophic,
when compared to the fact that the Budget for the entire year’s operation of
2013 of the Attorney General Department is only Rs. 434 Mn., and Capital
Expenditure of only Rs. 29.3 Mn., as per the Appropriation Bill 2012 ?
I do appreciate
that you are unaware of the past
facts, and hence I set out the following:
1.
In SC (FR) Application Nos. 535
& 536 instituted in November 2008, the Supreme Court promptly issued interim orders, suspending
the operation of these speculative transactions, ultra-vires the Ceylon Petroleum Corporation Act, and even ordered
the removal of the relevant Minister and Chairman, and further directing investigations
to be carried out by the Commission to Investigate Allegations of Bribery or Corruption
and the Criminal Investigation Department. The proceedings were terminated on
29th January 2009 since the Government did not comply with certain
other interim orders vis-à-vis
petroleum prices.
2.
Subsequently, having come to
know in May 2009, that the Standard Chartered Bank had remitted US $ 107 Mn.,
which had been put in issue by the Controller of Exchange in May 2009, I filed
SC (FR) Application No. 404/2009, i.e. within 30 days of the occurrence thereof.
3.
Subsequently, also coming to
know that the aforesaid foreign Banks had instituted legal proceedings in
foreign jurisdictions, I instituted SC (FR) Application No. 481/2009 on 25th
June 2009 i.e. within 30 days of the occurrence thereof.
4.
Nevertheless, your predecessor
in Office opposed the grant of leave in both my Applications filed in the
public interest, making misleading submissions
on grounds of ‘time bar’, whilst ‘assuring’ the Supreme Court and me in unequivocal terms, with effusing confidence, that he would
successfully defend and win the foregoing foreign legal proceedings,
notwithstanding me having pointed out that, he was on the defensive, whilst I was on the offensive.
I cite the Supreme
Court proceedings of 14.7.2009 viz:
“Mr. Mohan Peiris, P.C., A.G., too informs Court that he vehemently
objects to the leave to proceed being granted as he is defending the actions filed abroad
vigorously and the arbitration.”
I also cite the
following ‘extracts’ of my attached Letter dated 24th June 2010 addressed
to your predecessor in Office, Mohan
Peiris. P.C., for you to be apprised of the contents thereof:
“You would recollect that you made specific submissions to Court,
that I should ‘lay my head at rest’, impliedly leaving you to deal with this
matter in foreign jurisdictions.
You would also recollect that on the last day 11.5.2010, you
repeated the same submissions, that I should 'lay my head at rest', ironically
whilst at the same time concurring with my submissions.
This only reveals that you, as the Attorney General, curiously vehemently opposed this matter
of such vital public importance, being proceeded with and adjudicated upon,
with public hearings before the Supreme Court of our country, exercising the
judicial power of the people, which
indeed is quite mysterious and baffling !
On 11.5.2010, you submitted to the Supreme Court, that you fully
concurred with my submissions, particularly the stances taken and the arguments
adduced by me, and assured that you had taken all such stances and
arguments, and even more, in the foreign legal proceedings commenced by
Deutsche Bank against the Government of Sri Lanka before ICSID, and by Citibank
before the London Court of International Arbitration, and by Standard Chartered
Bank in the High Court of U.K., both against CPC. Significantly, none of the Counsel appearing for the Respondents Banks
were able to demonstratably refute and/or controvert the facts and the applicable
law, which were adduced.
By your submissions, you held out an unqualified assurance and
guarantee, that you will most certainly succeed in the above foreign legal
proceedings against the Government of Sri Lanka and the CPC, and that therefore
no payments, whatsoever, would thereby have to be made from public funds to the
Respondents Banks, under these
illegal deals as admitted by you, and accordingly that you would
also recover the costs, reckoned to be in the region of Rs. 150 Mn.
incurred utilizing public funds, to defend these foreign legal proceedings, in
retaining foreign Counsel and Experts, including costs incurred in overseas
travel by you and other Counsel.
In addition, on 11.5.2010 you reiterated to the Supreme Court
the averments in the Statement of Objections of the CPC, settled by you, in SC
(FR) Application No. 404/2009, concurring with my stances taken in the said
Application, that - 'the said transactions are illegal,
ultra-vires and/or unauthorized and that the Respondent Banks had
misrepresented the true nature of the these transactions and that they are
inter-alia null and void and/or unenforceable’.
Does not such stance on your part demonstrate the reality that you
did not want the truth and facts being disclosed to the public, whereas this
involves colossal funds of the public ? “
I also attach
copy of my Letter dated 13th August 2012 addressed to the Minister
of Petroleum Industries, Susil Premajayantha, the contents of which are self-explanatory
