Interim injunction sought against Ceylon Shipping Corp. refused

Mercator Lines (Singapore) Ltd. instituted action in the Commercial High Court in Colombo against Ceylon Shipping Corporation Ltd. and Lanka Coal Company (Pvt) Ltd., for the alleged wrongful termination of a contract in relation to the transportation and lightering of coal required for the Lakwijaya Coal Power Plant in Puttalam.

Mercator Lines pleaded that the dispute was to be referred to arbitration, but nevertheless sought injunctive relief restraining Ceylon Shipping Corporation from giving effect to the letter of termination and/or contracting with a third party and sought a further injunction mandating Ceylon Shipping Corporation to perform the contract until the arbitral tribunal was properly constituted and the Plaintiff Mercator Lines (Singapore) is able to move for interim relief there.

Counsel for Mercator Lines (Singapore) Dr. Harsha Cabraal, PC, on 12 October 2012 informed Court that he was not supporting the application for enjoining orders, when Faiszer Musthapha, Counsel for Ceylon Shipping Corporation, sought to resist the same.

It was agreed that the inquiry in respect of the interim injunctions be disposed of expeditiously and at the inquiry Musthapha raised several objections on behalf of the 1st Defendant, Ceylon Shipping Corporation, against the granting of injunctive relief including that the purported dispute of termination is not a matter agreed by the parties to be submitted to arbitration and hence the relief sought is not tenable in law, that Mercator is not entitled to seek specific performance of a agency contract by way of injunctive relief, that the appropriate relief for the Plaintiff would be damages – if at all, that the Plaintiff is not entitled to interim relief because it has breached the principle of utmost good faith in suppressing the several instances that the Plaintiff was in breach of the agreement, and that grave and irreparable loss would be caused to Ceylon Shipping Corporation, which is primarily responsible for the procurement of coal in as much as 20% of the total supply to the national electricity grid could be affected.

Judge of the Commercial High Court Gamini Amarasekera issued order on 14 November 2012 refusing to grant the interim injunctions prayed for by Mercator Lines (Singapore), thus holding in favour of Ceylon Shipping Corporation Ltd.

Musthapha appeared with Farman Cassim, Isuru Balapatabendi and Tharaka Nanayakkara for Ceylon Shipping Corporation instructed by Murugesu and Associates, and Dr. Harsha Cabraal appeared with Buddhika Ilanganthilake for Mercator Lines (Singapore), instructed by Neelakandan and Neelakandan.