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Sri Lanka to be paid $1.84 million over ship fire as captain barred from leaving

The owners of the New Diamond supertanker which caught fire off Sri Lanka’s coast have agreed to pay $1.84 million to the Sri Lankan government, whilst the Colombo Magistrate's Court imposed a travel ban on the captain preventing him from leaving the island.

The compensation is for services provided by various agencies, including the Sri Lankan, air force, ports authority and Marine Environment Protection Authority (MEPA). 

However, the claim does not include damages for the spill of fuel from 3rd September to 15th September, stated Dharshani Lahandapura, MEPA chairperson.

The supertanker was carrying two million barrels of Kuwaiti crude oil, chartered by Indian Corp when it caught fire. While the tanker did leak fuel, the crude oil cargo did not. 

Reports however have suggested that a misstep by the Sri Lankan government may have cost the country a $25 million payout, due to a loophole in international shipping law, when the navy allowed the tanker to be towed off of Sri Lanka’s coast onto international waters. 

The cost of the services deployed to help extinguish the fire such as the aircraft and navy and army services can be claimed through insurance from New Shipping Ltd. However, since the tanker was towed to international waters the commercial owner of MT New Diamond in Athens, Greece, a larger payment of up to 25% of the cargo cannot be claimed. 

See more from Forbes here and Reuters here.

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