Sri Lanka’s Supreme Court has ordered the owners and operators of the X-Press Pearl container vessel to pay $1bn in compensation for the devastating environmental and economic damage caused when the ship caught fire and sank off Colombo in 2021.

Described by the court as “the most severe marine environmental catastrophe in the country’s history”, the incident involved the Singapore-flagged vessel catching fire on May 20, 2021, while carrying hazardous cargo including 25 tonnes of nitric acid and over 1,500 containers. Despite weeks of firefighting efforts, the vessel sank on June 2, 2021, unleashing vast quantities of toxins and plastic pellets- also known as nurdles – into the Indian Ocean.

The fallout was catastrophic: extensive marine pollution, mass deaths of marine wildlife—417 sea turtles, 48 dolphins, eight whales—and severe disruptions to coastal ecosystems. A year-long fishing ban further devastated the livelihoods of thousands of Sri Lankans.

The court directed the $1bn be paid to the secretary to the treasury in instalments within one year. A MV X-Press Pearl Compensation Commission, chaired by retired justice E.A.G.R. Amarasekera, will oversee the restitution and rehabilitation process. The bench also directed Sri Lanka’s attorney general to expedite criminal investigations against those involved, including local agents and officials accused of inaction.

The ruling named the vessel’s owner, EOS Ro, charterers, and local agent Sea Consortium Lanka—all Singapore-based—as liable under the polluter pays principle. It found that these parties had acknowledged environmental harm but failed to offer credible assessments or counterclaims to the losses presented.

The Supreme Court held that the state had also failed its citizens. Then minister of environment Nalaka Godahewa and the Marine Environment Protection Authority (MEPA) were found to have violated fundamental rights by failing to take prompt preventive action. The ruling came in response to multiple fundamental rights petitions filed by environmentalists, fishing communities, and religious leaders.

The court declared the incident “the largest recorded marine plastic spill in the world”, citing the unprecedented release of hazardous materials that poisoned waters and harmed phytoplankton—critical to ocean ecosystems. The judgment also noted the disaster’s long-term effects, with pollution and ecological damage still evident four years on.

The owners and their representatives have yet to publicly comment on the ruling.

The full story of how the X-Press Pearl came to meet its fiery end in Sri Lanka has overtones of previous ship catastrophes such as the 2002 Prestige tanker incident and should fan the flames in the ongoing places of refuge debate.

Speaking with Splash in the wake of the disaster four years ago, Tim Hartnoll, the executive chairman of X-Press Feeders, said that poor packaging was responsible for an acid leak, which the crew had detected in some containers while in the Arabian Sea thousands of kilometres away from Sri Lanka. On detecting the leak, the ship’s captain then contacted two ports – Hazira on the west coast of India and Hamad in Qatar – requesting to offload the containers in question. The requests were denied and the brand new ship made its way to Sri Lanka.

“It was a case of not in my backyard syndrome,” Hartnoll said.