By:Staff WriterColombo (LNW):Sri Lanka Finance Ministry has swiftly moved in to submit the country’s legal submissions on April 7 in defence following a United States District Court’s denial Sri Lanka Government’s motion to dismiss the case filed by Hamilton Reserve Bank on behalf of certain holders of International Sovereign Bonds (ISBs).
US Court will take up this matter on April 20-The Case filed by Hamilton Reserve initially sought damages for alleged non-payment of bonds, as well as injunctive relief based on the alleged violation of a clause on public or private international unsecured debt obligation.
Issuing an update on the US court case between Hamilton Reserve Bank (HBR) and the Sri Lanka Government, the Finance Ministry said on 24 March 2023, the U.S. District Court denied Sri Lanka’s motion to dismiss the Amended Complaint in Hamilton Reserve Bank Ltd. v. The Democratic Socialist Republic of Sri Lanka,
Following Sri Lanka’s motion to dismiss that initial complaint, Plaintiff filed an Amended Complaint on 13 October 2022, which dropped the debt obligation claims and asserted a single claim for non-payment.
On 4 November 2022, Sri Lanka filed a motion to dismiss the Amended Complaint, which the Court denied on 24 March 2023, the Finance Ministry said.
“As a result of the Court›s decision to deny Sri Lanka’s motion to dismiss, the case continues. There has been no judgement on the merits of the claim.
On 7 April 2023, Sri Lanka filed an Answer, in which Sri Lanka denied liability on Plaintiff’s claim. The Court has set a status conference for 20 April 2023. Sri Lanka looks forward to discussing the case with the Court on that date. We cannot comment further at this time,” the statement added.
Hamilton Reserve Bank is the beneficial holder of bonds issued by Sri Lankan Government which according to the judgement, is currently experiencing an economic and humanitarian crisis –defaulted on the bonds and Hamilton brought this breach of contract action to recover the principal and accrued interest owed.
Sri Lanka moved to dismiss on the grounds that plaintiff lacks contractual standing.Hamilton owns over $ 250 million in principal amount of the ISBs. Sri Lanka in mid-April announced a moratorium on foreign debt repayments including the Bonds and since then has made no payments on the Bonds.
The Bonds matured on 25 July 2022. Hamilton alleged that as a result of Sri Lanka’s default, it is owed $ 250.19 million in principle and $ 7.349 million in accrued interest (before accounting for pre and post-judgement interest).
Hamilton initiated this action on 21 June 2022 after which on 21 September Sri Lanka filed a motion to dismiss the complaint.