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Sri Lankan firm Lanka Bunkering Services (Pvt) Ltd. (LBS) is said to be demanding a payment of almost US$1 million from John Keells Holdings(JKH) and Lanka Marine Services (LMS), after alleging that it was prevented from delivering marine fuel to ships in Colombo in 2004, The Sunday Times reports.

A payment of US$935,873.53 together with interest at 21% from 8th August 2004 is said to have been demanded by LBS in a letter of demand which was sent to JKH and LMS last week.

The letter reportedly claims that both JKH and LMS prevented LBS from delivering 58,229.133 metric tonnes of marine fuel carried on board a motor tanker named 'Serifos' lying within the port of Colombo.

LBS said the Serifos had been chartered to transport the aforementioned quantity of marine fuel to Sri Lanka, which had been purchased at a cost of approximately US$9 million. The company said it intended to transfer the bunker fuel to Colombo and then use smaller tankers owned by Sri Lanka Shipping Co. Ltd to provide bunkering services to ships calling at the port.

However, LBS alleges that the Serifos was denied a berth upon arrival at the port of Colombo on or around 8th July 2004 and subsequently prevented from carrying out bunker deliveries or transferring the fuel to other vessels.

LBS reportedly claims JKH and/or LMS had contrived to prevent them from delivering bunker fuel to ships in Colombo by compelling the Sri Lanka Ports Authority (SLPA) to invoke the terms of a Common User Facility (CUF) Agreement entered into between the government, the Ceylon Petroleum Corporation (CPC), the SLPA and LMS.

It is claimed that companies engaged in bunkering activities in Colombo were compelled to use the CUF, an agreement which the Supreme Court ruled as being illegal in its judgement in July 2008.

LBS has reportedly said that action will be filed in the District Court of Colombo if JKH and LMS fail to respond to the letter of demand within a period of two weeks from the date of receipt.