Update: Egypt Seizes Container Ship that Blocked Suez, Pending $916M Compensation

By Tarek El-Tablawy and | April 13, 2021

Egypt seized a giant container vessel that blocked the Suez Canal last month as it sought compensation of more than $900 million.

A court in the city of Ismailia granted a seizure request regarding the Ever Given vessel at the behest of the Suez Canal Authority, state-run Ahram Gate reported on its website.

Egypt’s move underscores the legal complications following the container vessel’s grounding on March 23, which closed the canal for almost a week and roiled shipping markets. Logjams are expected to continue in the coming weeks at major ports such as Singapore and Rotterdam because of disruptions to schedules, according to supply-chain data provider project44.

Read more: Lengthy Legal Battles Expected from Suez Canal’s Longest Closure in Almost 50 Years

The ship’s insurer for third-party losses, the U.K. P&I Club, said in a statement on Tuesday that the Ever Given’s owner — Japan-based Shoei Kisen Kaisha Ltd. — received a claim for $916 million.

“Despite the magnitude of the claim which was largely unsupported, the owners and their insurers have been negotiating in good faith with the SCA,” the statement said. “On 12 April, a carefully considered and generous offer was made to the SCA to settle their claim. We are disappointed by the SCA’s subsequent decision to arrest the vessel today.”

Tug boats pull the Ever Given container ship along the Suez Canal after being freed from the canal bank in Suez, Egypt, on Monday, March 29, 2021.
Photo credit: Islam Safwat/Bloomberg

The UK P&I Club also said it was “disappointed at comments by the SCA that the ship will be held in Egypt until compensation is paid, and that her crew will be unable to leave the vessel during this time.”

Loss of Fees

The SCA has said compensation is needed to cover losses of transit fees, damage to the waterway during the dredging and salvage efforts, and the cost of equipment and labor. It has calculated that it missed out on about $15 million of transit fees each day.

Read more: Suez Canal Authority Still in Talks About Compensation for Grounding of Container Ship

The UK P&I Club said the claim included a $300 million salvage bonus and another $300 million for loss of reputation.

“The claim presented by the SCA also does not include the professional salvor’s claim for their salvage services which owners and their hull underwriters expect to receive separately,” the UK P&I Club said. “The grounding resulted in no pollution and no reported injuries. The vessel was re-floated after six days and the Suez Canal promptly resumed their commercial operations.”

Negotiations will continue, it said. Calls to the SCA weren’t answered.

A spokesman for Shoei Kisen Kaisha declined to comment on compensation while discussions with the SCA are underway. The company said the crew is still on board the ship, which is now in the Great Bitter Lake, about halfway along the canal.

The charterer, Taiwan’s Evergreen Marine Corp., said in an email it hadn’t received any information from the ship’s owner about a court order.

–With assistance from Masumi Suga, Dana Khraiche, Salma El Wardany, Mirette Magdy and Cindy Wang.

Top photograph: In this photo released by Suez Canal Authority, the Ever Given, a Panama-flagged cargo ship, is pulled by one of the Suez Canal tugboats, in the Suez Canal, Egypt, on Monday, March 29, 2021. Photo credit: Suez Canal Authority via AP.

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