Suez Canal Authority says 'door still open to negotiate with Ever Given ship' over compensation dispute

Mohamed Soliman , Tuesday 25 May 2021

The Japanese ship owner haggles over $550 mln compensation of blocking Suez Canal; offers to pay $150 mln

Ever Given
A file photo of the Ever Given stuck diagonally across the Suez Canal before the refloating efforts succeed (AP)

Head of the Suez Canal Authority (SCA) Osama Rabie said that the door is still open to negotiations with the owner of the Ever Given vessel, which blocked the Suez Canal in March, despite being impounded at a court order.

Rabie's comments came a day after he told the media that the Japanese ship owner offered to pay $150 million in damage over the losses incurred from the six-day traffic halt, down $450 million from a recently reduced reimbursement requested by the SCA.

The Panama-flagged vessel, which has since been anchored in a lake between two sections of the canal, is caught in a legal dispute linked to a $916 compensation claim made by SCA.

Rabie tackled the issue in a meeting held on Tuesday in Ismailia with a Panamanian delegation led by Panama's ambassador to Egypt, Alejandro Gentes, where he said the "achievement" of refloating the ship in "only" six days with no harm caused to its hull or the onboard cargo is "unappreciated" by the ship owner's end.

The skyscraper-sized ship had run aground across the canal on 23 March and was refloated on 29 March by a fleet of Egyptian tugboats and diggers.

The salvage attempts have "taken a heavy toll" on the SCA," Rabie told the delegation, as the authority used 15 tugboats and 2 dredgers in the nearly week-long rescue process.

He added that over 600 members of the SCA's staff, as well as diving and rescue units, participated in the efforts and one of the participants died after a motorboat sank during the process.

The canal's bank was negatively affected as well by the ship's bow, which was firmly wedged into it, he went on saying.

"Forty-eight ships rerouted their cargoes around other lanes," said the SCA head, as the blockage dragged on for six consecutive days, causing the closure of both directions of the man-made waterway, which is the shortest link between Asia and Europe.

The authority attempted in vain to settle the dispute out of the court and negotiated with the ship owner for 11 days before resorting to the legal actions, he added, according to a statement issued following his meeting.

On 13 April, an Egyptian court ordered the mega-ship be impounded after Shoei Kisen, the Japanese ship owner, refused to pay the required sum.

An appeal filed by the ship owner against the impounding order was rejected by an Egyptian appeals court, which allowed the SCA to keep holding the vessel.

Rabie added that the SCA provided the ship with all needed facilitations, including reducing the compensation claims twice.

The SCA has offered to slash the requested compensation from $916 to $600 million in a bid to end the financial disagreements out of the court.

In a second attempt to settle the current judicial dispute, the SCA has offered to cut compensation claims to $550 million, with the mega-ship to be allowed to leave if $200 million is paid in cash and the rest payable separately, Rabie announced on Sunday.

However, the SCA said, during Tuesday's meeting, the offer has not been accepted so far by the ship owner, the statement added.

Rabie indicated that investigations into how the ship grounded showed error in steering the ship, saying "this matter rests with the captain's responsibility, not the SCA's pilots who were aboard the ship during the incident."

"Their opinion is advisory and nonobligatory," he said of the SCA's pilots role.

Rabie refuted the claims on the SCA's responsibility for allowing the ship to enter the waterway during the bad weather, saying 12 ships had passed the canal the same day before the massive ship ran aground.

He stressed that the canal has experienced harsher weather conditions without accidents.

He added that the SCA's regulation states that the ship passing through the canal "bears responsibility for any damage or loss that results directly or indirectly from the ship … or the members of the Suez Canal Authority."

Shoei Kisen's Legal team had said the dislodging efforts are part of the SCA's duties, claiming $100,000 in initial compensation for losses due to the impounding order.

Rabie reiterated that the authority dealt with the situation with "complete flexibility" during the negotiation procedures to maintain the long-standing relationship with the ship owner, as being one of the SCA's "most important" customers.

He also added that the SCA's flexibility continued although the ship owner did not report the presence of "dangerous, flammable material with the goods aboard the ship.

"This would have had catastrophic consequences if the authority had not dealt with it professionally," he pointed out.

"The negotiation's door is still open," Rabie said.

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