Egypt's Suez Canal Authority impounds Ever Given ship pending $900 million in compensation for blockage losses

Ahram Online , Tuesday 13 Apr 2021

The announcement was made on Tuesday by the SCA chairman, who said the figure covers the cost of refloating and maintaining the vessels under a lien order issued by the Ismailiya economic court

Ever Given
The giant Ever Given ship

Egypt's Suez Canal Authority (SCA) has provisionally impounded the giant Ever Given ship that had blocked the canal for nearly a week as per an Egyptian court's order pending payment of $900 million in compensation for the losses incurred by the blockage.

The announcement was made on Tuesday by Osama Rabie, the chairman of the SCA, who said the figure covers the cost of refloating and maintaining the skyscraper-sized vessels under a lien order issued by the Ismailiya economic court, according to Ahram Arabic news website.

A fleet of tugboats and diggers, with the assistance of the tide, managed to refloat the vessel, whose bow had been firmly lodged into the canal sandy bank, causing a huge build-up of vessels at the strategic waterway.

The 400-metre-long ship, which had run aground across the canal on 23 March and refloated on 29 March, is now idle in the Bitter Lakes, a wide stretch of water halfway between the north and south ends of the canal, where an investigation into the incident has been ongoing.

The SCA had submitted a report on the vessel's stranding and then filed a request with the economic court to impound the vessel until a compensation of $900 million has been paid, according to Rabie.

The Panama-flagged MV Ever Given, which is carrying cargo worth more than $3.5 billion, is owned by the Japanese firm Shoei Kisen and operated by a Taiwanese Evergreen Marine Corp.

In a TV comment to state-owned Channel 1 on Monday evening, Rabie said the investigation is expected to conclude by Thursday, unlike the negotiation process with the shipowner's insurance providers, which he said involves “many details.”

The shipowner, he added, is contesting 90 percent of the required sum, saying “they do not want to pay anything.” 

Last week, Rabie told AP that the authority was negotiating with the Japanese owner of the Ever Given on a financial settlement, expressing his hope that the talks would conclude without a lawsuit.

Earlier this month, the SCA chairman said a settlement could have been reached in a friendly way if the shipowner paid a lump sum compensation while assuring that going to court was on the table, albeit it would take a longer time.

He announced a rough estimate of $1 billion in compensation for the losses incurred from the blockage and for the cost of dislodging attempts.

"Extraordinarily large claim”

Ever Given’s protection and indemnity (P&I) insurer, UK Club, said it was “disappointed” by what it described as the arrest of the vessel despite a “carefully considered and generous offer” made to the SCA.

“We are disappointed by the SCA’s subsequent decision to arrest the vessel today. We are also 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,” it said.

It did not provide details on the offer it has submitted to the SCA.

UK Club said that “despite the magnitude of the claim which was largely unsupported, the owners and their insurers have been negotiating in good faith with the SCA”.

It said the SCA has not provided a detailed justification for this “extraordinarily large claim”, which it said includes a $300 million claim for a “salvage bonus” and a $300 million claim for “loss of reputation”.

The claim by the SCA does not include a salvage firm hired to rescue the vessel, it said, of which its owners and their hull underwriters expect to receive separately.

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