Egypt holds Ever Given ship until $916 million claim is paid

The giant container ship Ever Given that blocked the Suez Canal for almost a week in March is being held in the waterway as Egyptian authorities pursue a $916 million compensation claim against the ship’s Japanese owner.

Namely, the Suez Canal Authority (SCA) is seeking the $ 916 million claim in damages for the costs incurred by the ship’s blockage of the waterway.

Ever Given will be held until the claim is paid, with its crew of 25 members will not be able to leave the vessel.

Taiwanese shipping company Evergreen, the charterer of the container ship, said that any payments that are being demanded will be addressed by Shoei Kisen, the owners, and UK Club, the protection & indemnity (P&I) insurer for the Ever Given.

The P&I club has insured the company for third-party liabilities that might result from an incident such as this – including damage caused to infrastructure or claims for obstruction. The ship itself and its cargo will have been insured separately.

“Despite the magnitude of the claim which was largely unsupported, the owners and their insurers have been negotiating in good faith with the SCA. On 12 April, a carefully considered and generous offer was made to the SCA to settle their claim,”  the UK Club said in a statement on Tuesday.

“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.”

The UK Club further said that SCA did not provide a detailed justification for this extraordinarily large claim.’

As informed, the claim comprises a $300 million for a ‘salvage bonus’ and a $300 million claim for ‘loss of reputation’.

This does not include the professional salvor’s claim for their salvage services which owners and their hull underwriters expect to receive separately.

The P&I aspects of the claim are relatively modest, with the exception of the claim for loss of reputation, which is disputed, the club added.

The 20,000 TEU container ship, flagged in Panama, ran aground on March 23 blocking the Suez Canal waterway for hundreds of ships for six days.

On March 29, the ship was finally refloated and towed to the Great Bitter Lakes region for its technical examination. The Suez Canal resumed commercial operations shortly after refloating Ever Given and was able to clear the backlog in the following few days.

Previous reports indicate that gusting winds and poor visibility caused by a dust storm were the likely causes of Ever Given’s grounding. The owner refuted reports that linked grounding to a blackout due to a loss of power.

The flag state, Panama, has also launched an inquiry into the incident.

The UK Club added that owners have cooperated fully with the SCA throughout their investigation into the cause of the grounding, which is now complete.

As disclosed, the ship’s Voyage Data Recorder (VDR) data and all other requested information have been provided to the investigators.

“When the grounding occurred, the vessel was fully operational with no defects in her machinery and/or equipment and she was fully manned by a competent and professional master and crew. Navigation was being conducted under the supervision of two SCA pilots, in accordance with the Suez Canal Rules of Navigation,”  the insurer said.

ABS, the vessel’s classification society, completed its surveys on April 4 and issued a certificate of fitness to allow the vessel to move from Great Bitter Lake to Port Said.

Ever Given is expected to undergo reinspection in the port before completing its voyage to Rotterdam.

“The UK Club is working with all parties involved. Our priority is the fair and swift resolution of this claim to ensure the release of the vessel and cargo and, more importantly, her crew of 25 who remain on board,” the P&I club stated.

The owners plan to continue talks with the SCA.