The container ship that blocked the Suez Canal near Egypt for days at the end of March, the Ever Given, is still forbidden to leave Egypt. An Egyptian court has rejected an appeal by the Japanese owner against the earlier seizure.
Authorities are demanding damages of 900 million dollars from the owners of the ship. In April, the court allowed the 400-metre ship to be seized while compensation for Egypt was being discussed.
Claim unsubstantiated
The court has now ruled that the Suez Canal Authority (SCA) may maintain the seizure because of the shipowner’s ‘failure to pay a sum of 900 million dollars’. Charterer Evergreen had earlier argued that the claim was largely unsubstantiated and contained a number of ‘unusual’ items such as the USD 300 million “salvage bonus” and compensation for reputational damage of 300 million. In addition, the canal authority argued that the plaintiff had not notified all parties of its objection to the ship’s detention within the specified time.
Shoei Kisen Kaisha and insurer UK P&I have been trying for weeks to reach a compromise with the SCA, but so far the Egyptians have put their foot down. The court’s ruling has further strengthened the channel operator’s bargaining position. UK P&I says the owners are studying the court’s decision. They have until 20 May to appeal.
Also read: Container ship that blocked Suez Canal seized by Egypt
Maritime lawyer Gijs Noordam expects that insurer UK P&I will eventually have to give in and stand as guarantor for the payment of the claim. ‘When the legal possibilities have been exhausted, that is the only possibility to free the ship. The insurer will only do so under heavy protest to provide legal cover,’ he has told NT.nl. On the other hand, he says, SCA will do everything in its power to ‘pull money out of the guarantee’.
Loss of value
The departure ban does not apply to the crew and five crew members have already been given permission to leave. Bernhard Schulte Shipmanagement, which manages the ship operationally, says the welfare of the crew has ‘the highest priority’.
The court ruling adds to the uncertainty surrounding the estimated more than 15,000 TEU of loaded containers on board. The value of these amounts to hundreds of millions. Some of the cargo, such as seasonal items, lose value rapidly the longer the seizure lasts. The court has ruled that the containers cannot be transferred to another ship, as Evergreen has considered.
Security deposit
Because the shipping company has invoked the damage waiver, cargo interests will have to contribute to the salvage costs. This means that they will have to pay a deposit or provide a bank guarantee to get their containers back. The settlement of the damage claim, which will probably take some time, has been contracted out to the British claims agent Richard Hogg Lindley.
Suez Canal blockage
The Ever Given was stuck in the Suez Canal for almost a week. This is one of the most important waterways in the world and about one eighth of the world’s trade in goods passes through the 193 kilometre-long waterway between the Red Sea and the Mediterranean. Normally, almost ten billion dollars’ worth of goods pass through the canal every day.
The week-long blockage caused long queues of ships on both sides of the canal. More than 350 ships had to wait before they could pass. Some of the ships that were on their way to Europe from Asia decided to sail around Africa.
Also read: Container ship Ever Given grounding: Could it happen again?
Picture by Suez Canal Authority.
This article first appeared in Dutch on NT.nl, a publication of SWZ|Maritime’s publishing partner Promedia, but also contains additions from ANP.
