The huge container ship that blocked the Suez Canal for almost a week last month is being held by Egyptian authorities as they seek compensation of more than $900m from its owners.
An Egyptian court this week ordered that the Ever Given should be seized as talks continued between the Suez Canal Authority that operates the waterway and the vessel’s Japanese owner and its insurers over who pays for losses resulting from the blockage.
The SCA made a claim for $916m on April 7, according to the UK P&I Club, an insurer that covers the owner, Japan-based Shoei Kisen Kaisha, against third-party liabilities.
Osama Rabie, SCA head, told Egyptian television on Monday that an investigation into the cause of the incident would finish on Thursday, but that the talks over compensation continued.
The ship’s owner was trying to reduce the bill by 90 per cent, Rabie said, adding: “They don’t want to pay anything.”
The compensation covered the rescue as well as delay costs and damage to equipment and the canal, he explained. The canal “suffered enormous damages and we made no mistakes,” he said.
Shipping industry analysts pointed out that the SCA puts two pilots on board vessels to help them navigate the waterway.
UK P&I said on Tuesday that a “carefully considered and generous” counter-offer had been made to the canal authority, adding that it was “disappointed by the SCA’s subsequent decision to arrest the vessel”.
Shoei Kisen Kaisha confirmed on Wednesday that the Ever Given had been impounded but declined to comment further, saying it would respond in accordance with local law.
Evergreen Marine, the Taiwanese operator of the 220,000-tonne vessel, said on Wednesday that the SCA’s claims were “largely unsupported and lack any detailed justification”.
“Evergreen is urging all concerned parties to facilitate a settlement agreement,” it said, adding it was also “investigating the scope” of the court order.
The Ever Given is impounded in the wider Great Bitter Lake section of the canal where traffic can pass.
UK P&I is part of a an international group of 13 mutuals which share the first $100m of large claims. The group also has $3bn of reinsurance cover.
Fitch, the rating agency, has forecast the episode would be a “large loss event” for the reinsurance industry.
UK P&I said the SCA claim included $300m for “loss of reputation,” which the insurer disputed, as well as a $300m “salvage bonus”. It continued: “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.”
Refinitiv, a data provider, has estimated that lost transit fees totalled less than $100m.
Salvage costs will typically be paid by the hull and machinery insurer, according to insurance experts. Shoei Kisen told the Financial Times last month that this cover was provided by Tokyo-based MS&AD Insurance Group. MS&AD declined to comment at the time.
Shoei Kisen sent out a letter to cargo owners last month to declare so-called general average, according to one cargo owner with goods on board. General average is an ancient maritime law that requires all parties involved in a voyage to share losses proportionally resulting from actions taken to save the vessel.
The amount cargo owners or their insurers would pay depends on the value of their cargo onboard, not the number of containers, and insurers typically have to pay a guarantee to release the cargo that ensures they will adhere to the final bill determined by an insurance adjuster.
The cargo owner said a quick resolution was not expected. “I’ve told my customers to plan for a life without that cargo in the medium-term.”
Source: Economy - ft.com
