Ever Given Seized As Egyptian Authorities Demand $ 900 Million In Compensation

The huge container ship that blocked the Suez Canal for nearly a week last month is being held by Egyptian authorities as they demand more than $ 900 million in compensation from its owners.

An Egyptian court this week ordered the Ever Given to be seized as talks continued between the Suez Canal Authority which operates the waterway and the ship’s Japanese owner and its insurers over who pays for losses resulting from the waterway. blocking.

SCA filed a claim for $ 916 million on April 7, according to the UK P&I Club, an insurer that covers owner, Shoei Kisen Kaisha, based in Japan, against third party liability.

Osama Rabie, head of the SCA, told Egyptian TV on Monday that an investigation into the cause of the incident would end on Thursday, but that compensation talks were continuing.

The shipowner was trying to cut the bill by 90%, Rabie said, adding: “They don’t want to pay anything.”

Compensation covered the rescue as well as late fees and damage to equipment and the canal, he explained. The canal “suffered enormous damage and we made no mistakes,” he said.

Marine industry analysts have pointed out that the SCA puts two pilots on board ships 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 with the SCA’s subsequent decision to stop the vessel”.

Shoei Kisen Kaisha confirmed on Wednesday that Ever Given had been impounded, but declined to comment further, saying he would respond according to local law.

Evergreen Marine, the Taiwanese operator of the 220,000-ton vessel, said on Wednesday that the SCA’s claims were “largely unsubstantiated and lacked detailed justification.”

“Evergreen urges all parties involved to facilitate a settlement agreement,” he said, adding that he was also “investigating the scope” of the court order.

Ever Given is impounded in the larger Grand Bitter Lake section of the canal where traffic can pass.

UK P&I is part of an international group of 13 mutuals that share the first $ 100 million of large claims. The group also has reinsurance coverage of $ 3 billion.

Fitch, the rating agency, predicted the episode would be a “great loss event»For the reinsurance sector.

UK P&I said SCA’s claim included $ 300 million for “loss of reputation”, which the insurer disputed, as well as a “rescue premium” of $ 300 million. He continued, “The claim made by the SCA also does not include the claim of the professional rescuer for his rescue services which the owners and their hull insurers expect to receive separately.

Refinitiv, a data provider, estimated the lost transit charges to be less than $ 100 million.

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 coverage was provided by Tokyo-based MS&AD Insurance Group. MS&AD declined to comment at the time.

Shoei Kisen sent a letter to cargo owners last month to report what is known as general average, according to a cargo owner with goods on board. General average is an old maritime law which obliges all parties involved in a voyage to share proportionately the losses resulting from the measures taken to save the ship.

The amount that cargo owners or their insurers would pay depends on the value of their cargo on board, not the number of containers, and insurers usually have to pay a guarantee to release the cargo that ensures they will meet the determined final bill. by an insurance expert. .

The owner of the cargo said a quick resolution was not expected. “I have told my clients to plan a life without this cargo for the medium term.”

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