Egypt Seeks Out-of-Court Settlement with Owners of Huge Ship that Blocked Suez Canal

April 7, 2021 by

ISMAILIA, Egypt – The Suez Canal chief said Tuesday that authorities are negotiating a financial settlement with the owners of a massive vessel that blocked the crucial waterway for nearly a week.

Lt. Gen. Osama Rabie told The Associated Press he hoped talks with Shoei Kisen Kaisha Ltd., the Japanese owner of the skyscraper-sized Ever Given, will conclude without a lawsuit.

Related:

Suez Blockage Claims Expected to Hike Marine Reinsurance Rates, Says Willis Re

“We are discussing with them a peaceful resolution to the matter without resorting to the judiciary,” he said. He maintained that bringing the case before a court would be more harmful to the firm than settling with the canal’s management.

The canal chief said last week the Suez Canal Authority was expecting more than $1 billion in compensation, warning the ship would not be allowed to leave the canal if the issue of damages turns into a legal dispute. That amount takes into account the salvage operation, costs of stalled traffic and lost transit fees for the week that the Ever Given blocked the canal. He did not specify then who would be responsible for paying the compensation.

The massive cargo ship is currently in one of the canal’s holding lakes, where authorities and the ship’s managers say an investigation is ongoing.

Rabie also said Tuesday investigators have analyzed data from the voyage data recorder, also known as a vessel’s black box, but no conclusion had yet been reached on what led the Ever Given to run aground.

He refused to discuss possible causes, including the ship’s speed and the high winds that buffeted it during a sandstorm, saying he could not comment on an ongoing investigation. Initial reports suggested a “blackout” struck the vessel, something denied by the ship’s technical manager.

Last week, salvage teams freed the Ever Given, ending a crisis that had clogged one of the world’s most vital waterways and halted billions of dollars a day in maritime commerce.

“We’ve achieved one of the world’s biggest salvage operations under difficult and complicated circumstances … in only six days,” Rabie said.

The Panama-flagged ship that carries cargo between Asia and Europe ran aground on March 23 in the narrow, man-made canal dividing continental Africa from the Asian Sinai Peninsula.

Its bow was touching the eastern wall, while its stern looked lodged against the western wall – an extraordinary event that experts said they had never heard of happening in the canal’s 150-year history.

“The case that we had was complicated and non-traditional, so there should have been a non-traditional solution,” Rabie said.

He said they relied on dredgers to remove sand from underneath the hulking vessel. Then, a flotilla of tugboats, aided by the tides, wrenched the bulbous bow of Ever Given from the canal’s sandy bank, where it had been firmly lodged.

Rabie said it was a difficult decision to use dredgers because it was the first time authorities used such machines in rescue operations in the canal. But it proved fruitful, he said.

The unprecedented six-day shutdown, which raised fears of extended delays, goods shortages and rising costs for consumers, added to strain on the shipping industry already under pressure from the coronavirus pandemic.

The canal authority said it cleared a maritime traffic jam that had grown to more than 420 vessels waiting on both ends of the Suez Canal and in the Great Bitter Lake and the canal was back to its normal average.

Photograph: In this March 30, 2021 file photo, the Ever Given, a Panama-flagged cargo ship, is seen in Egypt’s Great Bitter Lake. The Suez Canal chief said on Tuesday, April 6, 2021, that authorities are negotiating a financial settlement with the owners of the massive vessel that blocked the crucial waterway for nearly a week. Photo credit: AP Photo/Mohamed Elshahed.