4:16am 19th April 2021
This seems to be the new cry from the shippers on the Ever Given which is currently bobbing in the Great Bitter Lakes since it was freed from the banks of the Suez Canal where it was stuck for 6 days.
Why the question?
Well, as you know, on Monday 29th March 2021, saw the Ever Given being freed and successfully refloated.
The famous “boat” that was stuck in the “canal” was towed to the Great Bitter Lakes area in the eastern Mediterranean where it has been lying in wait for clearance after an inspection of its seaworthiness to resume its scheduled service.
Although the ship has been cleared for the journey by its classification society The American Bureau of Shipping (ABS), it has been confirmed today that the ship has been arrested by the Suez Canal Authority (SCA) in Egypt.
A statement by Evergreen Marine Corp, the operators of the vessel, stated that Evergreen was informed by the Japanese shipowners Shoei Kisen Kaisha that the vessel had been officially arrested by the Court in Egypt on April 13, 2021.
In accordance with the information from U.K. P&I Club, the protection and indemnity insurer for the Vessel, the shipowners received a claim from Suez Canal Authority (SCA) for the sum of US$ 916 million on April 7, 2021, to cover losses during the Ever Given’s grounding in the Suez Canal.
The claim included a US$300 million claim for salvage bonus and a US$300 million claim for loss of reputation.
It has been reported that the arrest followed a meeting between the shipowners and SCA on April 12, 2021, where no consensus was reached as SCA’s claims are largely unsupported and lack any detailed justification.
The following day (13th April), SCA filed an application to arrest the Vessel and this has been granted by the Court of Egypt.
In its statement, Evergreen has urged all concerned parties to facilitate a settlement agreement to be reached while they are investigating the scope of such a court order and studying the possibility of the vessel and the cargo on board being treated separately.
While the owners Shoei Kisen Kaisha have declared General Average, the shippers who have cargo on board the Ever Given are unclear as to when their cargoes will be released to them.
UK P&I reacts
For its part, UK P&I released its statement stating “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 SCA has not provided a detailed justification for this extraordinarily large claim. The grounding resulted in no pollution and no reported injuries. The vessel was re-floated after six days and the Suez Canal promptly resumed their commercial operations. 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.”
The vessel owners are said to have been cooperating fully with the SCA throughout their investigation into the cause of the grounding which was completed on the 4th of April by ABS.
As per reports, “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.”
“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,” added the Club
On his part, Osama Rabie, chairman of the Suez Canal Authority, has told in a televised interview that the SCA was “demanding payment for the costs of the rescue operation, damages to the banks of the canal and lost revenues because they don’t want to pay anything,” referring to the Japanese owners.
The SCA and Admiral Rabie have repeatedly denied responsibility on the part of SCA/Egypt for the incident.
This arrest adds to the legal quandary that not only keeps the Ever Given in the Great Bitter Lakes areas of the Suez Canal but is also keeping the customers from receiving thousands of containers carrying cargo from day to day consumer goods to auto parts to industrial products all bound for manufacturing plants and retail outlets across Europe.
An amount of $3.1 billion of liability coverage is said to have been made available to Shoei Kisen Kaisha via the IG Protection & Indemnity Clubs and the group is reported to have “made an undisclosed offer to the Suez Canal Authority, or SCA, to settle the claim“.
While the P&I insurance would cover the shipowner’s legal liability to the cargo owners, they don’t cover payouts for costs of delays and possible litigation and General Average.
While cargo owners would have (hopefully) taken their own marine cargo insurance against the risk of damage and losses it may not cover the costs of delays as not all of them take this expensive option.
The customers of the cargo on board may well end up having to pay security deposits as part of the General Average processes in order to get the cargoes released.
WSJ is reporting that for general average purposes, the insurance industry values the cargo at around $20,000 per box.
While some of the cargoes may be of low value and some of the high value all of this will be considered by the average adjusters for this vessel Richard Hogg Lindley, when determining how much each of the shippers for the 18,000 odd TEUs will have to pay.
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