The UK Club, one of the oldest Protection and Indemnity (P&I) clubs in the world and the Ever Given’s insurer rejected a new, lower damages claim from Egypt. The Suez Canal Authority (SCA) was seeking $916 million for the blockage of the Suez Canal, then dropped it to $600 million but the London-based insurance entity said Egypt’s reduced compensation claim was still “exceptionally large” for them to agree to.
The Ever Given, one of the world’s largest container ships, ran aground in Egypt’s Suez Canal in March, causing the suspension of the international maritime navigation through the crucial waterway for six days. The canal is a major source of income and strategic power for the country as about 12% of world trade passes through it. The Suez Canal connects the Mediterranean Sea to the Red Sea and provides the shortest sea link between Asia and Europe.
A few days after the ship was freed, the Egyptian government-run authority impounded the ship and its cargo and lodged an insurance claim of $916 million with the UK Club. The initial claim was intended to cover the $300 million in salvage costs, as well as the “loss of reputation” suffered by the blockage of the Suez Canal, according to the SCA.
The insurance company issued a statement labelling the $916 million demand “extraordinarily large”. News of the new reduced offer was rejected on similar grounds.
“The Ever Given’s owners still have not been provided with evidence that would support a claim of this size, which remains exceptionally large. The Ever Given’s interests continue to negotiate in good faith with the SCA,” the UK Club stated.
The insurer also said that it had previously made a “carefully considered and generous offer,” that the SCA had rejected.
The vessel, chartered by the Taiwanese company Evergreen and owned by the Japanese company Shoei Kisen Kaisha, is still loaded with thousands of containers and is being held in the Great Bitter Lake, outside the canal, amid the financial dispute about the level of compensation SCA has claimed from Shoei Kisen Kaisha.
The UK P& I Club has previously criticised the decision to “arrest” the ship, pointing out that the 400m-long (1,300ft), 200,000-tonne vessel had already passed inspections and been cleared to resume its voyage.
“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.” the insurer said. All 25 crew onboard are Indian nationals.
According to Shipping and Freight Resource, the estimated values of property on board the vessel is as follows:
1. Vessel Value: Approx.: USD 125 million
2. Cargo Value: Approx.: USD 500 – 600 million (although some have estimated that the value of cargo may well exceed USD 1 Billion)
3. Container Value: Approx.: USD 30 million
The next hearing of the Egyptian economic court has been scheduled for May 22 when the SCA’s claim will be considered.
An Egyptian court in Ismailia governorate rejected an appeal by Shoei Kisen against the Ever Given’s detention earlier this month.