Sunday, June 13

Ever Given remains rooted in Egypt as Egypt compensation battle rages

Lemons, bamboo shoots, and tofu sit in the sweltering heat, along with products from Lenovo, Ikea, Dixons Carphone, and dozens of other brands, including barbecues, loungers, swimwear, lawn mowers, and camping gear, and they’ll come to you. their intended destinations much later. summer ends.

Since the successful operation to dislodge the 220,000 tonnes Ever Given from the Suez Canal, where it was stuck for six days, the freighter has been grounded again, this time by a fierce legal battle between the ship’s owners, insurance companies and the Suez Canal Authority.

At the end of April, Egypt declared that authorities were holding the ship, its 26-person crew and millions of pounds in cargo, until its owners paid compensation for the blockade.

The ship will not be able to leave Egyptian waters until the problem is resolved. “We are frustrated. Some of our customers are outraged, ”said Jai Sharma of the insurance company Clyde & Co, which represents the producers of more than $ 100 million in cargo aboard the Ever Given. Although the cargo remains officially stopped, physically removing it from the gigantic ship is unlikely to become an option, as equally gigantic cranes are required to move it into a port deep enough to accommodate such a large vessel.

Dixons Carphone, Chinese tech maker Lenovo and Ikea separately confirmed that their products remain trapped on the ship. “A small amount of our containers remain on the Ever Given vessel, however there is no significant disruption to our stock levels or business operations,” said a spokesperson for Dixons Carphone. Some retailers are considering taking legal action against the Egyptian authorities to try to free their cargo. “We are exploring ways to recover the assets,” Lenovo’s Charlotte West said, but declined to give details.

The battle revolves around a legal fight for compensation, which is due to return to court in the Egyptian port city of Ismailia later this month. Suez Canal Authority saying It seeks $ 916 million from Ever Given’s owners, Shoei Kisen, and its insurers, the UK P&I Club, including some salvage costs borne by cargo insurers.

The crew of the MV Ever Given during a visit by members of the International Transport Workers Federation
The crew of the MV Ever Given during a visit by members of the International Federation of Transport Workers. Photo: International Federation of Transport Workers

While the SCA has since said that it is willing to agree to a $ 550 million settlement, it has yet to provide information to explain its colossal lawsuit, aside from listing $ 300 million for a “ransom bond” and another $ 300 million for “loss of reputation”. ”And physical damage to the canal. Egyptian authorities quietly revealed In late May, that person died during the rescue effort.

“Even $ 550 million is unsustainable,” Sharma said. “My impression is that the entire claim is inflated.” Clyde & Co raised a particular problem with the size of the ransom bond. “The SCA said from the outset with great fanfare that 800 Egyptians worked for six days to rescue the ship – $ 300 million spread over 800 people for six days of work is a generous pay package, it’s hard to think how this makes any sense. “. Sharma said.

“The SCA has not provided a detailed justification for this extraordinarily large claim,” the UK P&I Club saying in April. “The ship was refloated after six days and the Suez Canal quickly resumed commercial operations.”

Observers remain confused as to why the SCA has lobbied for compensation for its reputational damage, while continuing to seize the ship, crew and cargo, causing further damage to global supply chains. “In many ways this incident was an opportunity for Egypt to shine,” said Dustin Eno of the UK P&I Club.

“The UK P&I Club recognized that the SCA assisted with the salvage and was successful within six days. This was a great result that Egyptians should be proud of, it brought a lot of attention to the Suez Canal and its tremendous contribution to world trade. I fight to see why they think their reputation was damaged. “

Clyde & Co wrote to the SCA in May, asking it to take into consideration the fact that some products on board are at risk of expiring, going out of season or becoming unsellable as delays lengthen. Expired goods could create a “significant disposal problem,” added Clyde & Co.

“In our opinion, if the SCA is reported to refuse to release urgent cargo during a global pandemic, such an approach could cause serious damage to the reputation of the SCA.” Clyde & Co said it has not received a response.

The ship of the International Federation of Transport Workers stops at Ever Given, showing part of the cargo on board.
The ship of the International Federation of Transport Workers stops at Ever Given, showing part of the cargo on board. Photo: International Federation of Transport Workers

There is still little agreement on what caused the ship to land. High winds and low visibility due to a sandstorm were initially raised as the likely cause, but disputes persist over why the SCA allowed Ever Given to enter the waterway if the weather put ships at risk.

The head of the SCA investigative committee on the incident, El-Sayed Sheisha, told reporters the Ever Given was speeding up and veering, and he blamed the ship’s captain. The SCA requires two canal pilots to stay aboard ships of this size, taking control to allow them to navigate the narrow waterway, but canal rules hold third parties responsible for any damage caused.

The UK P&I club said it was “concerned” by the SCA’s claims against the ship’s captain, including the fact that he was speeding. The speed of ships crossing the waterway is normally regulated when traveling in a convoy. “While the captain is ultimately responsible for the vessel, navigation in Canal transit within a convoy is controlled by the Suez Canal pilots and SCA vessel traffic management services. These controls include the speed of traffic and the availability of escort tugs, ”said the UK P&I club.

SCA President Osama Rabie saying Egyptian authorities now intend to expand a 30-kilometer stretch of the canal south of the Great Bitter Lake, where the Ever Given ran aground in March. Meanwhile, negotiations continue to free Ever Given, his crew and cargo again.

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