Tuesday, 6 July 2021 -
Ever Given – a 20,000 TEU containership that stuck in the Suez Canal three months ago – is finally set to depart the waterway on Wednesday. The announcement comes after the vessel’s owners (Japanese company Shoei Kisen Kaisha) reached a deal over compensation with the canal’s authorities in Ismailia, Egypt.
The containership was arrested on 13th April after the Suez Canal Authority (SCA) and the shipowners failed to agree on a compensation deal. The ship owners (Shoei Kisen Kaisha) felt at the time that the amount (in the region of $900 million) was too high and unsupported.
The SCA said the money was intended to cover the costs incurred in the ship’s salvage operations, as well as to balance the books for the losses that resulted from the waterway’s six-day blockage of commercial traffic.
Compensation Agreement
While the final details regarding the exact settlement amount have not been disclosed yet, here is what we know.
The UK Club (who have been actively involved in the negotiations) announced that the two parties had reached an agreement in principle. In an update, the UK Club said a formal solution had been agreed upon after a series of meetings with the SCA’s negotiating committee, as well as court hearings
The SCA acknowledged the agreement and said the signing ceremony has been planned in the city of Ismailia ahead of the ship’s departure on Wednesday.
The ship would be allowed to leave the Great Bitter Lakes region on Wednesday 7th, 2021, and preparations to mark its departure are already underway at the SCA headquarters in Ismailia.
According to the Associated Press, the two parties came to terms over compensation at the end of June over the ship’s grounding. The agreement comes on the back of months-long blame games and tug of war between the two parties, and the compensation claim proved to be an obstacle because the shipowners felt it was inflated.
Compensation Claim
Initially, the SCA sought a $916 million compensation amount, which the shipowners swiftly turned down as too high. The SCA subsequently slashed the amount to $600 million and broke down the settlement into a $200 million advance payment, plus a $400 million letter of guarantee payment. The owners made a series of rejection appeals but an agreement in principle has been reached and Ever Given containership is poised to depart the Suez Canal on Wednesday.
The Timeline
On 23rd March, Ever Given containership (owned by Japanese Company Shoei Kisen Kaisha and chartered by the Taiwan-based Evergreen Maritime Corporation) stuck in the busy Suez Canal, blocking the waterway for six days until the 29th of March.
After causing a six-day massive gridlock in the global trade, the containership was refloated on 29th March and towed to the Great Bitter Lakes, thereby enabling the canal’s authorities to clear the backlog and resume its commercial operations.
The ship remained anchored in the Great Bitter Lakes Region since then, while authorities embarked on a legal battle over a compensation deal to cover the ship’s salvaging operations and the six-day losses that stemmed from the blockage. A few days later, compensation negotiations hit a snag, leading to the ship’s arrest on 13th April.
The containership was manned by 25 sailors, who were allowed to sign off. At the time, SCA chairman Osama Rabie said the crew wouldn’t be held hostage to the situation and that the canal’s authorities were hopeful a compromise would soon be agreed upon.
(Written and edited by: The Decision Maker team)
