Settlement Is Reached Over Caught Ship That Blocked Suez Canal in Egypt

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CAIRO – The owner and insurers of the giant container ship, which blocked the Suez Canal for six days in March and disrupted worldwide shipping, have reached an agreement with the Egyptian authorities, one of the insurers said on Wednesday.

The insurer’s statement did not include any details on the amount, but said that – after nearly three months of haggling, finger pointing and court hearings – the ship would finally end its journey through the canal once the deal was formalized.

“After extensive discussions with the negotiating committee of the Suez Canal Authority in the last few weeks, a fundamental agreement was reached between the parties,” said a statement from the UK P & I Club. “Together with the owner and the other insurers of the ship, we are now working with SCA to conclude a signed settlement agreement as soon as possible.”

A UK club spokesman said it would not release any further details. The Suez Canal Authority had not commented on the deal by Wednesday afternoon.

Since the ship was freed in a huge rescue operation in March, about six days after it ran aground across the Suez, the Canal Authority was in an often bitter stalemate with the shipowner and the operators about the debts specified by the authorities for the incident .

The agency had asked for up to $ 1 billion in compensation, a figure that included the cost of tugs, dredgers and crews hired to salvage the ship, as well as the loss of revenue while the canal was closed. During the delay, some ships made a U-turn and sailed around the tip of Africa instead of waiting for Suez traffic to resume, thereby removing their tolls from the canal.

According to the standard conditions that shipping companies must accept before crossing the Suez Canal, ships are liable for any costs or losses they cause in the Canal. However, the agency has never broken down in detail how it came to such a large sum.

The total doesn’t cover the disruption to worldwide shipping, including delayed freight and costs to other shipping companies, which experts say could ultimately run into the hundreds of millions.

At least physically, the Ever Given was declared fit to move on a long time ago. But until the compensation is paid, the ship and its crew will remain in Great Bitter Lake, a natural body of water that connects the section of the canal where the ship was stuck to the next segment, according to Lt. Gen. Osama Rabie, the head of the Suez Canal Authority.

An Egyptian court had ordered the ship to be held until the financial claims were settled, a move that sparked protests from the Japanese owner of Ever Given, Shoei Kisen Kaisha.

They faced each other in an Egyptian commercial court and in the local press for over three months. The Egyptians insisted that the captain, who, according to the rules of the Suez Canal Authority, had ultimate responsibility for running the ship, was to blame despite the presence of Suez pilots who controlled the steering and speed.

Regardless of Ever Given’s objections, the channel, which has a reputation for demanding large amounts of liability from shipowners, had a strong hand in the negotiations. The canal remains the shortest route to transport cargo from Asia to Europe and beyond. The ship was far too valuable to be abandoned.

The months of negotiations left the ship’s crew of 25 Indian seafarers stuck in the middle and were unable to leave Ever Given until the end of the negotiations, but in some cases the Egyptian authorities upheld the requests of crew members after their contracts had expired or for family reasons.

After other marine casualties, crew members have been stranded on seized ships for months or even years. In some cases, they have been arrested because local authorities have found someone to be responsible for an oil spill or chaotic accident.

In this case, however, the crew seems to have been spared.

“A foreign seaman is a very easy target,” said Stephen Cotton, general secretary of the International Transport Workers’ Federation, which represents the crew.

In an interview following the ship’s seizure, Abdulgani Serang, the secretary-general of the National Union of Seafarers of India, described the crew he briefly spoke to as tense and under pressure from the investigation.

“Rightly so,” he said, “they are stressed.”

Nada Rashwan contributed to the coverage.