Settlement reached over ship stuck in Suez Canal

Reportedly, the owner and insurers of the mega container ship that blocked the Suez Canal for six days in March 2021 and disrupted global shipping have reached a settlement with the Egyptian authorities.

The insurer's statement did not specify the amount, but said that once the settlement is formalized, the ship ‑ Ever Given ‑ after nearly three months of haggling, finger-pointing and court hearings - would finally complete its journey through the canal.

"Following extensive discussions with the Suez Canal Authority's negotiating committee over the past few weeks, an agreement in principle between the parties has been reached," said a statement from the insurer UK P & I Club. "Together with the owner and the ship's other insurers, we are now working with the SCA to finalize a signed settlement agreement as soon as possible."

Since the ship was freed in a huge salvage effort, about six days after running aground across the Suez, the canal authority had been locked in an often acrimonious stand-off with the ship's owner and operators over what the authority said it was owed for the incident.

The authority had sought up to US$ one billion in compensation, a figure that included the cost of tugboats, dredgers and crews hired to salvage the ship as well as the loss of revenue while the canal was blocked.

Under the standard terms that shipping companies are required to accept before traversing the Suez Canal, ships are liable for all costs or losses they cause in the canal.

Still, the authority never provided a detailed breakdown of how it had arrived at such a large amount.

The sum does not cover the disruption to worldwide shipping, including delayed cargo and costs to other shipping lines, which experts have said could ultimately soar into the hundreds of millions.

Physically, at least, the Ever Given was long ago declared fit to move on. But until compensation is paid, the ship and its crew will remain impounded in the 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 SCA Chairman, Osama Rabie.

An Egyptian court had ordered the ship held until the financial claims were settled, a move that drew protests from the Ever Given's Japanese owner, Shoei Kisen Kaisha.

For more than three months, they faced off in an Egyptian commercial court and in the local press.

The Egyptians insisted that the captain - who, under SCA rules, bore ultimate responsibility for commanding the ship despite the presence of Suez pilots who directed steering and speed - was to blame.

Whatever were the Ever Given's objections, the canal having a reputation for demanding large liability sums from ship-owners, enjoyed a strong hand in the negotiations.

The months of negotiations left the ship's crew of 25 Indian seafarers stuck in the middle, unable to leave the Ever Given until the bargaining ends, but for a few cases in which the Egyptian authorities granted crew members' requests to leave after their contracts ended or for family reasons.