Suez Canal Authority seeks private settlement over Ever Given claims

The Suez Canal Authority (SCA) is talking to shipowner Shoei Kisen Kaisha about settling claims related to the Ever Given grounding.

SCA managing director Osama Rabie said the authority is seeking around $1bn in compensation for the grounding of the 20,388-teu containership Ever Given (built 2018) that closed the canal for six days from 23 March.

"We are discussing with them a peaceful resolution to the matter without resorting to the judiciary," he told Associated Press on Tuesday.

Suez Canal Authority threatens $1bn claim for Ever Given losses

Read more

Suez Canal expects to be 'back to normal' from Monday morning

Read more

Shoei’s principal third-party liability insurance, which would cover the SCA’s claims for damage and financial loss, is with the UK P&I Club.

A spokesman for the club said it had an "open dialogue" with the SCA and discussions are being held.

Rabie's comments came after Shoei Kisen made the first move in attempting to resolve the financial liability issues around the grounding by declaring general average.

The Japanese shipowner said it is fully cooperating with Egyptian officials to determine the cause of the accident, which may influence the settlement of financial liability.

"The data from the vessel’s voyage data recorder has been shared with the investigators," the company said. "The SCA teams have full access to the vessel and any data they may require to complete their investigations."

Shoei, through its companies Luster Maritime and Higaki Sangyo, has also begun limitation of liability proceedings in the High Court in London. Its filing names the ship's charterer, Taiwanese liner operator Evergreen Marine, and other interests as potential claimants against the shipowner.

Evergreen said it received a notice from the lawyer representing Ever Given’s owner on 1 April, "which specified that the owner had filed an admiralty limitation claim at the High Court of Justice in the UK in accordance with the Merchant Shipping Act 1995, in view of the liabilities and compensation that may occur due to the grounding incident”.

The move to declare general average will be a relief to Shoei’s Japanese hull and machinery insurers, as general average will now include cargo insurers in the settlement of the salvage bill.

Salvage services in the Suez Canal have a reputation for being expensive and are expected to make up one of the costliest elements of Ever Given claims.

Pooled claims

Charles Taylor company Richard Hogg Lindley has been appointed average adjuster and will determine the level of security required from cargo owners to secure the release of containers.

The vessel is being assessed for repair at Great Bitter Lake after a structural assessment by classification society ABS, and it is expected to be some time before cargo owners receive their cargo.

Further delays could add to cargo damage and increase insurance claims.

No claims reserve figure has yet been notified by the UK Club to the International Group of P&I Clubs under its pooled claims system, which includes claims over $10m.

International Group members hope the eventual figure can be kept below $100m.

Pooled claims above $100m eat into the International Group's reinsurance cover with the commercial market and could have implications for P&I rates in the future.