W
eeks after the container ship Ever Given was freed from the sandy banks of the Suez Canal, the financial fallout from its blockage of the crucial shipping route is still being counted. Until it is, the ship, its crew and its cargo remain in limbo. Egyptian authorities seized the Ultra Large Container Vessel (ULCV) after it was refloated, initially demanding $US916 million from its Japanese owner, Shoei Kisen and its insurer, protection and indemnity (third party) liabilities insurer UK P&I Club, as a condition for its release. The Suez Canal Authority says the compensation it is seeking is to cover it for “loss of reputation”, the rescue operation, transit fees lost during the holdup and other costs. It has since reportedly reduced its demand to $US550 million. But the financial dispute does not appear likely to be headed for a swift settlement. The most recent update from UK P&I as this issue went to print says “the owners of the Ever Given and their insurers have been committed to an amicable and fair resolution of this matter and remain so.” The matter is before the Ismailia Economic Court of First Instance, which adjourned proceedings until June 20 to “allow further settlement discussions to take place between the parties,” the UK P&I update says. Shoei Kisen has declared General Average. Under international maritime law, when the loss mitigation convention is triggered, all cargo owners with goods on a ship will contribute to the costs of any loss even if they have not suffered any damage. For insured cargo on the Ever Given part of these costs may be absorbed by the
38 insuranceNEWS
June/July 2021
insurance industry, depending on how the policies are arranged. The Ever Given saga may therefore drag on in courts for years. It has reignited the insurance industry’s nightmares about incidents involving ULCVs like the Ever Given. (Container ships are classified by the number of 20foot container units (TEUs) they can carry. It’s worth noting that at 20,000 TEUs the Ever Given is not even in the “top 10” of ULCVs. The largest such ship at present, the Algericas, carries 24,000 TEUs.) Loaded with a vast assortment of everyday goods, the Ever Given and its 18,000 containers were en route from Asia to the port of Rotterdam when calamity struck. The ship was moving through the Suez Canal on March 23 when it became jammed at an angle across a narrow section of the man-made waterway, its bow driving into the sandbank and its stern lodging against the other side. Initial reports suggested the grounding happened amid poor visibility and high winds from a sandstorm, although human error has not been ruled out. An investigation into the incident is ongoing. It took six days and seven hours for engineers and salvage crews, aided by a flotilla of tugboats and dredging equipment, to dislodge the vessel from the banks of the canal. The Ever Given accident reveals yet again the complexity of marine insurance when ships carrying cargoes insured by myriad insurers from many countries
