Early agreement reached in dispute over cargo ship which blocked Suez Canal

The owners and insurers of the huge container ship, which blocked the Suez Canal for almost a week at the beginning of the year, have reached a fundamental agreement on their dispute with the canal authorities, representatives from both sides said on Wednesday.

Stann Marine, lawyers for the shipowners and insurers, and a spokeswoman for the Suez Canal Authority both confirmed the development.

Neither of the two elaborated on what the deal would entail, but the Suez Canal Authority said more details would be released later.

The disagreements focus on the amount of compensation the Suez Canal Authority is demanding for the salvage of the Ever Given ship, which ran aground in March and blocked the vital waterway for six days. Specialized tugs and excavators finally freed the 400-meter-long cargo ship with a cargo of around 3.5 billion US dollars.

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The money would cover the salvage work, the cost of blocked canal traffic, and lost transit fees for the week that the Ever Given blocked the canal.

Initially, the Suez Canal Authority requested compensation of $ 916 million, which was later lowered to $ 550 million.

Since its liberation, the Panamanian-flagged Japanese ship, which carries cargo between Asia and Europe, has been ordered by the authorities, along with most of its crew as the owner, and the Canal Authority to try to resolve the compensation dispute.

In a statement, the UK Club, an insurer for the shipowners, Japanese company Shoei Kisen, said it was working with other insurers and the Canal Authority to sign a definitive agreement “as soon as possible”.

“As soon as the formalities have been completed, arrangements will be made for the release of the ship,” the statement said.

Both sides have swapped the guilt for the ship’s grounding, neglecting bad weather, bad decisions by canal authorities, and human and technical error as possible factors.

The six-day blockade disrupted worldwide shipping. Hundreds of ships waited in place for the canal to be cleared, while some ships were forced to take the much longer route around the Cape of Good Hope on the southern tip of Africa, which required additional fuel and other costs.

About 10 percent of world trade flows through the canal, an important source of foreign currency for Egypt. According to official information, around 19,000 ships passed the canal last year.

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