Sunday, September 26News That Matters

Egypt impounds Suez megaship amid talks over compensation claim

Ever Given will not be allowed to leave Egypt until a compensation amount is settled with its owners, canal authority says.

Authorities in Egypt have impounded a megaship that blocked the Suez Canal and crippled world trade for nearly a week in the face of a financial dispute with its owner.

Suez Canal Authority (SCA) chief Lieutenant General Osama Rabie said on Tuesday the hulking Ever Given would not be allowed to leave the country until a compensation amount is settled on with the vessel’s Japanese owner, Shoei Kisen Kaisha Ltd.

“The vessel is now officially impounded,” he told Egypt’s state-run television late on Monday. “They do not want to pay anything.”

Yumi Shinohara, deputy manager with owner Shoei Kisen’s fleet management department, confirmed the canal had made a compensation claim but gave no further details.

A source with SCA, who declined to be named, told Reuters news agency a court order had been issued for the ship to be held, adding that negotiations were still taking place.

Rabei did not say how much money the canal authority was seeking. However, reports quoting a judicial official said it demanded at least $900m.

The Taiwanese operated and Panama-flagged cargo vessel got diagonally stuck in the narrow but crucial global trade artery in a sandstorm on March 23, setting in motion a mammoth six-day effort by Egyptian personnel and international salvage specialists to dislodge it.

The unprecedented six-day shutdown, which raised fears of extended delays, goods shortages and rising costs for consumers, added to strain on the shipping industry already under pressure from the coronavirus pandemic.

Maritime data company Lloyd’s List said the blockage had held up an estimated $9.6bn worth of cargo each day between Asia and Europe.

That amount takes into account the salvage operation, costs of stalled canal traffic and lost transit fees for the week that the Ever Given blocked the canal.

In its court filing, the Suez Canal Authority referred to Articles 59 and 60 of Egypt’s maritime trade law which stipulates that the ship would remain seized until the amount is paid in full, state-run newspaper Al-Ahram said.

The Suez Canal earned Egypt just over $5.7bn in the 2019/20 fiscal year, according to official figures.

Rabie, the canal chief, told state-run television there was no wrongdoing by the canal authority. He declined to discuss possible causes, including the ship’s speed and the high winds that buffeted it during a sandstorm.

When asked whether the ship’s owner was at fault, he replied: “Of course, yes.”

Rabie said the conclusion of the authority’s investigation was expected on Thursday.