Settlement Reached To Release Ship That Blocked Suez Canal

Egypt will release the container ship that blocked the Suez
Canal in March, after it agreed a compensation deal with the
vessel’s owners and insurers.

The two sides said the Ever Given would be allowed on Wednesday
to leave the Great Bitter Lake, the canal’s midway point, where it
has been impounded.

The deal’s terms were not revealed, but Egypt had demanded $550m
(£397m).

The 400m-long (1,312ft) Ever Given became wedged across the
canal after running aground amid high winds.

It was freed six days later following a salvage operation that
involved a flotilla of tug boats and dredging vessels, and during
which one person was killed.

Global trade was disrupted as hundreds of ships had to wait to
pass through the 193km (120-mile) waterway, which connects the
Mediterranean Sea to the Red Sea and provides the shortest sea link
between Asia and Europe.

UK Club, which insured the Ever Given’s owner Shoei Kisen for
third-party liabilities, announced on Sunday that a “formal
solution” had been agreed with the Suez Canal Authority (SCA) to
settle their dispute over compensation.

“Preparations for the release of the vessel will be made and an
event marking the agreement will be held at the authority’s
headquarters in Ismailia in due course,” it added.

The SCA said the event would be held on Wednesday, and that
participants would be able to watch the ship leaving the canal.

Neither side disclosed the amount of compensation, but SCA
chairman Osama Rabie said it would receive a tug boat as part of
the deal.

The SCA initially asked for $916m, including $300m for a salvage
bonus and $300m for loss of reputation. But UK Club rejected the
claim, describing it as “extraordinarily large” and “largely
unsupported”.

The SCA later lowed its demand to $550m, but the owners and
insurers reportedly offered to pay $150m.

Mr Rabie said in May that the Ever Given had struggled to steer
and ran aground despite the efforts of two escort tugs because it
was moving at a “very high” speed and its rudder’s size “was not
appropriate”.

UK Club said that while the Ever Given’s owners and insurers
“fully acknowledge that the SCA is entitled to compensation for
their legitimate claims arising out of this incident”, they were
concerned by the allegations.

“It is important to clarify that whilst the master is ultimately
responsible for the vessel, navigation in the canal transit within
a convoy is controlled by the Suez Canal pilots and SCA vessel
traffic management services. Such controls include the speed of the
transit and the availability of escort tugs.”

The value of the goods inside the Ever Given’s 18,000 containers
has been estimated at $775m. They include products for large
multinational companies like Chinese PC manufacturer Lenovo and
Swedish furniture giant Ikea, as well as those for smaller
businesses like UK-based clothing company Snuggy and bicycle maker
Pearson 1860.

The canal earned revenue of $3bn in the first six months of
2021, up 8.8 percent compared with the same period last year,
despite the Ever Given accident, Rabie said.

Egypt will release the container ship that blocked the Suez
Canal in March, after it agreed a compensation deal with the
vessel’s owners and insurers.

The two sides said the Ever Given would be allowed on Wednesday
to leave the Great Bitter Lake, the canal’s midway point, where it
has been impounded.

The deal’s terms were not revealed, but Egypt had demanded $550m
(£397m).

The 400m-long (1,312ft) Ever Given became wedged across the
canal after running aground amid high winds.

It was freed six days later following a salvage operation that
involved a flotilla of tug boats and dredging vessels, and during
which one person was killed.

Global trade was disrupted as hundreds of ships had to wait to
pass through the 193km (120-mile) waterway, which connects the
Mediterranean Sea to the Red Sea and provides the shortest sea link
between Asia and Europe.

UK Club, which insured the Ever Given’s owner Shoei Kisen for
third-party liabilities, announced on Sunday that a “formal
solution” had been agreed with the Suez Canal Authority (SCA) to
settle their dispute over compensation.

“Preparations for the release of the vessel will be made and an
event marking the agreement will be held at the authority’s
headquarters in Ismailia in due course,” it added.

The SCA said the event would be held on Wednesday, and that
participants would be able to watch the ship leaving the canal.

Neither side disclosed the amount of compensation, but SCA
chairman Osama Rabie said it would receive a tug boat as part of
the deal.

The SCA initially asked for $916m, including $300m for a salvage
bonus and $300m for loss of reputation. But UK Club rejected the
claim, describing it as “extraordinarily large” and “largely
unsupported”.

The SCA later lowed its demand to $550m, but the owners and
insurers reportedly offered to pay $150m.

Mr Rabie said in May that the Ever Given had struggled to steer
and ran aground despite the efforts of two escort tugs because it
was moving at a “very high” speed and its rudder’s size “was not
appropriate”.

UK Club said that while the Ever Given’s owners and insurers
“fully acknowledge that the SCA is entitled to compensation for
their legitimate claims arising out of this incident”, they were
concerned by the allegations.

“It is important to clarify that whilst the master is ultimately
responsible for the vessel, navigation in the canal transit within
a convoy is controlled by the Suez Canal pilots and SCA vessel
traffic management services. Such controls include the speed of the
transit and the availability of escort tugs.”

The value of the goods inside the Ever Given’s 18,000 containers
has been estimated at $775m. They include products for large
multinational companies like Chinese PC manufacturer Lenovo and
Swedish furniture giant Ikea, as well as those for smaller
businesses like UK-based clothing company Snuggy and bicycle maker
Pearson 1860.

The canal earned revenue of $3bn in the first six months of
2021, up 8.8 percent compared with the same period last year,
despite the Ever Given accident, Rabie said.