5 MAY 2021 

On Tuesday (4th May), an Egyptian court upheld a previous court order for the seizure of the container ship Ever Given, leaving the vessel stranded in the canal’s Great Bitter Lake until further notice.

The Suez Canal Authority obtained the order on April 13, and the court has allowed it to hold the vessel until owner Shoei Kisen Kaisha and UK P&I Club pay a steep penalty for the vessel’s grounding in the canal. The order allows SCA to hold the Ever Given due to alleged “failure to pay an amount of $ 900 million.”

According to charterer Evergreen, this exceptionally high fee includes two unusual chargesa “$300 million claim for salvage bonus and a $300 claim for loss of reputation.” According to the Wall Street Journal, the real cost of the salvage operation is believed to be in the low seven figures. Refinitiv estimates the lost canal transit fees for the SCA at less than $100 million for the six-day shutdown. 

Negotiations between Shoei Kisen Kaisha, UK P&I and the SCA over the amount of the penalty were ongoing as of last week.

The court’s seizure order does not apply to the crew, and five crewmembers have already been given permission to return home. Technical manager Bernhard Schulte Shipmanagement told Reuters that the safety and wellbeing of the crew remains the “utmost priority” during the ship’s stay in the canal, and the International Transport Workers’ Federation (ITF) has confirmed that the crew is in good spirits and reports good treatment by the shipowner and the SCA.

Cargo delays

The now-confirmed court decision leaves the status of Ever Given’s cargo uncertain. The order specified that the vessel’s 15,000-plus TEU of cargo cannot be unloaded for transfer to another vessel, as Evergreen had reportedly contemplated. The vessel’s diverse cargoes – including La-Z-Boy furniture – may have to remain on board for an extended period.

When the cargo is eventually unloaded, the cargo owners (or their insurers) will have to post a general average bond covering their share of the cost of the salvage before they may retrieve their cargo. Shoei Kisen Kaisha has declared general average in connection with the grounding, and Richard Hogg Lindley has been appointed as the GA adjuster.


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