News / Deadlock broken as Ever Given owner and Suez Canal Authority come to terms

Photo: Suez Canal Authority

Shippers with cargo onboard the arrested Ever Given could soon see their shipments moving again as the deadlocked negotiations to free the ship appear to have been broken.

According to the representatives of the vessel, owner Shoei Kisen Kaisha and its insurers have agreed a settlement to free the vessel, currently under arrest in the Bitter Lakes region of the canal while the Suez Canal Authority (SCA) continues to demand compensation for the six-day blockage of its waterway.

According to the vessel’s insurer, the UK P&I Club, the parties have agreed a settlement in principle, with formal agreement on compensation due to the SCA now nearing completion.

It added: “Together with the owner and the ship’s other insurers, we are now working with the SCA to finalise a signed settlement agreement as soon as possible. Once the formalities have been dealt with, arrangements for the release of the vessel will be made.”

The UK P&I Club indicated at the beginning of the week that it thought a settlement was near, when it revealed it had made a new offer over the weekend – which led to an adjournment of a court in Egypt which was due to rule on the arrest – which it believed “satisfies all the requirements of the SCA”.

While the level of compensation has not been disclosed, it will likely be higher than the original $150m offered by the UK P&I Club, but lower than the $550m demanded by the SCA, which added that the Ever Given could be freed with a $200m down payment.

One expert had estimated approximate costs for the removal of the vessel at close to $200m, after the 20,388 teu Ever Given ran aground at the southern end of the Suez Canal on 23 March. There was no loss of cargo or any pollution as a consequence of the casualty, but around 400 vessels were delayed.

Following the freeing of the ship, the SCA made an initial compensation claim of $916m, which it later reduced. Vessel and cargo insurers were sceptical about the claim, arguing that the total costs were closer to $150m.