Insurers representing around $100m of cargo onboard the detained containership Ever Given are preparing legal action against the Suez Canal Authority (SCA) through London law firm Clyde & Co.
The pending litigation comes after the SCA did not respond to a letter sent in mid-May by Jai Sharma, Clyde & Co partner and head of casualty and cargo.
The letter was sent on behalf of insurers who urged the Egyptian authority to release the cargo, after payment of a reasonable security, and to revise its salvage claim.
The 20,388-teu Ever Given (built 2018) was arrested for a grounding on 23 March that closed the Suez Canal for six days. The SCA initially assessed its insurance claim at $916m, including $557m for salvage, but then reduced its estimate to $600m.
In the Clyde & Co letter, Sharma disputed whether the SCA could bring a salvage claim above the salvage expenses determined by its own tariff rates.
The letter also suggests that the SCA’s reported estimate of between $2bn and $3bn for the salved property, on which its salvage claim is based, is excessive.
Based on its own experience, Sharma said Clyde & Co estimates the value of the salved property at between $600m to $700m.
The London law firm's letter also points out that the excessive nature of the claim has led to delays in releasing the cargo, some of which is time sensitive.
While the SCA's dispute is with the owner of the Ever Given, the letter said cargo owners were "entirely blameless".
“As a result of the very high level of claims made by the SCA, and your ongoing dispute with the owners of the vessel ... it remains unlikely the cargo will be delivered for some time, and the cargo is already almost two months late,” the letter said.
Clyde & Co said much of the cargo will deteriorate or has been replaced by additional shipments. Some cargoes will be abandoned to the salvor, which will add to disposal costs, according to the firm.
“We do believe that the SCA needs to greatly reduce their salvage claim to reflect the legitimate expectations of the users of the Suez Canal, and the maritime industry in general,” Sharma said.
He warned that continued detention of the vessel could damage the reputation of the SCA.
“This is a case which has caught the attention of worldwide media," the letter said. "We do not believe this extended delay and very high amounts claimed for salvage are showing the SCA in a positive light.”
No one was available for comment at the SCA.
