The Suez Canal Authority (SCA) has hinted that it is preparing a $1bn claim for financial losses, damage and costs related to the grounding of the Evergreen Marine-operated Ever Given in the waterway.
SCA chairman and managing director Osama Rabie told local media that the amount of damages and losses, including dredging costs, is being calculated.
“Estimates, God willing, will reach a billion dollars and a little bit more,” he said, according to a Reuters account of a report on Egyptian television broadcaster Sada Elbalad.
The SCA is currently assessing a claim for loss of revenue, damage to the canal, salvage assistance and reputational damage for the six-day closure.
It has also sent investigators on board the ship to determine the cause of the accident.
The 20,388-teu Ever Given (built 2018) ran aground on 23 March, blocking the Suez Canal. The vessel was refloated and the Suez Canal reopened on 29 March.
“This is the right of the country,” Rabie said, according to Reuters. “This country should get its due.”
Japan's Shoei Kisen Kaisha, owner of the Ever Given, is covered by protection and indemnity insurer UK P&I Club.
P&I claims exceeding $10m are shared between the International Group of P&I Clubs' 13 members in a claims pooling system. Claims over $100m are met through the International Group’s reinsurance scheme, which has cover in place of up to $3bn.
However, the $1bn figure is being viewed in insurance circles as an indication that the SCA is testing the waters ahead of what is likely to be a long-running legal row over claims.
Valid claims considered
The UK P&I Club has said it will consider all valid claims related to the incident.
The Suez Canal earns around $15m a day, which adds up to around $90m in potential revenue over the six-day period it was closed because of the grounding.
However, many ships chose to wait until the Suez Canal reopened to transit, rather than divert, so the actual loss of revenue could fall short of that figure.
The SCA has said it may compensate shipowners for the delay caused and sources suggested it will try to recover this money from the UK P&I Club.
The other main question that hangs over insurance payments is how the ships, charterers and shippers will seek compensation for money lost due to the closure of the Suez Canal.
Lloyd’s of London has said it could be facing up to $100m in losses from claims related to the incident, which are likely to come from cargo insurance or business interruption claims.
However, a major legal question mark hangs over whether these losses can eventually be recovered from UK P&I Club.
The Ever Given is chartered and operated by Taiwan's Evergreen.
TradeWinds reported earlier on Thursday that the liner operator expects little in the way of exposure.
“Our risk exposure to the incident is very, very low,” Evergreen president Eric Hsieh told local reporters on Thursday. “We are only responsible for the carriage of cargoes on board. Even if we have some claims, those will be covered by insurance.”
This story has been amended since publication to reflect that the UK P&I Club said it will consider all valid claims related to the incident.
Read more
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