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Egyptian court demands 1 trillion won in compensation for Suez Canal blockage

Egyptian court demands 1 trillion won in compensation for Suez Canal blockage

Posted April. 15, 2021 07:35,   

Updated April. 15, 2021 07:35


The Egyptian authorities ordered the owner of the Japanese large container ship Ever Given to pay one trillion won in compensation for blocking the Suez Canal for six days after getting stuck in the waterway.

According to Egypt’s state-owned media Al Ahram on Tuesday, the Egyptian court ordered the ship’s owner Shoei Kisen Kaisha to pay 916 million dollars in compensation. In accordance with the order, the Suez Canal Authority seized Ever Given and cargo loaded in the ship. Egypt will allow the sailing of the ship once compensation is paid.

Ever Given, which got stuck in the southern entrance of the Suze Canal on March 23 and blocked 422 ships’ passage through the key waterway, was freed and transferred to the Great Bitter Lake six days later and under investigation for the causes of the incident. The Egyptian authorities estimated the damage caused by the incident to be around one billion dollars and were in negotiation with the shipowner. The authorities will announce the causes of the incident on Thursday.

Shoei Kisen Kaisha and the UK P&I Club, an insurer of Ever Given, argue that the compensation ordered by the Egyptian court is too high compared to the criteria for marine accidents. They claim that the upper limit of Shoei Kisen Kaisha’s compensation should be around 13 billion won or 133 billion won in accordance with the Convention on Limitation of Liability for Maritime Claims.

The UK P&I Club released a statement right after the court’s order, saying that most of the requests for a large sum of compensation have not been proven and that they will negotiate with the Suez Canal Authority. It is expected that the resolution of negotiations will take several months given the huge gap between the two sides regarding the amount of compensation.

Hyun-Seok Lim lhs@donga.com