Settlement reached to release ship that blocked Suez Canal

The Suez Canal Authority says it has reached an agreement to settle a financial dispute with the owners of a hulking container ship that blocked the crucial waterway in Egypt for nearly a week earlier this year.

The authority did not reveal details on the settlement deal with the Shoei Kisen Kaisha Ltd., the Japanese owner of the Ever Given. It said the deal will be signed in a ceremony in the Suez Canal city of Ismailia on Wednesday.

The vessel would be also freed Wednesday, it said.

“Preparations for the release of the vessel will be made and an event marking the agreement will be held at the Authority’s headquarters in Ismailia in due course,” Faz Peermohamed of Stann Marine, which represents owner Shoei Kisen and its insurers, said in a statement on Sunday, without providing details of the settlement.

The head of Egypt’s Suez Canal Authority, Osama Rabie, said last month the parties had agreed on a compensation amount. But he said it would not be made public as they had signed a non-disclosure agreement until the signing of the final contract.

He said the canal will receive a tug boat with a pulling capacity of about 75 tonnes as part of a settlement, without mentioning any other details.

“We preserved the rights of the authority in full, preserved our relationship with the company and also political relations with Japan,” he told a private TV channel on Sunday evening.

Trading blame

The vessel had run aground in the single-lane stretch of the canal on March 23 before it was extracted six days later after a huge salvage effort by a flotilla of tugboats.

Since it was freed on March 29, the Panama-flagged, Japanese-owned vessel, which carries cargo between Asia and Europe, has been ordered by authorities to remain in a holding lake mid-canal, along with most of its crew, as the two sides negotiated a settlement.

The disagreement had centred on the compensation amount the Suez Canal Authority is claiming for the salvage of the vessel.

The money would cover the salvage operation, costs of stalled canal traffic, and lost transit fees for the week the Ever Given blocked the canal.

At first, the Suez Canal Authority demanded $916m in compensation, which was later lowered to $550m.

The two sides have traded blame for the vessel’s grounding, with bad weather, poor decisions on the part of canal authorities, and human and technical error all being suggested as possible factors.

The six-day blockage disrupted global shipping. Hundreds of ships waited in place for the canal to be unblocked, while some ships were forced to take the much longer route around the Cape of Good Hope at Africa’s southern tip, requiring additional fuel and other costs.

The canal earned revenue of $3bn in the first six months of 2021, up 8.8 percent compared with the same period last year, despite the Ever Given accident, Rabie said.