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Agreement struck between parties in Suez Canal obstruction dispute

Parties strike deal in Suez Canal obstruction dispute
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The Suez Canal Authority (SCA) and the owners of the Ever Given have reached an agreement in principle regarding compensation for the six-day obstruction of the waterway in March 2021.  

In a statement, the UK P&I Club, the vessel’s insurer, said its negotiating committee it has been able to strike an agreement with all parties.

“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,” the company said.

“Once the formalities have been dealt with, arrangements for the release of the vessel will be made.”

The announcement follows a previous update on 20 June where UK P&I said it had tabled an offer to the SCA that it believed satisfied the demands of all parties.

The SCA was reportedly seeking compensation worth approximately $500 million from the vessels owner, Shoei Kisen Kaisha, for lost earnings during the six-day obstruction in March 2021.

It initially demanded $916 million and is believed to be willing to have $200 million up front, with $350 million paid later.

The 22,000 TEU vessel ran aground in the Suez Canal on 23 March 2021 and forced more than 300 cargo ships of all types to sit at anchor and many others to divert around the Cape of Good Hope.

The congestion and delay raised fears of a potential backlog crisis at Europe’s ports, and added to the maritime industry’s burden caused by the COVID-19 pandemic.

The vessel has been held by the SCA pending the outcome of the legal case since it was refloated on 29 March 2021.

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