Could Egypt really ask for $1bn-plus in damages?

Egypt is going to look for more than $1bn in damages as a result of the blockage of the Suez Canal from March 23rd to March 29th, according to Suez Canal Authority chairman Lt Gen Ossama Rabei.

He told Egypt’s Sada ElBalad news channel at the weekend that he estimated the $1bn figure would compensate for losses associated with transit fees, damage to the waterway during the dredging and salvage efforts, and the cost of equipment and labour.

Taiwan-based Evergreen Marine, the charterer of the Ever Given, said that it was not accountable for delays of any cargo it was transporting and that it expected minor costs for potential loss and damage arising from the blockage of the waterway. Evergreen president Eric Hsieh was quoted on local news in Taiwan on Thursday as saying that “our risk exposure to the incident is very, very low. We are only responsible for the carriage of cargoes onboard. Even if we have some claims, those will be covered by insurance”.

Rabie said they could be held in Egypt if the matter of compensation went to court. However, he accepted that such a scenario was unlikely, because Egypt had a long relationship with the ship owner. Evergreen’s agent in Egypt, Mohamed Bahaa, said he doubted there would be any financial dispute between his company and the canal authorities. “In 40 years now, not a single case of dispute has happened between SCA and Evergreen. We all respect all the rules of the SCA,” he said.

Evergreen has said that the Japanese shipowner, Shoei Kisen Kaisha, would be responsible for any costs, and that these would include any potential claims from Egypt, as well as third-party liabilities based on its charter arrangement.

Shoei Kisen is insured with UK Club for P&I.