The Ever Given's insurer calls the Suez Canal Authority's demand for nearly $1 billion bogus

Ever given suez canal maxar Mon april 12Satellite image ©2021 Maxar TechnologiesA satellite view of the Ever Given still in the Suez Canal’s Great Bitter Lake on Monday, April 12, 2021.
  • The Suez Canal Authority has impounded the Ever Given ship and is demanding $916 million in damages.
  • The UK Club, an insurer of the ship, said the demand is “largely unsupported.”
  • There is no timetable for the ship’s release but the insurer said it’s working closely with the SCA.
  • See more stories on Insider’s business page.

The Ever Given’s insurer said it was “disappointed” by the Suez Canal Authority’s decision to “arrest” the ship until it’s paid nearly $1 billion after the vessel blocked all shipping traffic for six days in March.

The head of the Suez Canal Authority, Lt. Gen. Osama Rabie, said the ship would be held in the Great Bitter Lake indefinitely until the investigation into the shipwreck was completed and $916 million was paid, though he never publicly explained where the estimate came from, nor did he provide a breakdown of expenses from the incident.

The UK Club, the protection and indemnity insurer for Evergreen Marine Corp., said even they never received a breakdown of the charges.

“The SCA has not provided a detailed justification for this extraordinarily large claim,” the UK Club said in a release on Wednesday.

The group said many aspects of the claim are understandable except for a $300 million claim for “loss of reputation.”

The insurer said it submitted a payment offer to the Suez Canal Authority on Monday, but it seems it wasn’t enough as the ship’s status is still on hold.

“Despite the magnitude of the claim which was largely unsupported, the owners and their insurers have been negotiating in good faith with the SCA,” the insurer said. “On 12 April, a carefully considered and generous offer was made to the SCA to settle their claim. We are disappointed by the SCA’s subsequent decision to arrest the vessel today.”

The UK Club also revealed that the investigation into the cause of the grounding from the Suez Canal Authority has been completed and that the ship and its machinery were fully operational with no defects at the time of its grounding.

According to the American Bureau of Shipping, the classification society for the Ever Given, the ship was cleared to complete its voyage to the Netherlands.

Abdulgani Serang, the general secretary-cum-treasurer of the National Union of Seafarers in India, recently likened the canal authority’s substantial cash demand as ransom. He told Insider on Tuesday 25 crew members are still aboard the vessel but there’s “no cause to worry about their supplies, including wages” due to their union agreement.

Despite the large cash demands, Serang said that NUSI and the Ever Given’s crew are upbeat and expect to leave the region soon.

“We are very positive about it and sanguine that all our 25 seafarers onboard will resume sailing soon,” Serang said.

But despite the union’s confidence, the UK Club said that it is still in the process of negotiating with the Suez Canal Authority about the $916 million demand and did not provide a timeframe of when the ship might be released.

“Our priority is the fair and swift resolution of this claim to ensure the release of the vessel and cargo and, more importantly, her crew of 25 who remain on board,” the insurer said.

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