Egypt finally reaches agreement in dispute over Suez Canal ship

The owners and insurers of the giant container ship that blocked the Suez Canal for nearly a week earlier this year have reached an agreement in principle over their dispute with canal authorities, representatives from both sides said Wednesday.

Stann Marine, the lawyers representing the vessel’s owners and insurers, and the Suez Canal Authority both confirmed the development.

The disagreement centers on the compensation amount the Suez Canal Authority is claiming for the salvage of the vessel Ever Given, which ran aground in March, blocking the crucial waterway for six days. Specialist tugboats and dredgers eventually freed the 400-meter-long (quarter-mile-long) cargo ship carrying some $3.5 billion in cargo.

In an on-air phone call to Egyptian talk show “Al-Hiyat Al-Youm” on Wednesday the head of Egypt’s Suez Canal Authority, Lt. Gen. Osama Rabie, said 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.

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 $916 million in compensation, which was later lowered to $550 million.

Since it was freed, 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 its owner and the canal authority try to settle the compensation dispute.

In a statement, the UK Club, one insurer for the ship's owners, the Japanese company Shoei Kisen, said it is working with other insurers and the canal authority to sign a final agreement “as soon as possible."

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

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 thrown out as possible factors.

On Sunday, the Ismailia Economic Court adjourned a hearing on the case after the Suez Canal’s attorneys said they were looking into a new offer made by the vessel’s owners. Lawyers did not share any details of the offer.

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.

About 10% of world trade flows through the canal, a pivotal source of foreign currency to Egypt. Some 19,000 vessels passed through the canal last year, according to official figures.