Egypt’s Economic Court of First Instance will hold a hearing today on the legality of the Suez Canal Authority’s seizure
Egypt’s Economic Court of First Instance will hold a hearing today on the legality of the Suez Canal Authority’s seizure of the Ever Given container ship.
The Ever Given—which ran aground shortly after entering the Suez Canal in March—obstructed canal traffic for six days before being re-floated. Current private estimates suggest that the blockage may have cost stakeholders up to $10 billion.
In April, the state-owned Suez Canal Authority impounded the Japanese ship following disputes with its owners, Shoei Kisen, over compensation. The authority contends that Shoei Kisen owes $550 million in damages. Yet, Shoei Kisen insists that the ship should not have been permitted to enter the canal because of its size and that liability therefore rests with the Authority.
Private negotiations between the Authority and Shoei Kisen will likely preempt the court’s ruling. Both parties have expressed willingness to settle, and the Authority has lowered its minimum settlement amount by $366 million since April. Shoei Kisen maintains that the need to address competing claims from external parties may prolong negotiations. Nonetheless, as the company settles related claims in the months ahead, a reduced payout, to be split between the Authority and other stakeholders, remains likely.
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