?Ever Given“ - Precedence (Part 2)
Gunter Schütze
Graduate Engineer Ship Management, Master Mariner, Captain, Consultant, Author
In the twilight of the search for debt and claims for damages that have arisen
Introductory words
As announced in the first part, in the second part I deal with questions of compensation claims that are made exclusively by the SCA against the shipowner of "Ever Given". I would like to start by saying that I am not a specialist in maritime insurance and have not received any legal training on this subject. There are specialists who deal with such problems on a daily basis.
My considerations are from a captain's point of view. I take the view that captains should have a basic knowledge of maritime insurance and also with internationally applicable formalities and expected processes in the event of a marine accident, general average or cargo damage and the associated IMO conventions / resolutions and their changes / extensions in general. Simply because of the fact, that they should know what is to expect in the event of damage. Regardless of the associated intensive support from the shipping companies' emergency response teams.
My remarks are intended to inform captains of the current IMO conventions and resolutions for marine casualties and damage cases that are not used on a daily basis on board but are nevertheless necessary for an emergency that will hopefully never occur. Because marine accidents, even if they happen again and again, are not the rule but the exception in maritime shipping.
The IMO conventions / resolutions cited by me in this article are normally not to be found on board in the ship's documentation.
?The accident of the “Ever Given” in the Suez Canal is therefore a good opportunity to take a closer look at the subsequent events and claims for damages by the SCA against the ship owners, also taking into account the national Egyptian legislation.
I would like to emphasize that I do not go into the demands of the ship owners on "Evergreen Line" as a charterer and the problem of cargo insurance due to the delays of the other shipping companies. This is an extremely complicated matter that laypeople cannot deal with. It will likely keep insurance agents and legal specialists busy for years to come.
?Suez Canal Authority (SCA) and its demands on the owners of the "Ever Given"
The accident of the “Ever Given” in the Suez Canal on March 23, 2021 shocked the international shipping and maritime insurance industry and caused enormous media coverage. In the global media, the SCA's claim for damages against the ship owners of the "Ever Given" of US $ 916 million caused a sensation and of course also criticism, which is understandable even with a rough external view.
These are claims that overshadow all previous maritime insurance claims with no evidence of environmental pollution, personal injuries and total losses. So P & I UK, the ship owner's insurer, will face enormous challenges.
What at first glance appears to be a disproportionate requirement is, on closer inspection, an extremely complicated matter.
The initial claim for damages of US $ 916 million, made on March 27, 2021 by the Chairman of the SCA, Admiral Rabie, i.e. at a time when the recovery was not yet completed, was in between on May 7th 2021to 600 US $ million by Admiral Rabie reduced. But more on that later.
The question of guilt - who is to blame for this accident?
The immense effort to get the ship free and the associated 6-day closure of one of the most important shipping lanes in the world naturally put the question on the agenda:
Who is responsible for the accident and has to bear the resulting claims for damages?
For the Suez Canal Authority, sole responsibility for this accident was quickly found. The Indian captain of “Ever Given”, but more on that later
?In the meantime, despite the still unclear course of the accident, which is still under investigation, the Chairman of the SCA Admiral Rabie has announced that the SCA and its controllers cannot be accused of any offenses / errors. A clear judgment that anticipated the investigation report. Welcome in the national glasses. But what was to be expected otherwise.
But is that really the case?
To do this, of course, we also have to deal again with the question of the role of pilots in the Suez Canal:
The pilots in the Suez Canal are advisory pilots; they are not allowed to intervene in the ship's command. They give recommendations to the ship's command.?
The fact is that “Ever Given” was tracked at 13.5 kt in the AIS prior to the incident, which is well above the recommended speed of 16 km / h (8.6 kt) specified in the SCA Navigation Rules (SCA Navigation Rules , Chapter III, Section II, Article 64 (2)). I'm still unchanged in my view that there some problems with strong gusty wind condition did exist. It is also a fact that according to AIS information the ship did hit the embankment at 12 kt, i.e. almost unbraked.
Anyone who knows the Suez Canal from personal experience as a captain and has passed through him several times knows that no captain would undertake such a speeding of himself. The pilots must therefore have made such a recommendation. Which the captain did follow without probably being aware of the enormous risks involved. And it would also be a sign that this practice recommended by the pilots is by no means an isolated case. The master has the right to reject such a pilot recommendation. The question arises why he did not do it, especially considering that pilots in the Suez Canal are given a carte blanche. As the evidence below shows.?
The sea / harbor pilot in Egyptian jurisdiction?
This is the really interesting part of answering the question of the accountability and liability of Egyptian pilots. For this it is also necessary to be aware of the fact that the Suez Canal is Egyptian territory and is therefore subject to Egyptian jurisdiction (UNCLOS, Part II Territorial Sea and Contiguous Zone, Section 1, article 2 (1) / Section 2, article 8 - Internal waters).?
So it is important to know how that is reflected in Egyptian law.
On April 22, 1990, the Egyptian Merchant Shipping Law No. 8, also known as EML (1990), came into force. There is in Article 279, and this jurisprudence was confirmed by the Supreme Court of Egypt:?
?…the responsibility for pilotage operation in port and in the Suez Canal lies entirely with the Master of the guided vessel even in case of the pilot’s error.”
?Nothing less means that no matter what mistake the pilot makes and the associated consequences are solely the responsibility and liability of the captain.?
This legal opinion is also clearly formulated in the SCA Navigation Rules for the canal pilots who work on behalf of the SCA. Why should it be any different if the highest court confirmation of Article 279 of the Egyptian Merchant Shipping Law No. 8 (EML 1990), was chiseled into Egyptian law. Without exception.
In the SCA - Navigation Regulation (Edition December 2020) it reads as follows:?
"Part 1 - Navigation/ Generalities?
Art., 4 - Responsibilities:?
(7) "The principals of vessels or floating units bind themselves responsible for any mistakes resulting from pilot’s advice or arise by SCA personnel."?
With this paragraph, which has been changed compared to the edition of August 2015, the client of the ship, i.e. ship owner / charterer / managing owner, is fully responsible.?
Section II - Pilotage of the SCA Navigation Rules specifies who is solely responsible in the event of an accident. There it says?
"Section II - Pilotage/ Art., 11 - Pilotage:
?A - General:
?Masters are held solely responsible for all damages or accidents of whatever kind resulting from navigation or handling of their vessels directly or indirectly by day or night
The pilot is not held responsible for any damages sustained during transit owing to his advices since the master or his deputy is the sole responsible for the ship. "
This is exactly where we find the passage stipulated in Article 279 of the Egyptian Merchant Shipping Law (EML 1990).?
Regardless of what happens by whom on board during the CHANNEL passage and on the approaches, the captain and the ship owner are ALWAYS responsible and the canal pilots are exempt from it. As a result, no claims can be made against the canal authority or the pilots, at least externally.
The extent to which the Egyptian authorities and SCA internally, in the event of misconduct by the pilots, hold the SCA pilots accountable and sanction them cannot be verified externally and has no influence on the clarification of the question of guilt according to the Egyptian legal situation.?
Why did the ship anchor in Bitter Lake??
It is in no way surprising that the ship was brought to the anchorage in the Bitter Lake with tug assistance. This arises from the fact that, of course, a detailed damage assessment on and in the ship and its technical systems is required, which means numerous assessments by the Port State Authority, the flag state authority, the classification society, insurers, vessel management, including a comprehensive underwater survey by divers to verify damage to the underwater hull and propulsion system.
After all, the ship hit the embankment with its bow at 12 knots. Which can lead to damage in the bow area, especially on the outer shell in the area of the front void space and the systems housed in it, such as echo sounder and bow thrusters. It takes time. So there are numerous people on board who are intensively involved in the investigation of the incident, including those by the owner or the lawyers commissioned by the management to advise the crew.?
A release to continue the journey of the ship is only possible if the classification society, in this case the "American Bureau of Shipping" (ABS), confirms in a protocol that the ship has no restrictions or only minor restrictions, which however warrant a reliable unrestricted operational service, to continue his journey. This has to be confirmed in written form in an endorsement to be issued as an additional document to the ship class certificate. ABS issued such an additional class endorsement on April 10th 2021.
The marine casualty investigation and its basics?
It is completely legitimate and in accordance with the international rules in force for the Egyptian authorities to initiate an investigation to investigate the cause and come on board, conduct interviews with the crew and pilots, evaluate the data from the Voice Data Recorder (VDR), check the technical condition of the ship, take a look and check the ship's documentation and documentation on the ship's safety management and their practical implementation. To find out as much as possible about the accident and its causes.
It is carried out in cooperation with the accident investigation authorities of the flag state and coastal state in which the accident occurred, primarily to determine the cause and course of the accident and to draw conclusions from them. And is based on the following IMO Regulations, which must also be converted into national law:
However, we know that the Egyptian authorities prevented the ship from continuing its journey with the application of April 13, 2021 for the ship to be arrested by a court until the SCA's claims for damages against the ship owners are met by the ship owners. The court granted this request.
What sanctions should the captain expect?
?Basically, the following applies first of all:
The marine casualty investigation does not determine a personal question of guilt. It is even explicitly stated that one should avoid using the final report as evidence for disciplinary measures, criminal convictions and civil liability. (IMO Casualty Investigation Code, Chapter 25, Paragraph 25.4)
?In
UNLOS / Part II - Territorial Sea and Contiguous Zone, Section 3, Subsection B, Article 27 - Criminal Jurisdiction on board a foreign ship / article 28 Civilian Jurisdiction in relation to foreign ships ?
are the legal possibilities of a coastal state vis-à-vis foreign ships, i.e. both criminal and civil law enforcement.?
The legal steps taken against the captain by the flag state are depend on the flag state's legislation. It should also be taken into account that in the event of a judicial clarification of his question of guilt in the event of a guilty verdict, his flag state Certificate of Competency (CoC - Endorsement according to STCW 95 Regulation II / 2 [VI / 1; VI / 2; VI / 3; VI / 4]; 1/11) can be withdrawn.?
In justified cases, the authorities of the captain's country of origin, in this case India, can initiate legal proceedings against him. With the consequence that if there is evidence of grossly negligent or intentional guilt, the national CoC could also be withdrawn by a corresponding court order.?
Claims for damages by SCA - what are they based on??
In the background, the legal poker game of SCA, the shipowner and the ship owner's insurers begins at the same time, in order to define the scope of claims for damages and compensation for expenses incurred for salvage, loss of performance and damage to technology, equipment and systems, whereby of course the creditor as first formulated his demands.
The use of the term poker comes very close to reality, because the SCA has made exorbitant demands. Whether these can then be enforced is another matter.?
The following claim for damages was made by the SCA on March 27, 2021.?Broken down into:
The basis for salvage and determination of the salvage fee is provided by "IMO International Convention on Salvage" from 1989,?
A salvage contract is usually concluded for this, the Lloyd's Standard Form of Salvage Agreement. Also?known as Lloyds Open Form (LOF), a standard contract stating that English law applies and that an?arbitration tribunal will determine and clarifies the salvage wages, which party involved in the accident is?liable to what extent. If no LOF or any other salvage contract is used, then the salvage a legal debtor?relationship. This is regulated in the “Salvage Convention”, an international law agreement that is?recognized worldwide and is reflected in the national legislation of the respective states when they have?acceded to the convention.
Overview about the "poker game" of compensation claims
The arrest of the "Ever Given" obtained by the SCA on April 13, 2021 in order to emphasize its claim is a sign that an agreement is not yet in sight.
On April 22nd, the owners appealed against this decision to the court in Ismailia and declared the SCA's claims regarding the validity of the arrest and the summons as well as the lack of evidence from the SCA to be unlawful.
?On May 4th, 2021 a hearing in front of the court?confirmed the court order of arrest for the "Ever Given" of April 13th, 2012. Nothing else was to be expected.
?On May 8th, 2021 a press release in “Egypt Today”?announced: that Admiral Osama Rabie, Chairman and Managing Director of the Suez Canal Authority, on May 7th, 2021 had announced, that the SCA did?its claims against the Japanese owners of the "Ever Given" reduced to US $ 600 million.
This clearly shows that the previously unclearly defined US $ 316 million would not stand up to any judicial review and was an arbitrarily requested amount without any acceptable basis. The ship owners and their insurer UK P&I also reject this reduced claim as unjustified and because of insufficient justification. Which is understandable from my view.
On May 22, 2021, according information from the SCA, was held an appointment at the Economic Court in Ismailia to review the SCA's claims in court. This appointment was unsuccessful because the Economic Court in Ismailia did not declare that it was responsible and referred the case back to the Court of First Instance in Ismailia.
An interim offer by SCA to pay a deposit of US $ 200 million to enable the ship to continue voyage and to settle SCA's outstanding claims at a later date was rejected by the ship's owners and their insurers.
?On May 27 2021, another court date was set in Ismailia, during which the court adjourned a decision in order to give the parties the opportunity to further negotiate. Which has been confirmed by lawyers on both sides. Furthermore, the court set a new trial date for June 22, 2021.
On 22 June 2021, UK P&I confirmed negotiations between SCA, the ship owners and their insurance partners about compensation payments in reference to by SCA valued claims .
?On June 24, 2021, media reported about a fundamental agreement between SCA,?the Japanese ship owners and their insurance partners on claims for damages.
About the amount of compensation was silence stipulated. However, it can be assumed that it will take at least 2-4 weeks for detailed a final agreement to be reached.
It is interesting that in the meantime the SCA tried to explain their questionable calculation of container cargo for their exorbitant claims. SCA stated for their high demands that it miscalculated in the calculations for the ship's cargo, i.e. overestimated it.
How comes that?
After all, apart from the submitted stowage plan and the information on dangerous cargo and refrigerated containers for the canal passage, SCA has no information about the contents of the containers. Not even the captain and his cargo officer know what they are transporting in the containers, except for dangerous goods and refrigerated / frozen goods, as the relevant manifests must be available on board for these containers.
The reduced revaluation of the charge value announced by SCA is a clear sign that attempts have been made to play poker to the maximum.
Basics of the SCA claim for damages according to EML (1990)
And this is exactly where the question arises, according to which criteria the Egyptian authorities claim their damages.
So let's take a look at the Egyptian legal regulations for claims against ship owners after marine casualties. Here, too, we refer to the Egyptian Merchant Shipping Law from 1990 (EML 1990), which I mentioned in above chapter.
Here we find the following formulated:
“In principle, the shipowner is liable under civil law for all acts of the master, seafarers, pilot and any other person who serves on the ship, if this act was committed in the course of or on the basis of their duties.”
?This also answers the question of who the SCA's demands are aimed at.
In addition, Article 81 EML provides the possibility that the shipowner can be granted limitations of liability, even if the debt is in favor of the state or the public sector and if the damage arises from one of the following causes:
?Damage caused by the ship, such as on
More on the limitations of liability later
However, Article 82 EML states that no limitation of liability is granted to the shipowner in the following six cases:????
Nuclear damage and oil spills are irrelevant in the case of "Ever Given" because they are not applicable. However, the other four sub-points can very well be used by Egyptian authorities / courts.
In the meantime, the shipowner is obliged to compensate the injured party for the damage determined by the competent court, without taking into account the limitation of the shipowner, if damage has occurred due to one of the above causes.
Limitation of Liability according to EML (1990)
In the event that limitations of liability for the shipowner come into question, the calculation of the limitation of liability for ship owners is based on Article 83 EML, which specifies the following:
In the worst case (physical and all other damage together), if the regulations for limitations of liability were applicable, the shipowner can therefore be prosecuted with EGP 900,000 if the total tonnage of the ship does not exceed 500 tons.
If it exceeds this tonnage, the liability per ton is increased, in the worst case by EGP 500.
For "Ever Given", if a total tonnage of 200,000 tons were taken as a basis, this would be a liability limitation of EGP 99,750,000 (million), which corresponds to US $ 6,369,000 (million) (midmarket rate May 3, 2021, 15:43 UTC, 1 US $ = EGP 15.6620)
?Due to the demand of the SCA against the owners and the court order for arrest on the request of the SCA, it becomes clear that there is no limitation of liability and that Article 82 EML is applied
Shipowners are not the only party with the right to limit their liability. According to the provisions of EML 1990, the limitation of liability can also be applied to the ship operator who is not the owner, charterer, manager, captain or seaman, as well as to other subordinates of the owner, operator, charterer or manager in relation to the performance of their duties and under the same conditions as for the owner, provided that the liability of the owner, as well as the aforementioned persons, does not exceed the limits set out in Article 83, with regard to the same accident.
The law also gives the right to limit the liability of the captain or seafarer in the event that proceedings are brought against them. As the captain or seafarer can insist on applying the restriction even if the accident that resulted in damage was due to their personal negligence.
The liability action against the shipowner and all interests expires after two years from the date on which the act giving rise to liability occurred (date of the incident).
This means that in the event of a non-agreement, the ship could be detained for a maximum of 2 years.
When can a ship be arrested under Egyptian law in order to enforce claims?
We know that the Egyptian authorities prevented the ship from continuing its journey based on the application by SCA at the court of April 13th 2021 to arrest the ship. With the aim of enforcing the SCA's claims for damages on the ship owners. The court granted this request.
It must be sent in advance for better understanding. The arrest of the ship does not mean that the crew is arrested. There is always the possibility to relieve parts of the crew.
The arrest of the "Ever Given" is not an arbitrary act of the Egyptian court, but refers to Article 60 EML (1990), in which an extensive list of “Maritime Claims” that are considered to be ship debts and which entitle a ship to be arrested to collect this debt. These claims include:
This list is based on Article 1 of the?
"International Convention Relating to the Arrest of Sea-Going Ships" (from Brussel 1952, in force since 1956) and
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"International Convention on Arrest of Ships" (from Geneva 1999, in force since 2011)?
In the 1999 Convention, there are some extensions in Article 1 to the Convention that has existed since 1952 and various rules have been adapted to reflect the times.
Egypt is a signatory to the 1952 Convention, which it has also ratified, and a signatory to the Final Act of the 1999 Convention.
Forms of arrest under Egyptian law
According to Egyptian law, two types of arrest are distinguished:
?1. conservatory arrest
2. administrative arrest
Conservatory arrest
An application for conservatory arrest of a ship must be submitted to the competent court and is only possible, when a "Maritime Claim" had been opened. In doing so, it is important to support the application for arrest with all relevant documents, which show the type of guilt as ship guilt and the amount of which is determined.
In procedural terms, there are a number of issues that must be considered when filing this type of arrest in court, namely that
It is worth mentioning here that, under Egyptian law, the Egyptian court is empowered to issue orders of a conservatory nature, even if the Egyptian court is not empowered to rule on the merits of the case.
Administrative arrest.
This sort of arrest is applicable in Egypt and gives the governmental authorities,?including inter alia the port authorities, the Navy, the Suez Canal Authority and governmental agencies including the Egyptian Environmental Affairs Agency the right to arrest a vessel for settlement of their claims, such as port dues, property damages, oil pollution, obstruction to navigation in navigational channels that may have been caused by a vessel.
For administrative arrests, no court order is required and the vessel shall not be allowed to sail and will remain detained until the competent authority/agency (the arrestor) has lifted the arrest pursuant to an agreement with the owner of the vessel involving payment or undertaking to pay the authority’s claim.
In the case of "Ever Given" we are dealing with a conservatory arrest, as the SCA submitted an application to the court to arrest the ship, which the court granted. The background was, on April 12th, failed talks between SCA and the shipowner, in which the shipowner rejected SCA's demands and, in their opinion, questioned the inadequate legal justification, as "Evergreen" announced in a statement on April 14th, 2021.
?The ship owners' appeal was rejected by the court and the arrest was confirmed by the court
Which, to be honest, doesn't surprise me. We know enough cases from the past where national glasses meant more than international conventions. "Prestige" and "Hebei Spirit" are just two examples of a series of national judicial solo attempts.
In the case of Ever Given, there is another point that must be taken into account than just the national Egyptian legal understanding.
?IMO 1976 Convention on Limitation of Liability for Maritime Claims (LLMC)
?These are:
?In principle, it must be pointed out that Article (3) of LLMC 1976 contains exclusion clauses that exclude a limitation of liability. These are:
(a)???????Claims for salvage or contribution in general average;
??????????????Remark: Salvage – International Convention on Salvage 1989
??????????????York-Antwerp Rules 2004/2016: General Average
(b)????????Claims for oil pollution damage within the meaning of the International Convention on Civil Liability for?Oil Pollution Damage, dated 29 November 1969?or of any amendment or Protocol thereto which is in?force
(c)?????????Claims subject to any international convention or national legislation governing or prohibiting limitation?of liability for nuclear damage;
(d)???Claims against the shipowner of a?nuclear ship for nuclear damage;
(e)?????????Claims by servants of the shipowner or salvor whose duties are connected with the ship or the salvage?operations, including claims of their heirs, dependants or other persons entitled to make such claims, if?under the law governing the contract of service between the shipowner or salvor and such servants the??shipowner or salvor is?not entitled to limit his liability in respect of such claims, or if he is by such law only permitted to limit his liability to an amount greater than that provided for in Article 6
Paragraph (a) could apply here in the case of “Ever Given”.?
The following changes to the LLMC in 2015 primarily include the adjustment of the liability limits for claims in international shipping. They amount to the following information and have been valid since June 8th, 2015
"Under the amendments to the 1996 Protocol, the limits are raised as follows:
The limit of liability for claims for loss of life or personal injury on ships not exceeding 2,000 gross tonnage is 3.02 million SDR (up from 2 million SDR).
For larger ships, the following additional amounts are used in calculating the limitation amount:
?? For each ton from 2,001 to 30,000 tons, 1,208 SDR (up from 800 SDR)
? For each ton from 30,001 to 70,000 tons, 906 SDR (up from 600 SDR)
? For each ton in excess of 70,000, 604 SDR (up from 400 SDR).
?The limit of liability for property claims for ships not exceeding 2,000 gross tonnage is 1.51 million SDR (up from 1 million SDR).
?For larger ships, the following additional amounts are used in calculating the limitation amount:
? For each ton from 2,001 to 30,000 tons, 604 SDR (up from 400 SDR)
? For each ton from 30,001 to 70,000 tons, 453 SDR (up from 300 SDR)
? For each ton in excess of 70,000 tons, 302 SDR (up from 200 SDR). "
It is important to note that Egypt has ratified the Convention on Limitation of Liability for Maritime Claims (LLMC 1976) and it has been in force in Egypt since 1988. So there are binding international rules that are recognized by Egypt
What is SDR?
The history of the SDR goes back to Bretton Woods. It was created as an additional international reserve asset under the Bretton Woods fixed exchange rate system. Which lost its importance in 1973 with the collapse of the Bretton Woods system.?
However, it still serves as the unit of account for the International Monetary Fund (IMF) and some other international organizations (including the IMO). It is neither a currency nor a claim on the IMF. Rather, it is a potential claim to the freely usable currencies of the IMF members. SDRs can be exchanged for these currencies.?
SDR Value?
The SDR value in US dollars and other selected currencies is calculated daily on the basis of the spot rates observed around noon in London and published and the daily conversion rate can be found on the IMF website
More details are to find under https://www.imf.org/
Who will be involved in the liability compensation of the SCA's claims
P&I Insurance (Protection and Indemnity), a liability insurance, is responsible for damage caused by the ship, for example on the canal and its equipment.
The extent to which the P & I insurance will also cover the costs for lost passenger fees is a big question mark and depends on the terms of the contract.
?The owner's comprehensive insurance, H&M Insurance (Hull and Machinery), is responsible for the salvage costs.
In all cases, however, the “paytobepaid” rule applies, which nothing other means that the damage must be paid first and then the insurance company pays the compensation.
"Ever Given" - A Case for the “General Average”?
?On April 1st, 2021 the owners of the "Ever Given" declared the case of the "General Average". The internationally renowned Adjustor, Richard Hogg Lindley, was appointed to handle this very complicated procedure
?What does that mean – “General Average”?
?It can be assumed that thousands of parties are involved in this ship due to the cargo situation.
“General Average” is supposed to cause the charge to be released more quickly. But it must be made clear that it can take weeks, months, even years until the interests of all parties are settled.
?“General Average” is a legal principle of the law of the sea and requires:
that all cargo owners on a ship contribute to the cost of loss, even if their cargo is undamaged.
The York-Antwerp Rules, which serve as the basis for the “Maritime General Average” procedure, must be used for this purpose.
Historical review of York-Antwerp-Rules
Details on the Maritime “General Average” are regulated in the York – Antwerp Rules 2004/2016.
It is known that the first talks about the development of a Maritime General Average where held in York in 1864. Its modern origins can be found in 1890, when on the so called Liverpool Conference 1890, through the “Association for the Reform and Codification of the Law of Nations”, the York-Antwerp Rules 1890 based on the existing General Average Rules , (“General Average” by Richard Lowndes, 4th Edition, published in London in 1888 by Stevens & Sons, London), a maritime codification of the “General Average” had been developed for shipping. The successor to this association is the "Comite Maritim International (CMI) 1897" founded in 1897 and based in Antwerp.
The core idea since 1890 has been:
To this day, despite all the revisions and adjustments, essentially nothing has changed since the introduction of the York-Antwerp Rules in 1890.
?It is crucial that the rules have been further developed to recognize that financial expenses / burdens, in principle, are nothing other than loss of property when they arise under similar circumstances and for the same purpose. Therefore, the associated immense recovery costs and follow-up costs of the "Ever Given" qualify for the General Average.
?Every standard marine insurance policy includes general average losses. If there is insurance, the cargo owner can receive a “General Average” guarantee. If there is no insurance, the cargo owner needs a cash deposit to receive the goods.
?What are the costs for the charterer "Evergreen Marine Corp." ?
Evergreen Marine Corp. President Eric Hsieh told Taiwan reporters in an interview that Evergreen's financial risk is very low:
"Our risk exposure from the Ever Given incident is very low - even if there are damages, it will be covered by insurance, Evergreen is free of responsibility from cargo delays [under the terms of carriage]."
How high must the costs of the "Ever Given" accident be estimated?
Personally, I assume that the costs for owners and insurers will exceed all previous cases in their dimensions. And this without oil pollution or personal injury. So damage cases that may cause enormous costs. In my view a novelty. It is quite conceivable that the ICS, FIATA, the maritime insurance industry and also the IMO will find themselves forced by the liability dimensions of this case to seriously reconsider the existing claims settlement mechanisms. Because it cannot be overlooked that the damage dimensions of large container ships with up to 20,000 TEU and more cargo capacity can put the maritime insurance industry in serious risk.
Final remarks
The "Ever Given" case is a very complicated case in terms of the legal aspects of the question of guilt and claims for damages/Cargo. As a result, very extensive researches are required to do justice to this topic. Of course, it is not possible to adequately deal with all criteria in a limited article. They can only be touched upon. It is not possible to go into all aspects of insurance law. I would just like to briefly refer to the application of the Hague-Visby or Hamburg Rules, depending on the cargo owner's existing insurance contracts, which should be important in the case of General Average. It is beyond the scope of this article to examine these rules in more detail.
I hope I was able to contribute some considerations that enabled a somewhat deeper understanding of this case and point to some national Egyptian and international legal bases.
From my point of view, from the perspective of a captain, the demands of the SCA are exaggerated for me, especially since they are not really adequately reasoned. But I'm not an insurance expert. I can only limited understand the amount of salvage costs, they seem for to high. And I don't understand what "reputation" was lost. I even go one step further and formulate it to the effect that the reputation of the SCA pilots shall be washed clean, with US $ 300 million. Because the question arises, is the pilot's recommendation to increase the speed 40 % above the regular speed limit only to be regarded as an individual case or as a possible common practice to increase the ship's throughput.
For Captains must be only one absolutely priority valid. Follow the SCA Navigation rules and understand the basics of bank effects and squat, not only in Suez Canal. There seem deficits in understanding of physical princips of hydrodynamic and ship dynamic to exist in the nautical knowledge base. The question is where it comes from.
So there is a lot of room for discussion. This is also my intention to open a substantiated and competent discussion that such further incidents might be avoided in future.
? Copyright Mai 2021, M. Eng. Capt. Gunter Schütze. Replication or redistribution in whole or in part is expressly prohibited without the prior written consent by M. Eng. Captain Gunter Schütze
?Sources:
all for this case relevant IMO conventions, resolutions and their amends
https://eams.gov.eg/Content/PDF/laws/????? ??? 8 ???? 90 (Egypt Merchant Shipping Law #8/1990)
https://www.suezcanal.gov.eg/English/Navigation/NavigationCirculars/Pages/Cir.8-2020.aspx
https://www.suezcanal.gov.eg/English/Navigation/NavigationCirculars/Documents/Cir.8-2020/SC-Rules-of-Navigation(Circ.8.2020).pdf
https://www.ukpandi.com/news-and-resources/press-release-articles/2021/ever-given-grounding-in-suez-canal/
https://www.evergreen-marine.com/tbn1/jsp/TBN1_NewsListOverview.jsp?newsType=G2
https://maatisaal.com/2018/10/09/shipowners-limitation-of-liability-for-maritime-claims-under-egyptian-maritime-law/
https://ehkelna.com/2018/10/09/shipowners-limitation-of-liability-for-maritime-claims-under-egyptian-maritime-law/
https://youssrysaleh.com/blog/egypt-liability-of-the-shipowner/
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festgesetzt-crew-eigner-ladung-verfahren/
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