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 on Wednesday.
The Lawyers representing the vessel’s owners and insurers, Stann Marine 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.
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.
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.
The Suez Canal Authority at first demanded $916 million in compensation, which was later lowered to $550 million.
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.
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.