Pic: Ever Given stuck in Suez Canal

Salient Features of the Suez Canal

The 120-mile-long canal, constructed in 1869, connects the Mediterranean in the North with the Red Sea in the South. The canal is managed and operated by the Suez Canal Authority (SCA) since 1956, when the Egyptian government nationalized the Suez Canal Company, which was largely owned by British & French interests. The chairman of SCA is Mr Osama Rabie. Captain Hassanin was on duty at the control tower located in Ismailia at the time of the incident. The pilots are employed directly by SCA. The waterway is only about 200 meters wide (from bank-to-bank) at some locations and about 24 meters deep. The cross-section profile of the canal appears like an inverted trapezium. A large section of the canal is too narrow for large ships to safely pass each other. Therefore vessels have to transit the canal in one-way convoys, each passage taking about 12 hours. The vessels have to wait in one of the lakes (located approximately mid-length of the canal) or side channels for the group of vessels going the other way, to pass safely.

General Description & Specifications of Ever Given

IMO #                  9811000

Year Built                          2018

Vessel Type                      Fully Cellular Containership

Capacity                             20,388 TEU

DWT                                   199,489

GT                                        217,612

LOA                                     399.99 mtr

Beam                                  59 mtr

Draught                             16 mtr

Flag                                     Panama

Class                                   ABS

P&I                                      UK Mutual Steam Ship Assurance Association

Owner                                Luster Maritime, Panama; subsidiary of Shoei Kisen Kaisha, Japan

Charterer                           Evergreen Marine Corp. Lines, Taiwan

Ship Op Manager            Higaki Sangyo Kaisha

Tech Manager Bernhard Schulte Shipmanagement

Master                 Captain Krishnan Kanthavel

Chronological Sequence of Events Leading to the Incident

Ever Given was en-route from Port of Ningbo, China towards Port of Rotterdam. She joined the northbound convoy on Tuesday 23^rd March 2021 morning, as the 13^th of 20 vessels. The southerly winds were about 40 mph. The dusty haze resulted in visibility reduced to about a mile. Two SCA pilots boarded the vessel. As she was proceeding along the channel, there are several reports suggesting that the vessel suddenly veered to starboard. At this stage the lead SCA pilot instructed the bridge team “hard-a-starboard” and “Full ahead.” The other pilot reportedly objected to this manoeuvre and there were some heated arguments between the two pilots. When the master tried to intervene, the lead pilot threatened to leave the vessel. The vessel ran hard aground at the 151 km mark viz. abut 6 nautical miles from the southern entry to the Suez Canal, at approximately 0540 hrs GMT (07.40 hours local time). Her bulbous bow got embedded in the Eastern bank of the canal and her port quarter grounded on the Western bank. She was thus wedged diagonally across the canal between the two banks. By sheer cruel fate, one of the largest container vessels to transit the canal, ran aground in one of its narrowest sections, blocking traffic in both directions.

Fortunately, the 6,188 TEU Maersk Denver, which was following the Ever Given, managed to stop just in time, thus averting a collision and further damages (the 2^nd mate Ernest Caponegro, was quoted as stating that there was a sudden gust of wind more than 40 miles an hour, resulting in sand being blown across, such that he momentarily lost sight of the Ever Given

The crew were safe and all accounted for. There was no report of pollution.

Re-Floating Operations

The rudder, stern frame and bow may have suffered damage. Bottom damage, if any had not been assessed. She was reportedly heeled to port. With the vessel grounded at the bow as well as the stern and afloat at mid-length, excessive SAG was a serious concern. It was determined that the water-tight integrity of the hull was not breached.

Time was of the essence in re-opening the Suez Canal as soon as possible. Operations to re-float the ship to clear the channel were carried out under SCA control.

Initially 2 tugs MOSAED 3 & MOSAED 2 were mobilized to try and free the vessel. Thereafter these efforts were supplemented by 8 tugboats, including BARAKA 1 (160 tons). Subsequently, 2 dredgers (Mashhour & Ramadan) were deployed to dig-out the sand banks to create a ‘turning basin’ for the vessel. They would run 12-hour shifts, alternating between excavators on shore removing the soil around the bow and stern, and tugboats pulling with as much power as possible.

Boskalis, Smit Salvage and Nippon Salvage were supplementing these efforts. Tugs “Carlo Magno” and “Alp Guard” Bollard Pull 280 tons, were mobilized, both arrived on the scene on Sunday 28^th March and commenced pulling the starboard quarter, but failed to re-float the vessel. In order to decrease the forward draught, the vessel ballasted about 2,000 tons aft and ordered all the tugs to try again. To minimize the risk of the bow swinging sideways suddenly, when she re-floats, four mooring ropes were secured / anchored ashore. Operations were timed to suitably to utilize favourable tidal and weather conditions. Finally she was refloated on 29 March 2021.

After being re-floated on 29^th March, Ever Given had anchored in the Great Bitter Lake, where she remained detained and laid-up.

SCA managed to clear the back-log of waiting vessels during the next 6 days.

Vessel Detention and Subsequent Release

On 13^th April, SCA secured an Egyptian court order to detain the Ever Given, seeking about USD 272 million in expenses, 300 million towards salvage bonus, and 344 million in damages & moral losses”, i.e. a total almost $1 billion from the ship’s owner.

The cargo was estimated to be worth about $ 780 million. WK Webster were appointed as the Average Adjuster.

Mr Faz Peermohamed of Stann Marine, was appointed by the owner Shoei Kisen Kaisha and insurers

In its initial public statements, SCA insisted that the Pilot did make the weather forecast (strong winds and poor visibility) available. The Master ought to have been aware of the vessel’s manoeuvring characteristics in this condition, loaded high with more than 18,000 TEU aboard. The Master is thus solely responsible for taking the decision to enter the Suez Canal. Informatively, some other vessels preferred to delay the transit, thus pointing a finger towards “compromised safety” to meet the high-pressure commercial demands of container shipping.

SCA released another statement to the effect that the vessel’s speed, which is the sole responsibility of the Master, exceeded the maximum limit established by the authorities. Lloyd’s List intelligence data indicated that she was travelling at 12.9 knots just before she grounded. The owner is believed to have provided evidence to the effect that the pilot ordered to increase speed, for steerage control.

The ship owner insisted that the ship grounded because “she lost control due to sudden strong wind in bad weather” and reiterated “absolute confidence in our Master, who has acted with professionalism and diligence throughout this period”. The “Indian Maritime Union” too released a statement urging the authorities not to “hold the crew to ransom”.

During the first hearing, the lawyer representing the ship owner submitted “voyage data recorder” as evidence, the contents of which were not made public and agreed to negotiate the terms of the release. Legal proceedings at the Ismailia Economic Court of First Instance were put on hold to allow the parties to reach an agreement. SCA subsequently reduced its claim to about USD 550 million.

The owner filed an application to limit its maximum liability.

The UK P&I Club released a statement on 22^nd June, to the effect that, consequent to meetings with the SCA’s negotiating committee and numerous court hearings, a formal solution has now been agreed.

On 26^th June, the ship-owner and SCA reached an “Agreement in Principle” for an undisclosed sum. A large section of the industry was naturally heartened to hear that after several rounds of consultations and negotiations, the Suez Canal Authority and the ship owner had reached an “agreement in principle”, which no doubt was facilitated by the reduction of the claim amount to a more realistic figure and perhaps by the realisation that the vessel was not entirely to blame.

Another press release quoted SCA as stating that it will accept $ 200 million now and the balance in the form of “letters of guarantee”, as a condition to allow the vessel to leave. The agreement enabled the SCA to lift detention orders.

On Wednesday, 7^th July 2021, 106 days after grounding, she finally hoisted anchor and joined the northbound convoy heading towards Port Said, at the northern end of the canal, where an under-water dive inspection of the hull, in-situ, was expected to be carried out, before she finally sails towards Rotterdam (next port of call to discharge cargo) expecting to arrive there in about 10 days.

The agreement presumably does not address the status of other parties, whose claims thus remain unsettled and are subject to further litigation in respective jurisdictions. The agreement, as the name suggests is merely a prelude to a formal contract, setting out in broad terms the amount, the stages of payment and the conditions. Long and contentious legal battles are expected to lay head.

Author’s Opinion

Probable Cause(S): –

1. Machinery Failure

The vessel must have resources available to ensure that she is able to maintain speed between maximum allowed in restricted waters and minimum required for steerage-way, consistently and over a prolonged length of time. The fine balance between safety and commercial expediency and the means to ensure that safety is always paramount. The official (preliminary/statutory) enquiry will determine the facts pertaining to machinery performance, from ship’s records

2. Effect of prevailing winds on ship manoeuvrability

Windage area alone is not the only factor to be considered especially for the ULCS and Post-Panamax Container ships. Reference is made to the IMO MEPC.1/Circ.850/Rev.1 (2015), interim guidelines for determining minimum propulsion power to maintain the manoeuvrability of ships in adverse conditions, as amended (resolution mepc.232(65), as amended by resolutions mepc.255(67) and mepc.262(68), as also to the Recommended Practice DNV-RP-C205; Environmental conditions and loads. Attention is also drawn to the Manoeuvrability Plots, which are provided by the shipyard, onboard large container ships like Ever Given, which are fitted with Transverse Thrusters. Ship maneuvering trials are invariably carried out in open waters. To control the adverse effects of shallow waters, larger vessels need to proceed at slower speeds, but keeping in mind the consequent compromise in maneuverability. Some reports have alluded to the possibility of “bank effect phenomenon” ie reduction in relative water-pressure between the ship-side and the near bank, due to the increase in ship’s engine speed, resulting in the stern tending to swing toward one bank with the bow pushed away towards the other. The investigating authorities will determine the facts pertaining to (a) strength and direction of winds forecast at commencement of transit passage (b) strength and direction of sudden gusts of wind as actually experienced.

3. Human Error (Master, Crew, Pilot)

Pilotage in the Suez canal is compulsory. The investigating authorities will study the VDR and other records to determine the facts pertaining to the actions taken during the final stages viz. between the time vessel suddenly veered and her grounding, by each pilot and the corrective actions taken by the Master in exercise of his over-riding powers in law and discretionary powers under ISM.

4. Systems failure

Like most canals and restricted waterways, the Suez is difficult to navigate during strong winds or in poor visibility. Informatively, four ports in the vicinity had ceased operations due to the weather. Furthermore, the master of an LNG carrier, sailing from Qatar, had the previous day taken the decision to delay the transit under the prevailing weather conditions. The investigating authorities will review the Standard Operating Procedures and mandatory risk assessment (critical limits of meteorological conditions which demand aborting port operations) and review of risk management policy and procedure (tug escort policy, deployment of tugs considering vessel size, freeboard and windage and weather). They will also study the master-pilot exchange records and determine the facts pertaining to (a) SOP as per port rules, (b) implementation of SOP especially pertaining to use of ESCORT tug, (c) the due diligence and risk assessment carried out by the Master (d) the decision-making process of the Master and the Port to proceed in transit passage despite the prevailing meteorological conditions.

5. Inadequate Depth of Water (Siltation)

The investigating authorities will determine the facts pertaining to the actual depths in the canal, being maintained as claimed and promulgated, keeping in mind that even the vessel did not touch ground during passage, a reduction in UKC may result in loss of steerage-way.

Insurance

Whereas the ship owner’s exposure to risks of property damage and liability (pollution, injury, loss of life etc) are usually covered by hull and machinery underwriters and by P&I Clubs respectively, the risk management of ports, vary. In India the government owned ports generally bear their own risk. Private terminals, operating under concession agreement, may either voluntarily insure their properties and third part liabilities or often do so as matter of prudent risk management; or they may be obliged to do so, by the banks/financers who have advanced loans to the terminals.

Needless to emphasize that in the absence of knowledge of the facts of the case, it is pre-mature to discuss financial liability and/or professional responsibility. The following paragraphs have been included merely as general information on how a similar incident, had it occurred in India, may be viewed under Indian law.

Civil Liability

1. Damage and/or loss to cargo on board

To be assessed by cargo insurers / cargo surveyors & loss assessors

2. Expenses incurred to re-float the vessel:

These would include expenses incurred towards owned and contracted tugs, dredgers, earth moving equipment, cranes etc

3. Consequential losses to SCA:

These would include the loss of revenue (canal transit fees) in the vent that some vessels deciding to go around the Cape of Good Hope instead of waiting indefinitely for the canal to re-open. The loss of revenue may generally be arrived at, on the basis of transit fees which SCA would have earned from that particular vessel, less expenses which SCA would have incurred forwards that transit.

4. Consequential losses to other ships / cargo interests etc

These would include the loss incurred by ships which waited at anchorage, during the period between when they would have exited the canal, had the Ever Given not grounded, till the time when they actually did exit after it was re-opened

The consequential loses of an incident or casualty such as this, may be excessive. This fact became readily apparent, after the impact of the canal blockage, reverberated throughout the shipping and logistics industry.

Damage to H&M of Ever Given will be assessed by Classification Society and surveyors, while she is afloat or in dry-dock.

Civil liability may arise out of tort or statute or from breach of contract.

In the case of the former, SCA / other interests have to demonstrate that the Master owed a “duty of care” and that Master failed to exercise it.

Professional Responsibility

Although the vessel remains monetarily liable to the port, the question of professional negligence or accountability under domestic law, shall have to be determined individually by departmental enquires. Thus parallelly and simultaneously with determining the above explained financial liability, the Master or pilot, may individually be held professionally negligent and thus responsible to their respective employers, in the case of the pilot, to the port authority and licensing authority; in the case of the Master, to the ship-owner and Flag State & Certificate of Competence authority.

Criminal Liability

There has been no report of personal injury or loss of life or environmental damage. Therefore it is not applicable in this case.

Why is Ship Held Liable for Damages and Losses?

To answer that question, one would need to study the developments in context of the legislative history.

Stage 1: The earliest “pilotage service” was voluntary (optional). The direct master-servant relationship resulted in the ship-master and ship-owner being held vicariously liable in Common Law.

Stage 2: Accidents happened. A need was felt to regulate pilotage services, by imposition of Compulsory Pilotage and licencing pilots, who would accordingly be held responsible for faults. The UK Merchant Shipping Act 1894 u/s 633, in support of this line of thinking, stated that Master / Owner were not answerable to any person, for any loss/damage due to fault of compulsory pilot. Furthermore section 388 limited the liability of owner. The logic was that to obtain the full benefit of compulsory pilotage, it was considered important that the pilot retains sole conduct of the vessel and that it was necessary to avoid a divided command. The pilotage services provider obtained insurance and loaded the premium onto vessel related charges.

Stage 3: Realization that the civil liability policy resulted in the Master becoming increasingly reluctant to over-rule or even interfere in the actions of the pilot for fear of losing the benefit of “no liability under compulsory” pilotage.

Stage 4: Liability Insurance, including liability during compulsory pilotage, was available to ship-owners through mutual clubs at competitive rates. Therefore, the risks came to be covered by both the ship-owner and the Port. It was felt that if financial liability is shifted to the vessel and the claim honored by the P&I Club, the latter would raise call money contribution from its members, the ship owner could theoretically (in actual practice of course, market conditions of supply and demand, dictates how much of the additional insurance premium cost is passed-on or borne internally as a loss), increase the freight or charter hire by a proportionate amount and the cargo traders would eventually pass on the additional cost to customers. Furthermore, it makes better economic sense to distribute the consequences of an accident, as wide as possible, the same being consistent with public policy. Shifting financial liability for all damages and losses; to the vessel, was thus considered a better option.

Stage 5: The impetus for change occurred when the International Collision Convention, 1910 created a conflict. The Departmental Committee appointed by the UK BoT accordingly recommended that the liability regime be reversed. The Pilotage Act 1913 thus incorporated section 15, which clearly stated that even during compulsory pilotage, Master was responsible, in the same manner as optional pilotage. A suitable clause to that effect was accordingly inserted in the Indian Ports Act, 1908 Section 31, sub-section 1 prohibits a vessel’s entry, movement or departure, without a pilot. Sub-section 2, states thar the master of a vessel which is required to have a pilot on board, shall be answerable for any loss or damage caused by the vessel or by any fault in the navigation of the vessel, in the same manner as he would have been, if he had not been so required by that sub-section. The law thus provides that notwithstanding the vessel proceeding under compulsory pilotage, the vessel / master is answerable (jointly and severally liable for any damage caused by the vessel) as if the pilot were not on board. In other words, the effect of such a legal provision is to equivalate the compulsory pilot with the pilot who is employed at the option / discretion of the master.

The Master-Pilot Relationship

Master is familiar with the vessel, the stability condition and manoeuvring characteristics. However in confined waters the time interval between error and its consequences is very short. The Pilot has local knowledge, is familiar with Port SOP and can effectively communicate with tug flotilla etc. Utilizing the combined expertise of the two professionals, thus minimizes the risk to the port and the vessel. If pilotage is mandatory as in most ports including the Suez Canal, the port’s responsibility is generally limited to ensuring that the pilots are competent & duly certified. In fact the level of competence is determined by the port itself, as per its own established rules.

The significance of the logbook entry “Proceeding to master’s orders & pilots advice” lies not in the meaning of the word “advise” per definition in Black’s Law dictionary as the “giving of an opinion or counsel; being discretionary or optional with the person addressed”. In actual fact, a compulsory pilot’s advice cannot be treated as above. Power is defined as the ability to act, whereas authority is the right to act. At sea, the Master has authority and power. The officers hand-over watch, with the phrase “she is all yours”. That phrase is not used after the pilot boards the vessel. Whereas the “authority” is retained by the Master, an element of the “power” is ceded to the pilot, when the “conduct” (con or conning) of the vessel is handed-over. Helm and engine orders are conveyed directly by the pilot to ship staff. Obviously, power which is delegated can also be reclaimed, but only under well-established circumstances, for example if the pilot is manifestly incompetent, intoxicated or incapacitated. Naturally, if the pilot’s actions are placing the ship in clear and imminent danger, thus jeopardising the safety of the ship, the Master has a duty to intervene. Even when the port rules enforce “compulsory pilotage”, it is important to appreciate the point that it is the PILOTAGE which is compulsory, not that particular pilot. Consequently the subsistence of the master-servant relationship between owner-and-pilot and the vicarious liability flowing therefrom, continues.

The Way Forward

The chairman of SCA’s reported statement to the effect that “the pilot gave master guidance, but it’s up to the master to comply with it or not. The master was solely responsible for the decisions and actions that led to the blockage of the Suez Canal. Egypt therefore detained the vessel and its crew until a settlement was reached, which was amicable and ‘everyone was happy’

But obviously “everyone is NOT happy.”

The question arises as to why the Ship-Owner is financially liable for all the damages listed above, even though pilotage is compulsory and Master was NOT entirely at fault.

For one; the frequent arrest of the Master (and crew sometimes) is resulting in a growing exasperation and simmering discontent among the seafarers.

Secondly; if the ports were to be held liable, and consequently were compelled to obtain liability cover, their insurers may demand; by incorporating suitable clauses / policy conditions, that a system of risk assessment, systems audit and loss-minimization procedures is duly implemented. Such measures would theoreticaly ensure not only improvements in safety standards, but also reduce the casualty response time, avoid involvement of multiple bodies, streamline the process and consequently reduce litigation.

And finally, the crew, the vessel and her cargo were detained by SCA as a bargaining tool, for over three months while negotiations regarding “civil liability” or rather “compensation” as some would say, continued between SCA and the ship interests. Had SCA proposed a more realistic initial claim, the additional losses, which mounted up, during the detention of the vessel while “negotiations” were in progress, may have been reduced considerably.

Unfortunately, even if IPA section 31(2) is amended to read “the vessel / port shall be responsible for the respective faults of the master/pilot”, it may not address all the above concerns.

A pre-condition to a ship voluntarily entering port limits, is her acceptance of its sovereign jurisdiction and consequently its laws. The vessel in foreign jurisdiction will thus remain hostage to domestic law. The port authority may decide to exercise jurisdiction and detain the master and/or the vessel, pending determination of cause and apportionment of fault or till determining that the pilot is hundred percent at fault (which is most unlikely). As per international maritime laws, accident investigation is carried out by the port and flag state. As regards the investigation by flag state, one has to appreciate that till the vessel is in detention, the progress of the flag state investigation, depends to a large extent on the co-operation of the port state, especially pertaining to pilots’ experience, bad-weather procedures and control tower–vessel communications.

A good indication of the possible way forward may be apparent in the press release which quoted SCA as stating that it will accept the balance in the form of “letters of guarantee”, as a condition to allowing the vessel to leave. If there is a system in place for the immediate acceptance by the port authorities, of P&I Club security for the full amount, detention, arrest and inordinate delays may be avoided.

MMT

Box 1

The Author

Kapildev Bahl

Maritime Arbitrator

Box 2

Disclaimer: This report is based on information available in the public domain through various media resources. Although the information thus obtained could not be verified, the data has largely been cross checked for inconsistencies. Only such data, which appeared reasonable and practical to the author (based on his professional experience and knowledge) has been included. Furthermore, chapters 01 to 05 have been compiled with information available up to vessel departure from Suez.