Trouble in the Suez Canal

The grounding of the container ship EVER GIVEN in the Suez Canal on the morning of March 23^rd, blocking the essential shipping channel, is looking like one of the worst maritime disasters to face the international shipping industry in recent years.  

In addition to the grounded EVER GIVEN, there are numerous vessels currently stuck in the canal, and even more waiting in the Mediterranean and in the Gulf of Suez for the situation to be resolved. International shipping firms will be looking at options for avoiding the canal as the salvage operation continues, with some estimates looking at weeks to refloat the EVER GIVEN, many vessels may be diverted around The Cape of Good Hope as reported by Trade Winds coverage.

In our globalised economy, the importance of international shipping trade cannot be overstated, with around 90% of international trade by volume transported by sea and 12% transiting through Suez according to the Organisation for Economic Co-operation and Developments coverage. A total blockage of the canal is a worst-case scenario for the global maritime industry and just-in-time supply chains. 

Now entering its fourth day, a delay of this magnitude represents a huge problem for the ship owners, charterers, and insurers of all the affected vessels, as well as third parties relying on the goods in transit. Lloyd's List estimates that some 230 vessels currently halted may lack coverage for delay.

The owners and insurers of the EVER GIVEN are likely to face a raft of claims and significant litigation arising from the grounding. Claims for damage to the canal infrastructure, as well as cargo claims for perishable goods or demurrage are likely to add up. Time-charterers, owners and insurers of the hundreds of other vessels affected by the delay will also be looking ahead to demurrage, cargo and various insurance claims as the situation draws on.  

The last major incident in the Suez Canal occurred on 15 July 2018. The AENEAS, suffering engine failure came to a halt in the canal at the head of a convoy. During mooring operations in the train behind, PANAMAX ALEXANDER collided with SAKIZAYA KALON and later the two vessels collided with OSIOS DAVID. Details on this case which was brought before Mr Justice Teare can be viewed here.

Multiple legal proceedings brought by the parties involved in the casualty were consolidated in Sakizaya Kalon, Owners of The Vessel v Panamax Alexander, Owners of The Vessel [2020] EWHC 2604 (Admlty) (05 October 2020). Full details on this case can be found here.

In his final ruling, now retired Admiralty Court judge, Justice Teare held the PANAMAX ALEXANDER solely responsible for the collision, finding the SK and OD at no causative fault.  

Demonstrating its position as a leading chambers for high-profile international shipping disputes, members of band 1 Shipping & Commodities set Quadrant Chambers appeared for all parties in the consolidated action.  

James Turner KC appeared for the owners of the OSIOS DAVID, Chirag Karia KC appeared for the owners of the SAKIZAYA KALON, and Robert Thomas KC and Ruth Hosking appeared on behalf of the owners of the PANAMAX ALEXANDER.  

These respected shipping barristers are all ranked alongside their peers in the Chambers & Partners UK Bar Guide 2021, where you can read more about their individual practices, and those of their peers. Chambers ranked barristers offer market-leading expertise across all the issues likely to arise as a result of the grounding of the EVER GIVEN and the blockage of the canal.  

As a major centre of international shipping law, those looking to instruct counsel in the wake of the ongoing EVER GIVEN crisis can turn to the pages of the UK Bar and Solicitors Guides when looking ahead to possible litigation. 

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