Slide pi insurance and legal impact concerning the stranding of the mv ever given (tailieuluatkinhte com)

Content Page INTRODUCTION 1 THEORETICAL BASIS 2 Overview of PI Insurance 2 Overview of legal impact analysis 3 OVERVIEW OF THE EVER GIVEN SHIP AND ITS INCIDENT IN SUEZ CANAL 4 Overview of the Ever Given ship 4 Overview of the Ever Given incident in Suez Canal 5 About the incident 5 About the impact on international logistics 5 About the ship rescue journey 5 About the aftermath 6 Overview of the relationship between interested parties 6 EVALUATION OF PI INSURANCE AND THE LEGAL IMPACT OF THE EVER GIVEN INCIDENT 9 PI insurance in the Ever Given case 9 The legal implications relating to the Ever Given’s Stranding Accident in the Suez Canal 13 Domestic Egyptian Legislation and International Law Governing the Suez Canal 13 The Presidential Decree of the Nationalization of the Canal of 1956 13 Law No. 30 of 1975 on the Organization of the Suez Canal Authority 13 International Legal Issue relating to Ever Given’s Blockage of the Suez Canal 14 Cargo insurance 14 General Average 15 International Salvage Law 15 LESSON LEARNED AND RECOMMENDED SOLUTIONS 17 Lesson learned 17 Risks learned from EverGiven case 17 EverGiven incident is a wakeup call for the industry to improve risk management and safety 18 Recommended Solutions 19 CONCLUSION 21 REFERENCES

P&I INSURANCE AND LEGAL IMPACT

CONCERNING THE STRANDING

OF THE MV EVER GIVEN

A P R E S E N T A T I O N B Y G R O U P 1

LESSONS LEARNED &

RECOMMENDATIONS

Insurance & Risk Management

THEORETICAL BASIS

OVERVIEW - P&I INSURANCE

P&I insurance protects ship owners and ship operators against civil liabilities that may arise against third parties in the course of business and operation of ships.

Insurance & Risk Management

P&I CLUBS

A P&I club is a mutual insurance

association that provides risk pooling,

information and representation for its

LEGAL IMPACT

ANALYSIS

The goal of legal impact

analysis is to record and

explain how a particular law or

group of subject-linked laws

works within a particular social

setting (Colin S Gibson, 1982)

Insurance & Risk Management

OVERVIEW OF THE EVER GIVEN

INCIDENT IN SUEZ CANAL

02.

Insurance & Risk Management OVERVIEW - EVER GIVEN SHIP

IMO: 9811000 Name: EVER GIVEN Vessel Type - Generic: Cargo - Hazard

A (Major) Vessel Type - Detailed: Container Ship

Status: Active Length Overall x Breadth Extreme: 399.94 x 59 m

Year Built: 2018 Home Port: PANAMA

Vessel information:

During its operational history, up to the moment, there have been two considerable

events which were 2019 Hamburg collision and 2021 Suez Canal grounding.

Insurance & Risk Management

OVERVIEW - EVER GIVEN INCIDENT IN SUEZ CANAL

23 March 2021, 07:40 EGY

The estimated loss to Global Trade was 6-10 billion USD.

The amount of goods worth 400 million USD was jammed every hour The total loss included 9.6 billion USD in goods that could not be

THE RESCUE JOURNEY

THE AFTERMATH

Insurance & Risk Management

13th April: the ship had been seized on court

orders - 900 million USD compensation.

4th July: compensation decreased: 550 million

USD (free the ship when 40% was paid)

7th July: Egyptian authorities released the ship.

29th July: the ship finally arrived at her

destination, Rotterdam container terminal.

SKK is in possession regarding the vessel’s operation Evergreen holds the commercial use of the vessel

SUEZ CANAL AUTHORITY (SCA)

Insurance & Risk Management

Has exclusive authority over the management, operation, use,

maintenance, and improvement of the Suez Canal.

Established its own "Rules of Navigation" for all vessels going through

the Suez Canal.

+ A vessel's owner, operator, and/or charterer is liable for any damage

caused by the vessel, directly or indirectly, to itself or to SCA properties or

personnel.

+ Including any physical injury or material loss brought on by the Suez

Canal's obstruction of navigation.

=> The SCA has the power of legal execution in the Ever Given case to

investigate root causes, liabilities of involved parties, and the estimated

compensation.

EVALUATION OF THE P&I

INSURANCE FOR THE EVER GIVEN INCIDENT

Insurance & Risk Management

P&I INSURANCE IN THE EVER GIVEN CASE

GENERAL AVERAGE

Declare on 1st April 2021 - G/A principle is for the salvaged ship's ownerand shippers, who are associated with the shipowner's actions, to sharethe costs as a means of self-protection

Refloating damage (the cost of fixing hull damage that could occurduring the process of refloating the ship to protect it and its cargo) can

be included in GA as GA sacrifice

Grounding damage is a particular average - not included in GA, notcovered by insurers or P&I clubs

The hull insurer is responsible for paying the ship's G/A contribution.

The cargo insurer is responsible for the cargo’s G/A contribution.

COMPLICATIONS IN DISTRIBUTING GA

Long time and great cost to

calculate GA & considerable

number of containers on board

(approximately 18,300).

-> The contributions requested

were complex.

Insurance & Risk Management

Some cargo owners disputed the sum paid to the SCA.

Ship owner had breach the terms of the contract of carriage -> Cargo should not contribute to G/A.

Ever Given would have insurance coverage of 3 billion USD.

Insurance & Risk Management

CLAIMS AND COSTS INVOLVED IN THE P&I INSURANCE

SCA claims for economic losses resulting from the accident = 1 billion USDLoss of reputation with regard to the canal's transit = 300 million USD

Compensation for cargo owners <= 500 million USD (according to the P&IClub)

Compensation for salvage reward = 300 million USDThe SCA's request did NOT include expenses incurred by salvagecompanies

-> The Club believes that the total amount of potential claims can never come close to the 3 billion USD coverage, but there may be insufficient justification for the amounts requested.

TO THE EVER GIVEN’S STRANDING ACCIDENT IN THE SUEZ CANAL

Domestic Egyptian Legislation and International Law Governing the Suez Canal

The 1956 Presidential Decree on theNationalization of the Suez Canal and theLaw No 30 of 1975 on the Organization ofthe Suez Canal Authority are the twodomestic legal instruments relating tothe Suez Canal

INTERNATIONAL LEGAL ISSUE RELATING TO THE EVER GIVEN’S BLOCKAGE

OF THE SUEZ CANAL

Insurance & Risk Management

The incident's impact on theworldwide supply chain will alsoresult in insurance claims Theclaims will not be limited to cargo

on the Ever Given, but will alsoinclude cargo on ships that will bedelayed owing to the inability topass through the canal

CARGO INSURANCE

The availability of recourse against maritime cargo insurance plans is also not

a guarantee, as the majority of marine cargo insurance policies do not coverthe delays-related loss According to Cls 4.5, the majority of this insurance are

of the all-risks variety, and delay is excluded

Insurance & Risk Management

INTERNATIONAL SALVAGE LAW

The public and private international law governing maritime salvage may be crucial in

future lawsuits relating to the Suez Canal blockage

International Salvage Convention (1989 ISC) & Lloyd's Open Form salvage contract (LOF)

Bigger ships create bigger problems

Dealing with incidents involving largeships is becoming more complex andexpensive

average costs

Mega ships require specialist tugsHard to find port with propercapacity

Cargo loss, fires

Risks learned

LESSONS LEARNED

Applying specialized tugsPorts, canals have access to adequateresources in a relatively short time

Put additional restrictions on mega shipsunder certain weather condition

Insurance & Risk Management

Minimize risks of mega-ships by

Ever-Given incident is a wake-up call for the

industry to improve risk management and safety

Safety concerns should be carefully considered

Ever-Given incident is a wake-up call for the

industry to improve risk management and safety

LESSONS LEARNED

Regulatory modernization

Promote improved ship designFire-fighting equipment to prevent andextinguish fires

02

03

04

Insurance & Risk Management

Further development of the Suez Canal

Implement a set of contingency plans alongwith regular maneuvers

RECOMMENDATIONS

Scrutinize the vessel regularly;

Ensure the insurance is well covered

Discover alternative maritime routes

EGYPT GOVERNMENT

SCA

EVER-GIVEN OWNER, OPERATOR

CHARTERERS, CONTAINER

THANK YOU FOR LISTENING!

P & I I N S U R A N C E A N D L E G A L I M P A C T

C O N C E R N I N G T H E S T R A N D I N G

O F T H E M V E V E R G I V E N

G R O U P 1