An update on the "Ever Given" case

Genova - The media hype generated by the grounding of the container ship "Ever Given" in the Suez Canal is now fading a month after the liberation of the canal. However, some important legal aspects of the possible legal proceedings that will arise from this affair are beginning to be outlined and that will certainly keep the attention of the experts alive in the coming months and years.

Following the release, there are three main updates to be reported from a legal point of view:

- the "Ever Given" ship was impounded by the Egyptian judicial authorities following the complaint filed by the Suez Canal management company;
- the owner of the ship would have declared a common average; and finally 
- the ship owner would have initiated a limitation of liability proceedings in London under the Convention on Limitation of Liability for Maritime Claims signed in London in 1976, as amended by the subsequent 1996 Protocol, as implemented in the United Kingdom.

These events can only have consequences in the identification of the procedural choices of Italian shipping operators, whether they are shippers or receivers, charterers or shipowners involved (directly or indirectly) in the accident involving the Ever Given ship.

As for those interested in loading on board the ship, the common average will certainly have immediate consequences. In fact, in the event of common damage, all those involved in the shipment share the costs incurred for the safety of the shipment placed in danger on the basis of this procedure. It is possible that the conditions for the declaration of common average are the subject of litigation, to establish whether the ship was actually in a dangerous situation and if the damage act is therefore justified. Without wishing to enter into the merits of the matter, from a practical point of view instead the owners of the goods stowed in the containers on board the ship will therefore be called by the damage liquidator to provide a guarantee from the cargo insurer, together with an "average bond". If the goods stowed inside the containers have been insured, it is in fact very likely that the risk of contributing to common average is covered and, therefore, it will be the insurers to issue the relative guarantee. In the event that the goods are not insured, then the owners of the goods will provide a cash deposit whose amount (usually a percentage of the value of the goods) will be determined by the damage liquidator. Failure to pay the deposit will give the ship owner a right of retention on the goods, when the goods can be unloaded.

Those interested in the cargo could have active claims against the sea carrier (the ship is chartered by time to the line carrier Evergreen) both for material damages or losses deriving from the delay or for economic damages deriving from the delay. The cause of such damage will probably be sought not only in the grounding, but also in the current kidnapping of the Egyptian authorities. The Evergreen company has declared that it is not responsible for damages due to delay, not guaranteeing a specific date of arrival at destination of the goods. The Evergreen company's bill of lading model available online on the company's website indicates that the carrier "does not undertake that the Goods shall arrive at the port of discharge or place of delivery at any particular time or to meet any particular market or use" and that "shall in no circumstances be liable for any indirect or consequential loss or damage caused by delay".

In any case, any liability for damages deriving from the delayed arrival of the goods at their destination will probably be examined according to the uniform legislation applicable to the bill of lading (the bill of lading model available on the Evergreen website contains an express reference Convention on the bill of lading of 1924, the so-called "paramount clause"), verifying, first of all, the application of the same discipline to damages due to delay (not only to "physical loss or damages" but also to damages of a strictly economic nature), then the eventual relevance of events exempting carrier liability and finally the subjection of this eventual liability to the limit per package / unit or weight.

Third parties unrelated to the voyage of the "Ever Given" ship (whether they are shipowners or charterers of ships that were passing through the canal or waiting to transit, or who have decided to divert the route originally planned to pass through the Suez Canal) could make complaints for loss of freight or, more generally for loss of profit, plus expenses (for example the bunker consumed while waiting or for diversion) towards the owner of the ship "Ever Given" or towards the management company of the Suez Canal.

In any case, these would be non-contractual actions, the applicable law of which could be Egyptian law if the action had begun against the channel management company before an Egyptian court. The action against the channel management company would not be subject to a limitation of liability.

If, on the other hand, a possible non-contractual action was brought against the owner of the "Ever Given" ship, it is likely that this claim could be presented before the defendant's jurisdiction (which should be Japanese) or the English jurisdiction, assuming acceptance of the jurisdiction of the courts of London, in consideration of the start of the limitation procedure before the English court, to which any extra-contractual claim would be subject. The rules of private international law of the competent court will then decide the law applicable to this non-contractual claim.

The curtain on the various legal battles resulting from the grounding of the Ever Given ship in the Suez Canal has just opened and the scene is now in the hands of insurers, liquidators, experts, lawyers and judges.

*Lawyer, Studio Dardani