International Journal of Law and Society 2021; 4(2): 107-114 http://www.sciencepublishinggroup.com/j/ijls doi: 10.11648/j.ijls.20210402.18 ISSN: 2640-1894 (Print); ISSN: 2640-1908 (Online) Legal Analysis in Maritime Laws Based on Grounding Case of M/V “EVER GIVEN” in Suez Canal Zhang Yizhen 1, * , Jiang Zhengxiong 1, Wang Deling 2 1Law School, Shanghai Maritime University, Shanghai, China 2Merchant Marine College, Shanghai Maritime University, Shanghai, China Email address: *Corresponding author To cite this article: Zhang Yizhen, Jiang Zhengxiong, Wang Deling. Legal Analysis in Maritime Laws Based on Grounding Case of M/V “EVER GIVEN” in Suez Canal. International Journal of Law and Society . Vol. 4, No. 2, 2021, pp. 107-114. doi: 10.11648/j.ijls.20210402.18 Received : April 30, 2021; Accepted : May 17, 2021; Published : May 26, 2021 Abstract: On March 24, 2021, M/V EVER GIVEN from Evergreen Marine Corp stranded in the southern part of the Suez Canal shortly after it entered the canal, resulting in the closure of the two-way channel of the Suez Canal and the blockage of hundreds of ships on the route between Asia and Europe. There exist quite tedious and complicated legal issues behind the stranding of M/V EVER GIVEN, including the contractual liability of M/V EVER GIVEN to the owners of cargo, the legal liability of M/V EVER GIVEN to the Suez Canal Authority and to the rescue force, and the establishment and contribution of general average. As to the specific claims for compensation, the legal relationship between the parties should be made clear firstly, and the establishment of the right to claim should then be confirmed. We should also distinguish claims which have been covered by the insurer or the P&I club from those which should be the responsibility of the ship owner. Combined with the gross tonnage data of M/V EVER GIVEN, the limitation of liability for maritime claims can be calculated according to the 2012 Amendment of CONVENTION ON LIMITATION OF LIABILITY FOR MARITIME CLAIMS 1976. To have a conclusion that the paper will predict whether the owner of M/V EVER GIVEN will be bankrupt, the value of the vessel should be compared with the amount of limitation of liability for maritime claims. Keywords: M/V EVER GIVEN, Stranding, Claiming, Maritime Law, Issues on the evening of March 29, stating that the M/V EVER GIVEN 1. Introduction has fully sailed back to its regular channel and reached the Great The Suez Canal connects the Red Sea with the Mediterranean Bitter Lake, and the Suez Canal has returned to normal traffic. Sea, and up to 13 percent of the world's maritime trade and The Suez Canal Authority then immediately announced the approximately 10 percent of maritime oil transportation pass detention of the ship and its cargo, while the shipowner through the canal. 1On March 24, 2021, an ultra-large container announced a general average. ship named M/V EVER GIVEN from Evergreen Marine Corp The claims for compensation of this accident are quite (the ship is 400 meters long, 60 meters wide, and carries 18,000 complicated. Maritime law textbooks usually divide maritime containers) stranded in the southern part of the Suez Canal law system into several parts, including bills of lading, charter shortly after it entered the canal, resulting in the closure of the party, ship collision, salvage, general average, limitation of two-way channel of the Suez Canal and the blockage of hundreds liability, ship mortgage, maritime lien and ship pollution. The of ships on the route between Asia and Europe. The accident M/V EVER GIVEN case, however, involves every one of shocked the world. After nearly a week of rescue activities, the them except the ship pollution. What's more, several claims in Suez Canal Authority (refers to the canal management authority the accident can not be directly resolved by a single or operating company, the same below) issued an announcement department law. Therefore, disputes cannot be avoided. Based on recent observations and reflections on the accident, the author summarizes and sorts out several relevant 1http://huazhihang.com/xyzx/mmsysyhwjc_1.html. legal issues in this case. According to the classification of 108 Zhang Yizhen et al. : Legal Analysis in Maritime Laws Based on Grounding Case of M/V “EVER GIVEN” in Suez Canal claiming subjects related to the M/V EVER GIVEN accident, canal tolls and other similar losses. The charterer, Evergreen the legal issues in this case are as follows: Marine Corp, shall not be liable for the losses. 1) Claims made by the Suez Canal Authority against the shipowner of M/V EVER GIVEN; 2.2. The Loss of Canal Tolls 2) Claims made by the owners of the cargo; Another part of the losses claimed by the Suez Canal 3) The contribution to general average claimed by the Authority was the loss of canal tolls caused by the blockade of shipowner of M/V EVER GIVEN; the canal. Based on a rough calculation of the canal’s revenue 4) Claims made by owners of the waiting ships against the of $5.6 billion last year, the daily income is about $15 shipowner of M/V EVER GIVEN. million. 2 Since this incident caused a 7-day float and then Furthermore, the article makes a prediction for the final took 10 days to perform the maintenance of the canal body, the settlement of the M/V EVER GIVEN case. claim amount was up to nearly $100 million. Unlike the situation where colliding a river bank is clearly 2. Claims Made by Suez Canal Authority excluded from the law of ship collision, the stranding accidents can be bound by the maritime law. For the owner of the cargos, Against the Shipowner of M/V EVER the shipowner can be exempted from the liability based on the GIVEN contract of carriage and maritime law and in accordance with the "Hague Rules", but will lose the right of exemption under These claims consist of the following items: the "Hamburg Rules". However, as to the economic losses of 1) The damage of the embankment directly caused by the other ships caused by the blockage of the waterway due to the collision of M/V EVER GIVEN; stranding, maritime law lacks corresponding provisions. The 2) The loss of canal tolls caused by the blockage of the verdicts in judicial practice are also not unanimous. Some shipping lane; believe that the shipowner can also be exempted from liability, 3) Salvage reward. while others believe that the losses are indirect and thus should 2.1. The Damage of the Embankment Caused by the not be borne by the shipowner who caused the accident. Collision of M/V EVER GIVEN It is worth noting that these situations are not accidental. They may occur not only in the Suez Canal and the Panama The situation in which the M/V EVER GIVEN collided the Canal, but any narrow waterways in and out of ports or inland embankment does not fall within the scope of the adjustment waterways. As can be seen, there is a missing piece in the of the maritime law, but the scope of the adjustment of the Tort maritime law legislation, and the establishment of international Law. Therefore, the shipowner’s responsibility for damage laws such as the "Lisbon Rules" should be listed on the agenda. caused by the collision is not under the protection of the limitation of shipowner’s liability system under the maritime 2.3. Reward for Salvage Organized by the Suez Canal law, and the shipowner of M/V EVER GIVEN should take full Authority responsibility for the compensation. This is almost an astronomical figure. At present, the Suez Pictures from news reports illustrated that both sides of the Canal Authority’s total amount of claims is about $1 billion, canal were filled up with mud. As a result, the author predicts and a large part of the amount comes from the salvage reward. that the amount of this part of the loss will not be too high and The dispute on salvage reward has long existed. For over one therefore can be ignored. hundred years, the salvage convention and the standard format In general, the intended shipowner should sign a river crossing of salvage contracts have been continuously refined, but contract with the company operating the Suez Canal and submit disputes on salvage reward have not substantially reduced. an application to cross the river. The company then submits the Therefore, a saying goes among the insiders that “Almost application to the Suez Canal Authority for approval, and the every salvage will be followed by an arbitration.” [1] operating company will organize the passage according to the After the stranding of the M/V EVER GIVEN, it took six approval. Therefore, as far as the Suez Canal Authority is days for the Suez Canal Authority to operate the rescue concerned, there is only one person who should be responsible activity. More than ten tugboats and two dredgers were used. for this accident— the shipowner of M/V EVER GIVEN. Finally, after a large amount of silt was dredged, the M/V However, since M/V EVER GIVEN is managed under a time EVER GIVEN refloated on the water when the tide was high. charter party, the charterer will inevitably be involved in this Frankly speaking, the time spent on rescue was not long, the accident. According to the common standard format of time rescue work was not difficult, and the rescue risk was charter party, the shipowner is usually responsible for the extremely ordinary.