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The Great Canal Crisis
When the Ever Given ran aground in the Suez Canal on 23 March for a week, Worldwide worry ensued as billions of pounds worth of shipments were stuck in a queue of traffic at either end of the canal.
The Ever Given, one of the largest container ships in the world, became stuck blocking the width of the waterway. Its owners have stated high winds and a sandstorm pushed the ship sideways, causing it to wedge into the bank of the canal.
Around 12% of global trade passes through the canal on a daily basis and the alternative route to bypass the canal would take an extra 9 days on average. The true cost of the crisis is extremely difficult to estimate, however Egypt has now seized the ship and intends to make a claim for $900 million in compensation.
At a time when the focus of the world's media outlets has been concentrated on the Covid-19 crisis, the Suez Canal crisis became a highlight of the daily media stream attracting attention across the globe, no doubt because of the knock on impact upon trade and the economy.
There are a number of legal implications, as well as reputational implications arising from the incident which often arise in other crisis situations, albeit many not on the global stage like the Suez canal crisis. When dealing with a crisis scenario, early intervention is key, assembling a team of advisors to assist, prepare and deal with a crisis head on.
- Adverse publicity - every major news outlet worldwide was covering the story, providing factual information about how the incident occurred and the rescue operations, but also with a heavy focus on the impact upon global trade. Short, succinct, factual statements were provided to the media by the various parties involved.
- Reputational damage - the Japanese owners of the Ever Given, Shoei Kisen and the ships operators Taiwan's Evergreen Marine, have suffered a great deal of reputational damage following the incident. It is likely such issues will continue as legal battles will last for several years. The country of Egypt, as part of its claim for compensation, has claimed $300 million for loss of reputation which the ships insurers are currently considering.
- Claims - it is anticipated legal claims in relation to the incident will last for several years, as disputes between the ships owners, operators and the Suez Canal Authority already begin. In addition, it is likely the owners of goods on the ship will be making claims for losses.
- Criminal investigations - the exact facts of how the ship came to be stranded have not been formally announced, albeit the ships owners have provided a brief explanation about how they say the incident occurred. Investigations will be detailed and should there be any particular individuals or corporate entities found to be criminally liable for the incident, it is possible criminal charges may be brought. In any event, such a large scale investigation will involve a considerable amount of management time on the part of the companies involved