Egypt seizes Ever Given ship in Suez Canal, demands compensation

Egypt has seized the container ship that last month blocked the Suez Canal, the vessel's owner said Tuesday, amid a dispute over how much compensation the country is owed following the weeklong shutdown of the waterway.

The move turns up pressure on Ever Given's Japanese owner to negotiate a settlement that Egyptian authorities are claiming should be roughly $1 billion for damage to the canal and lost business while the stuck ship blocked a critical artery for global trade.

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Shipowner Shoei Kisen Kaisha Ltd. said the waterway's manager seized the Ever Given after obtaining an order from an Egyptian court, comparing the move to an arrest. "They are still talking to us. So we will continue negotiations on compensation," said Ryu Murakoshi, a spokesman for the company. He declined to disclose the amount under discussion.

Osama Rabie, chairman of the Suez Canal Authority, told state-run television that it was demanding payment for the costs of the rescue operation, damages to the banks of the canal and lost revenues. The court order for the seizure claimed the ship's owners failed to pay $900 million, according to Egyptian state media.

"They don't want to pay anything," Mr. Rabie said of the Japanese owners. He has repeatedly denied responsibility on the part of Egypt for the accident.

A statement later Tuesday from the Ever Given's owners and insurers said they were negotiating in good faith with Egyptian authorities and disappointed by the seizure of the vessel.

SUEZ CANAL JAM IMPERILS SHIPPING WORLDWIDE

A total of $3.1 billion of liability coverage is available to Shoei Kisen Kaisha through a longstanding shipping-industry program that relies on 13 so-called Protection & Indemnity Clubs, The Wall Street Journal has reported. The group on Monday made an undisclosed offer to the Suez Canal Authority, or SCA, to settle the claim, it said.

The group said the SCA hadn't provided a detailed justification for the $960 million claim. It included a $300 million claim for a salvage bonus and a $300 million claim for loss of reputation, the group said.

One of the insurers in the group, the U.K. Club, condemned the decision of the SCA to seize the ship after the settlement offer was made. "Our priority is the fair and swift resolution of this claim to ensure the release of the vessel and cargo and, more importantly, her crew of 25 who remain on board," the U.K. Club said in a statement.

The ship's operator, Taiwan-based Evergreen Group, didn't immediately respond to a request for comment on the Ever Given's seizure.

The 1,300-foot container ship caused global supply disruptions when it ran aground in the Suez Canal on March 23, blocking the width of the waterway. Egyptian engineers and sailors, together with an elite Dutch salvage team, worked around the clock over six days to free the ship, dislodging it on March 29. The blockage cost the Egyptian state $95 million in lost transit fees alone, according to an assessment by Refinitiv, a financial analysis firm in London.

SUEZ CANAL BLOCKED AS MASSIVE CARGO SHIP TURNS SIDEWAYS

Traffic through the canal returned to normal about a week later and, since then, focus has shifted to why the ship veered into the eastern bank of the canal. Egyptian authorities are still investigating the cause and said they would disclose details by Thursday.

Initially, people involved in the investigation said that the probe focused on a sandstorm that likely threw the vessel off course.

But marine experts have begun to question the speed at which the Ever Given was traveling through the canal.

Kunihiro Suzuki, a Japan-based expert who investigates marine accidents, told the country's broadcaster NHK that before getting stuck, the Ever Given was sailing at 13 knots. He based that assessment on Automatic Identification System data that tracks vessels' speed, direction and location. The waterway's speed limit is 8.6 knots, according to the Suez Canal Authority's website.

The accident "could have been caused by strong wind. Or they might have been speeding up in a hurry," Mr. Suzuki, a former visiting professor at Kobe University, said.

The ship hit the western bank of the canal a few kilometers south of its eventual accident, damaging the waterway's side, and indicating a problem even before the grounding, people familiar with the Ever Given's rescue operation said. One of the people said the vessel was likely speeding at that point.

Mr. Murakoshi said the shipowner wouldn't at this time comment on the speed of the ship.

Egyptian pilots board all vessels that traverse the canal to help guide them through. Two captains were on the Ever Given when it crashed. But the Suez Canal Authority has noted that its staff are only ever on ships to advise and are never in control of a vessel.

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The ship, its cargo and a 25-person crew of Indian sailors remain at anchor in Egypt's Great Bitter Lake, a body of water that separates two sections of the canal.

--Miho Inada in Tokyo and Costas Paris in New York contributed to this article.

Write to Rory Jones at rory.jones@wsj.com