MSC ELSA 3

scrapped

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MSC sues to limit Liability to $14 Million for ship loss

The Mediterranean Shipping Company, as the charterer of the 'MSC Elsa 3', along with the vessel’s owners, has filed an admiralty suit in India seeking to limit their liability. The companies were citing the large number of claims already filed and the open-ended possibilities, saying that if the liability was not capped, it has the potential to disrupt insurance and freight operations and drive up the price of goods. There have already seven lawsuits been filed with the Kerala High Court, the largest being a claim for more than $1 billion from the government. Private cases were also filed on behalf of shippers who had cargo aboard the ship, as well as the fishing community and others. MSC in the filing sajd that it could be open to many claims, noting there were 643 containers aboard the vessel when it went down on May 25. The lawsuit was seeking to limit the amount of potential claims to a value calculated based on the tonnage of the vessel. It would be approximately $14.2 million, subject to current conversion rates, when the compensation fund is established. The lawsuit has been filed under India’s Maritime Shipping Act of 1958, which allows shipowners to cap liabilities, and the 2015 Merchant Shipping Rules, which reiterated the right to limit liability caused by the sinking of a ship. The suit further highlights that India is a signatory to the International Convention on Limitation of Liability for Maritime Claims. The suit was including an eight-slot beyond the current cases, which would be used as a catch-all for any future claims. They are also seeking a permanent injunction from other defendants initiating other cases against the MSC Elsa 3. The filing was coming in response to the massive claim filed by the government, which was seeking damages plus the cost of the remediation. India’s Directorate General of Shipping has overseen the recovery of containers that washed ashore, debris from the wreck, and the containment of oil leaking from the ship. The suits were proceeding even as the recovery effort was continued. A salvage team was in the area and prepared to begin saturation diving to the vessel as part of an effort to siphon oil from the tanks. However, the swell and seas have been too high for the effort to begin. Sri Lanka, which is hundreds of miles away from the wreck site, has also filed suit seeking compensation. It reports that debris from the ship was washing up on its beaches. The Kerala High Court has scheduled the next hearing for the case on Aug 21. The court continued to detain the the 'MSC Akiteta II' at the Vizhinjam port in effect as collateral against the claims. It had previously also briefly detained two other MSC ships in response to individual claims from shippers. MSC responded to the case denying the extent of the damage claimed by the government and rejecting posting a bond, which would have released the 'MSC Akiteta II'.

Call for action by MSC

Citizen groups, including Greenpeace India, along with environmental groups, legal experts and fishermen bodies have called for an urgent and enforceable action by the Mediterranean Shipping Company (MSC) regarding the sinking of the 'MSC Elsa 3'. In a press conference in Thiruvananthapuram on July 28, the citizen groups released a comprehensive white paper outlining the potential ecological and socio-economic impacts of the shipwreck. They demanded that the company be held fully accountable. The MSC company has denied its responsibility and refused to pay I9,531 crore compensation demanded by the state government and they claimed that there was no significant ecological damage from the shipwreck. The document also outlined the severe livelihood disruptions for fisherfolk, and growing concerns over marine biodiversity. The citizens groups demanded that the company support an independent environmental and social impact assessment and roll out a comprehensive compensation package that reflects the magnitude of the damage. The shipwreck has significantly affected over 10 lakh fisherfolk in Kerala, especially in the wake of early monsoon weather restrictions and the 20-nautical-mile fishing ban period following the accident, with serious consequences on daily income, food security, and occupational health.

First hearing related to compensation claim

The Kerala High Court in India held its first hearing related to India’s nearly $1.1 billion compensation claim related to the sinking of the 'MSC Elsa 3'. The MSC’s lawyers called the claims “highly exaggerated,” while lawyers for the state government said the extent of the damages is “incalculable and continuing.” MSC was arguing that the state provided no evidence to support its claims, while it reiterated that there has been no significant oil leak from the vessel. It was highlighted that the oil sheen around the vessel was limited to within one nautical mile of the wreck. The state countered by saying that the recovery of plastic nurdles continues on a daily basis with reports that it has now reached 450 tonnes. The clean-up is ongoing and in part delayed by discussions over the best methods to be used. One local area is barring the use of seawater washing to separate the nurdles, although the authorities contend it has proven effective elsewhere on the coastline. The court papers also said that nearly 78,500 fishermen have been compensated for the loss of their livelihood. They contend the fish market has collapsed due to a lack of confidence. The fishermen received a financial award as well as a distribution of free rice. The state was successful at the court earlier in the week in having the containership 'MSC Akiteta II' detained pending the posting of a bond. The company argued for the release of the vessel while declining to post a bond. The state cites the ownership structure of the vessels in independent companies, contending that it is “highlighting a pattern of deliberate corporate structure to defeat potential claims.” The court ruled that the vessel, which has been detained in Vizhinjam port, has to remain in the port until a bond is posted. The court had previously briefly detained two other MSC vessels, the 'MSC Manasa F' and the 'MSC Polo II', during their local port calls until bonds were posted for cases involving private claims related to the loss of the vessel. The state was given two weeks to file additional supporting information for its claims, while MSC also asked for time to respond to the claims. The court scheduled a follow-up hearing about the detention and the claims for Aug 6. In the court papers, the state highlighted that the vessel was loaded with 643 containers when it went down, with reports that approximately 60 have washed ashore. Based on the manifests, they contend the wreck is releasing plastic pellets, oil, calcium carbonate, and other materials into the ocean. The Directorate General of Shipping, which is overseeing the salvage efforts, said in its recent report that there remains an intermittent oil sheen near the wreck, but divers in June capped the tank ports that had been seeping oil. A new salvage program with saturation diving is due to begin in August in an effort to pump the oil from the vessel, which lies at a depth of 167 feet.