MSC Refutes India’s Compensation Claim and Declines to Post Bond
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 off the coast of India in late May. 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 is 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 this week, shall remain in the port until a bond is posted. The court had previously briefly detained two other MSC vessels, MSC Manasa F and 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 August 6.
In the court papers, the state highlights 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 last month 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 (51 meters).