Kerala High Court Orders MSC to Deposit Rs. 1,227.62 Crore Security in Ship Sinking Case

Kochi: The Kerala High Court has ordered the Mediterranean Shipping Company (MSC) to immediately deposit a security amount of Rs. 1,227.62 crore in connection with the sinking of the MSC LS-3 vessel off the coast near Kochi. The interim order was passed by Justice M. A. Abdul Hakeem in the admiralty suit filed by the state government seeking compensation of Rs. 9,531 crore for environmental and fisheries damage caused by the incident.

The court observed that the state government’s demands could not be summarily rejected and indicated that the arguments in this regard would continue. The deposit of the security amount will lead to the lifting of the arrest on MSC’s vessel ‘MSC Acitate 2’ docked at the Vizhinjam port.

Though the security amount was fixed at Rs. 1,227.62 crore, the court noted that the government could seek an enhancement of the amount based on further evidence. The possibility of arresting any other ship of the company for additional security could be raised during the ongoing proceedings, the court added.

MSC had contended that since the accident occurred 14.5 nautical miles off the Kerala coast, beyond the state’s maritime boundary, the central government was the appropriate party to be sued under the admiralty jurisdiction. However, the court held that despite the accident happening outside the territorial waters, the repercussions were felt in Kerala, thus giving validity to the state government’s plea. The court further stated that the extent of loss and the cost of remedial measures would be determined during the trial.

The Rs. 9,531 crore compensation claim includes losses arising from oil spillage, environmental pollution, and the livelihood impact on fishermen due to contaminated fishing areas and waste discharged from containers. Of the total claim, Rs. 8,554.39 crore pertains to the oil spill. Since the full extent of the spill is yet to be ascertained, the court provisionally set the security amount for this category at Rs. 500 crore.

The court also exempted the security deposit of Rs. 152.1 crore sought by the government concerning damages caused by chemical pollution.