The aftershocks of the grounding: international canals and their legal regime
The blockade of the Suez Canal in 2021 marked a before and after in the international trade, highlighting the importance of maritime routes and the legal frameworks that regulate them.
This canal, along with other key infrastructures such as the Kiel and Panama canals, is under a international legal regime which combines principles of free movement with the recognition of state sovereignty.
The Suez Canal in the context of Public International Law
The international channels They are artificial routes that connect two maritime spaces, and due to their strategic importance, their use is regulated by international treaties.
The Suez Canal, opened in 1869, was initially regulated by the Constantinople Convention of 1888, which guaranteed freedom of passage for commercial and military vessels, even in times of conflict.
However, the nationalization of the Suez Canal Universal Company by Egypt in 1956 marked a major change.
Egypt unilaterally assumed the obligations of the treaty, consolidating its control over the canal while maintaining the principle of freedom of navigation for the benefit of third States.
A nuanced international regime
Although the Vienna Convention of 1969 It regulates the effects of international treaties on third States, but does not fully recognise the concept of an "objective international regime" that some attribute to the Suez Canal.
Benefits for third States, such as the freedom of movement, depend on their adherence to the treaty or their recognition through extra-conventional agreements.
Lessons learned from the Suez Canal blockage in 2021
The ship's grounding Ever given in the Suez Canal had a global impact, halting the transit of goods and significantly affecting supply chains.
This event highlighted:
- The need to have clear contractual clauses to address disruptions to strategic routes.
- The importance of understanding the legal regime of international channels for managing disputes and claims.
- The value of robust commercial insurance to cover eventualities such as blockages.
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The historical importance of the Suez Canal in international trade
El Suez Canal blockade in 2021, caused by the grounding of the ship Ever given, stressed the importance of this route for the global economy.
As a strategic connection between the Red Sea and the MediterraneanThe Suez Canal is a true bridge between East and West, consolidating its position as one of the most valuable infrastructures for international trade.
A disputed geostrategic enclave
Throughout history, many countries have sought to control the Suez Canal due to its geopolitical value.
Its construction was partly financed by the United Kingdom, which acquired a majority stake in the Ottoman authority in Egypt.
This influence led to the adoption of the Constantinople Convention of 1888, which ensured freedom of movement in times of peace and war.
During the 20th century, the canal was the subject of multiple conflicts:
- First World War: Turkish troops attempted to attack the canal from the east.
- Second World War: The German Afrika Korps, led by Rommel, did the same from the west.
Despite these attempts, the Suez Canal remained under British control until 1956, when Egyptian President Gamal abdel nasser nationalized the canal, marking a milestone in the history of the region.
The Suez crisis and international tension
The nationalization of the Suez Canal triggered tensions with Israel, United Kingdom and France, countries with historical interests in the enclave.
This conflict, known as the Suez Crisis, almost led to war.
However, the mediation of the ONU and the pressure of United States They helped prevent military escalation, promoting stability in the region.
Lessons for international trade
The history of the Suez Canal highlights its strategic importance and the legal and commercial implications arising from its use.
For companies that rely on this route, it is crucial to:
- Having contractual clauses to address disruptions on key routes.
- Consider the international legal regime that regulates the channel.
- Protect yourself with specialized commercial insurance in the face of eventualities.
Legal advice on international trade with RRYP Global
En RRYP GlobalWe understand the importance of routes such as the Suez Canal to global trade.
We help you prepare robust international contracts and mitigate risks associated with disruptions in maritime transport.
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The Suez Canal: a pillar of international trade
El Suez Canal It is currently one of the most strategic infrastructures for the international trade.
Approximately 10 km of road passes through this pass. 10% of world trade, becoming a true jugular that connects East and West.
Without this route, international maritime traffic would be forced to bypass the African continent.
This would significantly increase costs, lengthen routes and expose goods to risks such as piracy or inclement weather.
Canal expansion: a visionary project
Aware of its strategic importance, Egypt pushed for an expansion of the Suez Canal in 2015. This ambitious project:
- It took just a year and employed 41,000 workers full time.
- Mobilized 250 million cubic meters of soil, the equivalent of building a hundred Egyptian pyramids.
- It was so profitable that local investments were recovered in just eight days.
Initial estimates projected that the channel's annual revenues would increase by $5,000 billion to $13,000 billion by 2023, in addition to generating around One million new jobs and significant regional development.
An example of economic diplomacy
Today, the Suez Canal is not only a global logistics hub, but also a symbol of multilateral economic diplomacy.
Its operation directly influences the growth and development of the world economy, consolidating itself as one of the main pillars of global trade.
The importance of the Suez Canal for companies
For companies dependent on international trade, the Suez Canal represents:
- Reduction of logistics costs: Avoiding longer routes and associated risks.
- Efficiency in transit times: Facilitating the connection between key markets.
- Legal security: Thanks to the international framework that regulates its use.
How does RRYP Global protect your international operations?
En RRYP Global, we help companies manage international contracts and mitigate risks associated with strategic trade routes such as the Suez Canal.
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The consequences of the Suez Canal blockage
Global impact and legal lessons
El Suez Canal blockade due to the grounding of the ship Ever given March 24, 2021 was one of the most disruptive events in the international trade recent.
Although the canal has been closed before, such as during the War of the six days (1967-1975), the impact of this incident was much greater due to globalization and supply chains weakened by the pandemic.
Scope of the blockade and number of vessels affected
The incident paralyzed traffic in the Suez Canal for six days, affecting approximately 400 ships and causing significant delays.
Compared to the previous closure of almost eight years, this event stands out for its immediate economic impact in a highly globalized world.
Economic cost of the blockade
El Economic cost of the break, estimated by Allianz, ranged between 6 and 10 billion dollars, considering:
- The 9,500 million daily generated by canal traffic.
- Compensation for delays and damage to goods.
- The additional cost of fuel for ships that chose to go around Africa.
- The increase in the price of a barrel of Brent, which rose by 3% after the incident
High litigation and legal complexity
The blockade has generated a context of high litigation, where determining responsibility is a challenge. Among the initial causes mentioned are:
- Overwhelming force: Adverse weather conditions, such as strong winds and low visibility.
- Technical failure: The Canal Authority points to possible failures in the ship's machinery.
- Human factors: Experts suggest that the canal's pilots are trained to cope with extreme conditions, so human error cannot be ruled out.
The organizational complexity of the Evergreen Shipping Company adds more layers to the litigation.
Ownership, operation, maintenance and crewing of the vessel involved companies and professionals from Japan, Taiwan, Germany, Panama and India, further complicating the allocation of responsibilities.
Lessons from the blockade: preparation and legal framework
This incident highlights the importance of:
- Force majeure clauses in international contracts to address unforeseen disruptions.
- Robust commercial insurance that cover operational and logistical risks.
- understand the international legal implications when operating on critical routes such as the Suez Canal.
Protect your international trade with RRYP Global
En RRYP GlobalWe help you mitigate legal and financial risks in international trade, offering expert advice on international contracts, transnational litigation y business risk management.
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