The High Court of India’s Kerala State has allowed a committee appointed by the state and comprising government officers to resume compensation negotiations with Swiss shipping company MSC over the May 25, 2025, sinking of the containership MSC Elsa 3.
The court recalled a restriction it had placed on the committee's talks on June 19, 2025. The Kerala State Government did not object.
The committee's remit covers environmental damage, restoration costs and economic losses, including those suffered by the local fishing community. It cannot reach a definitive settlement or enter into a binding agreement, however, and any terms must be submitted to the court for scrutiny.
Additional Solicitor General P. Sreekumar told the court that C Track Surveys had been selected to carry out a multi-beam survey of the wreck at the cost and responsibility of the vessel interests. MSC's counsel said the company would initially bear the cost.
The Director General of Shipping will monitor the survey. Stakeholders, including the Kerala State Pollution Control Board, have one week to submit suggestions on its scope.
In August, the national government told the court that the wreck held hazardous cargo and might require complete removal under the Nairobi Convention on the Removal of Wrecks.
The owners said about 437 tonnes of fuel-and-water mixture had already been pumped out. They opposed removal on the grounds that lifting waterlogged containers could rupture them and release further contamination.
MSC's counsel asked that the company's argument for limiting its wreck removal liability be kept open, citing its application to constitute a limitation fund under the Merchant Shipping Act.
"We will not say it is open,” said Justice Raja Vijayaraghavan V. “We will say that you raised the submission."
The state has filed an admiralty claim of INR95.31 billion (US$1 billion). MSC is seeking to limit its liability to about US$14.8 million, has described the state's claims as excessive, and has posted a bond of about US$133 million at the court's direction.
The Liberian-flagged MSC Elsa 3 sank on May 25, 2025, while sailing from Vizhinjam to Kochi. All 24 crew were rescued.
The ship’s cargo at the time included calcium carbide, chemicals used in rubber products, and plastic nurdles.
The wreck lies about 14.6 nautical miles offshore at a depth of 51 metres.