MSC Elsa 3 shipwreck: Rs 1,227.62 crore locked in Kerala High Court | What happens next?

Kochi: Mediterranean Shipping Company (MSC) has deposited Rs 1,227.62 crore as a bank guarantee in the Kerala High Court following the MSC Elsa 3 shipwreck off the Kochi coast in May last year. The amount was ordered by the court as part of an Admiralty suit filed by the Kerala government, which cited environmental and economic damage caused by oil spills and chemical contamination from the sunken vessel.

Following the deposit, the cargo ship MSC Acquittata-2, which had been arrested and detained at Vizhinjam port, has been released from state custody. The High Court had earlier ordered the detention of the vessel after MSC failed to immediately comply with the direction to provide financial security.

The state government had sought compensation of Rs 9,531 crore, arguing that the capsizing of MSC Elsa 3 — which was carrying around 600 containers — led to chemical waste and debris spreading across the sea and washing up along several parts of the Kerala coast. Containers from the ship were reported to have floated ashore at multiple locations, raising concerns over marine pollution and economic losses to fishing communities.

In September, the High Court directed MSC to deposit Rs 1,227.62 crore as a first-phase security amount, taking into account potential environmental damage. MSC had maintained that the actual damage was estimated at around Rs 136 crore and argued that such a large deposit was excessive. However, the court warned that failure to comply would result in the arrest of another MSC vessel, which led to the continued detention of MSC Acquittata-2 until the guarantee was furnished.

The deposited amount will remain with the court, and if the final verdict goes in favour of the state government, Kerala will receive the sum along with accrued interest. The case continues to be a key legal test on environmental liability and compensation in maritime accidents along India’s coastline.