India to Resume Negotiations with MSC Regarding Loss of MSC Elsa 3
Seventeen months after the sinking of the containership MSC Elsa 3 off the west coast of India, a court has lifted a stay on a state-appointed committee of government officers, permitting negotiations to resume with MSC Mediterranean Shipping Company. The move comes as the court continues to consider both an admiralty suit filed by the state as well as multiple claims for compensation and loss due to the sinking.
The containership sank about 14.6 nautical miles off the coast in the state of Kerala, India. It impacted the local fishing industry, and there were reports of containers and their contents, including nurdles, washing ashore. Salvage teams worked to stop oil leaks from the wreck, and a cleanup was conducted along the coastline. However, concerns continue over potential pollution from the wreck.
The Kerala High Court had previously, in June 2025, placed a curb on any negotiations with MSC and its insurance companies, requiring the state to file an admiralty suit. The company has filed, seeking to limit its liability, and has argued the state’s claims are inflated. The company has sought to limit its liability to approximately $14.8 million while the Kerala State Government filed a ?9,531 crore (approximately $1.1 billion) admiralty claim. The company posted a bond of approximately $133 million at the court’s direction.
The court on October 27 directed the committee to resume negotiations for compensation. It would cover the remedial work, economic losses, and damage to the environment and the fishing community. The purpose of the committee was to resolve the case “without undue delay.” The state said it had no objection to resuming the negotiations, but the committee is not empowered to conclude a final settlement or binding agreement. Details will still have to be submitted to the court.
The vessel still has containers aboard, and the parties are arguing that it continues to pollute the environment. In addition to the fuel that was aboard the vessel, the manifests reflected calcium carbide, rubber chemicals, and nurdles among the cargo.
The authorities have suggested to the court that the remaining containers might have to be removed from the wreck. Lawyers for MSC argued in court that 437 tonnes of fuel and contaminants had already been pumped from the vessel and that attempting to lift the waterlogged containers could cause them to break and release further potential contamination.
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They have been discussing a proposal for a multibeam survey of the wreck. MSC had proposed that the scope of the survey should be jointly formulated by the stakeholders. The court permitted India’s Directorate of Shipping to proceed with meetings that took place on October 17 and 20, selecting a company, C-Trck Surveys, to conduct the environmental assessment of the wreck. The court gave the Kerala State Pollution Control Board one week to submit its suggestions for the survey. The survey is to be undertaken at the cost of the vessel owner.
The court scheduled the next hearing regarding the MSC Elsa 3 for November 24.
