The Kerala High Court has dramatically scaled down the price tag for the release of Mediterranean Shipping Company’s arrested vessel, MSC Akiteta-II. Once facing a staggering demand of nearly ₹9,531 crore, the company has now been ordered to furnish ₹1,227.62 crore as security.
The State of Kerala dragged MSC into court after the Liberian-flagged MSC Elsa-3 sank off Alappuzha, unleashing oil spills and debris that fouled the coastline, battered fisheries, and sparked health concerns. The State pegged its losses at over ₹9,500 crore and pressed for the arrest of MSC’s sister ship as leverage.
Back in July, the High Court agreed, conditionally arresting MSC Akiteta-II unless MSC coughed up the full amount. But in a sharp course correction this week, Justice MA Abdul Hakhim revised the interim order, recalculating the damages and paring the security figure to a more defensible number.
The judge underlined that Kerala was well within its rights to bring an admiralty suit: though the wreck occurred 14.6 nautical miles from the coast, well into the Exclusive Economic Zone, the toxic effects seeped into territorial waters—giving the State standing to sue.
The Court accepted Kerala’s argument that MSC Elsa-3 and MSC Akiteta-II were indeed sister vessels, pointing out their shared ownership trail despite the shipping giant’s network of shell registrations. That meant Akiteta-II could be lawfully held to secure compensation claims.
But the Court refused to treat the State’s mammoth claim at face value. The largest chunk—₹8,554 crore—was tied to the company’s billion-dollar insurance coverage rather than hard evidence of pollution damage. Citing gaps in proof, the Court recalibrated:
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₹500 crore for oil pollution damage
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₹41.31 crore for plastic nurdles and cargo pollution
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₹1.38 crore for Kerala Pollution Control Board’s immediate expenses
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₹3 crore for future preventive steps
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₹45 lakh for fisheries impact studies
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₹150.45 crore for plastic clean-up costs
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₹56.10 crore for other pollutants
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₹349 crore for market scare–driven economic losses
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₹71 crore for the six-month fishing ban
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₹54.93 crore for direct losses to fishermen
The sum of these items—₹1,227.62 crore—became the new basis for the security deposit.
The Court also rebuffed MSC’s plea to replace the deposit with a letter of undertaking from its insurer, stressing that such undertakings aren’t recognized under Indian admiralty law and don’t guarantee enforcement against foreign operators.
Importantly, Justice Hakhim left the door open for Kerala to seek more security in the future and even target other sister vessels if fresh grounds emerge.