The Kerala High Court has allowed the State government’s special committee to resume MSC Elsa-3 compensation talks with the shipping line, recalling the curb it had placed on those negotiations in June 2025.
Kochi: The Kerala High Court on Tuesday (October 27) permitted the State-appointed committee of government officers to resume negotiations with Mediterranean Shipping Company (MSC) over environmental damage, restoration costs, compensation and other economic losses arising from the sinking of the container ship MSC Elsa-3, and gave stakeholders, including the Kerala State Pollution Control Board, one week to send their inputs on the scope of a proposed multi-beam survey of the wreck [T.N. Prathapan v. Union of India and Others].
A Division Bench of Justice Raja Vijayaraghavan V and Justice K.V. Jayakumar was hearing a batch of public interest litigations concerning the MSC Elsa-3 and MV Wan Hai 503 incidents off the Kerala coast. The petitions seek compensation for fishermen, environmental cleanup and accountability for the damage to the coastline.
Background
The Liberian-flagged MSC Elsa-3 listed and sank off the Kerala coast in May 2025, about 14.6 nautical miles from shore, with containers that included calcium carbide, rubber chemicals and plastic nurdles. The lead PIL was filed by former MP T.N. Prathapan, who raised the harm to coastal livelihoods and marine life. On June 19, 2025, a Bench of then Chief Justice Nitin Jamdar and Justice Basant Balaji deferred the State’s out-of-court settlement talks with MSC, questioning whether such negotiations would be transparent and binding, and indicated that the State could negotiate under court supervision if it filed an admiralty suit.
The State had set up a committee of officers to negotiate on marine damage, losses to the fishing community and wreck removal.
In August 2026, the Centre told the present Bench that the wreck held hazardous cargo and might have to be removed altogether, relying on the wreck-removal provisions of the merchant shipping law and the Nairobi Convention on the Removal of Wrecks. The ship owners opposed removal, saying about 437 tonnes of fuel and water mix had already been pumped out and that lifting waterlogged containers could rupture them. On September 22, 2026, the Directorate General of Shipping placed on record a proposal for an independent technical assessment, including multi-beam and side-scan surveys of the wreck site, to be done at the cost and responsibility of the owners or other vessel interests.
Survey agency chosen, inputs in a week
On Tuesday, Additional Solicitor General P. Sreekumar told the Court that meetings held on October 17 and 20 had selected C Track Surveys to carry out the multi-beam survey, at the cost and responsibility of the vessel interests. The Court noted that the Director General of Shipping would monitor the survey.
The Bench directed that the inputs from stakeholders must go to the Director General of Shipping, who will consolidate them and forward the proposed scope of work to the survey agency.
MSC’s limitation plea
Counsel for MSC said the company would initially bear the substantial cost of the survey and had applied to the Admiralty Court for constitution of a limitation fund under the Merchant Shipping Act. Counsel asked that MSC’s argument on limiting its liability for wreck removal be kept open for the Admiralty Court.
The Bench declined to put it that way. Justice Vijayaraghavan said:
We will not say it is open. We will say that you raised the submission.
The Court instead recorded the proposed admiralty suit for limitation of liability and the claim for survey costs, observing that these were matters for the court concerned to consider.
Committee can negotiate again
The Court permitted the State-appointed committee to resume its work, including negotiations with MSC on assessing environmental damage, restoration costs, compensation and other economic losses arising from the shipwreck.
The Member Secretary of the Kerala State Disaster Management Authority was designated as the single nodal point for communication with MSC.
The Court recalled the restriction in its June 19, 2025 order on negotiations by the special committee of government officers, holding that the committee may function and take appropriate action. The matter will be listed after four weeks.
Case Title: T.N. Prathapan v. Union of India and Others [WP(PIL) No. 50 of 2025] and connected matters
Bench: Justice Raja Vijayaraghavan V and Justice K.V. Jayakumar, Kerala High Court
Date of Hearing: October 27, 2026
Appearances: Additional Solicitor General P. Sreekumar for the Union; counsel for MSC and for the petitioners