Wan Hai 503 — Aftermath of fire & explosion

 

9th June 2025:

It was 09.50 hours. Wan Hai 503, a Singapore flagged container vessel and managed directly by Wan Hai Shipping Lines, while sailing off the coast of Kerala, experienced container explosion on board, resulting in a massive fire. The vessel had sailed from Colombo and was bound for Nhava Sheva (JNPT). The fire originated in the underdeck cargo hold and quickly spread to the upper deck too, causing container damage, as larger portions of the vessel got engulfed in the fire.  The Directorate General of Shipping (DGS) immediately informed the Indian Coast Guard, the Information Fusion Centre Indian Ocean Region and also informed the Flag State, Maritime Port Authority of Singapore.

The Indian Coast Guard swung into action and sent 3 surface vessels to the site of the burning Wan Hai 503. In addition, vessels with fire-fighting capability were mobilized by the DGS/shipowners. Two Dornier aircraft were pressed into service for aerial surveillance. The Indian Navy diverted a nearby vessel for search and rescue operations and managed to rescue 18 of the 22 crew members. The fate of the remaining 4 is not known even today, and the search operations have been given up. T & T Salvage have been appointed by the shipowners for salvaging operations. (SITREP-2 issued by the DGS).

Latest reports indicate that the fire is largely under control, but still thick smoke emanates from Wan Hai. The ship remains unmanned and not stable. She is supported by tow lines from two tugs, but unless she achieves stability, as confirmed by experts, she cannot be towed away from the spot. It must be noted that the vessel carries 2000 MT of fuel oil and 240 MT of diesel oil in tanks, close to the fire zone. This poses an additional danger, as also the large number of containers carrying IMDG cargo. Around 10-15 containers have fallen overboard and have been sighted drifting in the sea, posing navigational hazards. The identification of the containers and their contents has not yet been done.

The vessel was carrying 1754 containers, with 1083 of them underdeck and 671 on deck. 143 containers carried IMDG cargo, with varying degrees of hazard:

• IMDG Class 3 cargo – Flammable liquids
• Class 4.1 cargo – Flammable solids
• Class 4.2 cargo – Substances liable to spontaneous combustion
• Class 4.3 cargo – Substances that when in contact with water, emit flammable gases
• Class 6.1 cargo – Toxic substances
• Class 8 cargo – Corrosive substances
• Class 9 cargo – Miscellaneous dangerous substances and articles.

There is strong suspicion that cargo was mis-declared by the cargo owners and this resulted in wrong stowage plans, inadequate safety measures, etc. that caused the explosion and fire. It is also suspected that the Master and crew were privy to the mis-declaration. The immediate outcomes/directions stemming from these suspicions, even as deeper investigations continue, are:

• Kerala Police have filed a FIR against the vessel owners, Master & crew members
• DGS has ordered that Wan Hai 503 should not be allowed to berth in any Indian port

As the vessel is not permitted to berth at any Indian port, the first step, it appears is for experts to examine and certify if the vessel is stable can be towed to any other nearby port subject to regulatory approvals. The most likely port seems to be Hambantota in Sri Lanka, that is a Chinese controlled port on 99-year lease from the Sri Lankan government.

Let us now look at the cargo insurance angle and what lies in store for the anxious consignors/consignees whose cargo is/was on board Wan Hai 503.  Before, getting into these details, we need to examine what are the possibilities for the affected vessel:

• The vessel may not regain stability and the fire and attended damages may make the vessel go down.
• The vessel may well stabilize, receive regulatory approvals and be safely towed to a port in a country, other than India

 

If the first possibility occurs, the claimants could claim for Total loss of their cargo in containers, provided it is within the terms of the policy and where it can be clearly established that they had not mis-declared the cargo.

In case of the second possibility, the claims can take many forms:

• Partial loss or damage to the cargo
• Actual total loss of the cargo
• Total Loss of cargo due to containers falling overboard

It must be noted that to lodge and finalize a claim of either of these types, it is essential that the vessel berths first, then identification, segregation and assessment of damages are carried out along with the list of missing containers with cargo that have fallen overboard. All this points to a long time span before cargo owners can expect indemnification, even if they lodge claims with their insurers now for anticipated losses.

Can an insured lodge a claim for non-delivery, as he has been deprived of possession of the cargo and it is not known when he will be able to do so, if at all and further when the condition of the cargo remains unknown? Normally, a non-delivery claim would arise when the vessel reaches the named destination but the whole or part of an insured’s cargo is missing/not delivered. So, in the instant case, even if a non-delivery claim was to be lodged, insurers could well say that unless the vessel touches land and a complete survey and loss assessment carried out, question of non-delivery cannot arise.

What if an insured decides to issue Notice of Abandonment to the insurer and claim for Constructive Total Loss, saying he has been deprived of possession of the goods, even if it may be available on board the ship in unknown condition? In theory, it may be possible but, before admitting a CTL claim, the insurer may well want to see if the cargo is actually damaged beyond redemption or if the costs involved in transporting it back to the intended destination could be prohibitive and whether the cargo will be allowed entry at the destination. The basic requirement for this – Again, berthing of the vessel at some port, examination, segregation. Assessment, etc. will be a pre-requisite.

Another insurance requirement that can crop up – General Average and Salvage guarantees. So far, GA has not been declared, but given the appointment of salvors, plus involvement of the Coast Guard and Navy in the rescue, towing and firefighting operations over weeks, the amount will be enormous and GA and Salvage are likely to come up. Again, the vessel has to be brought back to a port first, for this to kick in. Even the few  fortunate insureds, whose cargo may not have been damaged in the incident, will have to fork out the guarantees themselves or through their insurers before they can take possession of their sound cargo.

It is going to take quite some time for matters to settle down and for insurers to decide on indemnification, given the complicated circumstances. It is going to be a Wait & Watch ……………. for long, for sure.