The High Court of Kerala, India, recently held its first hearing regarding the state’s nearly USD 1.1 billion compensation claim related to the sinking of the MSC Elsa 3 in late May.

Lawyers representing MSC described the allegations as “highly exaggerated,” while attorneys for the state government argued that the scale of the damage is “immeasurable and ongoing.”

MSC contended that the state had not provided any supporting evidence for its claims and reiterated that there was no significant oil spill. It was noted that oil traces near the vessel were confined to within one nautical mile of the wreck site.

The state responded by pointing to the ongoing plastic pellet recovery efforts, which have reportedly reached 450 tonnes. Cleanup operations are still underway, though they have been delayed in part due to discussions about the most effective methods. One local district has banned the use of seawater washing to separate plastic pellets, despite authorities stating that this method has proven effective in other coastal areas.

Court documents also reveal that approximately 78,500 fishermen have received compensation for lost livelihoods, citing a collapse in confidence in the fish market. In addition to cash support, free rice was distributed as aid.

Earlier this week, the state successfully secured the detention of the container ship MSC Akiteta II in court, pending the posting of a security bond. MSC requested the release of the vessel but declined to post the bond. The state cited the ship's complex ownership structure, as confirmed by an independent company, suggesting it reflected “a deliberate corporate pattern designed to avoid potential claims.”

The court ruled that the vessel, currently detained at Vizhinjam Port, must remain there until the bond is posted. The court had previously detained MSC Manasa F and MSC Polo II temporarily while private claims related to the MSC Elsa 3 incident were being settled with bond arrangements.

The state has been given two weeks to file additional supporting documents for its claim, while MSC has requested time to respond. A follow-up hearing on the detention and the compensation case is scheduled for August 6.

According to court filings, the MSC Elsa 3 was carrying 643 containers at the time of its sinking, of which approximately 60 have reportedly washed ashore. Based on the manifest, the state claims that the vessel is releasing plastic pellets, oil, calcium carbonate, and other substances into the ocean. The Directorate General of Shipping, which is overseeing the salvage operation, recently reported intermittent surface oil near the wreck. Last month, divers sealed a tank outlet that had been leaking oil. A new salvage operation, using saturation diving technology, is scheduled to begin in August in an attempt to extract oil from the wreck, which lies at a depth of 167 feet (51 meters).