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Maritime Forum

TOPIC: Salvage

Salvage 20 Oct 2011 11:50 #33

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Question:-What are principles of modern Salvage law? Briefly discuss the London Convention of 1989 ? Also discuss the different types of salvage contracts
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Re: Salvage 20 Oct 2011 11:53 #34

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Salvage can be described as ‘a Service rendered to save a Maritime property in Danger’
Salvage can be characterized by the following :-
1) Salvage service must be voluntary.
2) Salvage property must be a recognized Maritime property
3) Subject must be is danger.
4) Salvage must be successful.
Let look at the above points in detail:-
1. Vessel’s crew or pilot cannot claim salvage, as they are bound by contract to protect the vessel and its cargo from danger Tugs arranged previously for towage cannot claim salvage. However, tugs called in an Emergency can claim salvage.
2. Subject can be a Vessel, Cargo Special equipment on board a ship, Bunkers or any other Maritime property, at risk of being lost, if salvage is not rendered. Provisions, crew’s effects etc do not qualify for salvage.
3. Danger must be threatening, at commencement of salvage. However it might not be immediately present or imminent, e.g. a vessel which has lost it’s propeller is not in any immediate danger, if it is at sea. However, it may later lead to grounding.
4. Salvage Claim is paid out of the value of the Property saved, hence salvage must be successful (at least partly). Hence the term ‘No cur, No pay’ –viz. if salvage operation is unsuccessful, there can be no value to effect payment.
Beneficiaries of salvage are liable to pay salvage.
These include:
1) Owner of vessel.
2) Owner of any special equipment fitted on vessel.
3) Chartered of vessel.
4) Owners of ‘salved’ cargo.
5) Owners of bunkers on board.
Salver’s Maritime Lien:
Salver’s Right to a ‘Reward’ is protected by his lien (i.e. his claim) on the maritime property.
He is paid a Security Deposit by the beneficiaries, pending the actual outcome of the Salvage a ward.
If no deposit is forthcoming, Salver can enforce his lien by retaining possession of the Maritime property salved or applying to the Maritime courts to have the property arrested and sold.
London Salvage convention (1989):
Convention does not apply to Warships, Government ships on non-commercial run, mobile oil & gas rigs, unless they are in transit.
Duties of Salver:-
1) Operation must be carried out with all due care.
2) Care to prevent /minimize damage to the environment.
3) If required, they must seek assistance from other Salvers, to prevent loss.
4) Accept the intervention from other Salvers, under required circumstances, if requested by master /owner.
Duties of Owner & Master:-
1) Co-operate fully with Salvage operation.
2) Care to prevent / minimize damage to the environment.
3) Accept re-delivery of vessel, at place of safety, after being requested by Salver.
Salvage Contracts:
There are basically Two main types of Contracts:-
1) Ordinary Tariff, lump sum, or daily rate:-
This type is usually cheaper. Normally used when property is not in immediate danger and the rate can be negotiated, e.g. vessel is aground on a muddy bark or a wreck is to be raised.
2) Salvage on the basis that Remuneration be paid later:-
This type is used where imminent danger exists to the vessel or marine environment. Contract can be arranged verbally i.e. over the phone or VHF. It need not be signed, if time does not permit, as in the case of an emergency, bad weather.
A common agreement used is Lloyd’s Open Form LOF 2000 However other local form, Turkish form.
LOF (Lloyd’s Open Form) 2000:
This is Lloyds standard form of salvage agreement. It is a simple, single page document, which contains the following:-
a)Vessel’ Name b) Name of Salvers
c) Agreed place of safety d) Currency of award.
e) Date of Agreement f) place of agreement
g) If SCOPIC clause is incorporated h) Signature of both parties.
LOF 2000also contains 12 important clause, which are.
Clause A: - Basic obligation of Contractor.
Clause B: - Environmental protection.
Clause C: - SCOPIC clause.
Clause F: - Property owners must co-operate fully with Contractor with regard to usage of vessel’s machinery and gear. All information must be provided.
Clause G: - Both parties have a Right to Termination.
Clause I: - Dispute arbitration.
Clause J: - English Law applies.
SCOPIC CLAUSE: Special compensation P & I clause.
History:- The London salvage convention, 1989, article 14 introduces special compensation, Special compensation was used if the Salver succeeded in preventing or minimizing damage to the marine environment, but was not adequately compensated by the salvage awards.
This was given as an incentive to prevent pollution, as compensation to Salver to counter the disadvantages of the ‘No Cure, No Pay policy’


It was calculated as a certain percentage of Salvage expenses during the operation It could go up to 100% i.e. the Salver may even get double his expenses, as special compensation. However, difficulty in calculating special compensation leads to the formation of the SCOPIC clause.
SCOPIC remuneration is payable only by the Owner of the vessel and only to the extent by which the amou
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