SALVAGE

SALVAGE

Introduction

'Salvage' is payment made or due to a salvor for saving of a ship or its cargo from loss, damage, wreck, capture, or rescue of property from fire.  

A salvor is any vessel or person who renders salvage services to a vessel, and may include pilots, foyboatmen and others who provide equipment to render the services.

However, naval personnel, port authorities, or the crew of the salved vessel may all be excluded from claiming salvage as they are under a public or private duty to assist the vessel.

There are three basic criteria which must be met for services to be regarded as salvage:‑

Firstly, the subject of the salvage should be in danger, although not necessarily imminent danger.

Secondly, the services rendered by salvors must be beneficial to the salved property.

Thirdly, the services rendered must be successful

This chapter examines the following:‑

The salvage contract;

The evidence required from the Master in different

circumstances where salvage services are rendered;

Main engine breakdown,

Grounding,

Collision,

Fire,

War damage.

The Salvage Contract

Salvage services do not need to be rendered under contract provided that they meet the above criteria. Most salvage services are conducted on the Lloyd's Open Form (the LOF) which is a no cure no pay agreement. The LOF is designed to expedite the saving of property in danger as there is no possibility of dispute about the amounts payable to salvors at the time of danger. If subsequently the parties cannot agree to the reward due under the LOF, the matter is placed before an arbitrator chosen by Lloyd's committee who makes a salvage award which is fair and just to all parties concerned. In cases of salvage not governed by the LOF, the amount of the award will usually be decided by a court.

Payment of the salvage award is made to the salvors. The parties with an interest in the vessel, who have benefited from the salvage services, make contributions to the award in proportion to the salved value of their interest. These parties usually are the shipowner, cargo owner, and charterer.

In most cases, where time and circumstances permit, the owners together with the Master will agree with the salvors to the terms on which the salvage services will be rendered with the authority of other parties with interests in the vessel who will benefit from the salvage services. Therefore, in the event salvage services are required, it is important that the Master informs owners as soon as a casualty occurs to prevent salvage services becoming more urgent and consequently more expensive.

However, in cases of absolute urgency, the Master himself may negotiate the terms of the salvage agreement with the salvors, subject to the owners' standing instructions. It must be stressed that the Master only has authority to reach an agreement in cases where the vessel and the cargo on board are in imminent danger and there is no reasonable opportunity to contact owners and cargo owners and any other party with an interest in the vessel who will benefit from the salvage services in order to obtain their authority.

If the Master comes to an agreement with salvors without the authority of the interested parties in a case where there is no emergency, these parties (apart from owners) may not be bound by the agreement, and may recover any contribution to salvage from owners. Thus, the Master so far as is safe and practicable should obtain the authority of owners as well as cargo owners before agreeing to any proposed terms put forward by salvors.

Finally, it is important to note that most salvage agreements, including the LOF, require full co‑operation between the crew of the salved vessel and the salvors. Although there may be substantial tension between the two parties, the Master should ensure that crew fully assist and co‑operate with the salvors.

Evidence required from the Vessel

It is important to note that the type of evidence listed in this section will be relevant whether the Master finds his vessel in a position to render salvage services or whether the vessel is the recipient of such services. The evidence required from the vessel will depend on the circumstances in which salvage services are rendered and particular situations are discussed below. However, there are certain crucial items of evidence which will be required in all claims involving salvage, and therefore, if a casualty occurs, the Master should follow the procedures listed below:

Procedures

- Ensure that an accurate record is kept of any conversations relating to a salvage agreement. If

at all possible, where an agreement is reached by radio, an independent third party should be

asked to take notes for future reference;

- Ensure that a precise record is kept of the time of the commencement of salvage services, the times

of any communications relating to salvage agreements, and time of arrival of salvage vessels;

- Delegate a record keeper or clerk whose task it is to fully and accurately record events in writing, by

photographs, or any other available method;

- Ensure that deck, engine, and radio log books are accurate and current, and in particular the deck

logs contain regular recordings of the vessel's position.

In addition to the above items, in the following situations where salvage services maybe required, the record keeper should keep a note of the items listed below.

Main Engine Breakdown

The vessel's position, recorded at frequent intervals;

- Whether or not there is a danger of the vessel going aground;

- The extent of damage;

- The prospects of repairing the engine unassisted, and the crew's ability to complete such repairs;

- The prospects of repair at sea or in a port of refuge;

- The wind direction and tidal or other currents;

- If the vessel has to be towed, details of the tow, the distance towed, any difficulties on the tow, and

the weather conditions during the tow; and

- The identity of any alternative salvors.

Grounding

- The nature of the bottom and the manner in which the vessel went aground;

- The vessel's position and her heading when she grounded;

- The prospects of refloating the vessel unassisted;

- Whether or not the vessel is being driven further aground; ‑

- Whether or not the vessel's auxiliaries and main engine are available for use;

- Details of the pre‑stranding draft of the vessel and the draft when she went aground with particular

reference to tidal conditions;

- Details of the vessel's movement fore and aft and port and starboard (movement may be detected

by setting up two pendulums, one fore and aft and another athwart ship);

- Whether or not the vessel is hogging or sagging;

The extent of damage to the vessel, if any;

- Weather conditions including the wind direction;

- Weights on board the vessel and where carried;

- Condition and contents of tanks;

- Details of other tugs or other vessels assisting to refloat the vessel and the length of time they were

engaged in pulling the vessel; and

- Details of lightering operations, including the number of gangs used, the names of lightering vessels,

the vessel's draft on commencement and completion of lightering, and the amount of cargo discharged.

- In addition the Master should retain a copy of divers reports on the condition of the vessel's bottom.

Collision

- The condition of the vessel and the extent of damage;

- If there is an ingress of sea water, the areas of the vessel which were flooded, the attempts made to

seal openings, whether or not the doors were water tight;

- Whether or not the vessel's pumps, generators, and auxiliary machinery remains operable;

- Whether or not there is a danger of the vessel sinking; and

- The equipment used by salvors;

- In addition, the Master should retain a copy of any reports made by surveyors or naval architects.

Fire

- Where on the vessel the fire started and the extent of damage;

- What combustible material is there on board the vessel which the fire may reach;

- Attempts made by the crew to extinguish the fire including details of the use of foam, C02, or

portable pumps;

- If available, readings of explosimeters; and

- Whether or not there is a danger of explosion and whether or not the tanks are gas free or inerted;

- if tugs and other fire fighting craft involved, their names, positions, and details of their fire fighting

operations;

- The position of monitors and hoses; and

- The time taken to extinguish the fire.

If the fire is serious, a fire expert will probably be appointed by owners as soon as possible to determine the cause of the fire The Master should ensure that the area where the fire started is disturbed as little as possible.

War

- Details of the current war situation in the area;

- Whether or not the attack on the vessel is part of a campaign;

- Details of the last attack on a merchant vessel; and

- The chances of a second strike.

- The Master should ensure that the Salvage Association is informed of any attacks and the extent

of the damage.