FACTORS TO BE TAKEN INTO CONSIDERATION BEFORE MAKING AN OFFER TO TOW ANOTHER VESSEL WHICH IS DISABLED BUT NOT IN DISTRESS? WHEN TOWAGE BECOMES SALVAGE?
Prior offering to tow a disabled vessel the master should verify if he is permitted to do so by the charter party and/ or the b/l ‘s. In addition the following points must be carefully considered
- Whether there is sufficient bunker on board including an adequate reserve keeping in mind excess sailing time due to reduced speed during towage.
- Notifying the owners & the underwriters who may require an additional premium to be paid.
- Notifying the charterer, where applicable.
- The possibility, if under charter of not reaching port before the cancelling date.
- The nature of cargo being carried
- The condition of main propulsion machinery & any deck machinery to be used.
- The value of the vessel to be towed & its cargo to ascertain if an adequate salvage reward is possible.
- Deciding on the port of destination
- The obtaining of a LOF salvage agreement.
- To obtain a salvage award it is paramount that the tow be successful. Hence the master must take all the factors into consideration up to the part of destination i.e. weather currents etc.
A towage becomes salvage when:
- The services performed by the tug are of such an exceptional nature not within reasonable contemplation of the towage contract.
- The services in fact performed & the risk run which will not be adequately compensated by the mere difficulty in towing does not make it a salvage contract.
Presence of Unanticipated Marine Peril is necessary for Salvage.
WHAT IS SALVAGE? WHAT ARE ESSENTIAL ELEMENTS OF SALVAGE?
Under the court of admiralty Salvage means the service which saves or helps to save a recognized object or salvage, when in danger provided the service is voluntary
In the sense:
- Of not being due to pre existing legal obligation or
- Rendered in the interest preservation.
Essential elements of Salvage are :-
1) The salvage must be voluntary.
2) The salvage service must be rendered to Recognized subject of Salvage ( eg: Vessels, equipment, etc. Not to a Buoy.
3) The subject of Salvage must be in danger.
4) The salvage service must be successful.
THE USE OF LOF OFFERS SEVERAL ADVANTAGES TO THE CONCERNED PARTIES. DISCUSS THESE ADVANTAGES FROM THE POINT OF VIEW OF SALVOR & THE OWNER OF THE PROPERTY.
The LOF has achieved a high & justified degree of popularity & reliability as it has inherent advantages for the salvor as well as the owner of property.
a) The advantages of the LOF for the salvor are:
- He has a readily available agreement which is unlikely to be contested.
- He retains his right of lien
- His renumeration is preferable to arbitration & he does not have to resort to court cases which can be expensive & time consuming.
- There is a provision for special compensation if the salvor fails to carry out the salvage but has been diligent & prevented damage to environment during the salvage operations.
b)The advantages of the LOF to the owner of the property are:
- He has a readily available agreement.
- The principal of no cure no pay is an obvious advantage of the owner of the property.
- The claim of the salvor may be referred to arbitration without having to resort to lengthy court cases.
- The owner can seek early release of his property by providing a security against the salvor’s claim.
WHAT ARE THE DUTIES OF THE SALVOR , MASTER & OWNER AS PER LOF?
WHAT ARE THE CRITERIA FOR FIXING THE REWARD FOR SALVAGE AS PER LOF ?
A) The salvor owes a duty to the owner of the vessel or property in danger:
- To carry out salvage operation with due care.
- To prevent or minimize any damage to the environment when carrying out his salvage duties.
- Whenever the circumstances require to seek assistance from other salvor’s and,
- To accept the intervention of other salvor when required by the owner or master of the vessel or property in dangers. The amount of his reward shall not be prejudiced should it be found that such a request was unreasonable.
The owner and master of vessel in danger shall owe a duty to the salvor:
- To cooperate fully with him during the salvage operation.
- To exercise due care to prevent or minimize damage to the environment &,
- When the vessel has been brought to a safe place to accept redelivery, when reasonably requested by the salvor to do so.
B)The reward to be fixed is to be with a view to encourage salvage & the following criteria be taken into regard for fixing the reward:
- The salved value of the vessel & property.
- The skills & efforts of the salvor in preventing or minimizing damage to environment.
- The measure of success obtained by the salvor.
- The nature & degree of danger.
- The skill & effort of the salvor in salving the vessel, other property & life.
- The time used, expenses & losses incurred by the salvor.
- The risk of liability & other risks run by the salvors or their equipment.
- The promptness of services rendered.
- The availability & use of vessel & other equipment meant for the salvage operation.
- The state of readiness & efficiency of the salvors equipment & the value thereof.
DISCUSS THE PROVISIONS OF “LOF” AS REGARDS SPECIAL COMPENSATION FOR PREVENTING OR MINIMIZING DAMAGE TO THE ENVIRONMENT?
If a salvor engaged in the salvages of a ship which itself or due to its cargo threatens the environment has failed to earn reward under the principle of no cure – no pay. At least equivalent to the special compensation, he shall be entitled to special compensation from the owner of the vessel equivalent to his expenses – Applicable only if the ship or cargo is a threat to the environment.
If the salvor has prevented or minimized damage to the environment the special compensation by the owner to the salvor may be increased by up to 30% of the expenses incurred by the salvor. The tribunal deciding the award may increase it to a maximum of 100% of the expenses incurred by the salvor.
When calculating the salvors expenses his out-of-pocket expenses & a fair value for the equipment & personnel actually used, keeping in mind the availability, promptness of service rendered & the state of readiness of the equipment & its value is to be allowed for.
If the salvor has been negligent towards preventing or minimizing the damage to the environment, then he may have to forfeit the whole or part of the special compensation due.
LOF 2024
A Contractors’ basic obligation: The Contractors agree to use their best endeavours to salve the property and to take the property to the place stated or to such other place as may hereafter be agreed. If no place is mentioned and in the absence of any subsequent agreement as to the place where the property is to be taken the Contractors shall take the property to a place of safety.
B Environmental protection: While performing the salvage services the Contractors shall also use their best endeavours to prevent or minimise damage to the environment.
C Scopic Clause: Scopic Clause if incorporated the Contractors services shall be rendered and accepted
as salvage services upon the principle of “no cure – no pay” and any salvage remuneration to
which the Contractors become entitled shall not be diminished by reason of the exception to
the principle of “no cure – no pay” in the form of special compensation or remuneration payable
to the Contractors under a Scopic Clause.
D Effect of other remedies: Subject to the provisions of the International Convention on Salvage 1989 as
incorporated into English law (“the Convention”) relating to special compensation and to the Scopic Clause if incorporated the Contractors services shall be rendered and accepted as salvage services upon the principle of “no cure – no pay” and any salvage remuneration to which the Contractors become entitled shall not be diminished by reason of the exception to the principle of “no cure – no pay” in the form of special compensation or remuneration payable to the Contractors under a Scopic Clause.
E Prior services: Any salvage services rendered by the Contractors to the property before and up to the date of this agreement shall be deemed to be covered by this agreement.
F Duties of property owners: Each of the owners of the property shall cooperate fully with the Contractors. In particular:
(i) the Contractors may make reasonable use of the vessel’s machinery gear and equipment free of expense provided that the Contractors shall not unnecessarily damage abandon or sacrifice any property on board;
(ii) the Contractors shall be entitled to all such information as they may reasonably require relating to the
vessel or the remainder of the property provided such information is relevant to the performance of the
services and is capable of being provided without undue difficulty or delay;
(iii) the owners of the property shall co-operate fully with the Contractors in obtaining entry to the place of safety or agreed or determined.
G Rights of termination: When there is no longer any reasonable prospect of a useful result leading to a salvage reward in accordance with Convention Articles 12 and/or 13 either the owners of the vessel or the Contractors shall be entitled to terminate the services hereunder by giving reasonable prior written notice to the other.
H Deemed performance: The Contractors’ services shall be deemed to have been performed when the property is in a safe condition in the place of safety stated or agreed or determined
A. For the purpose of this provision the property shall be regarded as being in safe condition even though that property (or part thereof) is damaged or in need of maintenance provided that
(i) the Contractors are not obliged to remain in attendance to satisfy the requirements of any port or harbour authority, governmental agency or similar authority and
(ii) the continuation of skilled salvage services from the Contractors or other salvors is no longer necessary to avoid the property becoming lost or significantly further damaged or delayed.
I Arbitration and the LSA Clauses: The Contractors’ remuneration and/or special compensation shall be
determined by arbitration in London in the manner prescribed by Lloyd’s Salvage Arbitration Clauses (“the LSAC”) in force at the date of this agreement. The provisions of the said LSAC are deemed to be incorporated in this agreement and form an integral part hereof. Any other difference arising out of this agreement or the operations hereunder shall be referred to arbitration in the same way.
J Governing law: This agreement and any arbitration hereunder shall be governed by English law.
K Scope of authority: The Master or other person signing this agreement on behalf of the property enters into this agreement as agent for the respective owners thereof and binds each (but not the one
for the other or himself personally) to the due performance thereof.
L Inducements prohibited: No person signing this agreement or any party on whose behalf it is signed shall at any time or in any manner whatsoever offer provide make give or promise to provide or demand or take any form of inducement for entering into this agreement.
