Salvage and Towage

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Under Article 98 OF UNCLOS, Master has a legal duty to proceed with all possible speed to render assistance to any person in distress at sea nearby, without serious danger to his vessel, her crew and passengers. Under Regulation 10-1 of SOLAS 1974, master shall not be constrained by shipowner, charterer or any other person from taking decisions necessary for safe navigation.

International Salvage Convention 1989 defines Salvage operation as “any operation activity undertaken to assist a vessel or any other property in danger in navigable waters or in any other waters whatsoever”.

The service must be rendered voluntarily. But a person who offers to render salvage service may choose to do so under an agreement.

Questions to be answered are:

  • Has the claimant rendered a salvage service?
  • Has the service been successful?
  • How much should be paid as salvage?

Remuneration is payable out of value of property preserved. No salvage is payable unless property In danger or some part of it is saved. Service need not have been totally successful. For example, a ship aground, is refloated and towed into port, she may have suffered so much bottom damage that she is a Constructive total loss. But salvage is payable out of her scrap value. Salvage reward must be less than value of salved property so that some part of the fund is left for owner’s benefit. If it is more, owner can legally abandon the property. The “NO CURE NO PAY”, principle underlines entire institution of salvage.

Danger does not have to be absolute or imminent, but must be of a kind that a prudent master would not hesitate to accept assistance. If a vessel loses her Only propeller in mid ocean in fine weather, she is not in immediate danger. But onset of bad weather would leave her at mercy of the elements. Since he can’t get a propeller at sea, a prudent master would accept salvage on LOF. A vessel requiring tow into port in fine weather is not necessarily in distress. Just a tow into port is not always salvage. But it is rare these days that anybody would offer to tow a vessel from mid Ocean to harbour on any other terms but salvage.

Salvor must be a stranger to the maritime adventure, not under duty to render assistance. Crew of a vessel have a duty to their vessel without expecting extra reward. But if Master gives an order to abandon ship with the intention of not returning and few crew members return and render successful salvage service, they will be considered to have returned as strangers and may claim salvage reward.

Few salvage services are absolutely voluntary. Colliding Vessels are under statutory obligation to stand by one another to give necessary assistance. Saving life is a statutory duty. Law requires vessels to respond to distress calls.

But persons, who obey them, retain their voluntary status. Even a passenger who Could have escaped from a vessel in danger, but stays voluntarily to assist with salvage Work Will rank as salvor and earn a reward.

Where one ship negligently collides with another, and afterwards renders successful salvage services, she has a right to salvage subject to a counterclaim for damages in negligence.

Maritime lien Continues to attach to property saved, with right of possession, even if it has changed hands or flag. Even though salvors are not normally allowed to retain possession of salved property and to prevent owners from making use of it, we know how a person abroad can go to his court and say, “this ship owes me X, she is in our country. I have a lien on it. Therefore you arrange to procure for me what he owes me.

Art 98 of UNCLOG and provisions of SOLAS override clauses in any contract of affreightment or Insurance policy, if vessel deviates from a contractual route to save LIFE, or to take a ship in tow where lives are in danger. But once lives are in safety, regardless of whether the vessel is safe or not, assisting master may not want to salvage the ship or to tow her to nearest port. This because deviation from a contracted voyage to save property, is justifiable only if C/P or B/L reserve Master/owner’s right to deviate.

Furthermore to undertake to save property is a commercial decision and it may not be worth his while to do so. Master should check effect of delay to his ship and cargo with owners, especially if he is under C/P or his cargo is perishable.

If he decides to salvage, assisting Master should make Master of the other ship to agree to LOF, BEFORE service begins. LOF is usually signed much later but there must be enough evidence that it has been agreed before salvage service starts. Probable value of salved property should also be assessed for an adequate salvage award. Port of Refuge/destination of tow should be agreed with the other master.

Since success is vital to earn a salvage award, salving master should not hesitate to engage tugs or other assistance for safe navigation of both vessels. But he should not allow tugs to tow as principals. Otherwise they may also claim salvage award. If it is possible to do without tugs so much the better. But he should not take risks and record what assistance was available. Whether a vessel is Salving or is being Salved, Master should take notes, sketch and photograph nature of services rendered.

He should also record:

  • Name, Flag, Size of vessel in distress
  • Types of cargo (if any) on board her.
  • Salved Vessel’s proximity to shore,
  • List, draft, heading, sheering,
  • Nature of seabed, soundings, pounding (if aground),
  • State of main/auxiliary engines,
  • State of anchors, propellers and deck cargo,
  • Seat of fire or flooding etc,
  • Availability of her crew.
  • Weather, Tide, wind, sea swell, drift and weather forecasts applicable to that area,
  • General plan of operations,
  • Times of principle events,
  • Details of work done,
  • Services rendered and risk to personnel.
  • Equipment used e.g. Radar, Radio, Rockets, ropes, boats, pumps, etc.
  • Any expenses incurred such as any additional overtime earned even by his own crew, hire of boats or labour etc.
  • Inspections made. Damages, leakages, fire flooding etc., found.

Art. 8 of Salvage convention imposes following duties,

  1. Salvor shall owe a duty to owner of the vessel or other property in danger,
  2. To prevent or minimise damage to environment in carrying out salvage operation.
  3. Whenever circumstances reasonably require, seeking assistance from other salvors;
  4. To accept intervention of other salvors when reasonably requested to do so by owner or Master of the vessel or other property in danger, provided however that amount of this reward shall not be prejudiced should it be found that such a request was unreasonable;
  5. Owner and Master of the vessel in danger shall cooperate fully with salvor during salvage operations and exercise due care to prevent or minimise damage to the environment.

On successful completion of the service, salving master should take possession of the property salved until adequate security is obtained.

Owner should accept redelivery from salvor when reasonably requested to do so. LOF provides for security to be given to committee of Lloyd’s by owner of salved property.

Salvors usually accept security for special compensation by way of a P & I Club letter of undertaking. Master should liase with owners, agents and P&I club for guidance.

All interests, which have benefited from salvage services, must contribute to salvage rateably according to total salved value. Principle contributors are SHIP. CARGO and FREIGHT.

Master of a ship has implied authority to bind owners of ship to terms of a salvage agreement. Art. 6 of Salvage Convention 1984 give authority to Master and owner to bind cargo interests to salvage agreement.

If a Master requires salvage services he should not hesitate to call for help unless assistance on ordinary contractual terms can be obtained. If there are several offers of help, he should accept services that are required to take his ship out of imminent danger and liase with owners.

He should make salvor agree to LOF and record details of steps he might have taken to prevent damage if assistance was not available.

Tugs involved in towing a vessel in or out of harbour, have a duty to assist the vessel to safety under the towage contract. Therefore, even if a vessel grounds in the process and is safely hauled out by the tugs, it is part of same operation especially as these tugs cannot be deemed to be salvors as strangers to the maritime adventure.

But it may happen that tugs, which were towing the vessel, were disengaged and went away even after she grounded. In that case even if same tugs come back and assisted her out, it may become a case of salvage unless shipowner or Master have been clever enough to engage them on towage contract the second time round or have not released them from the first towing contract.

Master has to act reasonably as per generally accepted norms when contracting with salvors.

The “Choko Star” grounded leaving Argentina for Italy. Master required assistance, and contracted with Tsavliris (who were not locally based salvors) under LOF. Cargo owners paid the award, but instituted proceedings claiming damages from shipowners. They contended that Master acted unreasonably in contracting with European salvors, who had no resources and little experience of salvage in the Argentine. Local tugs and surveyors were available and could have done it better and at less cost. Court of Appeal held in favour of cargo owners.

In a 1995 case, a Court has held that since shipowner can claim salvage remuneration from cargo owners, a cargo owner can claim salvage against shipowner for salvage services rendered to their vessel as volunteers.

In 1995 it was also held that where a ship and cargo were salved by a vessel in the same ownership, the Master and Crew of salving ship were entitled to claim salvage against owners of the salved ship and her cargo, but a shipowner is not entitled to claim salvage against himself even though he can claim from owners of Cargo.



Definition of towage is “employment of one vessel to expedite the voyage of another”

Master needing a tow in open ocean, has limited options. If a vessel answers his distress call, her obligation is only to ensure safety of life on the distressed ship. Master of assisting vessel may be performing a valuable charter or rushing to meet a cancelling date etc. Once lives are not in danger International Law allows him to go his way.

A vessel requiring a tow into port may not be necessarily in distress. Therefore assistance need not mean salvage. Now we consider technical aspects of towing or being towed in open sea because of breakdown of vessel’s own motive power or some other reason.

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