Marine Salvage For Cmmi Master Class By M. V. Ramamurthy

MARINE SALVAGE
FOR CMMI MASTER CLASS
BY
M.V. RAMAMURTHY
29th JULY 2018

Acknowledgement
All the information contained in this
presentation is referred from the sources
available in the Public Domain and the
relevant sources are gratefully
acknowledged. This presentation is for
educational purposes only and in no way
makes any rightful or wrongful impression
on the relevant sources acknowledged or
the information obtained from them. This
presentation is for the own consumption of
the audience and they are restricted not to
use this presentation elsewhere.

MARINE SALVAGE
AND ITS ESSENTIALS

What is Marine Salvage
 The process of recovering a ship, its cargo or
other property when a ship is in peril or after
a ship-wreck .
 Salvage encompasses rescuing a ship like
refloating a sunken or grounded ship and
towing her to safety.
 The protection of environment (sea
pollution) from the cargoes or bunkers on
the ship is also a priority of the salvage
operation.

Prerequisites under Customary
Law of Salvage
 Danger – Along with prevention of physical
damage, mitigation of non-physical danger on
risk of third-party liability can enhance award
 Voluntariness – no pre-existing contract or
binding legal duty
 Success – assessed at the termination of the
salvage – can be partial
 Place of rendering the services -
 Type of property saved - ship, stores and
apparel, cargo, freight at risk

Who are the Salvors
 Seamen, Engineers and Specialists
who carryout the salvage:
 Who are not members of the ship’s
original crew.
 Who are not normally the owners of
the ship.
 However, there are also circumstances
when owners do their own salvage with
the consent of the underwriters. (Today
we shall study such cases.)

The Concept of Peril (1/3)
 It is enough that the property is in danger, either
presently or to be reasonably apprehended. It is
important to note that it is not the degree of peril
which necessitates for salvage service.
 If distress or peril is present, then a voluntary
salvage service with success entitles the salvor to a
salvage award.
 The degree of peril, whether slight, moderate, or
severe, affects only the amount of the award, and
not the entitlement of the salvor to a salvage award.
 It is futile to contend that a ship aground even in
shallow water on a sandy beach, but exposed to
wind and waves in the hurricane season, is in a safe
place and not in peril.

 To constitute a maritime peril, it is not necessary
that the danger be actual, absolute, immediate or
imminent; it is sufficient that, at the time assistance
was rendered, the vessel was stranded so that it was
subject to the potential danger of damage or
destruction.
 A situation of actual apprehension, though not of
actual danger, is sufficient to constitute a peril.
Hence, it should be clear that the concept of peril is
very broadly and liberally interpreted.
 In order to justify a salvage award for salvage
services, it is adequate that, when such service was
rendered, the vessel had encountered danger,
misfortune, peril or other circumstances which might
have exposed her to damage or destruction if the
services were not rendered.

 In the case of a vessel which had been driven
ashore, the court have stated that, “a vessel in that
situation cannot be considered as not in some
unusual peril, not wholly exposed, yet not so safe as
she would have been in a harbour”. Hence, the
degree of peril figures as an element in both the
entitlement of a salvor to an award as well as the
amount of award.
 The presence of peril in any degree, whether
imminent or potential, whether the vessel's damage
is slight or non-existent, will support a claim for
salvage services. However, the degree of peril, its
imminence, and its extent, figure very largely in the
amount of the salvage award.
 The dispute frequently arises in the context of
disabled vessels which are towed into port.

Perils in Grounding (1/3)
 The usual peril of a vessel leading to salvage is
grounding and the uninitiated do not normally
appreciate its dangers and perils inherent.
 The vessel’s hull is designed to be supported by the
uniform buoyancy and not with the uneven ground
reaction. Hence the hull of a grounded vessel can
deform and crack and the appendages can be
damaged by ground unevenness and protrusions.
 When grounded, though the vessel may not possess
sufficient reserve buoyancy to float by itself, the
vessel may momentarily be lifted completely or
partially off the ground when acted upon by
wind/waves and pound back to the ground on its
bottom as the influence of the wind/waves withdraws
from the vessel. This condition is a real danger to
any vessel in a grounding situation.

 Vessels which are grounded in such circumstances
face not only the peril of pounding, but also, if not
properly secured, shift over the ground and other
reefs in an uncontrolled manner due to
wind/wave/tide/current, resulting in further damages.
A grounded vessel can also experience severe fire
damage due to lightning.
 Hence. In every likely-hood, the marine peril to
vessels under grounding increases with the passage
of time and prompt action is to be taken to remove
the vessel from the site.
 The recovery operations, apart from salvage
equipments, may require the management of fuel,
drinking water, bilge water, ballast water and other
consumables.

 Such operations are not only time consuming and
expensive, but also may enhance the possibility of
marine pollution.
 In rocky ground, the damages can be severe by
pounding and shifting on uneven ground. Whereas in
partially sandy ground, scouring of these areas under
the hull increases the probability of hogging or
sagging of the hull with resultant stress fractures. In
areas of soft muddy grounds, there is a likelihood of
the vessel working herself into the mud and getting
embedded. In such a case, if the vessel is not removed
promptly, the stranding becomes permanent.
 Apart from the above, there is also inherent danger to
the personnel involved in attempting to remove the
vessel.

Towage and Salvage (1/2)
 Simple towage is a service that is based on the
employment of one vessel to make the voyage of
another.
 Simple towage is regarded as having taken place
when a tow is called for or taken by a sound vessel
as a mere means of saving time, or for
considerations of convenience.
 The hallmark of simple "towage" is the absence of
peril. The motivation for the towing service is
convenience and not safety.
 Services rendered by a salvor, who brings in a
disabled vessel at the end of a hawser, in many
cases, are still an act of salvage services of
“salvage towage” or “extraordinary towage”.

Towage and Salvage (2/2)
 There is no generic difference between towage and
salvage, except the context and conditions on which
the act is done.
 If there is no extraordinary special skills are
involved, like towage in very calm weather by the
salvor, the salvage reward or remuneration will be
low.
 Because of the relatively low order of salvage in
such cases, coupled with the ready availability of
numerous other companies to render such services
on fixed price hourly rates, it is the almost universal
practice of salvors to provide such services on a
fixed price basis or hourly rate.
 The situation changes totally in the event of foul
weather and cyclone and the vessel is in real peril.

Salvage Classifications
 Offshore Salvage
 Harbour Salvage
 Pure or Merit Salvage
 Cargo & Equipment Salvage
 Afloat Salvage
 Clearance Salvage
 Contract Salvage
 Naval Salvage
 Wreck Removal

Offshore Salvage (1/2)
 The refloating of ships stranded or sunk in weather-
exposed waters is called offshore salvage.
 In this type of salvage, vessels remain unprotected
to the mercy of winds, waves, tides, currents etc.
 There could be no easy access either from sea front
or from the coastal land.
 Offshore salvage may provide only a short window
of opportunity for the salvage team due to unusually
high tide or inclement weather.
 The favourable work window may not materialize
again for a long period and in the meantime, the
vessel may deteriorate more rapidly than such
vessels in protected harbours, even with
considerable efforts and precautions. As a result, it
is often imperative to expedite the salvage operation.

Offshore Salvage (2/2)
 Offshore salvage may have to be conducted from
well-equipped tugs/barges and carefully choosing
the resources to suit the situation.
 Portable diving facilities may have to be transported
by small shallow draught boats, zodiacs or choppers
to the work area.
 Working in unprotected and less hospitable waters
may not be conducive for employing salvaging
equipments like floating cranes, construction
tenders, dredgers and equipment barges.
 The situation is the most vulnerable and very
difficult to work on.
 it is often not feasible to provide accommodation at
the salvage site for longer and continuous duration
for a workforce of welders, fitters, divers etc.
Transportation of fuel, drinking water and
provisions to the workforce becomes critical.

Harbour Salvage
 The term harbour salvage refers to the salvage of
vessels stranded or sunk in sheltered waters and
generally within the harbour limits.
 Such vessels are not normally subject to the same
deterioration caused by sea and weather conditions
as offshore salvage vessels.
 Further, unless the wrecked vessel is obstructing
navigation, there may be no need of urgency for
salvage work as in offshore salvage.
 Pre-salvage surveys and planning stages can take
less time and not too dependent environmentally.
 Easier assistance from harbour authorities and
access to local skilled labour and salvage equipment
such as tugs, divers, floating cranes, barges etc.
 Lesser difficulty for accommodation and living
resources for the salvage workforce.

Pure Salvage (1/2)
 In pure salvage (also called "merit salvage"), there is
no contract between the owner of the goods and the
salvor.
 The relationship is implied by law. The salvor of
property under pure salvage must bring his claim for
salvage in a court of jurisdiction, which will award
salvage based upon the merit of the service and the
value of the salvaged property.
 Pure salvage claims can be of "high-order" or "low-
order“.
 In high-order salvage, the salvor exposes himself
and his crew to the danger/risk of injury/loss and/or
damage to his equipment in order to salvage the
property that is in peril.

Pure Salvage (2/2)
 “High-order salvage” situations occur in boarding a
sinking ship in heavy weather, boarding a ship which
is on fire, raising a sunken ship or towing a stricken
ship in heavy weather from high seas to the shore.
 “Low-order salvage” occurs in situations where the
salvor is exposed to little or no personal risk and
where higher skills and equipments are not called
for. This may include towing another vessel in calm
seas, supplying a stranded vessel with fuel and
consumables or pulling a vessel off a sand-bar.
 Obviously, salvors performing “high order salvage”
receive substantially greater salvage award than
those performing “low order salvage”.

Salvage Equipment
 Pumping equipment
 Air compressors
 Diving equipment / divers
 Buoyancy bags and Floatation equipment
 Underwater cutting equipment
 Tugboats and towing gear
 Winches
 Cranes
 Shear legs
 Floating dry-docks
 Containment booms and oil skimmers

Selection Criteria for Salvor (1/2)
 Currently in salvage service;
 Documented history of successful
salvages;
 Owns or has contracts for salvage
equipments;
 Has Personnel with qualification and
training on 24 hrs availability;
 Has on-going continuous training
programme for personnel;
 Owns fire-fighting equipments;

Selection Criteria for Salvor (2/2)
 Membership of National and
International Organizations;
 Has adequate and relevant insurance;
 Has sufficient up-front capital, back up
resources and funds;
 Has experience to work in the specific
geographical environment;
 Has necessary administrative, logistical
and transportation support;
 Has the express acceptability to the
insurers.

Owner’s Salvage (1/2)
 Owner know his vessel and the grounded area well.
 Owner probably built the vessel himself and has
been operating over a long time.
 Owner can have expertise and previous experience
in salvage operations.
 Owner can be confident that he could do a better /
faster job than any other professional salvor. (even if
vessel had cargo)
 Owner has his resources of salvage equipment –
tugs, divers, zodiacs and skilled manpower.
 Owner has the immediately available funds to buy
other equipments like submersible pumps,
compressors, welding machines, consumables to
undertake the salvage.
 Owner is capable of mobilizing both skilled and
unskilled labour for the salvage.

Owner’s Salvage (2/2)
 The vessel can not be abandoned by the crew at site
and any delay without immediate attention by the
owner awaiting a professional salvor can jeopardize
the salvage of the vessel.
 Owner is more aware of the conditions where the
vessel is grounded, and, probably an attempt by any
other salvor may end-up in loss of the vessel.
 The vessel can be very precious to owner’s own
operations – no replacement vessel may be possible
even in a short time and loss of vessel may result in
heavy losses to owner. Hence, salvage of the vessel
for further use is more impoertant to the owner than
the insurance claim as TCL. Owner may be s confident
that he only can expedite the salvage operations and
get the vessel re-floated within a short time to achieve
his aim.
 Owner also wants to reduce the salvage costs as a
prudent insured.

Wreck Removal
 Wreck removal focuses on the removal of hazardous or
unsightly wrecks that have little or no salvage value.
 Because the objectives here are not to save the vessel,
the wrecks are usually refloated or removed by the
cheapest and the most practical method possible. In
many cases, hazardous materials must be removed prior
to disposing of the wreck.
 The most common techniques used in wreck removal are
cutting the hull into easily handled sections or refloating
the vessel and scuttling it in deeper waters or selling it as
scrap.
 Wrecks are left at site without removal by navigational
marking, if not dangerous to navigation and no
possibility of shifting.
 Internationally, the Wreck Removal Convention – 2007 is
applicable. (not in the scope this presentation.)

Salvage Vs Wreck Removal
 A salvage operation is generally distinguished
from wreck removal as its purpose is usually to
save a vessel as a going concern.
 Whereas a wreck removal generally concerns a
vessel which is already agreed to be a total loss.
 Consequently, salvage operations usually try to
cause minimal damage to the concerned vessel,
without causing damage to the Environment.
 Whereas wreck removal operations often involve
intentionally breaking the vessel involved into
pieces. If the wreck does not affect navigation or
a environmental hazard, then it is left alone,
unless it has salvage value.

Background, Development and
Principles of Salvage Law
 To assist the owners in marine perils by the
availability of honest salvors
 To develop professional salvors with skills and
equipment
 To encourage the salvors by justly rewarding them for
their skills in salvaging & mitigating the situation; and
thus reducing the overall losses due to marine Perils
for owners and underwriters
 To protect the Environment, being today’s the most
essential concern and dominant in a salvage operation

Salvage Law
 Basic principle is that a salvor is to be rewarded for
risking his life and property to rescue the property of
another in peril.
 Ship is in peril when already in danger or when could
become in imminent or immediate danger.
 Salvor takes permission from owner to assist the ship
– permission not needed if the ship is abandoned. The
service should be voluntary and not required by law.
 The salvage award depends on the value of the ship
with its cargo, the degree of risk involved and the
degree of peril the ship was in.
 Presently applicable law in most countries Salvage
Convention of 1989 (Entry into force – 14th July 1996),
which superseded the Brussels Collison Convention
2010.

Salvage Claim
 For a salvage claim to materialize, three conditions
must be met:
 The property must be in peril;
 The services must be rendered voluntarily (no duty
to act); and
 Finally the salvage must be successful in whole or in
part.
 It is the well-settled view of the admiralty courts that
“salvage compensation is not viewed by the them
merely as pay on the principle of a quantum merit or
as a remuneration pro opere et labore, but as a
reward given for perilous services voluntarily
rendered.”

Salvage Award
 Justification of Salvage evolved from the principles
of unjust enrichment and justified reward to the
honest salvors who act on behalf of another in an
emergency.
 A successful salvor is remunerated for his services
limited to the value of the salved property, but not
limited merely by the law of restitution.
 Environment consideration plays a dominant part
bringing-in ship-owners and liability underwriters
and on the outcome of the negotiating process
between the Property insurers and P&I Cubs who
finally foot the bill.

Contract Salvage
 In contract salvage, the owner of the property and salvor
enter into a salvage contract prior to the commencement
of salvage operations and the amount that the salvor is
paid is determined by the contract.
 This can be a fixed amount, based on a "time and
materials" basis, or any other terms that both parties
agree to.
 The contract may also state that payment is only due if
the salvage operation is successful (e.g. "No Cure, No
Pay"), or that payment is due even if the operation is not
successful.
 By far the commonest single form of salvage contract
internationally is Lloyd's Standard Form of Salvage
Agreement (2011), an English law arbitration agreement
administered by the Council of Lloyd's, London.

Salvage Contracts (1/2)
 Not every salvage results in contract salvage.
 Pure salvage, also known as merit salvage, is the term given
when a person recovers property (known as the salvor)
without a contract between the salvor and the rightful owner
of the property. There are two forms of salvage recognized
under Admiralty Law, namely, Contract and Pure salvage.
 LOF is the most widely used “no cure-no pay” salvage contract.
In return for salvage services, the salvor receives a proportion
of the “salved value” (the value of the ship, its bunkers, cargo
and freight at risk). Traditionally, reward depends upon
success and the recovery of property.
 If the contract provides that the contractor will be paid
regardless of success, the services become contract salvage
services. And the contract salvor retains only a low priority
salvage lien.

Salvage Contracts (2/2)
 If contract fixes compensation to be paid to salvor but only in
the event of success, it is a fixed price "no cure-no pay"
salvage contract. Under such a contract, the salvor loses his
right to a discretionary salvage award and can only be
awarded the agreed amount.
 The use of fixed price contracts is not common except in cases
of raising vessels sunk at their berths in shallow water or in
the salvage of vessels of relatively low value.
 Salvage contracts provide for resolving disputes on salvage
award with a binding arbitration under English Law. The
purpose is to protect the owners and insurers from exorbitant
salvage award claims.

Essence of Salvage Contracts
 Owners representative
 Control
 Funding
 Salvage Remuneration
 Indemnity
 Warranties
 Insurance
 Law & Jurisdiction
 Disputed Invoices
 Interest
 Confidentiality

1989 London Salvage Convention (1/2)
 The Convention has a list of criteria as given
below for judicial determination of the
salvage reward:
 "The salved value of the vessel and other
property;
 The skill and efforts of the salvors in
preventing or minimizing damage to the
environment;
 The measure of success obtained by the
salvor;
 The nature and degree of the danger;
 The skill and efforts of the salvors in salving
the vessel, other property and life;

1989 London Salvage Convention (2/2)
 The time used and expenses and losses
incurred by salvors;
 The risk of liability and other risks run by
the salvors or their equipment;
 The promptness of the services rendered;
 The availability and use of vessels or other
equipment intended for salvage
operations;
 The state of readiness and efficiency of the
salvor's equipment and the value thereof.
 The Special Compensation Clause under
Articles 13 & 14.

Lloyds Open Form (LOF)
 It is a Standard Form of Salvage Agreement published
by Lloyd’s of London, more commonly known as LOF
and it is a two-page legal contract document for a
salvage operation on “No Cure - No Pay” basis.
 It is called “open” because literally it is open with no
amount of money stipulated for the salvage job.
 The sum to be paid is determined later in London by
a professional Arbitrator.
 The arbitrator, invariably is a Queen’s Counsel
practising in the Admiralty Bar follows English Law.
 The salvage award is determined on the value of the
ship, its cargo, freight at risk, extent of dangers and
difficulty in effecting the salvage.
 LOF was amended In 2011 last.

SCOPIC
 Article 14 of the 1989 Salvage Convention provided that
salvors could receive Special Compensation (ie their
expenses and a fair rate for tugs and equipment used in
salvage operations) in certain circumstances, where the
salved fund was insufficient to allow them to recover
adequate remuneration under Article 13 of the Convention.
 The SCOPIC clause endorsed this concept, but introduced a
tariff to calculate the Contractor's Special Compensation.
 Special Casualty Representatives (SCR) and Representatives
for hull and cargo were introduced and marine property
underwriters‘ access to information about the services was
improved.
 The Contractor shall have the option to invoke by written
notice to the owners of the vessel the SCOPIC clause set out
at any time of his choosing regardless of the circumstances
and, in particular, regardless of whether or not there is a
“threat of damage to the environment”

Special Casualty Representative
 Once this SCOPIC clause has been invoked, the owners of the
vessel may at their sole option appoint an SCR to attend the
salvage operation in accordance with the terms and conditions
set out.
 Any SCR so appointed shall not be called upon by any of the
parties hereto to give evidence relating to non-salvage issues.
 At any time after the SCOPIC clause has been invoked, the Hull
and Machinery underwriter (or, if more than one, the lead
underwriter) and one owner or underwriter of all or part of any
cargo on board the vessel may each appoint one special
representative (hereinafter called respectively the “Special Hull
Representative” and the “Special Cargo Representative” and
collectively called the “Special Representatives”) at the sole
expense of the appointer to attend the casualty to observe and
report upon the salvage operation on the terms and conditions
set out.
 Such Special Representatives shall be technical men and not
practising lawyers.

SCOPIC Remuneration
 The assessment of SCOPIC remuneration shall include
the prevention of pollution as well as the removal of
pollution in the immediate vicinity of the vessel insofar as
this is necessary for the proper execution of the salvage
but not otherwise.
 SCOPIC remuneration shall not be a General Average
expense to the extent that it exceeds the Article 13
Award; any liability to pay such SCOPIC remuneration
shall be that of the Ship-owner alone and no claim
whether direct, indirect, by way of indemnity or recourse
or otherwise relating to SCOPIC remuneration in excess
of the Article 13 Award shall be made in General Average
or under the vessel’s Hull and Machinery Policy by the
owners of the vessel.
 Any dispute arising out of this SCOPIC clause or the
operations thereunder shall be referred to Arbitration as
provided for under the Main Agreement

Admiralty Law (1/2)
 Admiralty law, also called maritime law, is a combination
of U.S. and international law that covers all contracts,
torts, injuries or offenses that take place on navigable
waters. Admiralty law traditionally focused on oceanic
issues, but it has expanded to cover any public body of
water, including lakes and rivers.
 Admiralty law is a body of law that governs nautical
issues and private maritime disputes. Admiralty law
consists of both domestic law on maritime activities, and
private international law governing the relationships
between private parties operating or using ocean-going
ships. While each legal jurisdiction usually has its own
legislation governing maritime matters, the international
nature of the topic and the need for uniformity has, since
1900, led to considerable international maritime law
developments, including numerous multilateral treaties.

Admiralty Law (2/2)
 Matters dealt by admiralty law include marine commerce,
marine navigation, salvage, maritime pollution, seafarers’
rights’ and the carriage by sea of both passengers and
goods. Admiralty law also covers land-based commercial
activities that are maritime in character, such as marine
insurance. Some lawyers prefer to reserve the term
“admiralty law” for “wet law” (e.g. salvage, collisions, ship
arrest, towage, liens, & limitation), and use “maritime law”
only for “dry law” (e.g. carriage of goods & people, marine
insurance, and the MLC.
 Admiralty law may be distinguished from the Law of the Sea,
which is a body of public international law dealing with
navigational rights, mineral rights, jurisdiction over coastal
waters, and the maritime relationships between nations. The
United Nations Convention on the Law of the Sea (UNCLOS)
has been adopted by 167 countries and the European Union
and disputes are resolved at the ITLOS tribunal in Hamburg.

Salvage Principles (1/2)
 Marine Salvage is the rescue of a wrecked or disabled ship
or its cargo from loss at sea. The Law of Salvage is a
principle of maritime law whereby any person who helps
recover another person's ship or cargo in peril at sea is
entitled to a reward commensurate with the value of the
property salved.
 The amount of the award is determined subsequently at a
"hearing on the merits" by a maritime court in accordance
with Articles 13 and 14 of the International Salvage of 1989.
The common law concept of salvage was established by the
English Admiralty Court, and is defined as "a voluntary
successful service provided in order to save maritime
property in danger at sea, entitling the salvor to a reward";
and this definition has been further refined by the 1989
Convention.

Salvage Principles (2/2)
 All vessels have an international duty to give reasonable assistance to
other ships in distress in order to save life, but there is no obligation to
try to salve the vessel. Any offer of salvage assistance may be refused;
but if it is accepted a contract automatically arises to give the
successful salvor the right to a reward under the 1989 Convention.
Typically, the ship and the salvor will sign up to an LOF agreement so
that the terms of salvage are clear. Since 2000, it has become standard
to append a SCOPIC ("Special Compensation - P&I Clubs") clause to the
LOF, so as to circumvent the limitations of the "Special Compensation"
provisions of the 1989 Convention (pursuant to the case of the
Nagasaki Spirit).
 The salvors may use Cranes, Floating Dry-docks and Divers to lift and
repair submerged or grounded ships. The goal of the salvage may be to
repair the vessel at a harbour or dry-dock or to clear a channel for
navigation. Salvage operations may also aim to prevent pollution or
damage to the marine environment. Additionally, the vessel or
valuable parts of the vessel or its cargo may be recovered for resale, or
for scrap.

Salvage Law and Conventions
 Basic principle is that a salvor is to be rewarded for
risking his life and property to rescue the property of
another in peril.
 Ship is in peril when already in danger or when could
become in imminent or immediate danger.
 Salvor takes permission from owner to assist the ship –
permission not needed if the ship is abandoned. The
service should be voluntary and not required by law.
 The salvage award depends on the value of the ship with
its cargo, the degree of risk involved and the degree of
peril the ship was in.
 Salvage Law Development – Brussels Collision
Convention 2010 followed by London salvage
Convention of 1989 (Entry into force – 14th July 1996)

Brussels Convention 1910 (1/2)
 Three general rules of legal liability are established by the
Convention:
 If a collision occurs that is accidental or of uncertain cause, the
damages are borne by the party that suffers them;
 If a collision occurs that is the fault of a party, the party at fault is
liable for the damages that were caused; and
 If a collision occurs that is the fault of more than one party, the
parties at fault are liable in proportion to the faults respectively
committed. (If it is not possible to determine the proportional fault,
the liability is apportioned equally between the parties at fault.)
 The implementation of these rules abolished any pre-existing legal
presumptions as to which party bore fault in maritime collisions.
 The Brussels Convention for the Unification of Certain Rules with
Respect to Assistance and Salvage at Sea is a treaty on marine
salvage that was concluded on 23 September 1910, in Brussels in
Belgium.

Brussels Convention 1910 (2/2)
 As of 2013, the convention remained in force in over 70
states.
 Brussels Convention forms the basis of current
international marine salvage law.
 The United States ratified the Convention in 1912 and
the treaty relates to salvage of both seagoing vessels,
things on board, freight and passage money, and also
services of the same nature granted to each other by
seagoing vessels and vessels of inland navigation."
 The Convention was amended by a Protocol issued in
Brussels on 27 May 1967.
 However, the Brussels Convention has been overridden
in some countries by the 1989 International Convention
of Salvage, which took effect in 1996. India has ratified
the 1989 Convention.
 Some states that have ratified the 1989 Convention have
denounced the 1910 Convention.

Torrey Canyon Incident (1/2)
 On her final voyage, Torrey Canyon left Kuwait , with a full cargo of crude oil.
Following a navigational error, she struck Pollard's Rock on Seven Stones reef
between the Cornish mainland and the Isles of Scilly on 18 March 1967.
 The Torrey Canyon oil spill was one of the world's most serious oil spills. The
jumboized tanker, broke-up spilling an estimated 164,000 MT of crude oil.
Extensive attempts to float the vessel proved unsuccessful. Attempts to
mitigate the damage by bombing of the wreck by Royal Navy/Air Force
aircrafts, causing a potential international incident, as the ship was not British,
and was in international waters. Hundreds of miles of coastline in Britain,
France, Guernsey and Spain were affected.
 Claims were made by the British and French governments against the owners of
the vessel and the subsequent settlement was the largest ever in marine history
for an oil claim. In traditional maritime Law, ships can sue and be sued, but
their liability is limited to the value of the ship and its cargo. Liberian law did
not provide for direct liability of the ship’s owners. Both the British & the
French Governments served writ against the ship's owners only by arresting the
Torrey Canyon's sister ship.
 At the time, it was the world's worst oil spill, and led to significant changes in
maritime law and oil spill responses. It remains the worst spill in UK history.

After Torrey Canyon Incident (2/2)
 The disaster led to many changes in international regulations, such
as the IMO International Convention on Civil Liability for Oil Pollution
Damage (CLC) of 1969, which imposed strict liability on ship owners
without the need to prove negligence and the 1973 International
Convention for the Prevention of Pollution from Ships. Two flaws in
the design of steering controls were also addressed by IMO.
 Legal right of a State to intervene
 Rights of compensation for pollution damage
 Limitation of Liability
 Enforcement of rights of recovery
 Further IMO Conventions: The Intervention relating to Intervention
on High Seas Convention - 1969, Fund Convention for establishing
an international fund for compensation for pollution damage - 1971
 Industry initiatives: TOVALOP, CRISTAL & ITOPF
 However, Revision of the Salvage Law was postponed till the Amoco
Cadiz incident

AMOCO CADIZ INCIDENT (1/2)
 The oil tanker Amoco Cadiz ran aground in stormy weather on Portsall Rocks,
5 km from the coast of Brittany, France, on 16 March 1978, and ultimately
split in three and sank, all together resulting in the largest oil spill of its kind
in history to that date, estimated at 220,880 MT.
 A heavy wave slammed into the ship's rudder and it was no longer
responding to the helm. Attempts to repair the damage and regain control of
the ship were proved unsuccessful.
 The German tug Pacific responded to Amoco Cadiz at 11:28, offering
assistance under a LOF. It arrived on the scene at 12:20, but because of the
stormy sea, a tow line was not in place until 14:00, and broke off at 16:15.
Several attempts were made to establish another tow line and Amoco Cadiz
dropped its anchor trying to halt its drift. A successful tow line was in place at
20:55, but this measure proved incapable of preventing the super-tanker
from drifting towards the coast because of its huge mass and Force 10 storm
winds.
 At 21:04 Amoco Cadiz ran aground the first time, flooding its engines, and
again at 21:39, this time ripping open the hull and starting the oil spill. Her
crew was rescued by French Naval Aviation helicopters at midnight, and her
captain and one officer remained aboard until 05:00 the next morning.
 At 10:00 on 17 March the vessel broke in two, releasing its entire cargo of
250,000 m3 of oil, and broke again eleven days later from the buffeting of
high stormy seas. The wreckage was later completely destroyed with depth
charges by the French Navy.

AMOCO CADIZ INCIDENT (2/2)
 A dispute arose between the captains of Amoco Cadiz and of German tug
Pacific on the issue of LOF. The tug Captain thought this a classic LOF case,
an oil tanker with damage to its steering gear, rough weather and getting
closer to the shore by the minute.
 At the time of the accident, the ship and the cargo were valued at about
US$40 million, so the tug Captain's company could, in the event of success,
have received a large award. However, Captain of Amoco Cadiz, on the
instructions of his owners, wanted “a towage rate to Lyme Bay."
 The dispute ended when Captain Amoco Cadiz finally received approval to
accept the LOF from the ship's owners. However, this dispute did not delay
the salvage operation significantly, because tugging preparations had
already started, but tow lines repeatedly parted. The tug Captain was aware
that if he were to succeed in bringing the tanker into the English coast, his
owners could arrest the ship in English High Court for a claim for salvage.
 It was incorrectly reported in the press at the time that, due to long
negotiations on financial terms between the ship's captain and the captain
of tugboat, the ship drifted onto the rocks. This version of events became
fixed in the public mind, although in fact delay was caused by Captain of
Amoco Cadiz contacting her owners in Chicago for instructions.

After Amoco Cadiz Incident
 CMI offered cooperation with IMO ( the IMODCO) for re-examination and
amendments to existing Salvage Law
 Lloyd’s appointed a Working Party to update LOF to LOF 1980 – solutions as
concept of Liability Salvage and Safety Net for tankers laden or partly laden – new
duty to salvors “to use their best endeavours to prevent the escape of oil from the
ship” with assured payments with 15% increase on expenses reasonably incurred,
provided no negligence on their part and whether “salvage successful or not”.
Equitable foundations of salvage law by binding all benefitting parties from the
salvage services to contribute to the salvage reward.
 The biggest beneficiaries or losers changed from Property Insurers to P&I Club
(though P&I club not contributing to the salvage reward, but to the costs of Safety
Net). Rigorous ‘no cure no pay’ principle to the salvors has transcended to take
care of environmental protection during salvage. with concession due to Safety-
Net.
 Since the LOF 1980 incentive to salvors was rather hollow with many restrictions
and since it does not fulfill the legal status or regime of an international
convention, as it can only regulates the relationship between the parties involved
and its limitations with the third-parties, the Salvage Convention 1989 came into
effect to provide a uniform legal authority. The “Montreal Compromise” initiated
by CMI was the forerunner to the Salvage Convention 1989 bringing together the
Property Insurers and P&I Clubs in sharing the financial burden and the traditional
salvage reward bearing from then the element of enhancement going on the
shoulders of the cargo and hull underwriters, being the general average
community. (Articles 13 and 14 of the Salvage Convention 1989)

TOVALOP, CRISTAL & ITOPF (1/2)
 Torrey Canyon oil spill was the cause for the creation of four international regimes
for compensation for pollution damage and clean-up costs following the escape or
discharge of persistent oil from tankers.
 Two regimes were created under the then IMCO. These were the Civil Liability
Convention 1969 (CLC –EIF 1975) and the Fund Convention 1971 (EIF 1978). The CLC
provided for strict liability on tanker owners for oil pollution damage. The Fund
Convention provided supplemental compensation funded by receivers of crude
and heavy fuel oil carried by sea.
 At the same time two voluntary agreements were set up by the tanker and oil
industries encouraging prompt and effective clean-up and assuring adequate and
timely compensation.
 One scheme was TOVALOP, the Tanker Owners Voluntary Agreement concerning
Liability for Oil Pollution. It came into effect on 6th October 1969. CRISTAL
(Contract Regarding a Supplement to Tanker Liability for Oil Pollution) came into
existence in 1971, applicability being to spills of cargoes owned by oil company
Members of CRISTAL. Similar provisions were incorporated into the Fund
Convention later that year. In 1978 the TOVALOP Agreement was amended to
include provisions similar to but slightly wider than the 1969 CLC.
 On 20th February 1997 the voluntary industry oil spill compensation schemes
TOVALOP and CRISTAL ended. However, the International Tanker Owners Pollution
Federation Limited (ITOPF), the Secretariat which administered the TOVALOP, will
continue in existence to provide its broad range of technical services.

TOVALOP, CRISTAL & ITOPF (2/2)
 The 1992 Protocols with their broader scope of application and higher limits
came into force in May 1996 which ended both TOVALOP and CRISTAL in 1997,
with the abolition of TOVALOP certificates and the TOVALOP charter-party
clause. ITOPF took over and new procedures for the membership of ITOPF were
introduced.
 ITOPF was established in 1968 as a non-profit making organisation for the
principal purpose of administering TOVALOP. Over the years its functions have
expanded to cover a range of technical services, of which the most important is
the provision of advice and assistance at the site of marine oil spills on behalf
of its tanker owner members. Since the mid-70s the ITOPF staff have been
directly involved in 400 oil spills in some 70 countries. In addition the
Federation assists governments and others in contingency planning and
undertakes other advisory assignments. It produces a range of technical
publications and maintains various data bases.
 Membership of ITOPF is open to the owners or demise charterers of tankers,
being vessels designed and constructed for the carriage by sea in bulk of crude
petroleum and hydrocarbon fuels and oils derived therefrom, but excluding
liquefied petroleum gas and liquefied natural gas.
 The ending of the voluntary agreements will result in changes from 20th
February 1997,

Salvage Convention 1989
• The International Convention on Salvage[is a treaty that was concluded in London on 28
April 1989 that replaced the Brussels Convention on Assistance and Salvage at Sea as
the principal multilateral document governing marine salvage.The Convention's main
innovation is that the scope of salvage law has been extended to cover "environmental
salvage". The 1989 Salvage Convention introduced a "safety net" in the form of a Special
Compensation in cases where a salvor performs salvage operations in respect of a vessel
which by itself or its cargo threatened to damage the environment. The SCOPIC Clause is
supplementary to the Lloyd's Form Salvage Agreement 1995 (LOF).
• The 1910 Brussels Convention had established the principle (known as "No Cure, No
Pay") that a salvor is rewarded only if the salvage operation successfully rescues the
ship or its cargo. The International Convention on Salvage expanded on this principle by
introducing the concept of an "enhanced salvage award", which may be awarded by an
arbitrator or a tribunal if the salvor took effective action to prevent or minimize
environmental damage but nevertheless failed to salvage the ship or its cargo.
• The 1989 Convention entered into force on 14 July 1996 and as of April 2016 has been
ratified by 69 states representing 52 per cent of the gross tonnage of the world’s
merchant fleet. The impetus for the new Convention was the LOF 1980, which permitted
salvage rewards to be made to salvor who acted to limit damage to the coastal
environment after oil spills.
• Articles 13 & 14 of the Convention made provision for "Special Compensation", but The
Nagasaki Spirit case revealed that the Convention had been poorly drafted and, rather
than encouraging environmental salvors, instead it limited the amount that such salvors
could be paid to mere "out-of-pocket expenses", with no allowance for any profit margin.
This deficiency has since been addressed by the SCOPIC codicil to the LOF.

SC1989 - Article 6 & 7 - Application
 This Convention shall apply to any salvage operations save to
the extent that a contract otherwise provides expressly or by
implication.
 The master shall have the authority to conclude contracts for
salvage operations on behalf of the owner of the vessel. The
master or the owner of the vessel shall have the authority to
conclude such contracts on behalf of the owner of the property
on board the vessel.
 Nothing in this article shall affect the application of annullment of
the contract as below nor duties to prevent or minimize damage
to the environment.
 A contract or any terms thereof may be annulled or modified if:
 (a) the contract has been entered into under undue influence or
the influence of danger and its terms are inequitable; or
 (b) the payment under the contract is in an excessive degree too
large or too small for the services actually rendered.

SC1989 - Article 8 & 9 - Salvor/Owner Duties & Rights of
Coastal State
 The salvor shall owe a duty to the owner of the vessel or other property in
danger:
 to carry out the salvage operations with due care and to exercise due care to
prevent or minimize damage to the environment;
 whenever circumstances reasonably require, to seek assistance from other
salvors; and to accept the intervention of other salvors when reasonably
requested to do so by the owner or master of the vessel or other property in
danger; provided however that the amount of his reward shall not be
prejudiced should it be found that such a request was unreasonable.
 The owner and master of the vessel or the owner of other property in danger
shall owe a duty to the salvor:
 to co-operate fully with him during the course of the salvage operations and
to exercise due care to prevent or minimize damage to the environment; and
 when the vessel or other property has been brought to a place of safety, to
accept redelivery when reasonably requested by the salvor to do so.
 Rights of coastal States - Nothing in this Convention shall affect the right of
the coastal State concerned to take measures in accordance with generally
recognized principles of international law to protect its coastline or related
interests from pollution or the threat of pollution following upon a maritime
casualty or acts relating to such a casualty which may reasonably be
expected to result in major harmful consequences, including the right of a
coastal State to give directions in relation to salvage operations.

SC1989 - Article 13 – The Reward
1. The reward shall be fixed with a view to encouraging salvage operations, taking into
account following criteria without regard to the order as they are presented below:
(a) the salved value of the vessel and other property;
(b) the skill and efforts of the salvors in preventing or minimizing damage to the
environment;
(c) the measure of success obtained by the salvor;
(d) the nature and degree of the danger;
(e) the skill and efforts of the salvors in salving the vessel, other property and life;
(f) the time used and expenses and losses incurred by the salvors;
(g) the risk of liability and other risks run by the salvors or their equipment;
(h) the promptness of the services rendered;
(i) the availability and use of vessels or other equipment intended for salvage
operations;
(j) the state of readiness and efficiency of the salvor's equipment and the value thereof.
2. Reward payment fixed as above shall be made by all of the vessel and other property
interests in proportion to their respective salved values. However, a State Party may in
its national law provide that the payment of a reward has to be made by one of these
interests, subject to a right of recourse of this interest against the other interests for
their respective shares. Nothing in this article shall prevent any right of defence.
3. The rewards, exclusive of any interest and recoverable legal costs that may be payable
thereon, shall not exceed the salved value of the vessel and other property.

SC1989 - Article 14 – Special Compensation
1. If the salvor has carried out salvage operations in respect of a vessel which by itself or its
cargo threatened damage to the environment and has failed to earn a reward under
Article 13 at least equivalent to the special compensation assessable in accordance with
this article, he shall be entitled to special compensation from the owner of that vessel
equivalent to his expenses as herein defined.
2. If, in the circumstances set out in paragraph 1, the salvor by his salvage operations has
prevented or minimized damage to the environment, the special compensation payable
by the owner to the salvor under the paragraph 1 may be increased up to a maximum of
30% of the expenses incurred by the salvor. However, the tribunal, if it deems it fair and
just to do so and bearing in mind the relevant criteria set out in Article 13 may increase
such special compensation further, but in no event shall the total increase be more than
100% of the expenses incurred by the salvor.
3. Salvor's expenses for the purpose of paragraphs 1 & 2 means the out-of-pocket expenses
reasonably incurred by the salvor in the salvage operation and a fair rate for equipment
and personnel actually and reasonably used in the salvage operation, taking into
consideration the criteria set out in Article 13, paragraph 1(h), (i) and (j).
4. The total special compensation under this article shall be paid only if and to the extent
that such compensation is greater than any reward recoverable by the salvor under
Article 13.
5. If the salvor has been negligent and has thereby failed to prevent or minimize damage to
the environment, he may be deprived of the whole or part of any special compensation
due under this article.
6. Nothing in this article shall affect any right of recourse on the part of the owner of the
vessel.

SC1989 - Articles 15 to 20
15. Apportionment between salvors
16. Salvage of Persons
17. Services rendered under existing contracts
18. The effect of Salvor’s misconduct
19. Prohibition of salvage operations
20. Maritime Lien
21. Duty to provide security
22. Interim Payment
23. Limitation of actions
24. Interest
25. State owned cargoes
26. Humanitarian Cargoes

Why SCOPIC (1/2)
 “Nagasaki Spirit” is an English Admiralty Law case on marine salvage and on
Articles 13 & 14 of the Salvage Convention 1989. It is on a collision in Sep.1992
between oil tanker “Nagasaki Spirit” partially laden with 40,000 tons of crude oil, and
container ship “Ocean Blessing” in the Malacca Straits due to piracy, which spilled
12,000 tons of crude oil into the sea and both vessels caught fire. All the crew of
“Ocean Blessing” perished and only two crew of “Nagasaki Spirit” survived.
 Professional salvors agreed to salve “Nagasaki Spirit” under LOF 1990 (including
Articles 13 & 14 of the Convention). Using several tugs, the fire was extinguished,
the cargo trans-shipped and the vessel after salvage redelivered to her owners. The
salvage award took the following route:
 The Award Arbitrator fixed Special Compensation to encourage environmental
salvage.
 The Appeal Arbitrator increased the Article 13 award, and since that was higher than
the Article 14 award, he held that no Special Compensation was available.
 On appeal, the Admiralty Judge held that although "fair rate" imported the idea of
remuneration, which would normally include a profit element, the Appeal Arbitrator
was right to reject this.
 The Court of Appeal agreed with the Judge, so that "fair rate" was not to be a
"salvage reward".
 In the House of Lords, it was also agreed that "fair rate" meant "fair rate of
expenditure" and did not include any element of profit. (Because it was interpreting
an international convention, the House of Lords had felt constrained to interpret its
provisions “literally”, rather than “purposively”.

Why SCOPIC (2/2)
• The case identified problems with the drafting of the
Convention, a response to which was the 2000 SCOPIC codicil
which may be attached to the LOF to vary the terms of the
salvage reward.
• The Salvage Convention 1989 permitted salvage rewards to be
made to salvors who acted to limit damage to the coastal
environment after oil spills. Articles 13 & 14 of the Convention
made provision for "Special Compensation", but “Nagasaki
Spirit” case revealed that the Convention had been poorly
drafted, thereby limiting the amount that environmental
salvors could be paid to mere "out-of-pocket expenses", with
no allowance for any profit margin.
• Not only the salvors in this case, but the entire salvage
industry felt disappointed and let down by this case. As an
antidote to this, the marine insurance industry and P&I Clubs
jointly developed the “SCOPIC” Clause, which is a codicil that
may be appended to an Lloyd’s Open Form (LOF) and may be
invoked, should the statutory payment provisions prove
inadequate. The first SCOPIC clause was in year 2000, and
there have been several iterations since.

SCOPIC 2014 Clauses (1/8)
 General
 Invoking SCOPIC Clauses
 Security for SCOPIC Remuneration
 Withdrawal
 Tariff Rates
 Article 13 Award
 Discount
 Payment of SCOPIC Remuneration
 Termination

 Duties of Contractor
 Article 18 – Contractor Deprived of Payment
 Special Casualty Representative (SCR)
 Special Representatives
 Pollution Prevention
 General Average
 Dispute Resolution

General – Article 14
 This SCOPIC clause is supplementary to any Lloyd’s Form Salvage
Agreement “No Cure - No Pay” (“Main Agreement”) incorporating the
provisions of Article 14.
 The definitions in the Main Agreement are incorporated into this
SCOPIC clause.
 If the SCOPIC clause is inconsistent with any provisions of the Main
Agreement or inconsistent with the law applicable hereto, the
SCOPIC clause, once invoked shall override such other provisions to
the extent necessary to give business efficacy to the agreement.
 Subject to the provisions of the withdrawal clause, the method of
assessing Special Compensation under Article 14(1) to 14(4) shall be
substituted by:
 If this SCOPIC clause has been incorporated into the Main
Agreement the Contractor may make no claim pursuant to Article 14
except in the circumstances described in sub-clause 4 hereof.
 For the purposes of liens and time limits the services hereunder will
be treated in the same manner as salvage.

Invoking the SCOPIC Clause
 The Contractor shall have the option to invoke, by
written notice to the owners, the SCOPIC clause at
any time of his choosing regardless of the
circumstances and, in particular, regardless of
whether or not there is a “threat of damage to the
environment”.
 The assessment of SCOPIC remuneration shall
commence from the time the written notice is given
to the Owners.
 Services rendered before the said written notice
shall not be remunerated under this SCOPIC
clause at all, but in accordance with Article 13 as
incorporated into the Main Agreement.

Security for SCOPIC Remuneration
 The Owners of the vessel shall provide to the contractor
within 2 working days after receiving written notice from the
Contractor invoking the SCOPIC clause, a bank guarantee or
P&I Club letter (hereinafter called “the Initial Security”) as
security for his claim for SCOPIC remuneration in the sum of
US$3 million, inclusive of interest and costs.
 If, at any time after the Initial Security, the Owners finds this is
higher, the Contractor shall be obliged to agree for a
reasonable sum.
 If, at any time after the Initial Security, the Contractor finds
this is lower, the Owners shall be obliged to agree for a
reasonable sum.
 In the absence of agreement, any dispute concerning the
proposed form of security/guarantee, shall be resolved by the
Arbitrator.

Withdrawal
 If the Owners do not provide the Initial Security within the said
2 working days, the Contractor, at his option, and on giving
notice to the Owners, shall be entitled to withdraw from all the
provisions of the SCOPIC clause and revert to his rights under
the Main Agreement including Article 14 which shall apply as if
the SCOPIC clause had not existed.
 Provided that, this right of withdrawal may only be exercised if,
at the time of giving the said notice of withdrawal, the Owners
have still not provided the Initial or any alterative Security.
Tariff Rates
 SCOPIC remuneration shall mean the tariff rates of personnel,
tugs/craft, portable salvage equipment, out of pocket expenses
(as per SCOPIC 2017 Appendix A Tariff rates) and bonus due.
 In addition to the rates set out above, the Contractor shall be
entitled to a standard bonus of 25% of those rates, subject to
certain other provisions.

Article 13 - Award
 The salvage services under the Main Agreement shall continue to be assessed
in accordance with Article 13, even if the Contractor has invoked the SCOPIC
clause. SCOPIC remuneration as per the SCOPIC Tariff will be payable only by
the Owners and only to the extent exceeding the total Article 13 Award (or, if
none, any potential Article 13 Award) payable by all salved interests (including
cargo, bunkers, lubricating oil and stores) even if the Article 13 Award or any
part of it is not recovered.
 The salvage Award under Article 13 shall not be diminished by reason of the
exception to the principle of “No Cure - No Pay” in the form of SCOPIC
remuneration.
Discount
 If the SCOPIC clause is invoked and the Article 13 Award or settlement under
the Main Agreement is greater than the assessed SCOPIC remuneration then,
notwithstanding the actual date on which the SCOPIC remuneration provisions
were invoked, the said Article 13 Award or settlement shall be discounted by
25% of the difference between the said Article 13 Award or settlement and the
amount of SCOPIC remuneration that would have been assessed had the
SCOPIC remuneration provisions been invoked on the first day of the services.

Payment of SCOPIC Remuneration
 If there is no potential salvage award as per Article 13 as incorporated into the Main
Agreement then, the undisputed amount of SCOPIC remuneration due hereunder will
be paid by the Owners within 1 month of the presentation of the claim. (with
applicable interest from the termination of salvage services)
 If there is a claim for an Article 13 salvage award as well as a claim for SCOPIC
remuneration, 75% of the amount by which the assessed SCOPIC remuneration exceeds
the total Article 13 security demanded from ship and cargo, will be paid by the owners
within 1 month and any undisputed balance when the Article 13 salvage award is
assessed and falls due (with applicable interest from the termination of salvage
services)
Termination
 The Contractor entitled to terminate the services under the SCOPIC clause and the
Main Agreement by written notice to Owners, if the total cost of his services to date
and the services that will be needed to fulfil his obligations will exceed the sum of: (a)
The value of the property capable of being salved and (b) All sums to which he will be
entitled as SCOPIC remuneration
 The Owners may at any time terminate the obligation to pay SCOPIC remuneration
after the SCOPIC clause has been invoked, provided that the Contractor shall be
entitled to at least 5 clear days’ notice of such termination. In the event of such
termination the assessment of SCOPIC remuneration shall take into account all monies
due under Appendix A Tariff rates hereof including time for demobilisation of his
equipment (if exceeding the 5 days’ notice of termination).
 The termination provisions as above shall only apply if the Contractor is not restrained
from demobilising his equipment by the Local Authorities having jurisdiction over the
area where the services are being rendered.

Special Casualty Representative
 Once this SCOPIC clause has been invoked, the owners of the vessel may at
their sole option appoint an SCR to attend the salvage operation in accordance
with the terms and conditions set out.
 Any SCR so appointed shall not be called upon by any of the parties hereto to
give evidence relating to non-salvage issues.
 At any time after the SCOPIC clause has been invoked, the Hull and Machinery
underwriter (or, if more than one, the lead underwriter) and one owner or
underwriter of all or part of any cargo on board the vessel may each appoint
one special representative (hereinafter called respectively the “Special Hull
Representative” and the “Special Cargo Representative” and collectively called
the “Special Representatives”) at the sole expense of the appointer to attend
the casualty to observe and report upon the salvage operation on the terms
and conditions set out.
 Such Special Representatives shall be technical men and not practising
lawyers.

LOF 2011 Amendments (1/2)
• Important Notices No. 3 - Awards
• LOF 2011 – Important Notices No. 4 – Notification to Lloyd's
• LSSA Clauses - Security for Arbitrator's and Appeal
Arbitrator's Fees
• LSSA Clauses – Availability of Awards/Appeal Awards –
Clause 12
• LSSA Clauses – Special Provisions – Container Vessels
• Clause 13 – Notice to the Guarantors and Representation
• Clause 14 – Settlements involving laden container vessels
• Clause 15 – Low Value Cargo

LOF 2011 Amendments (2/2)
 The potential effect of LSSA Clauses 13, 14 and 15 is to
reduce the cost of collecting salvage security and obtaining
an award against the containerized cargo interests.
 The accessibility of arbitrators' awards or appeal awards
and reasons is another step towards making the LOF
process more transparent and is likely to lead to more
consistency between decisions in much the same way as
reporting court cases assists users of the judicial system.
 The requirement of notification to Lloyd's of every LOF
case will assist in better gauging the actual level of use of
LOF. Whilst it is hoped that salvage remuneration issues
can be resolved without the parties resorting to arbitration,
the requirement for the provision of security for arbitrators'
fees will help satisfy any concerns as to the arbitrators'
exposure to the potential non payment of arbitrators' fees.
 The changes described above once again signify LOF's
ability to adapt and change to the needs and concerns of
the shipping and salvage industries.

LLOYD’S STANDARD FORM OF SALVAGE AGREEMENT (1/2)
A. Contractors’ basic obligation.
B. Environmental protection.
C. Scopic Clause.
D. Effect of other remedies.
E. Prior services.
F. Duties of property owners.
G. Rights of termination.
H. Deemed performance.
I. Arbitration and the LSSA Clauses.

LLOYD’S STANDARD FORM OF SALVAGE AGREEMENT (2/2)
J. Governing law.
K. Scope of authority.
L. Inducements prohibited.
IMPORTANT NOTICES
1. Salvage security.
2. Incorporated provisions.
3. Awards.
4. Notification to Lloyd’s.

LLOYD’S STANDARD SALVAGE AND ARBITRATION
CLAUSES (1/2)
1. Introduction.
2. Overriding Objective.
3. Definitions.
4. Provisions as to Security, Maritime Lien and
Right to Arrest.
5. Appointment of Arbitrators.
6. Arbitration Procedure and Arbitrators Powers.
7. Representation of Parties.
8. Interest.
9. Currency Correction.
10. Appeals and Cross Appeals.

LLOYD’S STANDARD SALVAGE AND ARBITRATION
CLAUSES (2/2)
11. Provisions as to Payment.
12. Awards.
13. Special Provisions
General Provisions
16. Lloyd’s documents.
17. Contractors’ personnel and subcontractors.
18. Disputes under SSCOPIC Clause.
19. Lloyd’s Publications.

The Salvage Questionnaire (1/2)
 Does a salvor need an affirmative salvage consent
from the Master or owner ?
 Can the salvage services be thrust upon an unwilling
Master?
 Whether it is necessary for the vessel’s Master or
owner to affirmatively agree to the rendering of
salvage services, when a prudent man would have
accepted salvage services under such circumstances?
 Whether the salvor can retain the vessel with him until
rewarded ?
 Can the salvor become a high-priority possessory or
have preferred maritime lien on the vessel?
 Can the salvor become the owner of the vessel?

The Salvage Questionnaire (2/2)
 Whether a salvor can salvage an abandoned vessel,
which was derelict or even temporarily left?
 Under such circumstances, can the salvor be
considered as a trespasser or can he proceed to assist
the vessel and make a claim for a salvage award ?
 Does the national law apply when the vessel is within
the territorial waters of a sovereign nation?
 Does signing of the salvage contract by the Master
after rendering of the assistance by salvor require the
authority of owner?
 Can a salvage contract be set aside under the pretext
of being signed under duress?

Salvage Cases
Four cases of salvage done on
the Indian Coast will be
presented, giving insight into
the various aspects of the
presentation made.

Marine Salvage For Cmmi Master Class By M. V. Ramamurthy

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