M.V. Ramamurthy Shipowner's Views on Salvage & Wreck Removal CMMI

1. CMMI Seminar
“Challenges in Marine Salvage & Emergency Response
Shipowner’s Viewpoint during Salvage &
Wreck Removal
BY
M.V. Ramamurthy
25th
May 2019

2. 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.

3. The Concept of Peril (2/3)
 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.
 This understanding of “peril” by the Master and the Shipowner is
essential.

4. The Concept of Peril (3/3)
 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.

5. 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.

6. Perils in Grounding (2/3)
 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 equipment, may
require the management of fuel, drinking water, bilge water,
ballast water and other consumables.

7. Perils in Grounding (3/3)
 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.

8. Marine Salvage
 Seamen, Engineers and Specialists 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/understanding of the underwriters.
 The process of recovering/refloating a ship, its cargo or other property when a
ship is in peril or after a ship-wreck 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.
 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.
 Place of rendering the services. Type of property saved - ship, stores and
apparel, cargo, freight at risk.
 Success – assessed at the termination of the salvage – can be partial.

9. London Salvage Convention 1989
• The International Convention on Salvage[
is a treaty that was concluded in London on 28 April
1989 that entered into force on 14 July 1996 and replaced the 1910 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 impetus for the Convention was the LOF, permitting
salvage rewards to salvor who acted to limit damage to the coastal environment after oil
spills.
• The Convention introduced a "safety net" as a” Special Compensation P&I Club (SCOPIC)”
where a salvor performs salvage operations for a vessel or its cargo threatened environment.
The SCOPIC Clause is supplementary to the Lloyd’s Open Form Salvage Agreement (LOF).
• The 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
Convention 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 even if failed to salvage the ship or its cargo.
• 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

10. Essence of 1989 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;

11. Essence of 1989 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.

12. 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 annulment 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.

13. 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.

14. SC1989 - Article 14 – SCOPIC
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.

15. 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.

16. 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.

17. 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.

18. 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.
1. 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.
2. 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.

19. 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

20. Special Casualty Representative (SCR)
 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.

21. 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

22. 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.

23. LOF PROCESS
FLOW CHART
Source: 2012 Report Lloyds.com

24. Marine Casualties
 Legislation concerning Marine Casualties in every State may vary slightly and
local legislation shall be referred for specific detail, but generally a ‘casualty’ is
deemed to have occurred when:
• A vessel is lost, abandoned, stranded, grounded, or materially damaged
(whether by fire or otherwise), or has been in a collision with another vessel
or with any other thing;
• There is a loss of life or injury to a person due to an accident occurring on a
vessel.
 No matter how minor the grounding, fire, injury etc. are considered, still the
procedures of recording and reporting are to be followed.
 Immediately after the casualty, it may not be possible to assess damage done
to the vessel.
 There could be legal ramifications at a later date, which is difficult to evaluate
and understand fully at the time of casualty.
 There could be a need for Salvage Services.

25. Action to be taken by Master in all casualties
 If appropriate, emergency procedures to be initiated.
 Whatever action deemed necessary to be taken as per planned
responses to minimise the danger, while noting the
chronological order of all the events leading up to and during
the Casualty.
 Detailed entry into ship’s Official Log Book/Record Book noting
times, actions taken, response of other vessel, weather and
visibility details, etc.
 These details will be required to substantiate reports, insurance
claims and will be invaluable when the casualty leads to an
official investigation.
 A full report to the appropriate authority is to be made at the
earliest opportunity, say, within usually 24 hours.
 Appropriate timely actions by Master in a situation of
peril/casualty will be very useful in the event of salvage
operations.

26. Master’s Action on ship casualty (1/2)
Master of a vessel in casualty, before attempting his own salvage endeavours, should
consider the following:
The Master should ensure that he does not endanger his own vessel further or his crew in
the operation.
The Master should be satisfied that his endeavours will lead to success and will not further
aggravate the situation.
The question really is to what extent should a master and crew be expected to resolve
problems themselves by “self helping” when it may be that by so doing the risks to the
vessel, its cargo, the environment and, more importantly, the crew, might be increased.
The Master should advise his owners of his intention to attempt his own salvage
endeavours and the information from the Master to the Owners is to be precise and timely,
so that any salvage help can be made available by owners without delay. The Master
should also inform his charterers.
The Master should establish that his endeavours will not invalidate the insurance of his
vessel.
The world has zero tolerance for marine pollution (oil spills), and timely action by the
Master can save a catastrophe.
The Master should have adequate knowledge of the Salvage Convention 1989, the LOF
and the SCOPIC.

27. Master’s Action on ship Casualty (2/2)
 The master can often obtain guidance and advice from his
owners. Its usefulness in solving a problem or alternatively
providing a false sense of security depends on circumstances and
it is for the Master to advise the shipowner for deciding whether
he requires salvage assistance and what kind.
 The decision depends on the urgency of the situation, proximity
of the ship to the coast/seabed, sea/weather conditions, the
extend of damage suffered by the vessel, possibility of
aggravating the damage, the threat of pollution the coast, the
risk to the crew, communication facilities in operation, the
availability of timely external assistance etc.
 A competent master is best placed to interact with the shipowner
for advice and at the same time act on his own without delay.

28. Salvage Situation Coordination
 The demanding interventions during the salvage from coastal authorities proactive in
protecting their waters translate into expense for the shipowner and underwriters.
 Hence, timely co-operation after a casualty with a common goal between the
shipowner, their underwriters and salvors and shore-based authorities is vital for a
successful salvage to mitigate the damage to the vessel, cargo and environment and
to prevent loss of life/injury to the crew.
 The SCR is appointed by the owner or his P&I Club to represent all salved interests
including property with the primary duty to attend/assist the salvage operation with
the best interests in the salvage of the vessel and its cargo and to minimize damage to
the environment. The salvage master and the shipowner must cooperate with the SCR
and permit him to have full access to the vessel to observe the salvage operation and
to inspect such of the ship’s documents as are relevant to the salvage operation SCR.
The success of the SCOPIC system depends on the impartiality which SCRs are able to
bring to the casualty response, working with the salvors and other interests in the
common cause. However, the SCR’s role is limited to salvage issues alone.
 In any casualty, various conventions, guidelines, national response plans, rules and
regulations become relevant and timely assistance may be delayed due to practical
difficulties of local regulations for which alignment is vital of shipowners and salvors
with all these agencies.

29. Co-ordinated Training for a Salvage
Situation• Response efficiency is increased by detailed contingency planning and joint
training. Response inventories should include listings of all salvage assets held at
local, regional, national and international level. Best practice would provide for
joint training and exercises involving response agencies and commercial salvors.
• The idea is to ensure that if ever deployment is ever required, prior training and
familiarization will facilitate the immediate entry for salvage teams and their
equipment, with no delays at the place of entry due, for example, to customs
requirements and regulations.
• For facilitating quick and effective response, the ISU regards the UK’s model as
the outstanding example of best practice in terms of command, control and
cooperation. In the UK a senior civil servant is appointed as the Secretary of
State for Transport’s Representative – shortened to SoSREP who combines an
understanding of salvage with an extraordinary degree of delegated political
authority. In fact, under the UK system politicians may not intervene while a
salvage operation is still in progress. All the key decision-making is focused on
just two individuals: SoSREP and the salvage master. This model is enhanced
even further when the ship’s interests are aligned and supportive.
• Salvors need freedom of action if they are to use their best endeavours. They
need to be confident that their plan, personnel and equipment will be supported
by the ships interests.

30. Places of refuge
• In some cases cooperation between responders and authorities will lead
to permission to enter a place of refuge. Following the loss of the
Prestige and the severe consequences for Spain, the International
Maritime Organization (IMO) accelerated its work on the Place of Refuge
Guidelines.
• These were adopted at the November 2003 Assembly. The International
Salvage Union (ISU) has welcomed the introduction of those Guidelines
but stated that they are too narrowly focused and concentrate on the
“refuge” issue without addressing many other important aspects of
casualty management. Today, there is still no IMO instrument providing a
comprehensive best practice model for the complete casualty response
process.
• The Comite Maritime International (CMI) has also drafted an
International Convention on Places of Refuge which is a very welcome
development. At the same time, however, ISU believes that
consideration should be given to expanding the existing Place of Refuge
Guidelines into broader-based Casualty Management Guidelines. A draft
of such guidelines has been produced by ISU and is currently being
discussed with stakeholders. Such guidelines could, in due course, be
developed into an International Convention on Marine Casualty
Management.

31. Conclusion
• The shipowners need to ensure that the masters and superintendents of
their ships have undergone training courses on casualty situations and
responses to them. Masters and owners Superintendents need to have
adequate knowledge on UNCLOS, Salvage Laws & Conventions,
LOF/SCOPIC/ITOPF etc. Complete knowledge of their ships and trading
routes by them and their timely actions will help to mitigate the salvage
situations.
• In a marine casualty response, the potential for disagreement, delay and
confrontation are all expected. Circumstances are usually challenging
requiring immediate response, the environment is difficult, the authorities
are demanding and the money at stake is very high. The shipowner, the
superintendents and the master need to have full understanding of the
situation during the salvage operation.
• It is essential that the shipowner and the salvors are aligned and work
cooperatively together to prevent loss of life, injury and damage to the
marine environment. Speed of response is key and delay brought on by
interference from those who are not at the scene having the full picture
are not to be entertained. All concerned parties with responsibilities are
to work with real cooperation for a successful outcome.

32. 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.

33. 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.

34. Nairobi Wreck Removal Convention 2007 (WRC)
Nairobi Wreck Removal Convention 2007 (WRC) entered into force on the
14th
of April 2015.
•Who is responsible for a Wreck? The registered owner of a ship bears strict
liability, but can be exonerated by certain limited defenses.
•What measures can and are to be taken based on that responsibility?
Includes locating, marking and subsequently removing the wreck
•How can the responsibility be enforced? On the registered owner: but if he
is non-contactable or non-cooperative, options are available for the
affected State.
•Convention ensures compulsory insurance of ships of 300GT and above.
•The affected State can also claim directly from the Insurer.
•The Convention provides a unified Framework for wreck removal, but is
part unclear, ambiguous and inhibits harmonization.

35. Salient Points of WRC (1/2)
• Area of Application and types of Wrecks
• When & How a State can take action
• Measures to report, locate and mark a wreck
• The Owners responsibility (not the Manager) – Measures to be
taken, cost of wreck removal, owners right to limit liability
• Compulsory Insurance
• Time Limits – 6 years from casualty for affected state to declare
as wreck and 3 years for claim since wreck is declared as hazard.
• Settlement of Disputes – Art. 15.1 and 15.2
• WR Liability Certificate on board.

36. Salient Points of WRC (2/2)
• Two types of wrecks – one for wrecks obstructing navigation and the other
of environmental concern.
• Art. 1.1 - Applicable to the Exclusive Economic Zone of the State as per the
international Law – not on territorial waters or international waters.
• Art. 3.2 - “opt-in-clause” allows extension to “within its territory including
the territorial sea” hence covering internal waters as well.
• Art. 1.2 - Definition of a ship.
• Art. 1.7 - “Removal” means any form of prevention, mitigation or
elimination of the hazard created by a wreck. “Remove”, “removed” and
“removing” shall be construed accordingly.
• Art. 1.3- Definition of wreck - Wreck Includes stranded/sunken ships and
objects onboard.
• Art.5 - Master or ship operator to report without delay maritime casualty
resulting in wreck.

37. Wreck Removal Insurance Cover
• In a wreck removal, as opposed to salvage, the ship is recovered from being
completely destroyed but not put to further use. As a result, wreck removal
is a risk covered by Protection and Indemnity (P&I) insurance, whereas
salvage is covered, in principle, by Hull and Machinery (H&M) insurance.
• Mutual P&I Cover is designed to the raising, removal, destruction or the
marking of the wreck of the entered vessel and any attendant debris lost as
a result of the casualty, where ordered by law/government or to remove to
navigational obstruction. For conventional shipping casualties this applies.
• However, for the offshore sector, normally the circumstances of wreck
removal is governed by the contract. The charterers or their client consider
if the casualty will interfere with their operations, the owners shall be
liable for the removal of the wreck. In contractual wreck removal, the
charterers may also include the liability for the owner for “”Site Clearing”.
Owners can take special covers from their P&I Club for liabilities outside
the Mutual Cover as MOU P&I Cover.

38. Conclusions
 Advantage of the convention:
• Provides a uniform regulation of wrecks stating clearly states the registered owner as the one
responsible for the wreckage, but also enabling the Affected State to act in situations where
immediate action is needed. Furthermore, the convention also ensures monetary compensation
following wreck removal.
• It further states on measures in the form of reporting, locating, marking and removing the wreck that
can and are to be taken after a wreckage.
• Ensures that possibility of enforcement by compulsory insurance on the behalf of the owner combined
with a possibility of claiming the insurer directly.
• Hence, Nairobi Convention is a step in the right direction toward a unified framework for wreck
removal.
 Disadvantages of the convention.
• A peculiar inclusion is the opt-in clause that allows States to extend the application to the territorial
sea and internal waters, inhibiting harmonization in direct opposition with the wording in the
preamble on the Convention.
• Lack of uniformity when it comes to limitation as some States have opted out of the possibility to limit
liability when it comes to wreck removal in the LLMC as amended. There may also exist different
national regimes in this respect.
• The convention also includes some unclear and ambiguous articles, e.g., the already mentioned art.
2.1 and art. 16 WRC.
• Another thing to keep in mind is the definition of removal in the convention which opens up for other
measures than an actual wreck removal in toto.

39. LLMC Convention

40. Acknowledgement
All the information contained in this
presentation is referred from the sources
available in the Public Domain and the relevant
sources, including the ISU, 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.

41. 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?

42. 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?

43. Thank You