SALVAGE

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Salvage
Aspects of salvage

-Salvage must be considered from four aspects:

1-The common law aspect;

2-The statutory aspect; and
3-The contractual aspect,
4-The practical seamanship aspect.

Common law aspect of salvage

Essential elements in a salvage service

-In common law any salvage service rendered will not qualify for a salvage reward unless the following conditions
are all met:

1-The salvage service must be voluntary;

2-The salvage service must be rendered to a recognized subject of salvage;
3-The subject of salvage must be in danger; and
4-The salvage service must be successful.

-These common law principles would be applied by a court in the absence of any express contract terms and where
no overriding statutory provisions applied.

Voluntary service

-The person rendering the salvage service must be a “volunteer”, i.e. he must not be under any pre-existing contract
or statutory duty to render the service.

-The crew of a ship cannot, therefore, claim salvage in respect of their own ship unless the crew agreement has been
terminated either expressly or by implication or the services rendered are in excess of what could reasonably be
expected of them under the contract.

-Harbor tugs and pilots are in a similar position.

-Tugs called out in an emergency would be “volunteers”, but tugs engaged under a previously arranged towage
contract would not be “volunteers”.

Recognized subject of salvage

-Salvage services can only be rendered to “maritime property”, i.e. property at risk of being lost if the salvage service
is not rendered.

-“Maritime property” includes vessels, their equipment, cargo, bunkers, wreck and the freight that stands to be lost
by non-completion of the voyage.

-Salving of ships’ provisions, passenger’s and crew’s personal effects, and other property saved at sea, e.g. drifting
navigation buoys, do not qualify for salvage rewards.

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-The saving of life, called “life salvage”, may qualify, provided property is also saved from which a life salvage
award can be made.

-A salvage award is also payable in respect of aircraft in danger of being lost at sea.

In danger

-The danger must be such that any prudent master would consider it reasonable to accept an offer of salvage assistance.
This means that a real peril must be threatening the property at the commencement of the salvage service, but it need
not be present or imminent.

-For example a vessel which has lost her propeller at sea will be in peril, since she will eventually either run aground or
founder. The danger, although not necessarily imminent, makes it imperative to call for assistance.

Successful

-Since the salvage reward is payable out of value of the property saved, it follows that unless something of value is
saved, there can be no salvage reward. This is what is meant by the well-known “no-cure, no-pay” salvage principle.

-The service need not be entirely successful, however, as long as something is saved from which a reward can be
paid.

Salvage claims under common law

-A salved vessel’s own master, crew and pilot cannot normally claim salvage for saving their own vessel, since they
are employed to preserve her from danger. However, any person performing duties in excess of those expected
under the terms of his contract of employment may have a valid claim for salvage.

-When a crew properly abandons their vessel (on the orders of the master and without hope or expectation of returning
to her), the crew are no longer employed under the crew agreement and the vessel becomes a “derelict”. If the (former)
crew members subsequently manage to re-board and save the vessel, they do so as volunteers and may have a valid
claim to a salvage reward.

Salvage reward

-To qualify for a salvage reward, salvage services must be rendered.

-A salvage reward is not payable where a vessel stands by without actually rendering salvage services.

-The salvage services must be rendered in tidal waters, i.e. on the high seas or in waters directly connected therewith.

-A salvage reward is payable to the salvor on the successful conclusion of the salvage services, i.e. after some
recognized subject of salvage, of some value, has been saved.

-The salvage reward is paid out of the value of the property saved and can not, therefore, exceed this value.

-The size of the salvage reward will depend on many factors including the degree of danger, the enterprise and
skill of the salvors, the degree of risk to which the salvors were exposed, the extent of labour of the salvors, the risk
to the salvor’s property, the value of property saved, and the loss, if any, incurred by the salvor.

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-Where a merchant ship has performed salvage services the salvage reward is normally divided between the
shipowner (and charterer if any), and the master and crew, the proportions varying according to the degree of
effort by each.

-The beneficiaries of salvage services, and therefore the parties liable to pay the salvage reward, are the owners of
the property salved by the salvor, who may include:

1-the owner of a salved vessel;

the owners of any equipment fitted on the vessel (e,g. diving equipment or cable-maintenance equipment fitted
on a chartered ship);
owners of salved cargo (i.e. cargo salved from a vessel or from the sea);
4-the owner of salved bunker fuel (e.g. a time charterer); and
5-the party to whom any freight at risk (i.e. unpaid freight) is due.

-Where there is a “common maritime adventure”, i.e. a voyage in which there are several participant owners of
property at risk, each party is liable for a contribution to any salvage reward in proportion to his share of the total
salved values.

Salvor’s maritime lien

-A salvage reward may not be known for some months after the completion of the salvage services. In the meantime
the salvor’s rights are protected by his maritime lien on the property salved. (Where LOF has been used, the salvor
also has a contractual lien on the salved property for his security.)

-In practice a salved cargo will have to get to its market and a salved ship will have to continue trading.

-Owners of salved property are therefore usually willing to pay security to the salvor pending the final reward being
made by the court or arbitrators.

-Where no security is forthcoming, the salvor may enforce his lien by retaining possession of the property saved and
applying to a court to have the property arrested and, if necessary, sold in order to pay the reward.

General Average and salvage

-Salvage expenditure is normally allowed as General Average. Rule VI - Salvage Remuneration - of the York-
Antwerp Rules 1994 provides: “Expenditure incurred by the parties to the adventure on account of salvage, whether
under contract or otherwise, shall be allowed in General Average to the extent that the salvage operations were
undertaken for the purpose of preserving from peril the property involved in the common maritime adventure.”

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Statutory aspect of salvage

International Convention on Salvage 1989

-“Salvage operation” means any act or activity undertaken to assist a vessel or any other property in danger in
navigable waters or in any other waters whatsoever. (Article 1a)

-“Vessel” means any ship or craft, or any structure capable of navigation. (Article 1b)

-“Property” means any property not permanently and intentionally attached to the shoreline and includes freight at
risk. (Article 1c)

-The convention will apply whenever judicial or arbitral proceedings are brought (i.e. before a court or arbitrators) in
a country which is party to the Convention. (Article 2)

-The convention will not apply to mobile oil or gas rigs when they are on location and working, but will apply when
they are in transit between locations. (Article 3)

-The convention will not apply to warships and other non-commercial vessels owned or operated by a State and
entitled to sovereign immunity under international law unless the State decides otherwise. (Article 4)

-The convention will not affect provisions of any national laws or any international convention relating to salvage
operations by or under the control of public authorities. (Article 5)

-The convention will apply to any salvage operations save to the extent that a contract otherwise provides, either
expressly or impliedly. (Article 6)

-The master of the salved vessel will have the authority to conclude salvage contracts on behalf of the owner, and
the master or the owner will have the authority to conclude salvage contracts on behalf of the owner of property
on the vessel. (Article 6)

-A contract or any contract terms may be annulled or modified if: (Article 7)

1-The contract was agreed under undue influence or the influence of danger and its terms are inequitable; or

2-The payment agreed is in an excessive degree too large or too small for the services actually rendered.

-Under convention article 8.1 the salvor will owe a duty to the owner of the vessel or other property in danger:

1-To carry out the salvage operations with due care;

2-To exercise due care to prevent or minimize damage to the environment;

3-Whenever circumstances reasonably require, to seek assistance from other salvors; and

4-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 that the amount of his reward will not be prejudiced if it is found that
the request was unreasonable.

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-Under article 8.2 the owner and master of the vessel or the owner of other property in danger will owe a duty to
the salvor:

1-To co-operate fully with him during the salvage operations;

2-To exercise due care to prevent or minimize damage to the environment;

3-When the vessel or property have been brought to a place of safety, to accept redelivery when reasonably
requested by the salvor.

-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. (Article 9)

-Every master must, so far as he can do so without serious danger to his vessel and persons on board, render
assistance to any person in danger of being lost at sea (article 10).

-Co-operation: A State Party shall, whenever regulating or deciding upon matters relating to salvage operations such
as admittance to ports of vessels in distress or the provision of facilities to salvors, take into account the need for co-
operation between salvors, other interested parties and public authorities in order to ensure the efficient and successful
performance of salvage operations for the purpose of saving life or property in danger as well as preventing damage
to the environment in general. (Article 11)

Rights of salvors

-Salvage operations which have had a useful result give right to a reward. (article 12.1)

-Except where special compensation is due, no payment will be due if there is no useful result. (article 12.2)

-The salvor’s rights are not affected where he owns both the salving and salved vessel. (article 12.3)

-Article 13.1 contains the criteria for fixing the reward. The reward will be fixed with a view to encouraging
salvage operations, taking into account the following criteria (without regard to the order of the list):

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 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.

-Payment of the reward will be made by the vessel and other property interests in proportion to their respective
salved values. (article 13.2)

-The rewards, exclusive of any interest or legal costs, will not exceed the salved value of the vessel and other
property. (article 13.3)
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-Salvage of persons: No remuneration is due from persons whose lives are saved, but nothing in this Article shall
affect the provisions of national law on this subject. A salvor of human life, who has taken part in the services rendered
on the occasion of the accident giving rise to salvage, is entitled to a fair share of the payment awarded to the salvor for
salving the vessel or other property or preventing or minimizing damage to the environment. (Article 16)

-Services rendered under existing contracts: No payment is due under the provisions of this convention unless the
services rendered exceed what can be reasonably considered as due performance of a contract entered into before the
danger arose. (Article 17)

-The effect of salvor's misconduct: A salvor may be deprived of the whole or part of the payment due under this
convention to the extent that the salvage operations have become necessary or more difficult because of fault or neglect
on his part or if the salvor has been guilty of fraud or other dishonest conduct. (Article 18)

-Prohibition of salvage operations: Services rendered notwithstanding the express and reasonable prohibition of the
owner or master of the vessel or the owner of any other property in danger which is not and has not been on board the
vessel shall not give rise to payment under this Convention. (Article 19)

Special compensation

-If the salvor has carried out salvage operations in respect of a vessel which by itself or its cargo threatened damage
to the environment, have failed to earn a reward at least equivalent to the special compensation assessable under the
convention (because, for example, of the low values of the vessel and/or cargo salved), the salvor will be entitled to
special compensation from the vessel’s owner equivalent to his expenses, i.e. his out-of-pocket expenses reasonably
incurred in the salvage operation and a fair rate for equipment and personnel actually and reasonably used. (article 14.1)

-The special compensation payable by the owner may be increased up to a maximum of 30% of the salvor’s expenses
(i.e. it may be 130% of his expenses). However, the tribunal, if it deems it fair and just to do so, and bearing in mind
the relevant criteria for fixing the reward, may increase the special compensation up to a maximum of 100% of the
salvor’s expenses (i.e. the salvor may recover between 130% and 200% of his expenses). (article 14.2)

-The total special compensation under article 14 will be paid only if and to the extent that it exceeds any reward
recoverable by the salvor under article 13. (article 14.4)

-If the salvor has been negligent and has thereby failed to prevent or minimize damage to the environment, he may
be deprived of all or part of his special compensation. (article 14.5)

Claims and actions

-Nothing in the Convention will affect the salvor’s maritime lien under any international convention or national
law. (article 20.1)

-The salvor may not enforce his lien when satisfactory security for his claim, including interest and costs, has been
paid. (article 20.2)

-On the request of the salvor a person liable for a salvage reward or special compensation must provide satisfactory
security for the claim, including interests and costs of the salvor. (article 21.1)

-The owner of the salved vessel must use his best endeavors to ensure that the owners of the cargo provide satisfactory
security for the claims against them including interest and costs before the cargo is released. (article 21.2)

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-The salved vessel and other property must not, without the salvor’s consent, be moved from the port or place where
they first arrive after completion of the salvage operations until satisfactory security has been put up. (article 21.3)

-The apportionment of a reward between salvors will be made on the basis of the criteria in article 13 of the
convention (article 15.1).

-The apportionment between the owner, master and other persons in each salving vessel will be determined by the
law of the flag State. (article 15.2)

Convention provisions on government intervention in maritime casualty incidents

-Nothing in the Convention will affect the right of a coastal State to take measures in accordance with the generally
recognized principles of international law to protect its coastline or related interests from pollution upon a maritime
casualty or acts relating to a maritime casualty which may reasonably be expected to result in major harmful
consequences, including the right to give directions in relation to salvage operations (Salvage Convention, article 9).

-If the vessel is on the high seas, then under the International convention relating to intervention on the high seas in
cases of oil pollution casualties 1969, and the protocol relating to intervention on the high seas in cases of marine
pollution by substances other than Oil 1973, the government of any country that is threatened by pollution may take
measures to prevent, mitigate or eliminate any grave and imminent danger of pollution. The government must consult,
if possible, with other affected governments, including the ship’s flag State Administration and the owners of the ship
and cargo, if known. Measures taken must be reasonably necessary for the purpose, and compensation is payable if
damage is caused by excessive measures.

Contractual aspect of salvage

Salvage agreements

-Although the right to a salvage reward exists independently of contract, most salvage services are rendered under an
agreement (i.e. a contract) of one sort or another.

-Any agreement made for salvage services will not alter the statutory obligations of the parties involved.

-There are two main types of salvage agreement:

1-On the basis of ordinary tariff, fixed lump sum or daily rate; and

2-On the basis that remuneration will be settled later, whether by agreement, court judgment or arbitration.

-Salvage services arranged on basis of ordinary tariff, lump sum, etc. is usually cheaper and should always be
obtained if time allows, e.g. where the vessel is “soft aground” in a sheltered, non-tidal harbor and not in imminent
danger. In these cases assistance will normally be arranged by the owner through negotiation with tug companies, etc.
Salvage on this basis may also be used when a sunken or capsized vessel is raised.

-Salvage on the basis that remuneration will be settled later includes services rendered in times of imminent danger
to the ship or environment.

-Salvage contracts on the basis of ordinary tariff, fixed lump sum or daily rate must be approved by hull
and P&I underwriters.

-The agreement most often used in such cases is Lloyd’s Standard Form of Salvage Agreement, commonly known
as “Lloyd’s Open Form” or “LOF”.
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-Advantages of using LOF may be summarized as:

1-Agreement can be reached via radio (if witnessed) or other telecoms methods; there is no need for the form to be
signed until the salvage services have been completed;

2-The agreement is less likely to be disputed;

3-LOF is basically a “no-cure, no-pay” agreement;

4-English law applies to claims;

5-The salvor has a maritime lien in the property salved, even after its sale to another party (e.g. where a salved ship
or cargo is sold to try to avoid having to pay salvage charges);

6-Salved property can be quickly released on payment of security to the salvor;

7-The salvor gets an interim award;

8-Disputes are referred to arbitration in London, saving legal costs;

9-Uderwriters’ liability cannot be increased beyond that for total loss (i.e. underwriters will not be liable for “sue and
labor” costs where a total loss occurs);

10-Excessive claims by salvors are avoided. and

11-LOF is not required to be approved by hull underwriters and P&I club.

Lloyd’s Open Form 2011

-Should be used where the ship or marine environment are at risk and the master has insufficient time to request the
owner to arrange salvage services on the basis of a pre-agreed rate or sum.

-Does not need to be on board; the masters of the vessels involved simply need to expressly agree to its terms before
the salvage services commence.

-Superseded LOF 2000. Where a salvor offers services on LOF 2000 or some other terms, the master of the vessel in
difficulties should attempt to get agreement to LOF 2011 terms if incorporated in the safety management procedures of
the company.

Scopic clause

-The Special Compensation P&I Clause, known as the “Scopic clause”.

-A number of problems arose from the implementation of article 14, causing concern to shipowners, P&I clubs and
salvors.

-Salvors have been concerned that article 14 only applies if there is a threat to the environment, which has to be proved,
and there is also a geographical restriction because article 14 is not relevant outside coastal or inland waters or adjacent
areas. All these issues have led to long and expensive arbitration involving article 14.

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-The special compensation P&I clause (SCOPIC) was agreed after negotiations between the International Salvage
Union (ISU), the P&I clubs and property underwriters. SCOPIC provides a simplified framework for special
compensation intended to promote a fast response to casualties but reduce the potential for legal disputes. The clause
also provides compensation to salvors when the salvage is likely to be unsuccessful to encourage them to take steps to
control pollution. It is an alternative to article 14 for dealing with special compensation.

-In a salvage incident, the contracting salvor undertakes the salvage on a ‘no cure – no pay’ basis. But, under LOF 90,
LOF 95 or LOF 2000 and LOF 2011 the salvor has the option of invoking the special provisions of the SCOPIC clause
at any time by giving written notice to ship’s owners, regardless of the circumstances. The salvor does not have to
prove an environmental threat and there is no geographical restriction. Once notice of invoking the SCOPIC clause has
been given, an assessment of the SCOPIC remuneration starts. Services rendered before the said written notice shall not
be remunerated under this SCOPIC clause at all but in accordance with convention Article 13. The salvor cannot make
any claims under article 14 once SCOPIC has been invoked.

-Unless the word “No” in Box 7 of the Lloyd’s Open Form has been deleted the agreement shall be deemed to have
been made on the basis that the Scopic Clause is not incorporated and forms no part of this agreement. If the word
“No” is deleted in Box 7 this shall not of itself be construed as a notice invoking the Scopic Clause unless written
notice to invoke the provisions of the Scopic clause is given to shipowners.

-Salvage services then continue to be assessed in accordance with article 13, even if the contractor invokes the SCOPIC
clause. If there is no potential article 13 award, for example in an unsuccessful salvage operation, the SCOPIC
remuneration is to be paid by the shipowner. However, if the contractor invokes the SCOPIC clause and then the article
13 award is greater than the SCOPIC remuneration, the article 13 award will be discounted by 25% of the difference
between it and the amount of the SCOPIC remuneration that would have been assessed had the SCOPIC remuneration
provisions been invoked on the first day of the services. This is to discourage salvors from invoking SCOPIC
unnecessarily.

-A further requirement is that when the SCOPIC clause is invoked, the shipowner must provide security in an amount
of US$3 million within two working days. The P&I clubs expect to provide security for SCOPIC, but provision is not
automatic. If the shipowner does not provide the security within the two working days required, the contractor can
withdraw from the provisions of the SCOPIC clause and revert to its rights under article 14. The amount of security
may be adjusted by agreement or arbitration at a later stage.

-It is no longer necessary to prove an environmental threat and the geographical restriction has been removed. This may
be an advantage to salvors and a disadvantage to shipowners. The provision of security to the salvors is also more
certain.

-Remuneration rates payable under the SCOPIC clause are based on a standard tariff for time equipment and materials
used, plus a standard bonus of 25%. The P&I clubs have reached agreement with the ISU on the tariff rates for tugs,
personnel and other equipment.

-Scopic remuneration is payable only by the owners of the vessel (and not by the cargo owners) and is only payable
to the extent that it exceeds the total Article 13 award (the salvage award) or, if none, any potential Article 13 award.

-Where the owner of the vessel is a member of a P&I club, the club will normally pay the special compensation (hence
the interest and involvement of the P&I clubs in drafting the Scopic Clause).

-Is not a General Average expense (unlike the salvage award).

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Scopic clause 2011

1-General: Subject to the provisions of sub-clause 4 hereof, the method of assessing Special Compensation under
Convention Article 14(1) to 14(4) inclusive shall be substituted by the method of assessment set out hereinafter. 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.

2-Invoking the SCOPIC Clause: The Contractor shall have the option to invoke by written notice to the owners of
the vessel the SCOPIC clause set out hereafter 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 of the vessel and services
rendered before the said written notice shall not be remunerated under this SCOPIC clause at all but in accordance with
convention Article 13 as incorporated into the Main Agreement (“Article 13”).

3-Security for SCOPIC Remuneration: The owners of the vessel shall provide to the Contractor within 2 working
days (excluding Saturdays and Sundays and holidays usually observed at Lloyd’s) after receiving written notice from
the contractor invoking the SCOPIC clause, a bank guarantee or P&I Club letter (hereinafter called “the Initial
Security”) in a form reasonably satisfactory to the Contractor providing security for his claim for SCOPIC
remuneration in the sum of US$3 million, inclusive of interest and costs.

4-Withdrawal: If the owners of the vessel do not provide the Initial Security within the said 2 working days, the
Contractor, at his option, and on giving notice to the owners of the vessel, 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 of the vessel have still not provided the Initial Security or
any alternative security which the owners of the vessel and the Contractor may agree will be sufficient.

5-Tariff Rates: SCOPIC remuneration shall mean the total of the tariff rates of personnel; tugs and other craft; portable
salvage equipment; out of pocket expenses; and bonus due. Out of pocket expenses shall mean all those monies
reasonably paid by or for and on behalf of the Contractor to any third party and in particular includes the hire of men,
tugs, other craft and equipment used and other expenses reasonably necessary for the operation. In addition to the rates
set out above and any out of pocket expenses, the Contractor shall be entitled to a standard bonus of 25% of those rates.

6-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 assessed under sub-clause
5 above will be payable only by the owners of the vessel and only to the extent that it exceeds 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) before currency adjustment and before interest and costs even if the Article 13 Award or any
part of it is not recovered.

7-Discount: If the SCOPIC clause is invoked under sub-clause 2 hereof and the Article 13 Award or settlement (before
currency adjustment and before interest and costs) 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.

8-Duties of Contractor: The duties and liabilities of the Contractor shall remain the same as under the Main
Agreement, namely to use his best endeavors to salve the vessel and property thereon and in so doing to prevent or
minimize damage to the environment.

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9-Pollution Prevention: 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.

10-General Average: 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.

Practical aspect of salvage

Considerations before accepting salvage assistance

-When a vessel is in peril, the master must immediately assess the threat and decide urgently whether assistance,
including salvage assistance, is needed or not. The master should always over-react on the side of safety and
pollution prevention rather than delay in the hope that the situation may improve.

-Seek advice and instructions from the ship owner, but only if time allows. If the urgency of the situation does not
permit communications with the owners of the property in peril, the master will usually have authority to act on his
own initiative (i.e. as an agent of necessity).

-Immediately request assistance if he thinks it necessary for the safety of the ship, crew and cargo.

-Accept the assistance that seems the most reasonable, taking into account the possible value of the assisting ships, her
ability to perform the salvage services and the amount of her deviation from her intended route.

-Try to obtain agreement to Lloyd’s Open Form 2011 (if incorporated in the owners’ safety management
procedures) before accepting any salvage services offered.

-Give the salvor all possible assistance to enable him to do the job, remembering, however, that the more that can be
done by the ship’s crew, the less will be the salvor’s reward and the cost to the ship owner and cargo owners.
(Professional salvors may well want to do everything, in order to maximize their reward.)

-Gather contemporaneous evidence relating to:

1-The terms on which assistance was offered and accepted (e.g. witnessed log entries of radio messages);

2-Details of assisting vessels and their equipment used (e.g. ropes, pumps, etc.);

3-Any measures taken before the salvor’s arrival, and measures that might have taken to save the ship had salvors
not arrived (i.e. “sue and labor” cost items);

4-Any damage to the ship, injuries to crew, etc.;

5-Assistance rendered by the ship’s crew, the master and the ship’s own equipment during the salvage services.

-If immediate assistance is not required and time allows (e.g. where a disabled vessel is adrift in fine weather far
from land and shipping lanes), assistance should be arranged through the owner on a contractual basis stipulating
ordinary tariff, fixed lump sum or a daily rate.

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-Where safety of life, the ship, the cargo or the marine environment are in immediate peril, however (as in the
case of a disabled, laden vessel drifting onto a lee shore in a densely-trafficked area), negotiations should not delay the
engagement of salvors. In this case, when one or more suitable vessels respond, they should be immediately requested
to undertake whatever action is necessary.

-In cases of immediate peril there should never be a delay to negotiate a particular form of agreement or contract
terms. Any form of contract offered (whether Lloyd’s Open Form or some other form) should be immediately agreed
to in order to get the salvage operation under way.

-In addition to any threat to life, ship and cargo, the necessity to avoid or reduce the risk of harm to the marine
environment should be a prime consideration.

-In deciding whether to accept salvage assistance the master should take account of all circumstances including:

1-Safety of personnel;

2-Proximity to the shore or shoal water;

3-Weather and sea conditions;

4-Current and tide;

5-Nature of sea bed and shoreline;

6-Potential for safe anchoring;

7-Availability of assistance;

8-Damage already sustained by ship;

9-Risk of further damage to ship;

10-Prospect of maintaining communications;

11-Threat of pollution; and

12-Manpower and material requirements.

Accepting salvage assistance

-Acceptance of an offer of services on the basis of Lloyd’s Open Form (LOF) may be made orally or by radio, fax,
e-mail or other form of communication by sending a message as follows:

“ACCEPT SALVAGE SERVICES ON BASIS LLOYD’S STANDARD FORM LOF NO CURE NO PAY.
ACKNOWLEDGE REPEATING FOREGOING. MASTER (SHIP’S NAME).”

-Where several prospective salvors appear on the scene, the master has absolute discretion in deciding which
vessel(s) will be employed. If more assistance is required, more salvors should be engaged. (A salvor may also
engage one or more sub-contractors.) Vessels already engaged in a salvage operation have no right to object to others
being brought in.

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-Where there is more than one salvor, the agreement of all salvors to co-operate with each other should be obtained.
One leading salvor should be appointed.

-If the vessel offering assistance declines to accept LOF but proposes other terms, these should be accepted.
However, if the terms offered seem unreasonable or extortionate, the master should communicate a suitable protest
and record this in the deck log and the Official Log Book.

-The authority of the master is not reduced by engagement of salvors; the master remains in command of his
vessel, even where a salvage master is on board and is supervising the salvage operation. Even where salvage services
have been accepted and assistance is being rendered, the salvor must cease the services if so instructed by the master.

-The master and crew should, however, co-operate fully with professional salvors since they are experts in salvage
operations. Any advice given by a salvage master or other person in charge of providing or advising on salvage
services should be heeded.

-The master should ensure that he is fully aware of all salvage actions being taken.

-Salvors may not be experts in safety and handling of certain special cargoes, or be familiar with the vessel being
salved. If the master is in doubt about the advisability of any action suggested by the salvors, he should challenge the
advice given, bearing in mind his overriding responsibility for the safety of the ship, her cargo and the personnel on
board.

-In deciding on a “place of safety”, the factors to be considered include:

1-The repair facilities at the place;

2-The possibility of safely discharging and storing cargo and of forwarding it to its destination;

3-The danger of deterioration of the cargo in the place;

4-Whether the place is the most suitable place at which the vessel can be repaired, with regard to nearness,
convenience, cheapness and facilities; and

5-Whether the vessel is capable of maneuvering under her own power or not, and whether, therefore, she could still be
regarded as being in a position of danger even though moored in a “safe port”.

-Taking the above factors into account, it may be necessary for the ship to be towed past places at which she could lie
in safety. Arbitrators tend to consider that unless a vessel is at a port or place where she can effect the repairs necessary
for the safe continuation of the voyage, she cannot be considered to be in a “place of safety” so far as completion of the
salvage services is concerned. The master should not, therefore, release the salving vessel until his ship is in a place of
safety or a place named in the LOF.

Offering salvage assistance

-There is a statutory obligation to attempt to save the lives of persons in distress at sea, but no such obligation to
save maritime property in danger of being lost. Any attempt by the master of a merchant vessel to save property is a
commercial venture and not a statutory obligation.

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-A vessel requiring a tow (e.g. a disabled, drifting vessel) is not necessarily in distress. The master of a vessel offering
a towage service should, therefore, carefully consider the following points before contracting to perform a salvage
service:

1-Does the contract of carriage (as contained in the charter party or bill of lading) give the vessel the liberty to tow?

2-Are there sufficient bunkers and/or fresh water on board for the tow, and will sufficient reserves be maintained,
throughout and after the tow, to meet the stipulations of the owner or charterers?

3-Is there a possibility of missing any cancelling date under a charter party?

4-Does the nature of the cargo permit a lengthening of the voyage? (This is relevant especially in reefers.)

5-Is the vessel’s machinery of adequate power and in good enough condition for towing?

6-Is the value of the vessel requesting the tow, plus her cargo, of sufficient value to merit a salvage service?

7-Has an agreement to salvage on Lloyd’s Open Form terms been made?

8-Has a port of destination or place of safety been agreed?

9-Have the owner or manager and any time charterer been notified, so that additional hull insurance can be
arranged if necessary?

10-Are proper records of all events and circumstances to date being kept?

Record-keeping during salvage operations

-Detailed records should be kept of all events associated with the accident or the breakdown of machinery or
equipment, and the salvage services subsequently rendered. The records may be in any form. All contemporaneous
notes, whether on scraps of paper, in movement books or log books should be retained, together with course, rudder
angle, depth and other records. Appropriate entries should be made in deck and engine room logs and in the Official
Log Book.

Accounts should be kept of:

1-Particulars of the vessel and her cargo;

2-The condition of the vessel (including its position, proximity to the shore, nature of the sea bed, the condition of the
engines and anchors, the availability of crew, etc.;

3-All salvage services rendered;

4-All expenses incurred (overtime, hire of boats, etc.); and

5-The weather conditions prevailing.

END OF DOCUMENT

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