The salvage Convention 1989, replaced its earlier predecessor which was adopted in Brussels in 1910. It could be summarized by the ‘no cure, no pay’ principle. Salvor could get remunerated only for success. There was no mention at all of the environmental pollution. Environmental damage became a major concern with pollutions resulting from large tankers with growing tanker traffic.
There was therefore no or little incentive to a salvor who undertook an operation which had only a slim chance of success. Thus, where a damaged tanker was towed away from a sensitive zone but could not be saved from sinking, fetch nothing for salvor. This being in spite of salvor risking his resources, risking his life, preventing pollution of sensitive area, etc.
The 1989 Convention somewhat tried to resolve this deficiency. Though, the LOF 1980, already existed before the 89, Convention came into force. It would be interesting however, to compare the two Conventions to precisely know about the changes which were brought after learning from the experiences of nearly 8 decades. It is also interesting to note the similarities between the two conventions, which also form the core and spirit of the basic principles of salvage.
A. Meaning of Salvage:
Provisions of the Convention apply to assistance and salvage of seagoing vessels or inland vessels (given by either of them) in danger, in respect of:
- things on board,
- passage money, and
There is no mention of mobile offshore drilling units and platforms.
‘Salvage operation means any act or activity to assist a vessel or any other property in danger in navigable waters or in any other waters whatsoever.
Where property means any property not attached to the shoreline and includes freight at risk. Convention specifically denies application to fixed or floating platforms or to mobile offshore drilling units when such platforms or units are on location and are engaged in exploration, etc.
B. Environmental Consideration
No mention of environmental pollution.
Defines damage to the environment as substantial physical damage to human health or to marine life or resources in coastal or inland waters or areas adjacent thereto, caused by pollution, contamination, fire, explosion or similar major incidents. Thus, a recreational in the inland waters affected by pollution is considered damage.
Article provides duties of the salvor and of the owner and Master in respect of environment.Thus,the salvor shall owe a duty to the owner of the vessel or other property in danger, to exercise due care to prevent or minimize damage to the environment. Thus, if a tug is engaged in salvage operation, it becomes responsibility of salvor that damage to environment is not caused by ship. On the other hand the owner and Master of the vessel or the owner of other property in danger shall owe a duty to the salvor in addition to co-operating fully with salvor during the course of the salvage operations must exercise due care to prevent or minimize damage to the environment. Article 9 provides right to Coastal States 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. This means preventive action in apprehension of damage to environment. Article 13 b states, ‘the skill and efforts of the salvors in preventing or minimizing damage to the environment’ is to be considered when assessing the reward.
Article 14 says, 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 and if, 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 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, paragraph 1, 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.
Thus, engagement of salvor in respect of a vessel threatening damage to environment entitles the salvor of special compensation. This may be increased by 30% if pollution prevention or minimization is actually done. Tribunal is empowered to increase it by 100%.
Article 14 / 5 however states, 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.
C. Ships of War / Govt. / Public Service:
Article 14 says, it shall not apply to ships of war or to government ships appropriated exclusively to a public service.
Article 4 says it shall not apply to warships or other non-commercial vessels owned or operated by a State, unless that State decides otherwise. Salvage operations controlled by public authorities or warships as agreed by State party can come under Convention.
D. Pre-existing Contracts & Reward where there is No Contract
Article 6 states the amount of remuneration is fixed by agreement between the parties, and, failing agreement, it is decided by the court considering the factors stated in Article 8. This means the consideration is given to the Salvage Agreement. Article 7 states, ‘the agreement however, as to assistance or salvage, entered into at the moment and under the influence of danger may, at the request of either party, be annulled or modified by the court, if it considers that the conditions agreed upon are not equitable’. Even if the consent of one of the parties is vitiated by fraud or concealment, or when the remuneration is, too large or too small, the agreement may be annulled or modified by the court.
Article 8 provides the factors regarding fixing of reward by court. Thus, it is fixed on the circumstances of each case, on the basis of the considerations stated in paragraph (a). Thus, the measure of success obtained; the efforts and deserts of the salvors; the danger run by the salved vessel; by her passengers, crew and cargo; by the salvors, and by the salving vessel; the time expended; the expenses incurred and losses suffered; and the risks of liability and other risks run by the salvors; and also the value of the property exposed to such risks; due regard being had to the special appropriation (if any) of the salvors’ vessel for salvage purposes. In the paragraph (b) a special mention about the value of the property salved is there.
Transparency and truthfulness are important as the court may deprive the salvors of all remuneration, or may award a reduced remuneration, if it appears that the salvors have by their fault rendered the salvage or assistance necessary or have been guilty of theft, fraudulent concealment, or other acts of fraud.
It applies to any salvage operations save to the extent that a contract otherwise provides expressly or by implication. This means a duty under existing contract is not covered by the Convention. Article 13, which is Criteria for fixing the reward, states that there ward shall be fixed with a view to encouraging salvage operations, taking into account the criteria (a) to (j) without regard to the order in which they are listed. The criteria being:
- 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;
- the time used and expenses and losses incurred by the 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.
Article 17 says that no payment can be 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. This covers a situation where initially a contract is say drawn regarding towage. A service provided subsequently after a danger arose, will attract salvage claim.
E. Apportionment of a Reward
Article 5 states the proportion in which the remuneration is to be distributed amongst the salvors is determined by the law of the vessel’s flag.
Article 15 is Apportionment between salvors states:
1. The apportionment of a reward under article 13 between salvors shall be made on the basis of the criteria contained in that article.
2. The apportionment between the owner, Master and other persons in the service of each salving vessel shall be determined by the law of the flag of that vessel. If the salvage has not been carried out from a vessel, the apportionment shall be determined by the law governing the contract between the salvor and his servants.
F. Prohibition of salvage operations
Article 3 states, ‘Persons who have taken part in salvage operations notwithstanding the express and reasonable prohibition on the part of the vessel to which the services were rendered, have no right to any remuneration’.
Article 19 is quite similar. It says, ‘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’.
G. Depriving Salvor of Reward
Article 7 says, ‘Every agreement as to assistance or salvage entered into at the moment and under the influence of danger may, at the request of either party, be annulled or modified by the court, if it considers that the conditions agreed upon are not equitable. Also, in all cases, when it is proved that the consent of one of the parties is vitiated by fraud or concealment, or when the remuneration is, in proportion to the services rendered, in an excessive degree too large or too small, the agreement may be annulled or modified by the court at the request of the party affected.’
Article 8 says, ‘The court may deprive the salvors of all remuneration, or may award a reduced remuneration, if it appears that the salvors have by their fault rendered the salvage or assistance necessary or have been guilty of theft, fraudulent concealment, or other acts of fraud’.
Art 14 / 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’. Article 18 states, ‘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.’
H. Securities provided to Salvor
Although, no specific provision as in 1989 Convention but applicability of Maritime law as vide Maritime Lien must prevail. Also the court keeps the authority.
Article 21 & 22 are, ‘Duty to provide security & Interim payment’ respectively. Article 21 states, ‘upon the request of the salvor a person liable for a payment due under this Convention shall provide satisfactory security for the claim, including interest and costs of the salvor before the cargo is released’. Also that, the salved vessel and other property shall not, without the consent of the salvor, be removed from the port. Article 22 states, ‘the tribunal having jurisdiction over the claim of the salvor may, by interim decision, order that the salvor shall be paid on account such amount as seems fair and just, and on such terms including terms as to security where appropriate, as may be fair and just according to the circumstances of the case’. Article 20 provides applicability to maritime lien under any international convention or national law.
I. Limitation Period
Article 10 says, ‘a salvage action is barred after an interval of two years from the day on which the operations of assistance or salvage terminate. The grounds upon which the said period of limitation may be suspended or interrupted are determined by the law of the court where the case is tried’.
Article 23 is Limitation of actions. It states,‘Any action relating to payment under this Convention shall be time-barred if judicial or arbitral proceedings have not been instituted within a period of two years. The person against whom a claim is made may at any time during the running of the limitation period extend that period by a declaration to the claimant’.
J. Remuneration for saving life
Article 9 states, ‘no remuneration is due from persons whose lives are saved, but nothing in this Article shall affect the provisions of the national laws on this subject. Salvors of human life, who have taken part in the services rendered on the occasion of the accident giving rise to salvage or assistance, are entitled to a fair share of the remuneration awarded to the salvors of the vessel, her cargo, and accessories.
Article 16 is salvage of persons. It is nearly the same except that there is also the consideration for preventing or minimizing damage to the environment by the salvor.
Article 5 of 1910 Convention states, ‘remuneration is due notwithstanding that the salvage services have been rendered by or to vessels belonging to the same owner. Similar rule is in 1989 Convention Article 12/3. It states, ‘this shall apply, notwithstanding that the salved vessel and the vessel undertaking the salvage operations belong to the same owner’.
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