Assessment of a salvage award

In this instalment, I will look at Articles 13.1 (g) and (h).

(g) The risk of liability and other risks run by the salvors or their equipment

Obviously if the salvors are performing a particularly dangerous operation, such as firefighting, and also where there may be dangerous cargoes involved, the salvors are putting at risk their own personnel and equipment. This will be reflected in the award. 

Conversely, if the salvors are not, in fact, using their own personnel and equipment, this will have a reducing effect on the award depending, of course, on potential contractual liabilities. It may be, for example, that a salvor sub-contracts on commercial terms a towing tug at a cheap rate, but if anything goes wrong it will still be responsible or liable to the salved property. Even in that situation, the salvor is carrying the risk as well as incurring the expense up front with the possibility of no cure. The nature and extent of that risk will be analyzed by the Court or the Tribunal and taken into account.

Unfortunately, in this day and age, the risk of civil and/or criminal liabilities is all the more prevalent. In the well reported incident, following the breakup of the laden motor tanker “TASMAN SPIRIT” off Karachi in 2003, the salvors’ salvage officer, along with seven of the ship’s crew, were put under house arrest in Pakistan and charged with various offences, including oil pollution. They were only released after some considerable time, when the P & I Club concerned paid significant compensation to the relevant authorities.

In the “TASMAN SPIRIT”, various sub-contracted craft were detained by the authorities and although the salvors claimed frustration of the relevant charterparties to avoid the ongoing liability, the High Court in London dismissed that argument. In the same case, the salvors were covered under SCOPIC by the P&I Club, but if SCOPIC had not been invoked, the salvors would have faced a very substantial bill for which they would not have been able to recover from what was salved.

In other cases, where the salvors’ tug may tow a vessel to a place of safety, often the authorities will refuse to allow the tug to leave until the owners of the salved property take over and take responsibility for the vessel. This often leads to problems with terminating salvage services and is probably one of the biggest concerns in the industry in this day and age, particularly where the value of the salved property may not be sufficiently high enough to pay for the continuing standby services.

(h) The promptness of the services rendered

The speed of response is always encouraged because this removes any dangers facing the casualty. Obviously the more risks faced by the casualty the greater the benefit conferred by the promptness of response. It is even more meritorious when a salvor responds promptly on speculation, i.e. without a contract to do so, and also where the salvor responds if it is with his own station keeping tug. However, as we will see in the last instalment, such tugs are now almost non-existent.

In the last instalment of this series, to be published on Tuesday 13 May 2025, I will look at the final two sub-clauses of Article 13.1 relating to investment and encouragement.