Admiralty Court determines salvage remuneration

Admiralty Court determines salvage remuneration

SD Rebel BV & another -v- Elise Tankschiffahrt KG (VB Rebel) [2025] EWHC 376 (Admty)

The English Court has recently handed down a noteworthy decision on salvage remuneration – noteworthy not least because the majority of salvage awards are assessed by a single arbitrator under Lloyd’s Salvage Arbitration.

The matter came before the English Court (after much contention), because the Master of the salved vessel, the STELA (the Vessel), signed a “Certificate of Safe Delivery” on the tug company’s standard form which stipulated that any dispute arising out of the provision of salvage services would “be settled in London, in accordance with English law”. We address the jurisdictional issues which this presented briefly further below. 

The background facts

The Vessel was an inland motorways tanker with five cargo tanks, carrying a cargo of Light Oxo Fraction (the Cargo) worth just under USD 600k. The Vessel had a salved value of EUR 1.8m. The total salved fund was just less than USD 2.4m. 

The tug which performed the services, VB Rebel (the Tug), with a BP of 60 tonnes, was part of a large fleet of tugs operated by Boluda Towage Rotterdam BV (Boluda).

On 14 November 2023, the Vessel was contacted repeatedly by Rotterdam port control who told her she was heading directly for the mole which separates the port from the canal. These calls were heard on the Tug. The Vessel collided with the mole at around 5-6kn and grounded on the berm of boulders.  It was dark, wind was Bf7>6, the tide was ebbing and had a further 0.5m to drop. The vessel’s bow was 10cm out of her marks indicating she was aground forward. 

As the Tug had heard the radio calls, it diverted to assist the Vessel. The Tug offered via VHF to provide services on the basis of the LOF, but no response was received. The Vessel’s crew communicated by visual signals with the Tug to make fast. 

On the arrival of a port authority launch, it was confirmed that there appeared to be no escape of cargo and pollutants so the Tug increased power astern until the Vessel came free. Once the Vessel was clear of the mole, the Vessel resumed use of her main engine and berthed. The Tug Master went on board the Vessel and provided the Master of the Vessel with the “Certificate of Safe Delivery”, which both Masters signed.

The defendant shipowner subsequently denied that salvage was provided.

The Admiralty Court decision

Were the services ‘salvage’?

The Court cited Kennedy & Rose on the law of Salvage, 10th Edition, at paragraph 5-004 at length, including that: 

"there must be such reasonable, present apprehension of danger that, in order to escape or avoid the danger, no reasonably prudent and skilful person in charge of the venture would refuse a salvor’s help if it were offered to him upon the condition of his paying a salvage reward.”

The Court had little hesitation in determining that the services provided amounted to salvage.

The Court rejected the claims that the Vessel manoeuvred herself throughout, which was not supported by the Vessel’s Master’s own evidence. The Court also did not accept the Vessel’s Master’s evidence that he did not appreciate the services would lead to remuneration and thought they were being provided as a favour. The Court found that no Master could or would believe a professional tug would do so.

Salvage Remuneration

Article 13 of the Salvage Convention 1989 provides the criteria for fixing a salvage award. The Court considered the criteria in turn in the usual manner.

The Court also expressly confirmed that it would be appropriate for it to be guided by appropriate awards issued under LOF Arbitration, albeit ultimately found there was no sufficiently comparable award.

In particular, the Court was guided by the principle that rewards should be assessed with a view to encouraging salvage operations, particularly noting that major players have left the business and ships are getting larger, and the remaining salvors have to be provided with sufficient incentive to stay in the business. The Tug owners had heavily invested in salvage materials and equipment, such that they can be on standby in every port in which they operate. 

The defendant claimed that alternative assistance was available and would have been available on commercial terms. No detail was provided in support of those allegations, and the burden of proof was on the defendant. With the Vessel aground forward on a falling tide, the Court found it not obvious that urgent alternative assistance would have been on anything other than salvage terms.

The Court was asked by the Tug owners to consider the settlement which had been reached between the Cargo Interests and the Tug owners. The agreement reached was based on a hypothetical global salvage award for all property interests of GBP 150k of which Cargo Interests’ share was 23.29% on the basis of the salved value of the Cargo. 

Although the Court agreed that Cargo Interests would have been diligent at the negotiating table, the Court only attributed limited weight to the Cargo settlement for the purposes of assessing its award. 

The Court noted that as part of the Cargo settlement, Cargo Interests had only paid minimally towards costs and would likely have been willing to strike a quick bargain before the Tug owners’ legal costs became disproportionate. Ultimately, the Court’s salvage award was GBP 90k in respect of all salved property. 

Jurisdiction

The defendant had argued that it could not be bound by the jurisdiction agreement in the “Certificate of Safe Delivery”, as the Master believed it was a routine receipt. The Master’s evidence was that he had asked in German what it was and was told it in German it was nothing special.

However, the Court noted that it is not open to a person who signs without taking the trouble to find out at least the general effect of the document to later disavow its effect. The Court also noted that the working languages of the relevant VTS stations were English and Dutch and so doubted that the Vessel Master could not understand the document. Even if he could not understand, the Master ought to have enquired properly, not casually. 

The Court also rejected the idea that determination “in London, in accordance with English law” was too vague to properly incorporate the jurisdiction of the English courts.

The Court issued a final anti-suit injunction, despite the defendant having breached previous ones. The Rotterdam District Court has, however, declared itself competent to adjudicate and is due to issue its judgment on or before 19 March 2025. Further procedural battles potentially await.

Comment

The judgment provides a relatively rare treatment of salvage law in the public forum of the English courts and represents a sensible and diligent continuation of the existing LOF Arbitration jurisprudence by the Court. 

The dispute also reveals the futility, and possible self-injury (at least for the purposes of an English court judgment), of seeking to avoid proceedings at a late stage. The defendant’s English solicitors were removed from the record in late January 2025, shortly before the hearing. The Court made repeated criticisms that the defendant’s failure to provide proper evidence had impaired the Court from properly ventilating arguments which might have assisted the defendant’s position, albeit the eventual award can hardly be described as unfair.

Of course, whether the avoidance approach will prove beneficial in the Dutch court proceedings (in breach of the anti-suit injunction) or for frustrating later enforcement efforts is yet to be determined.