Assessment of a salvage award

In the last article, I looked at dangers under Article 13(d) of the Salvage Convention. I will now look at Clause H of the LOF with regard to place of safety.

Clause H of LOF

Place of safety is a matter that is covered under the Lloyd’s Form. Nowadays, it would not be possible for any salvage company to leave a vessel without a propeller at anchor in Aden (such as in The “TROILUS” referred to in the previous article), or any other port for that matter, as the authorities will insist on a standby tug. Under clause A of the LOF, the salvors’ basic obligation is to take the property to the place agreed in box 3 or to such other place as may be agreed. If no place of safety is stated in box 3, the salvors shall take the property to a place of safety, which invariably will be, or should be, the nearest place of safety where redelivery can take place.

Usually, this was a matter of fact as to what would be regarded as a place of safety and it would depend on the sort of circumstances that were considered by the House of Lords in The “TROILUS”. The more recent editions of LOF, however, have sought to clarify the issue under clause H, which states: - 

"The contractors’ services shall be deemed to have been performed when the property is in a safe condition in the place of safety in box 3 or agreed or determined in accordance with clause A. For the purpose of this provision the property shall be regarded as being in safe condition notwithstanding that the property (or part thereof) is damaged or in need of maintenance if (i) the contractors are not obliged to remain in attendance to satisfy the requirements of any port or harbour authority, governmental agency or similar authority and (ii) the continuation of skilled salvage services from the contractors or other salvors is no longer necessary to avoid the property being lost or significantly damaged or delayed.”

Unfortunately, these days more often than not a disabled vessel will still require tug assistance to standby in order to satisfy the relevant authorities. If such tug assistance can be engaged on a daily rate basis, this will enable the LOF to be terminated provided the vessel is not subject to any other dangers.

Clause H was tested in the case of the “SAM LION” by the current LOF Appeal Arbitrator. In that case, in 2018, the vessel suffered severe bottom damage while running over rocks as she entered Ceuta for bunkers. LOF was signed and the salvors mobilised a team to Ceuta and made arrangements for divers to attend and carry out temporary repairs. By the time the salvors arrived, the authorities had allowed the vessel to come alongside a berth. As a result, the owners terminated the LOF as they claimed the vessel was in a place of safety. The salvors successfully claimed damages for breach of the LOF on the basis that, while the vessel was in a place of safety, she was not in a condition of safety as skilled salvage services were still required to carry out the temporary repairs in accordance with LOF.

It is clear, therefore, under LOF, in terms of redelivery and terminating the LOF, that not only must the vessel be in a place of safety, but she must also be in a safe condition such that skilled salvage services are no longer required. What will constitute safe condition for these purposes will be a matter of fact. If a standby tug is all that is required, or supply of pumps to keep a small water ingress under control, then this could easily be arranged and paid for by the shipowners on commercial terms. Temporary repairs as in the “SAM LION” to put the vessel into a condition where she can proceed to a repair port would still be skilled salvage services.

In the next instalment, which you can now find here, I will look at other Articles of the Salvage Convention.