Key takeaways
Understanding salvage awards beyond compensation
Salvage law rewards public service, not just effort
Article 13: the modern salvage framework
Ten guiding principles now shape global salvage awards
Courts balance risk, value and public policy
Judicial decisions weigh fairness with encouragement
In this Part, we look at Articles 13 (e) and (f) of the Salvage Convention.
13.1 (e) The skill and efforts of the salvors in salving the vessel, other property and life
Salvage requires skill, knowledge and expertise. A variety of skills may often be required such as firefighting, naval architecture, knowledge of dangerous cargoes etc. The greater the skill and the more arduous the effort, the more meritorious the service. Likewise, if the skill and expertise is supplied in-house rather than bought in, more credit will be given to the salvors.
In addition, if the service is rendered by a professional salvor who is dedicated to performing such operations the award will be greater than if rendered by commercial operators who may not necessarily have the same skills, expertise and equipment available to them.
It is worth noting the reference to saving of lives. For obvious reasons, those whose lives have been saved are not expected to pay for this. Life salvage is paid for out of the property that has been saved. If it is the same salvor who saves both lives and property, the effort to save lives will enhance the award. If it is a different salvor who has simply saved lives and no property, that life salvor will be entitled to an award out of the salved fund but such life salvage will be paid by the P&I insurers and not the property insurers.
13.1 (f) The time used and the expenses and losses incurred by the salvors
Obviously, the longer the service the greater the award, depending on the size of the fund. As we will have seen, a one-day short and simple service to property not in immediate danger will not attract a disproportionately high award even if the fund is enormous. On the other hand, a long service involving, for example, transshipment of cargo and/or high dangers will generate a large and encouraging award.
Likewise, the expenses incurred by the salvors will be taken into account. The greater the expenses generally the higher the award, but this is not a given. It may be that if the ultimate salved fund is very modest and the expenses substantial, the award may not exceed the amount of the expenses. As already indicated, we are looking at benefit conferred and, of course, under an LOF at the “no cure no pay” principle. It is a risk salvors take.
As was found in the judgment in the “VOUTAKOS” (2008), the expenses or commercial rates may be regarded as the “floor” but not necessarily in all cases.
The out-of-pocket expenses are also another example of where commercial rates are relevant in assessing salvage awards. If the salvors perform a simple straightforward towage operation by a tug that is chartered in, the amount paid by the salvors will be taken into account and probably have a reducing effect on the award compared to, for example, a professional salvor using his own tug that has been standing by waiting for a salvage to occur.
In the next instalment, which you can now find here, I will look at the risks run by salvors.
