Assessment of a salvage award

Assessment of a salvage award: a review of Article 13 of the Salvage Convention 1989 and case law

Part 5 of 10

I now turn to one of the most important articles and aspects for assessing a salvage award over and above the salved fund.

13.1 (d) The nature and degree of the danger

Again, as with Article 13 (c) that I looked at in the previous article (Assessment of a salvage award: a review of Article 13 of the Salvage Convention 1989 and case law - Part 4 of 10 | Hill Dickinson), this reflects the benefit conferred. Although, as already mentioned, there is no order of preference in the list of “Ten Commandments”, this is clearly one of the more important ones given that danger is a pre-requisite to salvage. The greater the danger obviously the greater the reward. Simple immobilization, even if there is no physical risk to the salved property, is sufficient to constitute danger for the purposes of establishing salvage. At the opposite end of the scale, there is the “nick of time” salvage where the vessel is at real and imminent risk of becoming a total loss but for the salvors. In between, there will clearly be different degrees of danger and different time scales for the danger to manifest itself from the short term to the long term, all of which will govern the amount to be awarded.

Very often, in order to reduce the level of the award, the respondents will argue that there will have been other alternative salvors available to perform the salvage. The availability of alternative salvage assistance does not of itself negate the nature of the danger, but it will affect the degree given that the danger as found by the Court or Tribunal may not in reality have materialised in the event of alternative assistance.

It will be the practice of arbitrators or the courts to analyse the danger faced by the casualty without looking at alternative assistance and only then to consider whether or not the danger would, in fact, have materialised based upon the evidence of available alternative assistance.

It is for that reason particularly important for the respondents to produce as much evidence as they can that there were other salvors available and ready to assist. Much will depend on when the danger would materialise; where the casualty occurs in the first place; how long any alternative assistance would take to reach the casualty and what the nature of the alternative assistance is.

This is one area where commercial rates may be relevant in terms of assessing the amount of the salvage award. If the alternative assistance was offering at the time to perform, for example, a relatively straightforward towage operation on commercial terms, rather than on LOF terms, that would clearly have a reducing effect on the amount of the award.

In the next piece, which will be published on Tuesday 15 April, I will take a look at the leading case law on dangers.