Salvage Law

The Law of Salvage is a principle of maritime law whereby any person who helps recover another
person's ship or cargo in peril at sea is entitled to a reward commensurate with the value of the
property salved.

What is Salvage?

It is defined as the service which saves or help save a recognized object of salvage in danger
provided that:

 The service is voluntary;

 Not being of pre-existing legal/contractual obligation; and
 Rendered in interest of self-preservation
 The service must be successful or partial successful

The term “Salvage” applies to

 Service performed by salver;

 A reward paid to salver in respect of successful services

Three Elements Must Be Fulfilled Before the Maritime Property Can Give Rise to a Valid Claim for a
Salvage Award

1. The service must be voluntary and not under any contractual official duty to render assistance
2. The property must be in danger, danger must be real
3. The service must be successful

Contribution to the Salvage Awards Shall be:

 Owner of the salved vessel

 Charterer of the salved vessel
 Owners of the cargo
 Owners of the bunker
 The party to whom the freight is due
 Salvage expenses shall be allowed as per York rules in general average if the act was so
committed

The Criteria for Fixing Salvage Award

1. The salved value of the vessel, cargo, and freight

2. The skills and efforts of the salver in salving the cargo, the vessel, and life
3. The measure of success obtained by the salver
4. The nature and degree of danger to which the salved property and the salver is exposed
 The time utilized and the expenses and losses incurred by the salver

5. Risk run by the salver

6. The quantum of equipment that is used
7. Promptness of service
8. The skills and efforts of the salver in minimizing danger to environment

What are the Duties of the Salver?

1. To carry out salvage operation in due care

2. To prevent or minimize damage to environment while carrying out salvage duties
3. When circumstances require to seek assistance to other salvers
4. To accept intervention from other salvers when required by the owner or the master of the salved
vessel which is in danger
5. Take the vessel safely to the destination nominated in the Lloyd’s open form

What Are the Duties of the Master of the Vessel?

1. To cooperate fully with the salver throughout the salvage operation

2. To exercise due care to prevent or minimize damage to the environment
3. To make available all necessary vessel’s equipment
4. To make available all performance of salvage
5. When vessel has been brought to safe place, to accept the deliver and assist bringer her to safety

What Factors Shall the Master of the Vessel Take into Account Before Committing Himself to a Salvage
Operation?

1. Has the basic element of salvage criteria being satisfied?

2. Does the charter party permit and have the owners/charterer confirmed permission?
3. Has the possibility of delay to your vessel being taken into account bearing in mind cargo, charter
commitments, etc.?
4. Does your vessel have skilled manpower/machinery bearing in mind no cure no pay?
5. Has the fruit of maximum salvage award being taken into account I.E. value of property, cargo or
freight?
6. Can you cope with any oil pollution?
7. Can you reach the port of destination taking into account anticipated weather and stores on board?
8. Have you mutually agreed upon the approximate salvage agreement to be used?
What is Salvage Association?

 The Salvage Association is an association of shipping surveyors who acts as coordinating body in
behalf of underwriters’ interest and other concerned parties. It is a non-profit making body and
will take steps to minimize losses and assist in the recognition of repair yards and finalizing
repairs from competent yards at competitive prizes. Failure to inform the underwriter’s result in
a deduction of reimbursement from the repairer bill under the tender clause.
 The Salvage Association is composed of professional surveyors and underwriters and should
always be called whenever salvage is required, or a casualty occurs or major structural damage.
They provide valuable guidance on economical efficient repairs bearing in mind interest of all
parties they link between repairers, underwriters and owners.

What is it Meant by No Cure No Pay?

 Form of salvage agreement, almost universally used is the Lloyd’s Standard Form of Salvage
Agreement which has a number of advantages.
 All the usual conditions of the salvage are implied in the salvage agreement and further the
agreement is based on ‘No Cure No Pay’ basis which is also endorsed in the agreement. The
owner of the property thus benefits from ‘No Cure No Pay’ basis. This term is defined in the
salvage convention that as per agreement the service should be successful in order to warrant
payment. The clause was slightly modified over time to include payment for the protection of
the environment.

Advantage of Lloyd’s Open Form to Salver

 Ready agreement not likely to be contested

 Though vessel shall be released, the salver still retains his right for lien
 The remuneration is referred to arbitration and does not involve expensive time consuming
court expenses
 There is provision for special compensation even if salvage was unsuccessful but salver
prevented damage to environment

Advantage of Lloyd’s Open Form to Owner

 He has a ready available standard agreement

 The principle of ‘No Cure No Pay’ is advantageous to owner
 The claim may be referred to arbitration instead of court
 The property is not arrested for releasing claims
 In case of tanker, steps are taken by salver to limit pollution
 Experienced salvage operators are available for service to owners, thus ensuring care to
property