SALVAGE

Subject

• Principles of Salvage
• Process of Salvage
• LOF
• SCOPIC
Salvage Basic principles

• What is entitled to be salved?

• Geographic Limitations
• Who can /may salve properties?
• What activities lead to a salvage fee?
• What determines the relation between salvor and salvee?
• Calculation?
• Means to enforce payments
Principles of Salvage

• Pre requisites
–Need for assistance

–Master’s responsibility
•Captain keeps oveall control to the vessel. On his behalf it is decided
whether the salvage must proceed or not.

–Authority of the master

•Captain decides when salvage is stopped. This in case he thinks the
imminent danger of the vessel has disappeared
Background principles of Salvage

• Principle always has existed!

–Assist of Help
•Developed from Admiralty Law
•In case of salving a vessel and/ or its cargo you are entitled to receive
a percentage of the value of the property salved

Prior to SALVAGE Convention 1989 we had the law of salvage

1910 also known as the process Convention.
 • Outsider
Voluntary • So in principle no vessel’s crew
–No direct realtionship with the vessel
Basis –Hight of the rewards is NEVER
higher than the ship’s value
The TWO important aspects of this:

• Is a basic principle, No custom!

NO CURE, • Is laid down in the Lloyds Open
NO PAY Form (LOF)
(known as a MEANS • Principle - No problem no
AGREEMENT)
reward

Taking
• No threat to the environment – no
Pollution need for the operation
into account
 Who may salve
• Personal - another vessel
• Shipowners of vessel who give assistance
• Both can ask for salvage fee

SALVAGE means an act undertaken to assist the vessel or any other property in danger in navigable waters,
also four conditions have to be met:
1) salvage must be voluntary
2) The object of salvage must be recognized
3) The subject of salvage must be in real danger
4) Salvage operation must be successful
• Personal effects are not taken into account in the
salvage
–And therefore not being incorporated in the salvage fee
• If no agreed currency, then USD
• Right to end the contract
–As well as Salvor as Salvee (clause G)

• In case no SCOPIC Clause in salvage contract, the

salvor remains its right for compensation according
to art-14 salvage convention
Process of Salving

Contract version /
validity/ autority

Responsibility

Decision /
consultation

Safe Haven

Guarantee/ •Difference between guarantee in Salvage and Genreal Average

superseeding •GA guarantee is a contract between shipowner and cargo owner

Wat may be salved

• Traditional
–Ship + Cargo
•Vessel as is defined by Law

• Non traditional:
–Planes
–Lives

• Contractual
–Oil rigs
Danger!

• Absolute condition for salvage

• No Danger / no Salvage!
Danger II

• Is no May also have a precausious reason

• need for actual danger
Geografic limits

• Sea!

• So:
–No Inland constructions
–No inland waters
Who may claim

• Shipowner
• Other forms of charters it is not allowed
LOF

• Standard form used in Salvage

• Development since 1894
–Since 2000 includes standard option to preserve oil
spillings
•Mainly to preserve oil pollution

• Contract comes into play Universally – most famous contract. Developed by Lloyd’s Register
of London & recognized all over the world.

• Other contracts – Scandinavian, Japanese etc

 LOF and IMO

• Interaction between IMO and LOF

• LOF is a private initiative; constant need for unifying
• Adjustments according to contemporary developments
• From 1989: International Salvage Agreement
 International Salvage
Convention

• Drawn in 1989
• From IMO
• Gradual incorporation LOF principles

• Continuation of the NO cure, NO Pay principle

• Act in cases of environmental issues and problems
In general whole salvage convention can be divided into two articles
• ARTICLE 13 which talks about criteria for fixing there evolved
• ARTICLE 14 the special compensation – ONLY comes into place when
there is a danger to the environment (could be proven) & salver is not
able to earn the reward in the normal Art-13 way. In such cases
salver’d be at least compensated for the amount he spent in the
salvage operation, but in case successful operation (minimize
environment damage) his compensation would be raised up to 30-
100% of the spent operation.
Salvage convention: overlap LOF

• Article 13: criteria for reward

–Value of vessel and cargo
–Limitation/ preservation of damage to the environment
–Rate of succes
–Danger and circumstances
–Expenses and time span
–Rendered services and use of materials
Special
compensation
 • What are expences made?
–Fair rate
• Time bar to file claims
and expences
• Untill 1997
–2 years after

Problem completion
salvage!
 • Because of discontent
of the present LOF by
the P&I
–Until two years after
salvage, claims for
special compensation
Adjustment could be filed
–It was no claim which
could fall under of the

of LOF H&M claim , but was

filed under P&I
insurance
–Incorporation of SCOPIC

THE LOF is a standard 2 page document it documents 9 points -

EXAMPLE
LOF

• Comparison to last version

• Fill in questions and tick boxes
• Simplified appearance
• Possibility to tick on SCOPIC
• SCOPIC has no immediate legal implication.

ONLY if SCOPIC ticked – in that case would be used.