By Priya Ayyappaswamy
“Cast thy bread upon the waters: for thou shalt find it after many days”
Kipling’s Bread Upon Water, In a Day’s Work (Kipling, 1895).
Salvage refers to the act of “reward for saving property at the sea”. In Blackwall Case. (The Blackwall, 1987), Salvage was defined as the reward for saving property from “imminent peril” at sea or in instances of Recovery of Maritime Property from actual loss in cases such as “Shipwreck, Derelict or Recapture” (Robinson, 1938). The Salvage Service takes many forms, but in actuality, the Salvor, in most cases, is rewarded in proportion to the property saved and the peril faced (Davidson, 1990). however, in these kinds of calculations, the loss suffered by the salvor is not included in the calculation of the “Salvor’s Award” (The Blackwall, 1987). The author believes that the essential elements of salvage are the subject of salvage, the peril involved, the salvor, and the success of the maritime adventure.[SP1] This essay has tried to explain the essential elements of the salvor, thereby broaching upon the duty of care of the salvor and the laws that protect the salvor’s interests.
The Type of “Salvage Service” Rendered and Associated Duty of Care
An important aspect of Salvage is that one should be free to render the service. Salvors might be the master, the crew members, Pilots, passengers, coastguards etc. Salvage is only payable to the volunteers if additional services are performed in addition to the original obligation (Williams, 1997). The salvors are volunteers who should not be bound by some official duty to the owner of the salvage property (Wells, 2011).
Salvor’s can either be Professional or Amateur salvors. The duty of care is to an extent lower for Amateur Salvors in comparison with the Professional Salvors (Canfield, (1920)). When a Salvor is able to act professionally in terms of assistance is able to preserve the endangered property the salvor obtains a right to claim the Salvage Award (Symmons, 1971). However, there exist instances where a salvage operation can cause a loss to the salvee. In this case there need to be protection mechanisms in place delimiting the salvors duty of care especially in instances where the salvor might have acted negligently or carelessly damaging the salvage property.
This was been dealt with the development of the Doctrine of Affirmative Damages in US Jurisprudence (Mason v. The Ship Balireau, 1804). This system involves a number of criteria for salvee to claim damages from salvor in addition to salvor giving up the salvage award (Barrios, 2004). However, the courts are more lenient to salvor’s since it is a voluntary act and it was developed in a way that public policy tends to encourage an adventurous mariner to engage in such laborious and dangerous enterprise by providing a liberal compensation for services rendered, this is to incentivize the salvor with the reward other to them engaging in dishonest acts and embezzlement (Brice, 1999).
There is a public policy of leniency shown toward salvors and international legislations concerning salvor’s duty of care tend to limit the liability of the salvor and stipulate circumstances where a salvor can be potentially exposed to liability. This provides an opportunity for salvors to limit their liability (Re Dammers, 1988).
Public Policy of Leniency
The Public Policy of Leniency to Salvors Developed in the Early 19th Century and this jurisprudence was followed by the European and American Courts. In the Case of Cape Packet (The Cape Packet, (1848) ), the general duty of care of a salvor was ordinary skill and prudence but however, during that period salvors were seamen conducting the operation and not professional salvors. In later part of the 19th century the emergence of contractual services to hire professional services lead to Lloyds Open Forum incorporating the duty to ensure best endeavours to salve a vessel and onboard cargo. (James, 1920). This created certain obligations for the salvor when conducting salvage operations.
The creation of such obligations exposed the salvor to certain liability and in spite of the salver engaging in such endeavours, a salvor can only claim the property on a successful rescue. Thus in accordance to 1957 Limitation of Liability Convention & Article 18 of the 1989 Salvage Convention the salvor is able to limit the scope of “financial liability” when his performance is “below the expected standard”. But the need for remedies to a salvee when there has been negligence to non-performance of salvage operation is discussed (Dewell, 1912). The most common format for salvage agreements is through Lloyds open forum, which operates based on the “No Cure No Pay” formula (Noel, 2014). However, this does not encourage salvors and is prone to creating a loss for salvors. Thus, currently salvage operations are under a Fixed Price Contract where there is salvage remuneration irrespective of the results of the salvage operation (kent, 1986 ). The shipowner needs to make an entire payment to salvors for ship, cargo and other interests that are salved. The shipowner, if the vessel was loaded with cargo, can declare general average and seek to recover from owners or underwriters of the interests involved (Cullity, 1967).
Doctrine of Affirmative Damages
Under this doctrine which primarily operates for professional salvors who perform services negligently the following results are the consequence of their conduct (The Henry Steers, Jr., 1901): A Reduced Salvage Reward, Forfeiture of Salvage Reward, Salvor is liable to pay damages in addition to forfeiture of salvage award (The Alenquer (The Rene (Owners) v. The Alenquer (Owners), 1955). In Noah’s Ark Case (The Noah’s Ark v. Bentley & Felton Corp., 1963), The US Admiralty Courts have opined that the negligence of the salvor played a second role in assigning liability rather the existence of a ‘distinguishable damage’ by the salvor which was different from the damage arising from the original peril is what the strict application of the Doctrine of Affirmative Damages involves (D. Evanow and Others, v. The Tug Neptune, and Others , 1988). If the damage is ‘non-distinguishable’ from the damage caused due to the original peril, the salvor can be held liable only in instances of wilful or gross negligence.
The Kentwood Case (Kentwood v. United States, 1997), took the established principle further, stating that even in cases of non-distinguishable damages, professional salvor rendering services without proper equipment and undertaking such operations without due protocol in non-emergency situations is liable under Affirmative Damages and the Degree of negligence is immaterial in this situation (The Cape Race,, 1927). In the Toju Maru Case (The Tojo Maru (Owners of the Motor Vessel Tojo Maru v. N.V. Bureau Wijsmuller), 1972), it was held that when there is no emergency to conduct the salvage operation, and the professional salvor rushes without proper care and equipment causing loss to shipowner, the “more good than harm” principle developed out of “public policy of leniency” will not apply (Brough, 1990). Rather, in this case, the “more harm than good” rule was observed if the salvor employed a different tactic, considering the peril was not imminent. In this instance, the first phase of the salvage operation was successful, and the salvor was at liberty to carefully craft the next state and execute repairs; this was not done, and this is attributable to a breach of duty of care and damages were claimed (Kerr, 1989).
Salvor’s Liability, Salvors Award
The 1957 Limitation of Liability Convention comes into the picture when a salvee makes damages claims against a salvor (Fujimoto, (1956). ). Thus, while calculating “the salvor’s award,” the author would like to mention the case for negligent services renders – Firstly, it may reduce the amount of salved property, which would increase the value of other costs for the ship owner and, in return, lead to a decrease in repair costs. Secondly, a reduction or complete forfeiture is possible when the loss to the shipowner exceeds the amount of salvage through services rendered if it was possible to avoid such loss, and the loss can be attributed to the professional salvor (Sutton, 1945). Lastly, as already mentioned in certain circumstances, the salvee is liable to pay for damages directly attributable or resultant from salvage operations (The Delphinula (Anglo-Saxon Petroleum Co. Ltd. and another v. Admiralty), 1947).
The application of the Doctrine of Affirmative damages is not possible if the operations were carried out when faced with an imminent threat (Stevens v. The S. W. Downs, 1854). Also, the author would like to point out the fact that the doctrine of affirmative damages is applicable whether the damage is distinguishable damage or non-distinguishable damage due to gross negligent performance (SELVIG, 1981). Thus, the author would like to conclude by stating that the present regime not only incentivizes the salvor to undertake the maritime adventure but also offers due protection. And by giving the salvee remedies through counter-claims and present jurisprudence, this acts as a check and balance in preventing the salvor from taking undue advantage of the present legal framework (RUDOLPH, 1976).
Recommendations for the Interpretation of the Salvage Regime
1. When dealing with “salvage awards”, Article 8 and Article 13 should be read with Article 12 to fix Rewards to Salvors, i.e. the “duty of care” owed along with criteria and conditions for reward need to be read together in providing compensation in the form of “salvors award”. This is in Regard to the 1989 Salvage Convention. The type of “contract format”, either LOF or a fixed price contract, also needs to be discussed (Teitelbaum, 2015).
2. After the termination of successful services, the Contractor will claim security in respect of his “remuneration” and will notify the Committee of Lloyd’s and the owners of the amount for which he requires “security” to be given, including “costs”, “expenses” and “interest”. Pending the completion of the security, the contractor has a “maritime lien” on the property salved for his “remuneration” (Robinson, 1938).
3. Article 14 of the 1989 Convention, deals with the situation where the salvor has performed services where there was “a threat to the environment” but has earned “no traditional award” (because he has failed to save the vessel or any other property) or has earned “a very low award” (because the salved values were low) (Brice, 1999). It is intended to give the salvor “some financial return” where he continues working, and his work may protect the “environment”, even when the chances of a traditional award were low, and he might otherwise be inclined to abandon further efforts (Brice, 1999).
4. In accordance with Rule VI (a) of York Antwerp Rules, expenditure incurred by the parties to the adventure, in “the nature of salvage”, whether under contract or otherwise shall be allowed in general average, provided that “the salvage operations” were carried out for the purpose of preserving from peril the property involved in “maritime adventure” (Knauth, 2012). The same rule also allows, in general average, any “remuneration” paid to salvors for their skill and efforts in “preventing or minimizing damage to the environment”, as referred to under Article 13 paragraph 1(b) of International Salvage Convention, 1989 (Knauth, 2012).
5. When SCOPIC is incorporated in the LOF contract, “the salvors” are not entitled to claim “special compensation” payable as per Article 14 except when “the owners” or “their P&I Club” fail to provide initial security of “US$ 3 Million” (Force, 2003). By agreeing to SCOPIC, the owner gives up his “rights to argue”, as he would have under Article 14, on issues such as whether the “casualty posed no environmental threat” or “the extent to which salvors have prevented or minimized damage to the environment”, etc (Force, 2003).
6. Furthermore, Article 18 of the 1989 Convention, which deals with Salvor’s misconduct, needs to be examined at the time of fixing rewards (Canfield, (1920)).
Conclusion
The author would like to hereby conclude that her analysis has not only broached on her primary topic of protecting salvor’s[SP2] interests but has gone further in providing insights into the rules of Interpretation of laws governing the present Salvage Regime.[SP3] Thus, while salvaging maritime property is a voluntary endeavour entering into fixed price contracts, or LOF format of contracts will be advantageous to the salvor in protecting his interests. In these cases, the “salvors” award is a reward for the success of the adventure. The salvor can also limit his financial liability through the limitation of liability convention.
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[SP1]What next? The author need to justify this statement as well. The should be changed to the
[SP2]Salvors’
[SP3]Conclusion should be in a neutral perspective. A thorough conclusion for the article is needed.
Centre for Maritime Law 