Salvage, Refuge, and Wreck

• Author: Edgar Gold; Aldo Chircop; Hugh M. Kindred; William Moreira
• Pages: 779-823

779

CH AP TER 18

SALVAGE, R EFUGE,

ANDWR ECK

A. INTRODUC TION

The discussion in the previous two chapters concerned the provision of

services to ships to ensure their safe navigation in normal operations. This

chapter discusses services to ships in need of assistance because of some

unforeseen incident threatening the safety of the ship, cargo and per-

sons on board. The vast majority of ships trade with little or no incident

throughout their operational lives. Ageing vessels are more likely to en-

counter distress situations at sea because the harsh marine environment

places further stress on the hull and equipment of the ship. However, even

the most modern, best crewed and well-operated ships may encounter in-

cidents at sea which could potentially threaten their safety. In such infre-

quent instances, a prudent master will contract salvage assistance to better

the condition of the vessel and to have it accompanied to a place of safety.

On even fewer occasions, the vessel in such a state that it threatens to lose

its cargo and bunkers, potentially causing substantial damage to the mar-

ine environment, or if not carrying a potentially polluting cargo, carries

some other dangerous cargo which potentially poses a threat to whatever

place of safety it may be moved to. In recent years there have been several

instances of coastal states refusing refuge to the ship in need of assistance

precisely for these reasons. In a worst case scenario, the ship may be lost at

sea, despite salvage efforts. Ships lost at sea or which are not salvable after

grounding or even cargo lost at sea become wrecks. This chapter discusses

the law applicable to salvage, refuge, and wreck in that order.

PART V: MAR ITIME SERVICES780

B. M AR ITIME SA LVAGE

1) Context

Maritime salvage is concerned with the saving of life and property from

the dangers of the sea. The law of maritime salvage is of very ancient ori-

gin and is generally based on the principles of equity. Under such prin-

ciples a volunteer who successfully saves maritime property in danger at

sea gains a right of reward from the owner. In order for a claim for such

a reward to succeed, the three required elements of a maritime salvage

act, namely, voluntariness, danger, and success, must all be present. This

is also often expressed in the principle of “no-cure-no-pay” that has been

enshrined in most salvage contracts. It means that in the absence of any

success, that is, if despite the salvor’s efforts nothing has been rescued or

saved, no payment or reward can be claimed. This principle has been ac-

cepted almost universally and has been conf‌irmed by two international

maritime conventions that have codif‌ied almost all traditional salvage

principles established in the subject’s lengthy history.1 In practice, most

commercial salvage services are today performed under some sort of sal-

vage contract. The best known of these is the Lloyd’s Open Form of

Salvage Agreement,2 which is widely recognized internationally and, in

addition to stating the no-cure-no-pay principle, provides for a system of

arbitration for the settlement of salvage claims.

It should be noted that in the maritime context the word “salvage”

has two accepted meanings: Firstly, the act of saving, or assisting in sav-

ing, or rescuing3 maritime property, such as a vessel, cargo, freight or

other recognized subject of salvage, without any prior legal or contrac-

tual obligation, from a danger at sea.4 Secondly, the actual reward, re-

muneration, or compensation payable to the successful salvor by the

benef‌iciary of such service. There are also three different types of salvage:

1 The Convention for the Unif‌ication of Certain Rules of Law Respecting Assistance and

Salvage at Sea, 1910, 23 September 1910, UKTS 1913 No 4 [Assistance and Salvage

Convention 1910] and the International Convention on Salvage, 1989, 28 April 1989,

1953 UNTS 165 [Salvage Convention] which are both discussed in some detail below.

2 Lloyd’s Standard Form of Salvage Agreement (LOF) is approved and published by

the Council of Lloyds and administered by Lloyd’s Salvage Arbitration Branch. The

current version, LOF 2011, is accompanied by Lloyd’s Standard Salvage and Arbitra-

tion (LSSA) Clauses, online: Lloyd’s www.lloyds.com/the-market/tools-and-resources/

lloyds-agency-department/salvage-arbitration-branch/lloyds-open-form-lof.

3 “Rescue at sea” has been advocated as a more appropriate modern def‌inition. See

Enrico Vincenzini, International Salvage Law (London: Lloyd’s Press, 1992) at 3.

4 As def‌ined in one of the leading texts on salvage law: John Reeder, Brice on Mari-

time Law of Salvage, 5th ed (London: Sweet & Maxwell, 2012) at 1-01.

Salvage, Refuge, an d Wreck 781

1) Civil salvage, the rescue of maritime property from perils of the sea

in times of peace. Civil Salvage encompasses contract salvage and

common law salvage.

2) Life salvage, the saving or attempting to save lives on board vessels

in peril on the sea.

3) Military salvage, the rescue of maritime property from the enemy in

wartime.5

In practical terms there is also what is sometimes considered to be an-

other form of salvage related to protection of the marine environment,

which has been termed “environmental salvage” or “liability salvage.”6

2) International Law

a) The Assistance and Salvage Convention 1910

The long-established principles of maritime salvage were codif‌ied inter-

nationally in the Assistance and Salvage Convention 1910.7 The Conven-

tion was accepted by a large number of states and has worked reasonably

well.8 It ref‌lected the principle that remuneration should be f‌ixed by a

court or arbitral tribunal in accordance with the practical circumstances

of each case based on the following considerations:

• The measure of success obtained

• The efforts and skills of the salvors

• The danger from which the salved vessel, crew, passengers, cargo or

other property was rescued

• The time expended and expenses incurred by the salvor

• The losses incurred by the salvor

• The risks of liability and other risks to which the salvor was exposed

• The value of the salvor’s property and equipment made available and

exposed to such risk

5 This chapter is primarily concerned with civil and life salvage, but issues involv-

ing environmental and liability salvage are considered brief‌ly in the discussion on

salvage contracts and clauses.

6 See Colin de la Rue & Charles Anderson, Shipping and the Environment: Law and

Practice (London: Lloyd’s Press, 1998) at 571. See also Chapter 20.

7 Above note 1. For a full discussion of this convention see Vincenzini, above note 3.

8 Although now superseded by the Salvage Convention, above note 1. As of 2015

the Salvage Convention had been accepted by 65 states comprising just over 50

percent of global shipping tonnage. See IMO, Status of Multilateral Conventions

and Instruments in Respect of which the International Maritime Organization or its

Secretary-General performs depositary or other functions (18 March 2015), on-

line: IMO www.imo.org/About/Conventions/StatusOfConventions/Documents/

Status%20-%202015.pdf.