Topic 9 Contracts And Salvage Flashcards
a) List 3 conditions required to make a salvage claim. (3)
b) Outline the conditions required to agree the use of an LOF. (5) p 180
c) List 4 benefits to the ship owner of using LOF. (4)
d) List 4 disadvantages to the ship owner of using LOF. (4) p184
a)ESSENTIAL ELEMENTS FOR A VALID SALVAGE CLAIM UNDER ADMIRALTY
LAW
Under common law (in the absence of a contract), any salvage service rendered will not qualify for a salvage reward unless the following conditions are all met:
1. The salvage service must be voluntary
2. The salvage service must be rendered to a recognised subject of salvage
3. The subject of salvage must be in danger
4. The salvage service must be successful
5. The salvage must occur at sea
Q2
The Master of a yacht is on a lee shore and at risk of foundering on the adjacent coastline within 2 hours. The owner wishes to dispatch a tug from the nearest safe harbour that is
at least 1 ½ hours passage time away.
a) If the Master receives an offer of assistance from a nearby ship using LOF, state who has the right to decide whether to take this offer or to use any other assistance that might be available. (4)
b) State the international conventions that are relevant to the relationship between the Master and owner with regards to a salvage contract. (4)
c) The Master of a ship in difficulties has decided to engage the assistance of a nearby ship using LOF. List 8 practical steps which should be taken to achieve this. (8) p180
d) List the factors that are required to allow a salvage agreement to be used. (4) 181
Aa) the master
b) International salvage convention
SOLAS, because its the parent conventions of ISM, master has overriding authority
03
Explain the essential elements of a valid claim for a salvage award where there is no salvage contract. (20)
ESSENTIAL ELEMENTS FOR A VALID SALVAGE CLAIM UNDER ADMIRALTY LAW
Under common law (in the absence of a contract), any salvage service rendered will not qualify for a salvage reward unless the following conditions are all met:
1. The salvage service must be voluntary, crew can’t salvage own ship, towing is not voluntary
2. The salvage service must be rendered to a recognised subject of salvage.
3. The subject of salvage must be in danger, has to be threatening.
4. The salvage service must be successful, no cure no pay
5. The salvage must occur at sea, salvage is encouraged
04
List six considerations that would be taken into account by the Lloyds arbitrators when assessing the value of salvage award. P169
Criteria for Fixing the Reward
Article 13 contains the criteria for fixing the reward. The reward will be fixed with a view to encouraging salvage operations, taking into account the following criteria:
• The salved value of the vessel and other property;
• The skill and efforts in preventing or minimising damage to the environment;
• The measure of success obtained by the salvor;
• The nature and degree of danger;
• The skill and efforts of the salvors in salving the vessel, other property and life;
• The time used and expenses and losses incurred by the salvors;
• The risk of liability and other risks run by the salvors or their equipment;
• The promptness of the services rendered;
The availability and use of vessels or other equipment intended for salvage operations; and
The state of readiness and efficiency of the salvor’s equipment and the value thereof.
05
When ships are in need of services in the nature of salvage at sea, the use of Lloyds Open Form of salvage agreement is generally considered to be beneficial to both parties involved Identify and explain briefly. the advantages to the salvor, the owner and to both p174
LOF: ADVANTAGES AND DISADVANTAGES
Advantages to Both Parties
• Agreements can be reached via radio (if witnessed)
• There is no need for the form to be signed until the salvage services have been completed
• It is not likely to be disputed
• English law applies to claims
• The award is determined by arbitration, which is usually less expensive and quicker than litigation.
• Disputes are referred to arbitration in London, saving legal costs
• LOF removes the need to negotiate a fee
Advantages to the Salvor
• There is no doubt as to the nature of the service being offered, the owner may not claim that the service was conducted on the basis of another type of contract (such as towing).
The owner may also not claim that there was no real danger or that his property is not a “maritime property”.
• The salvor has a maritime lien in the property salved even after its sale to another party
The salvor gets an interim award
• The agreement allows the salvor to obtain his expenses before the final award is determined.
Advantages to the Owner
• There is no doubt as to the nature of the service, the salvor may not claim that the service was in the form of a hiring agreement.
• In an emergency, there is no requirement to haggle over terms, thus delaying the start of salvage operations.
• No cure, no pay
• Salved property can be quickly released on payment of security to the salvor
• By avoiding the need for the property to be arrested, the vessel can resume trading.
• Underwriters liability cannot be increased beyond that for total loss
• Excessive claims by salvors are avoided
Q6
In a situation where it was determined that Lloyds Open Form is to be employed;
a) Discuss the steps to be taken when entering into this agreement (10) 180
b) Describe the advantages to BOTH parties of using LOF (5)
C) Describe the advantages to EACH party of using LOF (5)
If the Master of a ship in difficulties has decided to engage the assistance of a nearby ship using LOF, the following practical steps should be taken to achieve this:
• establish radio communication
• determine whether SCOPIC or Special Compensation will be agreed on
• the final destination / place of safety should be agreed
• agree the currency
• obtain witness over radio
• establish details of the vessel and owner
• confirm that the vessel is capable of performing salvage
• brief the crew
• make a clear and unambiguous statement as to acceptance of the LOF agreement
• make appropriate entries in the OLB
• keep detailed records of all actions taken
Advantages to Both Parties
• Agreements can be reached via radio (if witnessed)
• There is no need for the form to be signed until the salvage services have been completed
• It is not likely to be disputed
• English law applies to claims
• The award is determined by arbitration, which is usually less expensive and quicker than litigation.
• Disputes are referred to arbitration in London, saving legal costs
• LOF removes the need to negotiate a fee
Advantages to the Salvor
• There is no doubt as to the nature of the service being offered, the owner may not claim that the service was conducted on the basis of another type of contract (such as towing).
The owner may also not claim that there was no real danger or that his property is not a “maritime property”.
• The salvor has a maritime lien in the property salved even after its sale to another party
The salvor gets an interim award
• The agreement allows the salvor to obtain his expenses before the final award is determined.
Advantages to the Owner
• There is no doubt as to the nature of the service, the salvor may not claim that the service was in the form of a hiring agreement.
• In an emergency, there is no requirement to haggle over terms, thus delaying the start of salvage operations.
• No cure, no pay
• Salved property can be quickly released on payment of security to the salvor
• By avoiding the need for the property to be arrested, the vessel can resume trading.
• Underwriters liability cannot be increased beyond that for total loss
• Excessive claims by salvors are avoided
a) State the definition of salvage under admiralty law. (5) 169
b) List the five essential elements for a valid claim for a salvage award where there is no salvage contract. (5) p
c) Describe what is required to satisfy each element. (10) p181 182
The IMO defines salvage as:
“A voluntary response to a maritime peril by other than the ship’s crew, and from which the ship or property could not have been saved without the effort of the salvor.
ESSENTIAL ELEMENTS FORA VALID SALVAGE CLAIM UNDER ADMIRALTY LAW
Under common law (in the absence of a contract), any salvage service rendered will not qualify for a salvage reward unless the following conditions are all met:
1. The salvage service must be voluntary
2. The salvage service must be rendered to a recognised subject of salvage
3. The subject of salvage must be in danger
4. The salvage service must be successful
5. The salvage must occur at sea
Q8
a) State which international convention governs the law of salvage. (1)
b) State how salvage law is incorporated into UK maritime law. (1) p169
International convention on Salvage
Ratified
In English law, the law of salvage holds a unique position. If a salvor renders successful salvage services at sea, he is entitled to claim a reward or a maritime lien (claim for possession) upon the vessel salved.
