SALVAGE LAW WOULD REWARD ENVIRONMENT-SAVING EFFORTS Peter D. Clark

Sea Spills Spur Revision Draft

A new convention has been drafted to cope with a major problem that has occurred in recent years – environmental pollution resulting from casualties at sea.

On April 28, 1989, a diplomatic conference concluded in London after reaching agreement on a convention that soon will change the law of salvage throughout the world. The International Convention on Salvage 1989 is the culmination of a lengthy process that began a decade ago in the wake of the Amoco Cadiz disaster.

The American delegation has been represented from its inception by Edward C. Kalaidjian, an admiralty attorney in New York.

The universal law of salvage developed in response to society’s need to encourage maritime commerce by reducing some of its hazards. The law is based on the premise that a person who voluntarily saves another’s property from sea perils is rewarded for his efforts in the form of an award from the owner of the salvaged property. The compensation for perilous services also serves as an inducement to seamen and others to embark on salvage operations.

A salvor must satisfy certain criteria to qualify for a salvage award. There must be a maritime peril from which the property could not have been saved without the salvor’s efforts. The salvor must provide assistance voluntarily, and the efforts must be successful. If the property is not saved (“no cure”) the salvor receives no remuneration (“no pay”).

The amount of compensation is based upon various factors such as the labor expended, skill and energy displayed, value of the property employed by the salvor and the danger to which it was exposed, the risk incurred and the value of the property saved. The majority of maritime nations, including the United States, subscribe to these principles that have been incorporated into the 1910 Brussels Convention on Salvage.

While the law of salvage has remained constant over the past century, the shipping industry has not. Merchant vessels are large and carry more cargo. There are fewer professional salvage vessels available to assist ships in peril.

Recent maritime casualties have resulted in massive oil spills. There have been instances where salvors have successfully salvaged damaged tankers, but because of pollution risks, were not permitted to take them into ports for discharge or repair. Under no cure, no pay principles, salvors have received nothing for their efforts.

The 1989 convention attempts to rectify some of these shortcomings. It creates an obligation on vessel owners and salvors to exercise due care in salvage operations to protect the environment. The salvor is rewarded if he can demonstrate that he protected cases he is guaranteed at least his expenses, regardless of success.

It is hoped that the convention will offer salvors inducement to maintain viable salvage capabilities and to undertake high-risk operations.

Article 13 of the convention sets forth the traditional elements of salvage to be considered in making awards. However, an additional criterion is added. Skills and effort in preventing or minimizing environmental damage are now considered.

Recent maritime casualties have resulted in massive oil spills. There have been instances where salvors have successfully salvaged damaged tankers, but because of pollution risks, were not permitted to take them into ports for discharge or repair. Under no cure, no pay principles, salvors have received nothing for their efforts.

The maximum recovery under Article 13 will be the value of the salvaged property.

Article 14 guarantees the salvor at least the expense of the salvage operation, whether or not successful in dealing with the environmental damage. He is entitled to special compensation up to double his expenses. However, the amount recovered under article 13 is credited against the article 14 award.

The convention is open for signatures and will enter into force one year after it is signed by 15 countries.

If the United States fails to ratify the convention, its interests might still be affected by it.

Most major salvage operations are conducted pursuant to Lloyd’s Open Form contracts, which stipulate that disputes will be arbitrated in accordance with English law. If England ratifies the convention and it goes into force, American commercial interest involved in Lloyd’s salvage arbitrations will be subject to awards based upon the convention. Accordingly, U.S. shipping interests might be wise to familiarize themselves with this new convention at the present time.


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