What Is a Salvage Agreement
The Law of Rescue is a principle of the law of the sea, according to which any person who assists in recovering the ship or cargo of another person in danger at sea is entitled to a reward equal to the value of the recovered property. An ancient saying used in the marine rescue industry is: “No cure; ” No salary” refers to the fact that without reasonable success in rescue work, no reward or payment can be expected. This is applied to prevent miners from partially recovering the wreck and then claiming the full reward. The definition of reasonable success is often agreed upon by the parties. A rescue below this standard does not have to be paid for by the shipowner. The use of Lloyd`s Open Form`s traditional “No Cure-No Pay” recovery contract has slowly but steadily declined. According to Lloyds Statistics, 255 LOF contracts were awarded in 1980, but only 37, the lowest record, in 2014. In the 1990s, the average number of LOF contracts was 138.7 and the average value of an arbitral award was 9.56% of the property saved (the highest value was 18.8% in 1999). In the 2000s, the annual average fell to 102.6, while the average scholarship increased to 12.99% (the highest was 20.4% in 2009). In 2018, the number dropped to 53 (63 in 2017) and the average reward also fell to 11.9%. This includes containers and other cargo storage units, equipment on board a ship or offshore facility, personal belongings, etc.
Remember that payment will only be made for the successful restoration of the goods mentioned in the rescue contract. In deciding on the rescue award, an arbitrator must comply with the English Civil Rescue Act, which is itself subject to the 1989 Rescue Convention, which succeeds the original 1910 Convention. The value of the ship, its cargo and vulnerable cargo will be taken into account when the arbitrator decides what the award should look like, as well as the extent of the dangers and the difficulty of carrying out the rescue. One of London`s Maritime law firms suggested what commentators were quick to describe as “LOF light.” The lightweight wording of LOF automatically incorporated SCOPIC and allowed parties to opt for services to be provided at the SCOPIC rate with an optional bonus. The bonus reflected the encouraging factors listed in Article 13 of the 1989 Rescue Convention, such as dexterity, danger, ointment value and seniority. The rescue forces, through their association, the International Rescue Union (ISU), did not support the proposal. Shipowners do not like to take into account the elements of article 13 of the 1989 Rescue Convention because they cannot estimate their exposure or the total cost of the rescue operation. The uncertainty makes the proposal unattractive to shipowners.
By the 1970s, there was virtually no real-time communication between ships, shipowners and insurance companies. The ship`s captain reportedly had little experience in dealing with the victims and would not have been able to consult others in time. In such circumstances, the master often signed a LOF contract with the lifeboat, even in the event of a minor engine failure. With today`s technology, the land side can receive updated notifications from the ship in a very short time, sometimes even in real time. The masters of the modern world no longer have to make unilateral decisions when faced with difficult times. The right type of rescue contract can be chosen and concluded by shipowners and rescuers, and the LOF cannot be used for small victims. Rescue operations are costly for both the miner and the shipowner, as they require equipment and manpower. Therefore, a fixed time frame is required to create a realistic expectation of the required duration. The aim is to protect the shipowner in the event that a minor tries to delay his operations but still demands the reward. If the rescue is carried out beyond the agreed period, a penalty or fine may be imposed on the salvo. The danger must be real, but not necessarily immediate or absolute. [6] The object of recovery must be in real danger, which means that the property is damaged or destroyed.
[7] A formal contract is not strictly necessary if it is proven that the owner tolerated the lawyer`s intervention. It is presumed that a reasonable and prudent owner would have accepted the rescue conditions offered due to the loss of his vessel and cargo, even if time had not allowed such negotiations. Nevertheless, the shipowner has the right to refuse any offer of assistance and would do so if the shipping company had already concluded agreements with a professional rescue company of his choice. [4] The right to be rewarded for rescue at sea is based on both the principles of fairness and public order. The law tries to be fair to both landowners and rescue companies. The legal right to a rescue reward arises when a person acting as a volunteer (i.e. acting without any contractual obligation or other pre-existing legal obligation to act) protects or contributes to a ship, cargo, cargo or any other recognized object of rescue from hazards at sea. For the recovery of offshore works not covered by the 1989 IMO Convention, a local maritime court or other competent supervisory authority may be consulted with regard to the salvage work and the subsequent reward to be paid.
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