With its origins in antiquity, the basis of salvage is that a person helping another at sea is putting himself and his vessel at risk and should be appropriately rewarded. A related consideration was to prevent piracy, since any vessel in peril might well be abandoned to pirates if the owner did not reward an honest salvor. Salvage law has been recognized for centuries in such documents as the
edicts of Rhodes and the Roman
Digest of
Justinian. It is still a nearly universally recognized right, though conditions for awards of salvage vary from country to country. The right to be rewarded for
salvage at sea is based both on principles of fairness and
public policy: the law seeks to be fair both to the property owners and to the salvors. The legal entitlement to a salvage reward arises when a person, acting as a volunteer (that is, without any pre-existing contractual or other legal duty so to act), preserves or contributes so to preserving at sea any vessel, cargo, freight, or other recognized subject of salvage from danger. A salvage situation arises when a shipowner accepts an offer of help from a salvor. To that extent, the arrangement is contractual, but it is not a contract for services with a pre-arranged fee (such as, say, a towage contract). Instead, the law provides that after the service is done a court or arbitrator will make an award taking into account: • the degree of success of the salvage venture • the degree of danger of the salvage venture • the value of the property salved • whether a reasonable attempt to protect the coastal environment was made • the provisions of Articles 13 & 14 of the
Salvage Convention 1989. A formal contract is not strictly necessary, provided there is evidence that the owner has acquiesced in the salvor's intervention. The assumption here is that when faced with the loss of his vessel and cargo, a reasonable prudent owner would have accepted salvage terms offered, even if time did not permit such negotiations. Even so, the shipowner is entitled to reject any offer of help, and would do so if the shipping line had already made arrangements with a professional salvor of their choice. There is no equivalent to salvage when ashore: a person who assists another on land has no entitlement unless a court deems that an implied contract had arisen, whether objectively or subjectively.
Recognized subject matter Traditionally, salvage only recognizes a ship or craft ("vessel"), cargo on board, freight payable, and bunkers carried on board as the subject of property in danger. The scope of salvage has been expanded by the 1989 Salvage Convention, and protection of the environment is part of salvage. Oil pollution can cause damage to the environment. If the salvor prevents oil pollution from happening, he indeed performs a valuable service to the community as mentioned by (1997) 1 Lloyd's Rep 323 (HL), pp. 326–328. Therefore, the salvor will be rewarded with special compensation, i.e.,
liability salvage instead of
property salvage. The convention does not consider
saving lives to be part of salvage, but if one vessel saves life and the other saves property, the arbitrator may apportion the salvage reward between them as he thinks fit.
Real peril Danger needs to be real but not necessarily immediate or absolute. The subject of salvage must be in real danger, which means the property is exposed to damage or destruction.
The burden of proof lies on the salvor, which means the salvor needs to prove real danger existed when the performance of service commenced. The court or arbitrators must determine whether the property was truly in danger. As every situation differs, both subjective and
objective tests will be conducted. Common considerations are: It is incumbent upon the court to assess the existence and level of danger, both present and future. The case of the
Troilus (1951 1 Lloyd's Rep. 467, HL) illustrated the concept of future danger that the court must take into account when determining the existence of danger. In this particular case, the cargo owners contended that the ship was in perfect safety when she reached Aden, and therefore it constituted ocean towage but not salvage when towing from Aden to UK. The court held that even though the ship and cargo was in physical safety, the services rendered still amounted to salvage service on the grounds that the master of a damaged ship must do his best to preserve the ship and cargo and bring them to their destination as cheaply and efficiently as possible. The salvage award was reasonable as long as the master acts reasonably for the combined benefit of ship and cargo. In the modern world, the dispute normally is not about whether there is just the existence of danger, but also the degree of danger, as it determines the extent of the award.
Voluntary service Voluntary means that the services are not rendered under a pre-existing contract agreement or under official duty or purely for the
self-preservation interests of the salvor. Because of this, there is no limitation to the class of persons that can be considered as volunteers. A pre-existing agreement refers to any agreement entered into before the time of the existence of danger. It includes ship's master and crew who have pre-existing
employment agreement with ship-owners. They have the duty to preserve the ship and cargo, and therefore they cannot convert themselves into salvors in the event of trouble. Notwithstanding, exceptions still exist in this area. Salvage can still be rendered if the pilot or crews of the ship in peril rendered service outside or beyond the scope of their duties under the contract. The case of the
Sandefjord (1953 2 Lloyd's Rep. 557) held that the pilot brought his personal knowledge of the local conditions and his seafaring skills to bear when faced with a grounding. Moreover, the pilot relieved the ship owner of paying a vast salvage award for tug assistance. Under these conditions, the pilot was entitled to a salvage award. Crewmen cannot claim themselves as individual salvors unless their employment contract has been actually or constructively terminated before the salvage service commenced. The termination of contract could be brought by: Authorized abandonment refers to a condition wherein, at the time the Master decided to abandon ship, there was no hope or intention of returning to the stricken ship. There can be no suggestion that a mere temporary abandonment would dissolve the crew's contract of employment. The case of the
Albionic (1941 70 L1.L.Rep.257) ruled that there was no express order given by the Master to abandon the ship, and therefore the crew's contracts of service were not terminated at the time when they performed the salvage service. The
San Demetrio (1941 69 L1.L.Rep.5) case demonstrated a good example of an authorized abandonment of ship under the Master's authority. If the ship was properly abandoned under the orders from the master, the vessel's own crews who saved the vessel or cargo on board were entitled to claim salvage. In the case of the Master's discharge of crew concerned, the
Warrior Lush (476) case ruled that if the crew is properly discharged by the master, their employment contract is validly terminated. Therefore, any crew who returned to and saved the vessel were truly salvors. Additionally, hostile capture of the crew effectively causes the dissolution of the sailors' employment contract, as the general and expected duties for the seamen no longer exist. The
Two Friends (1799 1 Ch Rob 271) provided support for this argument.
Success The requirement for the service to be successful can be summed up from the common expression
no cure; no pay. However, success need not be total. Partial success, provided that there is some measure of preservation to the owners, is sufficient. The
Tojo Maru (1972 AC 242 HL) examined certain characteristics of salvage contracts and concluded that the primary consideration is that the person rendering the salvage service is not entitled to any remuneration unless he saves the property in whole or in part. If the ship's peril following the service is as grave as before, no award will be given. Likewise, if the salvage services which rescue a vessel from one danger eventually make the situation worse, no salvage award is typically granted. The
Melanie v
The San Onofre (1925 AC 246) held that the services which rescued a vessel from one danger, but eventually left her in a position of even greater danger, did not contribute to ultimate success and therefore do not amount to salvage. The ship owner as well as the claimant are expected to adhere to the maritime laws to ensure they succeed.
Salvor-in-possession The rights of the salvor can be secured, in addition to
maritime lien, by a right of possession over the yet-to-be-recovered property. When the ship is no longer in possession of its master, this
salvor-in-possession status is granted to the first salvor who takes possession and demonstrates capability of a successful salvage. == Salvage under contract ==