ASSITANCE AT PORT:

PILOTAGE, SALVAGE &

TOWING
PILOTAGE
Pilotage
• Meaning - the conduct of a vessel by a
pilot
• Inward pilotage/outward pilotage/harbour
pilotage
• The master of a vessel must not enter,
leave or move within a pilotage port with
the vessel before taking on board the
marine pilot made available by the
pilotage service provider to conduct the
vessel on its movement into the port, out
of the port or within the port
Pilotage
• A pilot is the best knowledge of the port;
better equipped with requisite local
knowledge to get the vessel in and out of
port safely.
• Where pilotage is compulsory, the pilot is
entitled, and the master is bound to permit
him, to conduct the ship, that is, to take
charge of the navigation of the ship
• When the master hands over the conduct
of the vessel to the pilot, the pilot and his
employer (the port/independent
contractor) are legally responsible for his
actions.
• The master’s right to interfere is restricted
SALVAGE
 INTRODUCTION
• A unique concept to maritime law.

• If a person voluntarily saves the lives and

property of another at sea. He (known as
‘the salvor’) will be entitled to a reward
for their efforts based on English Law .

• However, there is no reward for such act

on land.
• WHY DO YOU THINK
SO??
• Reason : there is a need to provide financial
encouragement to vessels to assist other
vessels in distress.

• The reward is not exceeding the value of the

property salved.
• Otherwise, the owner of the property salved
would receive no benefit from the
efforts/actions of the salvor
 DEFINITION
SALVAGE:
A legal liability arising out of the fact that
property has been saved and that the owner of
the property , who has had the benefit of the
property being saved, should make remuneration
to those who have conferred the benefit upon
him.

SALVOR:
Seamen and engineers who carry out salvage to
vessels that they do not own, and who are not
members of the vessel’s original crew.
 When large ships are salved, cranes,
floating dry dock, and divers to lift and
repair submerged or grounded ships.

 A tugboat may also be used to tow the

salved ship.
 The goal of salvage:
to repair the vessel at harbour/dry dock
to clear a channel for navigation (wreck
removal)
to prevent pollution or damage to marine
environment.
HISTORY OF SALVAGE
LAW
 SOURCES OF SALVAGE LAW
• NON CONTRACTUAL SALVAGE (very rare today) :
The rights and obligations of parties will be determined by:
i. Common law rules
developed specially during the last two hundred
years.
Some areas have been modified by the Salvage
Convention 1989  
ii. Salvage Convention 1989

• CONTRACTUAL SALVAGE
The rights and obligations of parties will be determined by
the contract.
** The Salvage Convention 1989 and common law will
be only relevant to fill the gaps.
SALVAGE WITHOUT
A CONTRACT
 ESSENTIAL INGREDIENTS OF A VALID
SALVAGE SERVICE WITHOUT A CONTRACT

In the absence of a contractual arrangement

between the parties (e.g. LOF), a salvage claim
exists if:
1. The property salved is a subject of salvage

2. The service must be voluntary

3. The property salved must be in danger

4. The service must be successful

1. The property salved is a subject
of salvage

Recognised subject matter of salvage:

i. Ship or craft (vessel)
ii. Cargo on board
iii. Freight payable
iv. Bunkers carried on board
v. Protection of the environment (preventing oil
pollution)
** if life is the only subject saved – X salvage
reward
If life & property are saved – √ salvage reward.
 2.The
2. Theservice
servicemust
mustbe
bevoluntary
voluntary

 Means that no consideration has been given by the

promisee in return for the promisor’s offer.

 The salvage service is not voluntary if it is done due

to a duty owed to the owners of the property saved.
 E,g crew of the ship in distress or a pilot on board
are usually unable to claim salvage because their
efforts will be regarded as performance of their
pre-existing duties under their contracts of
employment.
 EXCEPTION: the service rendered beyond the
scope of their duties under contract.
 If the vessel is abandoned by the master, the
crew’s duties have been discharged.
 The San Demetrio

 A tanker was severely damaged in the North Atlantic

by gunfire from a German warship.
 She was fully loaded with a cargo of petrol (gasoline).
 The Master gave the order to abandon ship and the
whole crew left in the three lifeboats.
 The tanker caught fire after being hit again.
 The following day, the crew sighted the vessel from
their lifeboat. The tanker was still on fire.
 The crew, with great skill and courage, re-boarderd
the ship and brought the vessel several hundred
miles to safety.
 The crew claimed salvage award.
 HELD: the crew were entitled to claim
salvage
3. The property salved must be in
danger

 The subject matter of salvage must be in danger

when the service rendered.

 The salvor needs to prove the existence of real

danger when the service commenced. The court or
arbitrators will then decide whether the property was
really in danger.

 The danger must be real; the property is exposed to

damage or destruction.

 The danger usually refers to physical danger to the

maritime property. (X liability to 3rd parties)
4. The service must be successful

 No cure, no pay.
 No need to be total success.
 Partial success is sufficient. As long as there is
some measure of preservation to the owners.

Article 12 of the 1989 Salvage Convention:

“(1) Salvage operations which have had a useful

result give rise to a reward.
(2) Except as otherwise provided, no payment is due
under this Convention if the salvage operation has
had no useful result.”
 The Rene

 A vessel rendered assistance but her efforts

produced no success and worsened the
situation.
 Two ships collided through the fault of the
salving vessel.
 HELD: Salvor’s claim for salvage reward failed.
CONTRACTual
salvage
CONTRACTUAL SALVAGE

• Professional organisations would normally

provide salvage services under a standard
salvage agreement.

• Most common form is Lloyd’s Open Form

(LOF). LOF is known as Lloyd’s Standard
form of Salvage Agreement.
Lloyd’s Open Form (LOF).
 Several versions: LOF 1980, 1990, 1995, 2000.
 The current version is Lloyd’s 2011.

 It is a marine salvage contract which is legally

binding.

 Published by Lloyd’s of London.

 Under LOF, the parties accept that the services

are salvage services. Thus, it prevents the
owner of the salved property from arguing that
the property was in danger.
Lloyd’s Open Form (LOF).
SALVAGE REWARDS UNDER LOF

 The rewards are based on ‘no cure, no pay’

principle ( No reward if no property is salved).

 The amount of service will be determined by

arbitrator in Lloyd’s London Arbitration.

 LOF 2011: is parallel with the 1989 Convention

and incorporates Lloyd's Standard Salvage and
Arbitration Clauses 2011 (LSSA Clauses) and
the Procedural Clauses.
The international
convention on
salvage
INTERNATIONAL CONVENTION ON SALVAGE
1989 (SALVAGE CONVENTION 1989)
 This Convention is promoted by IMO.

 Supersede Salvage Convention 1910 which made

no reference to environmental matters.

 It was influenced by the development in LOF 1980

 Salvage Convention 1989 – incorporates

provisions on protection to the environment.
(physical damage to human health/marine
life/resources in coastal or inland waters or nearby
areas)
Environmental Matters Addressed
by Salvage Convention 1989
1. Duty of care to prevent or minimise damage to
environment.
– On salvor- Article 8(1)(b)- Art 8(1)(b) Salvage Convention
– On shipowner & master -Article 8(2)(b) Salvage Convention

2. Additional criteria in assessing the salvage award

i.e. “the skill and efforts of the salvor in preventing or
minimising damage to the environment” (Article 13(1)
(b).

3. Special compensation was introduced to enable

salvor to recover his expenses when there was a threat
of damage to the environment even though no success
is achieved. (Article 14 of Salvage Convention)
SALVAGE AWARD
CALCULATION
i) non-contractual
salvage
Article 13 of the 1989 Convention:
“The reward shall be fixed with a view to encouraging salvage
operations, taking into account the following criteria without
regard to the order in which they are presented below—

a) the salved value of the vessel and other property;

b) the skill and efforts of the salvors in preventing or
minimising damage to the environment;
c) the measure of success obtained by the salvor;
d) the nature and degree of the danger;
e) the skill and efforts of the salvors in salving the vessel,
other property and life;
f) the time used and expenses and losses incurred by the
salvors;
g) the risk of liability and other risks run by the salvors or
their equipment;
h) the promptness of the services rendered;
i) the availability and use of vessels or other equipment
intended for salvage operations;
Article 14 of the Convention (Special
Compensation):
The salvor can claim his for special compensation
under Article 14.1.
a) If there is a threat of damage to the
environment; AND
b) If the salvor’s expenses exceed the reward
under Article 13-

Article 14.2 (enhanced special compensation):

If the salvor is successful in preventing damage to
the environment, his special compensation under
Art. 14.1 could be increased up to 30 % of his
expenses. The tribunal may increase the
compensation up to 100%
 The salvor does not necessarily have to achieve
success in preventing / minimising damage to
the environment in obtaining special
compensation under Article 14(1).

 If the salvor succeed in preventing / minimising

damage to environment, the salvor will be able
to claim enhanced special compensation under
Article 14.2
ii) calculation of award
for contractual salvage
(lof )
• Since LOF contract is to be governed by English Law, the
1989 convention as enacted by Merchant Shipping Act 1995
(*UK Law) is applied.

• ASSESSMENT OF AWARD UNDER LOF 2011:

1. It is based on ‘no cure, no pay’ principle. Salvor receives
no reward if no property is saved.

2. If the property is saved, the arbitrators/judges will fix the

award based on criteria under Article 13.1 of Salvage
Convention 1989 (above).

3. The limit for the salvage award is the salved fund (the
salved value of the ship, its cargo and bunkers).

4. If no property is saved, but there is an effort to prevent

or minimise damage to the environment, special
compensation (Article 14) will be paid.
 SCOPIC (Special Compensation P&I
Club)
 Article 14 was found to be costly and time consuming in
terms of assessing the ‘special compensation’.

 There was also an issue of uncertainty as to whether a right

to special compensation existed and increment awarded was
claimed to be insufficient to give professional salvors the
encouragement to maintain and provide salvage services.

 As a result, the International Group of P&I Clubs (representing

shipowners’ liability insurers, marine property insurers, the
ISU (International Salvage Union), shipowners discussed and
developed an alternative method assessing the Special
Compensation for a salvor i.e. SCOPIC

 SCOPIC is a voluntary addition to the Lloyd’s Open Form

contract which can be incorporated at the time LOF is
agreed.
SCOPIC (Special Compensation P&I
Club)
The SCOPIC remuneration is paid by owners and the
clause may operate in relation to any salvage
operations, whether or not there is an environmental
risk.

Main features of SCOPIC :

• SCOPIC remuneration is based on a range of
agreed tariff rates (calculated by reference to the
horsepower of the salvage tug(s) employed) plus a
fixed bonus.
• Degree of success is immaterial (not necessary).
• The salvor doesn’t have to prove a threat to the
environment.
• By incorporating SCOPIC into the LOF, the salvor is
deprived of the benefits of Art 14.
THE LEGAL POSITION
OF SALVAGE IN
MALAYSIA
 Merchant Shipping Ordinance 1952 (section
393-402)

 Malaysia is not a party to Salvage Convention

1989. However, it may be adopted contractually
by incorporating it in the salvage contract.

 Salvors operating in Malaysian waters may offer

salvage services to shipowners by way of LOF
1990 onwards which incorporates the provisions
of 1989 Convention.
CRITERIA FOR SALVAGE AWARD
UNDER MSO 1952
Section 396(1) MSO 1952 provides criteria to be
taken into consideration by the Court in fixing the
salvage award:
a) The measure of success obtained
b) The efforts and deserts of the salvors
c) The danger run by the salved vessel, by her
passengers, crew and the cargo
d) The danger run by the salving vessel and the
salvors
e) The time expended, the expenses incurred, the
losses suffered, and the risks of liability and
other risks run by the salvors and the value of
the property exposed to such risks
f) The value of the property salved.
TOWAGE
Towing - a service by one vessel to another for a
fixed remuneration.

Common reason for towing :

 the vessel lacks its own motive power.
 Vessel emerges from a dockyard and is still
without functioning engine.
 A ship manoeuvering in a restricted area of water
where her very size could cause her to be a
hazard to other waterway traffic if she relied on
her own motive power entirely.

 Contract of towage – Tow has control over tug and

is responsible for any damage done by the tug.
The Niobe (1888)
The Niobe was being towed by the tug “Flying Serpent”
under a towage contract.

Both vessels collided with the “Valetta”. The “Valetta”

was
damaged only by the “Flying Serpent” not “the Niobe”.

There was a bad lookout on the “Niobe”. If there was

no problem on the lookout, the orders could have been
given to “the Flying Serpent” and collision could have
been avoided.

Held: Owner of “the Niobe” were liable for the

negligence of the “Flying Serpent” because the tow
had control over the tug.
• Contract of Towage: Normally, it is
mentioned that the Master and crew
while carrying out the towage
service are to be the servant of the
tow (or its owner) and not of the tug
owner
REFERENCES

Baughen, S. (2012). Shipping Law. UK: Routledge.

n.a. (2012). Shipping Law. Institute of Chartered

Shipbrokers.

Thomas, D.R. (2013). Shipping, Law and the Marine

Environment in the 21st Century: Emerging
Challenges for the Law of the Sea- Legal
Implications and Liabilities. UK: Lawtext Publishing
Limited. Chapter 6: Marine Salvage and the
Environment: Developments, Problems and
Prospects.