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Developments in Salvage Law

COMING TO THE RESCUE - DEVELOPMENTS IN SALVAGE LAW

BY GAVIN BROWN

The law of salvage and wreck is an area of maritime law where a study of the cases, from which the principles are derived, reads a bit like a pirate novel filled with references to treasure, danger, reward and steam boats floundering at the mouth of the Thames.

This is probably why the subject is a favourite of maritime lawyers the world over. However, in South Africa, despite the notoriously dangerous coastline and the number of wrecks scattered along it, there are surprisingly few cases dealing directly with salvage.

This is probably the reason why the recent Supreme Court of Appeal judgement in the matter of the mv “Cleopatra Dream” has raised such interest in South African maritime legal circles.

The facts of the case are as follows. On 2 April 2004 the “Cleopatra Dream” completed loading at the Saldanha bulk ore terminal and requested a pilot for 04h00. Saldanha is a compulsory pilot port and the pilots are employed by Transnet National Ports Authority (“TNPA”).

At 04h00 the vessel commenced casting off her mooring lines with a pilot onboard. The tug “Jutten” made fast to the vessel and aided her from the berth, casting off just before the “Cleopatra Dream” reached the channel for departing ships at 04h20.

At 04h40, and within port limits, the “Cleopatra Dream” experienced a power failure which resulted in the stoppage of her main engine. She was unable to drop anchor. The vessel accordingly began to drift without power in the south-westerly wind and towards the shallow water around Jutten Island.

The pilot, still onboard the vessel, requested tug assistance and at 06h18 the “Jutten” again came alongside. A second pilot was placed on the vessel and shortly thereafter a further tug, the “Meeuw” also made fast to the “Cleopatra Dream” and she was manoeuvred alongside.

Almost immediately thereafter TNPA arrested the “Cleopatra Dream” with the intention of enforcing a claim for salvage services with security to be posted in an amount of approximately R10 million to secure the release of the vessel. This resulted in fierce litigation between the owners of the “Cleopatra Dream” and TNPA which was finally resolved by the Supreme Court of Appeal early this year.

During the course of the litigation, the owners of the “Cleopatra Dream” disputed that TNPA was entitled to claim salvage because, so the owners contended, the services it rendered did not conform with all of the essential requirements of salvage.

The general approach to salvage is neatly summed up by Dr Lushington, a pillar of English maritime law, in his comments in the 1861 case of the mv “Albion”:

“It is of the utmost importance to the safety of shipping, that the owners of steam-tugs… should know that this Court is inclined to reward liberally unusual efforts to assist vessels in distress, where those efforts are successful.”

From this, and in a long line of cases dating back to the 1800’s, the principle elements which must be present for assistance to qualify as salvage have been developed. Briefly summarised, they are as follows: Salvage which qualifies for a salvage reward must be:

1.    Voluntary services in circumstances of danger which must be rendered to;
2.    Salved property, giving rise to;
3.    A salved fund from which an award is made to;
4.    A salvor whose conduct does not preclude him/her from receiving such an award.

In the view of the owners of the “Cleopatra Dream” all of the elements were present except for voluntariness. It was the owner’s contention that, as the vessel was within port limits and, as TNPA, was under both a statutory and common law duty to users of the port, it could not be said that the services were rendered voluntarily.

This was in turn based on the long standing principle of salvage that a reward cannot be claimed where there is a pre-existing duty to render assistance, whether that duty is in contract or otherwise. The rationale behind this principle is that the law should not encourage a person to neglect his duty in order to contribute to danger, which will result in salvage and a greater reward.

TNPA disputed this and argued in response that it was not under a statutory or a common law duty to render assistance in the circumstances facing the “Cleopatra Dream”. Furthermore, even if it was under such a duty, the Wreck and Salvage Act of 1996 read together with the International Convention on Salvage, 1989 (“the Convention”) (which has the force of law in South Africa) entitled a public authority to a salvage reward.

The court found against TNPA. In its judgement the court held that TNPA was under a duty to render assistance to vessels within the port limits. This was not least because a pilot remained onboard during the incident and summoned the tug assistance. The rendering of such assistance, so the court held, was not discretionary in the circumstances.

The court also found that, where a pre-existing statutory duty exists, in terms of the Convention, it is possible for a salvor to claim a reward but only in circumstances and to the extent to which its actions, in rendering assistance, exceed the breadth or degree of any assistance required in terms of its duty. In the present case the court did not agree with TNPA’s submissions that the assistance rendered to the “Cleopatra Dream” went beyond the scope of the statutory duty it owed to the vessel and to other users of the port.

The judgement is welcome, not least because, as in Saldanha, the only possible assistance one can summon in a time of distress is controlled by TNPA and its employees. The notion of an authority, which has a monopoly over port services, having an incentive to wait until port users are in trouble prior to coming to their assistance, in the hope of receiving a reward, is repugnant to the idea of properly functioning, safe ports.

Turning back to Dr Lushington’s analysis, TNPA did not qualify for a salvage reward simply because its efforts to assist the vessel in distress were in no way “unusual”.


POST IT NOTE:

Did you know…

That apart from the traditional areas of maritime and transport law, the maritime and transport department also advises on:

•    Contracts for the purchase and sale of commodities;

•    The physical trading of commodities;

•    Logistics, warehousing and distribution agreements;

•    Customs and excise; and

•    Financing arrangements for the purchase of boats and marine assets.



Kind regards
Anusha Mudhai
Consultant - Private Sector
Meropa Communications


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