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By:

LISSA BELLE M. VILLANUEVA

Historical Background
Origins of salvage
The origins of salvage in maritime law are both ancient and
obscure, and although there is no comprehensive history of
salvage, there are some excellent summaries.
evidence of salvage rewards is found in the Rhodian Law of
approximately 800 B.C.,
while there is reference to remuneration for salvors at art. 4
of the Roles of Oleron
and in the Consolato del Mare at art.CCXLV,
as well as in the medieval sea codes.
The Ordonance de la Marine, 1681 of Louis XIV also codified
several rules on cargo salvage in the event of shipwreck

Historical Background
The Salvage Convention 1910 adopted the
English maritime law principle of salvage,
involving no cure/ no pay, rather than the
civil law principle of assistance, permitting
remuneration no matter what the outcome

Even before the IMO came about

Built in the US in 1959


Cargo capacity : 60,000 tons

Later, she was expanded to twice


that capacity in Japan; 63,000
tonnes for the ship and 120,000
for the cargo

Built in the US in 1959


Cargo capacity : 60,000 tons

Later, she was expanded to twice


that capacity in Japan; 63,000
tonnes for the ship and 120,000
for the cargo

Started spilling 30,000


gal of oil

British Air Force dropped


30 bombs, 11 rockets

1 salvor died

Led to development of
CLC, IOPC

Amoco Cadiz
March 16, 1978,
from Persian Gulf to
Rotterdam
Ran aground off the
coast of Brittany,
France
Spilled 68.7 million
gallons of oil
Damage to its
steering gear during
heavy weather

Amoco Cadiz
German Tug, Pacific
11:28 am to 4pm
Master had to wait
for the decision of
the ship owner

Historical Background
1. The Salvage Convention 1910 adopted the English
maritime law principle of salvage, involving no cure/ no
pay, rather than the civil law principle of assistance,
permitting remuneration no matter what the outcome
2. The Salvage Convention 1989 adopted the concepts of
both no cure/no pay and assistance, this latter with
respect to avoiding damage to the environment
3. Lloyds Standard Form of Salvage Agreement (LOF 1995
and LOF 2000) the most common form of salvage
contract in use around the world, Lloyds Standard Form
of Salvage Agreement (LOF)

Historical Background
1. The Salvage Convention 1910 adopted the English
maritime law principle of salvage, involving no cure/ no
pay, rather than the civil law principle of assistance,
permitting remuneration no matter what the outcome
Act No. 2616 The Salvage Law, enacted by the
Philippines which took effect in February 4, 1916
2. The Salvage Convention 1989 adopted the concepts of
both no cure/no pay and assistance, this latter with
respect to avoiding damage to the environment
3. Lloyds Standard Form of Salvage Agreement (LOF 1995
and LOF 2000, 2005) the most common form of salvage
contract in use around the world, Lloyds Standard Form
of Salvage Agreement (LOF)

Historical Background
1. Act No. 2616 The Salvage Law, enacted by the
Philippines which took effect in February 4, 1916

2. Republic Act No. 5173

3. Republic Act No. 9993 The Philippine Coast Guard Law


of 2009

Legal Basis
(Philippine Laws)
RA No. 9993. The Philippine Coast Guard Law of 2009
Section 3. Powers and Functions. The PCG shall
have the following powers and functions:

x x x
(g) To remove, destroy or tow to port, sunken or
floating hazards to navigation, including illegal fish
traps and vessels, at or close to sea lanes which may
cause hazard to the marine environment;

Legal Basis
(Philippine Laws)
Section 3, RA No. 9993. Powers & Functions of the PCG

(h) To issue permits for the salvage of vessels and to


supervise all marine salvage operations, as well as
prescribe and enforce rules and regulations
governing the same;

Legal Basis
(Philippine Laws)
RA No. 9993 The Philippine Coast Guard Law of 2009
Section 3. Powers and Functions of the PCG
(i) To render aid to persons and vessels in distress
and conduct search and rescue in marine accidents
within the maritime jurisdiction of the Philippines,
including the high seas, in accordance with
applicable
international
conventions.
In
the
performance of this function, the PCG may enlist the
services of other government agencies and the
merchant marine fleet;

To encourage mariners to provide prompt


service in emergencies the award of a
compensation which is computed much greater
than the value of the actual labor involved is
given.

Definition:

a service which one person renders to


the owner of a ship or goods by his own
labor, preserving the goods or ship which
the owner or those entrusted with the
care of them have either abandoned in
distress at sea or are unable to protect
and secure. It is founded on the equity
of
remunerating
private
services
performed in saving, in whole or in part,
a ship or its cargo from impending peril,
or of recovering them after actual loss.
Philippine Supreme Court

Principles of Modern Salvage Law


Five basic requirements
a. Maritime Property
b. Voluntary action
c. Danger
d. Success
e. Location

Principles of Modern Salvage Law


Maritime Property
a. Ship
b. Cargo
c. Freight
Excludes : aids to navigation at sea (buoys,
beacons)
: pure life salvage

Principles of Modern Salvage Law


Voluntary Action
a. No pre-existing contract to render
assistance to the distressed/salvaged
ship
b. No public duty to render salvage service
Excludes : crew, tug, pilots, govt agencies

Principles of Modern Salvage Law


Danger
a. the marine property must be in danger
of being lost;
b. the danger must be real although not
necessarily immediate
c. subject to the assessment of the master
The master always has the discretion to accept
or reject salvage service.

Principles of Modern Salvage Law


Success
a. no cure no pay;
b. the reward is payable out of the value of
the property salved
c. all those who materially assisted in
the rescue of the ship or cargo
Courts tend to favor the payment of salvage claims.

Principles of Modern Salvage Law


Location
a. the place where salvage service was
rendered must have salvage law or must
allow the payment of salvage claims;
b. in the jurisdictions of signatories to the
Salvage Convention

The Salvage Reward


1.Basic criteria of salvage reward
2.Other criteria
3.Criteria under US practice
4.Special compensation
5.The SCOPIC clause
6.Quantum and apportionment

The Salvage Reward


Basic criteria of salvage reward
a.

Extent and skill of the acts of the salvors;

b.

the dangers encountered;

c.

Value of the property salved and the salving


property at risk;

d.

Time used in the salvage operations;

e.

Expenses and losses incurred by the salvors;

f.

Risks of liability by salvors;

g.

Measure of success attained

The Salvage Reward


Other criteria
a. Promptness of the services rendered;
b. Availability and use of vessels or other
equipment intended for salvage
operations;
c. Readiness and efficiency of the
salvors equipment and its value

The Salvage Reward


The Blackwall (USA)
Courts of admiralty usually consider the following
circumstances as the main ingredients in determining
the amount of the award to be decreed for a salvage
service:
1. The labor expended by the salvors in rendering the
salvage service;
2. The promptness, skill and energy displayed in
rendering the service and saving the property
3. The value of the property employed by the salvors in
rendering the service and the dangers to which such
property was exposed

The Salvage Reward


The Blackwall (USA)
4. The risk incurred by the salvors in securing the
property from the impending peril
5. The value of the property saved
6. The degree of danger from which the property was
rescued

The Salvage Reward


Special compensation
- Considered for the salvage of vessel or
cargo which poses a danger to the
environment;
- Covers out-of-pocket expenses + a fair
rate for equipment and personnel
actually and reasonably used in the
operation

The Salvage Reward


The SCOPIC clause
Provided in the Lloyds Open Form
Has nothing to do with the environment
Provides for guaranteed remuneration
for services rendered based on a
schedule of rates for materials and men
Computation : out-of-pocket expenses
+ standard 25% bonus

The Salvage Reward


The SCOPIC clause

If no cure no pay < SCOPIC = SCOPIC

If no cure no pay > SCOPIC :


no cure no pay SCOPIC x 25% = discount
SCOPIC discount = reward

The Salvage Reward


Quantum and apportionment
Reward is based on the market value
of the property after it is salved or its
replacement cost if there is no available
market for the property salved;
From this amount is deducted taxes,
costs of storage, valuation, sale and
expenses of the salvor

The Salvage Reward


1. Salvage claims constitute a lien on the
property salved
2. Salvage claims enjoy priority in payment
3. Under Philippine law, if no agreement:
a. Ship owner 50%
b. Master 25%
c. Crew 25% to be divided in proportion
to their salaries

Salvage Reward in the Philippines


Sale value of the property salved
Less:
Expenses
of
custody,
conservation,
advertisement & auction, taxes and/or duties

Less:
Expenses of the salvage operations

*******
Get 50% of the net remaining amount and
divide in accordance with law

State Controlled Salvage


1.Salvage by Public authorities
2.Need for Cooperation

Legal Mandate
Republic Act No. 9993 The Philippine Coast Guard Law of
2009
Section 3 Powers and Functions: xxx
(g) To remove, destroy or tow to port, sunken or
floating hazards to navigation, including illegal fish
traps and vessels, at or close to sea lanes which
may cause hazard to the marine environment;)
(h) To issue permits for the salvage of vessels and to
supervise all marine salvage operations, as well as
prescribe and enforce rules and regulations
governing the same;

Nam Yang 8, Pagudpud, Ilocos Norte

January 1, 2010 December 2010

Time for Suit


1.Two-year limitation
2.Extensions on indemnity actions if
allowed in national laws

Thank you