Lloyd’s Open Form of Salvage
Agreement 1990
LOF 1990
STANDARD FORM OF
SALVAGE AGREEMENT
(APPROVED AND PUBLISHED BY THE COUNCIL OF LLOYD’S)
_________________
NO CURE NO PAY
On
board the………………..
Dated ……..
………
.SeeNote 1
IT
IS HEREBY AGREED between Captain+……………………..
for and on behalf of the Owners of
the”………………………” her
cargo freight bunkers stores and any other property
thereon (hereinafter collectively called “the Owners”)
and ……………..for and on
behalf of ……………….
.See
Note 2
Above ………………(hereinafter called “the
Contractor’*) that: ¬≠
1.       
(a) The Contractor shall use his best
endeavours: ­
(i)      
to salve the”……………………….” and/or
her cargo freight
.SccNore3 bunkers
stores and any other property thereon and take them to # …………. or
to such other place as may
hereafter be agreed either place to be deemed a place of safety or if no such
place is named or agreed to a place of safety and
(ii) while performing the salvage services to prevent or minimize
damage to the environment.
(b) Subject to clause 2 incorporating Convention
Article 14 the services shall be rendered and accepted as
salvage services upon the principle of “no cure – no
pay.
(c) The Contractor’s remuneration shall be fixed
by Arbitration in London
in the manner hereinafter prescribed and any other difference arising out of
this Agreement or the operations thereunder shall be referred to Arbitration in
the same way.
(d) In the
event of the services referred to in this Agreement or any part of such
services having been already rendered at the date of this Agreement by the
Contractor to the said vessel and/or her cargo freight bunkers stores and any
other property thereon the provisions of this Agreement shall apply to such
services.
(e) The
security to be provided to the Council of Lloyd’s (hereinafter called “the
Council”) the Salved Value(s) the Award and/or any Interim Award(s) and/or any
Award on Appeal shall be in
.SccNore3 # ………….. currency.
(f) If clause 1(e) is not completed then the security to be provided
and the Salved Value(s) die Award and/or Interim Award(s) and/or Award on
Appeal sha 24324t1917y ll be in Pounds Sterling.
(g) This Agreement and Arbitration thereunder shall except
as otherwise expressly provided be governed by the law of England,
including the English law of salvage.
PROVISIONS AS TO THE
SERVICES
2. Articles
1(a) to (e), 8,13.1, 13.2 first sentence, l~3.3 and 14
of the International Convention on Salvage 1989 (“the Convention Articles”) set
out hereafter are hereby incorporated into this Agreement. The terms
“Contractor” and “services” / “salvage services” in this Agreement shall have
the same meanings as the terms “salvor(s)” and “salvage operation (s)” in the Convention
Articles.
3. The Owners
their Servants and Agents shall co-operate fully with the Contractor in and
about the salvage including obtaining entry to the place named or the place of
safety as defined in clause 1. The Contractor may make reasonable use of the
vessel’s machinery gear equipment anchors chains stores and other appurtenances
during and for the purpose of the salvage services free of expense but shall
not unnecessarily damage abandon or sacrifice the same or any property the
subject of this Agreement.
PROVISIONS AS TO
SECURITY
4. (a) The Contrator shall immediately after the termination of
the services or sooner notify the Council and where practicable the Owners of
the amount for which he demands security (inclusive of costs expenses and
interest) from each of the respective Owners.
(b) Where the exception to the principle of “no cure – no
pay” under Convention Article 14 becomes likely to be applicable the owners of
the vessel shall on the demand of the Contractor provide security for the
Contractor’s special compensation.
(c) The amount of any such security shall be reasonable in the light of
the knowledge available to the Contractor at the time
when the demand is made. Unless otherwise agreed such security shall be
provided (i) to the Council (ii) in a form approved by the Council and (iii) by
persons firms or corporations either acceptable to the Contractor or resident
in the United Kingdom and acceptable to the Cu.’9cil. The Council shall not be
responsible f(x the sufficiency (whether in amount or otherwise) of any
security which shall be provided nor for the default or insolvency of any
person firm or corporation providing the same.
(d) The owners of the vessel their
Servants and Agents shall use their best endeavours to ensure that the cargo
owners provide their proportion of security before the cargo is released.
5. (a) Until security has been provided as aforesaid the
Contractor shall have a maritime lien on the property salved for his
remuneration. The property salved shall not without the consent in writing of
the Contractor (which shall not be unreasonably withheld) be removed from the
place to which it has been taken by the Contractor
under clause 1(a).
(b) The Contractor shall not arrest or detain the property salved unless: ­
(i) security is not
provided within 14 days (exclusive of Saturdays and Sundays or other days
observed as general holidays at Lloyd’s) after the date of the termination of
the services or
(ii) he has reason to
believe that the removal of the property salved is contemplated contrary to
clause 5(a) or
(iii) any attempt is made
to remove the property salved contrary to clause 5(a).
(c) The Arbitrator appointed under clause 6 or the Appeal Arbitrator(s)
appointed under clause 11(d) shall have power in their absolute discretion to
include in the amount awarded to the Contractor the whole or part of any
expenses reasonably incurred by the Contractor in: ­
(i) ascertaining
demanding and obtaining the amount of security reasonably required in
accordance with clause 4
(ii) enforcing and/or
protecting by insurance or otherwise or taking reasonable steps to enforce
and/or protect his lien.
PROVISIONS AS TO ARBITRATION
6. (a) Where security is provided to the Council in whole or in
part the Council shall appoint an Arbitrator in respect of the property covered
by such security.
(b) Whether security has been provided or not the
Council shall appoint an Arbitrator upon receipt of a written request made by
letter telex facsimile or in any other permanent form provided that any party
requesting such appointment shall if required by the Council undertake Co pay
the reasonable fees and expenses of the Council and/ or any Arbitrator or
Appeal Arbitrator(s).
(c)Whew an Arbitrator has been appointed and the
parties do not proceed to arbitration the Council may recover any fees
costs
and/or expenses which are outstanding and thereupon terminate the appointment
of such Arbitrator.
7. The Contractor’s remuneration shall be fixed by the Arbitrator
appointed under clause 6. Such remuneration shall not be diminished by reason
of the exception to the principle of ‘no cure – no
pay’ under Convention Article 14.
REPRESENTATION
8. Any
party to this Agreement who wishes to be heard or to adduce evidence shall
nominate a person in the United
Kingdom to represent him failing which the
Arbitrator or Appeal Arbitrator(s) may proceed as if
such party had renounced his right to be heard or adduce evidence.
CONDUCT OF THE ARBITRATION
9. (a) The Arbitrator
shall have power to
(i) admit such oral
or documentary evidence or information as he may think fit
(ii) conduct the
Arbitration in such manner in all respects as he may think fit subject to such
procedural rules as the Council may approve
(iii) condemn the Contractor in his absolute discretion in the
whole or part of the expense of providing excessive security and deduct the
amount in which the Contractor is so condemned from the salvage remuneration
and/or special compensation
(iv)
make Interim Award(s) on such terms as may be fair and
just
(v) make such orders as
to costs fees and expenses including those of the Council charged tinder
CI2~P~ 9(b) and 12(b) as may be fair and just.
(b) The Arbitrator and the
Council may charge reasonable fees and expenses for their services whether the
Arbitration proceeds to a hearing or not and all such fees and expenses shall
be treated as part of the costs of the Arbitration.
(c) Any Award shall (subject to Appeal as provided in this Agreement)
be final and binding on all the parties concerned whether they were represented
at the Arbitration or not.
INTEREST
10. 1 crest at rates per annum to be fixed by the Arbitrator shall
(subject to Appeal as provided in this Agreement) be payable on any sum awarded
taking into account any sums already paid: ­
(i) from the date of
termination of the services unless the Arbitrator shall in his absolute
discretion otherwise decide until the date of publication by the Council of the
Award and/or Interim Award(s) and
(ii) from the expiration of 21 days (exclusive of
Saturdays and Sundays or other days observed as general holidays at Lloyd’s)
after the late of publication by the Council of the Award and/or Interim
Award(s) until the date payment is received by the Contractor or the Council
both dates inclusive.
PROVISIONS AS TO APPEAL
11. (a) Notice of Appeal if any shall be given
to the Council within 14 days (exclusive of Saturdays and Sundays or other days
observed as general holidays at Lloyd’s) after the date of the publication by
the Council of the Award and/ or Interim Award(s).
(b) Notice of Cross-Appeal if any shall be given to
the Council within 14 days (exclusive of Saturdays and Sundays or other days
observed as general holidays at Lloyd’s) after notification by the Council to
the parties of any Notice of Appeal. Such notification if sent by post shall be
deemed received on the working day following the day of posting.
(c) Notice of Appeal or
Cross-Appeal shall be given to the Council by letter telex facsimile or in any
other permanent form.
(d) Upon receipt of Notice of
Appeal the Council shall refer the Appeal to the hearing and determination of
the Appeal Arbitrator(s) selected by it.
(e) If any Notice of Appeal or
Cross-Appeal is withdrawn the Appeal hearing shall nevertheless proceed in
respect of such Notice of Appeal or Cross-Appeal as may remain.
(f) Any Award on Appeal shall
be final and binding on all the parties to that Appeal Arbitration whether they
were represented either at the Arbitration or at the Appeal Arbitration or not.
CONDUCT OFTHE APPEAL
12.(a) The Appeal
Arbitrator(s) in addition to the powers of the Arbitrator under clauses 9(a)
and 10 shall have power to
(i) admit the evidence
which was before the Arbitrator together with the Arbitrator’s notes and
reasons for his Award and/or Interim Award(s) and any transcript of evidence
and such additional evidence as he or they may think fit
(ii) confirm increase or
reduce the stun awarded by the Arbitrator and to make such order as to the pay ­ment
of interest on such sum as he or they may think fit
(iii)
confirm revoke or vary any order and/or Declaratory
Award made by the Arbitrator.
(b) The Appeal Arbitrator(s) and the Council may charge reasonable fees
and expenses for their services in connection with the Appeal Arbitration
whether it proceeds to a hearing or not and all such fees and expenses shall be
treated as part of the costs of the Appeal Arbitration.
PROVISIONS AS TO PAYMENT
13. (a) In
case of Arbitration if no Notice of Appeal be received by the Council in
accordance with clause 11(a) the Council shall call upon the party or parties
concerned to pay the amount awarded and in the event of non-payment shall
subject to the Contractor first providing to the Council a
satisfactory Undertaking to pay all the costs thereof realize or enforce the
security and pay therefrom to the Contractor (whose
receipt shall be a good discharge to it) the amount awarded to him
together with interest if any. The Contractor shall reimburse the parties
concerned to such extent as the Award is less than any sums paid on account or
in respect of Interim Award(s):
(b) If Notice of Appeal be received by the Council in accordance with
clause 11 it shall as soon as the Award on Appeal has been published by it call
upon the party or parties concerned to pay the amount awarded and in the event
of non-payment shall subject to the Contractor first providing to the Council a
satisfactory Undertaking to pay all the costs thereof realize or enforce the
security and pay therefrom to the Contractor (whose
receipt shall be a good dis ­charge to it) the amount awarded to him
together with interest if any. The Contractor shall reimburse the parties con ­cerned
to such extent as the Award on Appeal is less than any
sums paid on account or in respect of the Award or In ­terim
Award(s).
(c) If any sum shall become payable to the Contractor as remuneration
for his services and/or interest and/or costs
as the result of an agreement made between the Contractor and the Owners or any
of them the Council in the event of non-payment shall
subject to the Contractor first providing to the
Council a satisfactory Undertaking to pay
all the costs thereof realize or enforce the security and pay therefrom to
the Contractor (whose receipt shall be a good discharge to
it) the said sum.
(d) If the Award and/or Interim Award(s) and/or
Award on Appeal provides or provide that the costs of the Arbitration
and/or of the Appeal Arbitration or any part of such costs shall be borne by
the Contractor such costs may be deducted from the amount awarded or agreed
before payment is made to the Contractor unless satisfactory security is
provided by the Contractor for the payment of such costs.
(e) Without prejudice to the provisions of clause
4(c) the liability of the Council shall be limited in any event to the amount
of security provided to it.
GENERAL PROVISIONS
14.
The Master or other person signing this Agreement on behalf of the property to
be salved enters into this Agreement as agent for the
vessel her cargo freight bunkers stores and any other property thereon and the
respective Owners thereof and binds each (but not the one for the other or
himself personally) to the due performance thereof.
15. In considering what sums of money have been
expended by the Contractor in rendering the services and/or
in fixing the amount of the Award and/or Interim Award(s) and/or Award on
Appeal the Arbitrator or Appeal Arbitrator(s) shall to such an extent and in so
far as it may be fair and just in all the circumstances give effect to the
Consequences of any change or changes in the relevant rates of exchange which
may have occurred between the date of termination of the services and the date
on which the Award and/or Interim Award(s) and/or Award on Appeal is made.
16.
Any Award notice authority order or other document signed by the Chairman of
Lloyd’s or any person authorised by the Council for the purpose shall be deemed
to have been duly made or given by the Council and shall have the same force
and effect in all respects as if it had been signed by every
member of the Council.
17. The Contractor may claim salvage and
enforce any Award or agreement made between the Contractor and the Owners
against security provided under clause 4 if any in the name and on behalf of
any Sub-Contractors Servants or Agents including Masters and members of the
crews of vessels employed by him or by any Sub-Contractors in the services
provided that he first provides a reasonably satisfactory indemnity to the
Owners against all claims by or liabilities to the said persons.
18.When there is no
longer any reasonable prospect of a useful result leading to a
salvage reward in accordance with Convention Article 13 the owners of the
vessel shall be entitled to terminate
the services of the Contractor by giving notice to the
Contractor in writing.
19. No person signing this Agreement or any party on
whose behalf it is signed shall at any time or in any manner whatsoever offer
provide make give or promise also to provide demand or take any form of
inducement for entering into this Agreement.
THE
CONVENTION ARTICLES
Article 1
Definitions
(a) Salvage operation means any act or activity undertaken to assist a
vessel or any other property in danger in navigable
waters or in any other waters whatsoever.
(b) Vessel means any ship or craft, or any structure capable of
navigation
(c) Property means any property not permanently and intentionally
attached to the shoreline and includes freight at risk
(d) Damage to the environment means substantial physical damage to
human health or to marine life or resources in coastal or inland waters or
areas adjacent thereto, caused by pollution, contamination, fire, explosion or
similar major incidents
(e) Payment means any reward, remuneration or
compensation due under this Convention
Article8
Duties of the Salvor and of the Owner and Master
1. The
salvor shall owe a duty to the owner of the vessel or other property in danger
(a) to carry
out the salvage operations with due care;
(b) in performing the
duty specified in subparagraph (a), to exercise due care to prevent or minimize
damage to the environment;
(c) whenever
circumstances reasonably require, to seek assistance from other salvors; and
(d) to accept the intervention of oilier
salvors when reasonably requested to do so by the owner or master of the vessel
or other property in danger, provided however that the amount of his reward
shall not be prejudiced should it be found that such a request was
unreasonable.
2. The
owner and master of the vessel or the owner of other property in danger shall
owe a duty to the salvor:
(a) to co-operate fully
with him during the course of the salvage operations;
(b) in so doing, to
exercise due care to prevent or minimize damage to the environment; and
(c) when the vessel or
other property has been brought to a place of safety, to accept redelivery when
reasonably requested by the salvor to do so
Article
13
Criteria for fixing the reward
1. 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
minimizing 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;
(j) the
state of readiness and efficiency of the salvor’s equipment and the value
thereof
2.       
Payment of a reward fixed according to
paragraph 1 shall be made by all of the vessel and other property interests in
proportion to their respective salved values
3.       
The rewards, exclusive of any interest and
recoverable legal costs that may be payable thereon, shall not exceed the
salved value of the vessel and other property
 
Article
14
Special Compensation
1.       If
the salvor has carried out salvage operations in respect of a vessel which by
itself or its cargo threatened damage to
the environment and has failed to earn a reward under Article 13 at least
equivalent to the special compensation assessable in accordance with this
Article, he shall be entitled to special compensation from the owner of that
vessel equivalent to his expenses as herein defined
2.       If,
in the circumstances set out in paragraph 1, the sa]vor by his salvage
operations has prevented or minimized damage to the environment, the special
compensation payable by the owner to the salvor under paragraph 1 may be
increased up to a maximum of 30% of the expenses incurred by the salvor.
However, the Tribunal, if it deems it fair and just to do so and bearing in
mind the relevant criteria set out in Article 13, paragraph I, may increase such
special compensation further, but in no event shall the total increase be more
than 100% of the expenses incurred by the salvor
3.¬†¬†¬†¬†¬†¬† Salvor’s
expenses for the purpose of paragraphs 1 and 2 means the out-of-pocket expenses
reasonably incurred by the salvor in the salvage operation and a fair rate for
equipment and personnel actually and reasonably used in the salvage operation,
taking into consideration the criteria set out in Article 13, paragraph 1(h),
(I) and(j)
4.       The
total special compensation under this Article shall be paid only if and to the
extent that such compensation is greater than any reward recoverable by the
salvor under Article 13
5.        
If the salvor has been negligent and has
thereby failed to prevent or minimize damage to the environment, he may be deprived
of the whole or part of any special
compensation due under this Article
6.       Nothing
in this Article shall affect any right of recourse on the part of the owner of
the vessel
For and on behalf of the Contractor
……………………
(To be signed either by the Contractor personally or
by the Master of the salving vessel or other person whose name is inserted in
line 4 of this Agreement)
For and on behalf of the Owners and propriety to be
salved.
……………………
(To be signed by the Master or other person whose
name is inserted in line 1 of this Agreement)