News & Insights

Co-Salvage: How to Slice the Pie

In many cases salvage operations are a cooperative venture conducted by more than one Salvor. Salvors may work together at the same time or may work consecutively toward their ultimate goal of salving property and minimizing damage to the environment. Co-salvage situations most commonly occur near busy harbors or other places where salvage assets are more closely concentrated.

In order to be successful, Salvors must remember that the first Salvor on the scene does not necessarily possess any greater right to handle a particular salvage situation than do later arrivals. In fact, Article 8 of the Salvage Convention of 1989 (SALCON 89), requires a Salvor to seek assistance from other Salvors whenever the circumstances reasonably require it. Article 8 also requires a Salvor to accept the intervention of other Salvors whenever the Salvor is reasonably requested to do so by the Owner or Master of the vessel or other imperiled property. In fact, Article 19 of SALCON 89 recognizes that the Owner or Master of a vessel in distress may expressly and reasonably refuse salvage services or prohibit a Salvor from providing salvage services. A Salvor who provides his services despite such express refusals will not be entitled to a reward.

In co-salvage situations, there is only one salvage reward, which must be divided between all Co-Salvors. In the event one or more Co-Salvors decide not to press their claims, then the court or other tribunal which determines the amount of the reward, must credit their efforts and must apportion the salvage reward to include even their absent claims.

Quite often in co-salvage situations a single reward must be apportioned between several classes of Salvors:

  1. Those Salvors who actively pursue their claims
  2. Those Salvors who are prevented by law from seeking a reward (such as the Coast Guard or fire department)
  3. Those Salvors who have already settled with the Owner of the salved property
  4. Those Salvors who are either unaware of their salvage rights or decide not to seek a reward

The proceedings in such co-salvage situations are complicated by the tendency of active salvage claimants to neglect mentioning the role of their Co-Salvors (so as not to risk minimizing the amount of their own rewards), the natural tendency of Owners not to mention efforts taken by those sleeping Salvors who may be awakened after failing to assert their salvage claims, and by the court’s need to bring out all of the facts, circumstances, and actions by each and every Salvor in order to set the reward in a just and appropriate amount.

Setting the reward and apportioning it between Co-Salvors can be similar to trying a case to an empty chair. Those parties who neglected to pursue their claims or who cannot legally collect upon their claims will still be granted a portion of the reward. Their failure to claim their proportion or to be able to collect it will inure to the benefit of the vessel owner, not to the benefit of the other Salvors.

The mere fact that a co-salvage situation involves a number of Salvors does not necessarily increase the size of the reward, which must be apportioned among the Co-Salvors. Nevertheless, the efforts taken by a number of Co-Salvors will be considered by the court in assessing the degree of peril, and the effort required to salve the endangered property.

The first Salvors on scene, whose operations have had a useful result, will typically receive an enhanced reward over Salvors who arrive later. This policy is to promote a swift response to the scene and to alleviate some of the competition felt between first arriving Salvors and later arrivals. Otherwise, the first Co-Salvors arriving on the scene would be more hesitant to cooperate with later arrivals. In addition, the first arriving Co-Salvors who are legally in possession of the vessel or other property being salvaged will typically be granted the legal right of possession. Later arriving Salvors who wrongfully deprive the first Salvor of possession will be presumed to be guilty of misconduct unless they can carry the burden of proving that taking possession of the property from the first Salvor was necessary for the preservation of the property or because the first Salvor did not have adequate power, equipment or skills to do the job. In situations where a vessel remains in peril despite the arrival and departure of several consecutive Co-Salvors, each Salvor who contributed to the successful result will share in the salvage reward.

Of course, when deciding how to apportion the reward among Co-Salvors, the court will compare their various lengths of time on-scene, the respective amounts of labor, supplies and equipment expended by each Salvor, and the risks taken by each Co-Salvor. Only after examining each of the ten criteria upon which salvage awards are based in accordance with Article 13 of SALCON 89, will the court decide upon the most appropriate manner in which to “split up the pie”. In the end it is hoped that each Co-Salvor will be happy with his respective slice. Those “pieces of the pie” that are unclaimed by Salvors who either do not or cannot assert their rights to a share of the reward shall remain on the plate. Unfortunately, they will not inure to the benefit of the Co-Salvors who presented their claims, but to the benefit of the Owner of the salvaged property, who will escape paying those shares.

Tags: ,