The law of salvage

The law of salvage is a principle of Maritime Law whereby any person who helps recover another person’s ship or cargo in peril at sea is entitled to a reward commensurate with the value of the property salved. Maritime law is inherently international, and although salvage laws vary from one country to another, generally there are established conditions to be met to allow a claim of salvage.

Salvage could be defined as “Any act or activity to assist a vessel, or any other property in danger, in navigable waters, or in any other waters whatsoever”. The English Oxford Dictionary defines salvage as “Rescue (a wrecked or disabled ship or its cargo) from loss at sea”. The general definition of salvage as a maritime term is, “a reward for saving property at sea”. Reward for saving life has also come up, but historically, salvage has to do with the saving of property.

History

With its origins in antiquity, the basis of salvage is that a person helping another at sea is putting himself and his vessel at risk and should be appropriately rewarded. A related consideration was to prevent piracy, since any vessel in peril might well be abandoned to pirates if the owner did not reward an honest salvor. The law of salvage has been recognised for centuries in such documents as the Edicts of Rhodes, the laws of the Romans, the Justinian Digest, the Medieval Laws of Oleron (the first formal statement of “maritime” or “admiralty” laws in Northwestern Europe), and the Code of the Hanseatic League.

The law of salvage

Salvage, in maritime law, is the rescue of a ship or its cargo on navigable waters from a peril that, except for the rescuer’s assistance, would have led to the loss or destruction of the property. Under some jurisdictions, aircraft may also be salved. Except for salvage performed under contract, the rescuer, known as the salvor, must act voluntarily without being under any legal duty to do so, apart from the general duty to give assistance to those in peril at sea, or to stand by after a collision.

So long as the owner or his agent remains on the ship, unwanted offers of salvage may be refused. A derelict (a vessel found entirely deserted or abandoned without hope or intention of recovery) is, however, fair game for anyone who comes across it. Typical acts of salvage include releasing ships that have run aground or on reefs, raising sunken ships (or their cargo), putting out fires, and so on.

The legal entitlement to a salvage reward arises when a person, acting as a volunteer (that is, without any pre-existing contractual or other legal duty so to act) preserves or contributes so to preserving at sea any vessel, cargo, freight, or other recognised subject of salvage from danger.

The popular belief that a salvor becomes the owner of the property, at least if it was abandoned by the owner or was derelict, is erroneous. The owner may always reclaim his property from the salvor on paying salvage money. The salvor, for his part, has a maritime lien on the salved property (in an amount determined by national statute or juridical custom) and need not return the property to the owner until his claim is satisfied or until security to meet an award is given. An owner who elects not to reclaim his property cannot be made liable for a salvage reward. Much salvage is carried out under contract by professional salvors. Ordinarily, such salvors get nothing unless the salvage is to some degree successful.

The law of salvage is the result of the Latin negotiorum gestio concept. Negotiorum gestio (Latin for “management of business”) is a form of spontaneous voluntary agency in which an intervenor, the gestor, acts on behalf and for the benefit of a principal (dominus negotii), but without the latter’s prior consent. The gestor is only entitled to reimbursement for expenses and not to remuneration, the underlying principle being that negotiorum gestio is intended as an act of generosity and friendship and not to allow the gestor to profit from his intermeddling. This form of intervention is classified as a quasi-contract (or implied-in-law contract or constructive contract), a fictional contract recognised by a court. The notion of a quasi-contract can be traced to Roman law and is still a concept used in some modern legal systems.

The legal background

The Brussels Convention for the Unification of Certain Rules with Respect to Assistance and Salvage at Sea is a treaty on marine salvage that was concluded on September 23, 1910, in Brussels (Belgium). The Brussels Convention forms the basis of current international marine salvage law. The Convention was amended on May 27, 1967 and overridden in some countries by the 1989 International Convention on Salvage, which took effect in 1996.

The 1989 International Convention on Salvage replaced a convention on the law of salvage adopted in Brussels in 1910 which incorporated the “no cure, no pay” principle under which a salvor is only rewarded for services if the operation is successful. Although this basic philosophy worked well in most cases, it did not take pollution into account. A salvor who prevented a major pollution incident (for example, by towing a damaged tanker away from an environmentally sensitive area) but did not manage to save the ship or the cargo got nothing. There was therefore little incentive to a salvor to undertake an operation which has only a slim chance of success.

The 1989 Convention seeks to remedy this deficiency by making provision for an enhanced salvage award taking into account the skill and efforts of the salvors in preventing or minimising damage to the environment. The 1989 Convention introduced a “special compensation” to be paid to salvors who have failed to earn a reward in the normal way (by salving the ship and cargo). Damage to the environment is defined as “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”.

The compensation consists of the salvor’s expenses, plus up to thirty percent of these expenses if, thanks to the efforts of the salvor, environmental damage has been minimised or prevented. The salvor’s expenses are defined as “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”. The tribunal or arbitrator assessing the reward may increase the amount of compensation to a maximum of one hundred percent of the salvor’s expenses, “if it deems it fair and just to do so”. If, on the other hand, the salvor is negligent and has consequently failed to prevent or minimise environmental damage, special compensation may be denied or reduced. Payment of the reward is to be made by the vessel and other property interests in proportion to their respective salved values.

The Lloyd’s Open Form, formally “Lloyd’s Standard Form of Salvage Agreement”, and commonly referred to as the LOF, is a standard form contract for a proposed marine salvage operation. Originating in the late 19th century CE, the form is published by Lloyd’s of London and is the most commonly used form for international salvage. Innovations in the LOF 1980 have engendered a major change in environmental salvage.

The space law of salvage?

Let’s recall that Article V of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies (entered into force on October 10, 1967) affirms that “States Parties to the Treaty shall regard astronauts as envoys of mankind in outer space and shall render to them all possible assistance in the event of accident, distress, or emergency landing on the territory of another State Party or on the high seas. When astronauts make such a landing, they shall be safely and promptly returned to the State of registry of their space vehicle. In carrying on activities in outer space and on celestial bodies, the astronauts of one State Party shall render all possible assistance to the astronauts of other States Parties. States Parties to the Treaty shall immediately inform the other States Parties to the Treaty or the Secretary-General of the United Nations of any phenomena they discover in outer space, including the Moon and other celestial bodies, which could constitute a danger to the life or health of astronauts”.

It is really interesting to understand that this Article V is at the basis of the idea of solidarity in outer space. When human beings in outer space are in trouble, the Public International Space Law obligates “the astronauts of one State Party” to “render all possible assistance to the astronauts of other States Parties”.

It would be interesting to think about an application of the law of salvage in outer space: if a space object (a component, a stage orbiting in LEO, a module from the ISS, a satellite…) was to be endangered, and if a company/State (Article VI) was to help the company/State (Article VI) at risk, how would the situation be dealt with? The law obligates “the astronauts of one State Party” to “render all possible assistance to the astronauts of other States Parties”; could there be a compensation for help?

This question might especially be interesting in the case of space debris and Active Debris Removal (ADR). Active Debris Removal (ADR) is necessary to stabilise the growth of space debris, but even more important is that any newly launched objects comply with post-mission disposal guidelines – especially orbital decay in less than twenty-five years. If this were not the case, most of the required ADR effort would go to compensate for the non-compliance of new objects. Studies performed with long-term evolution models like DELTA have shown that a “business as usual” scenario will lead to a progressive, uncontrolled increase of object numbers in LEO, with collisions becoming the primary debris source. We might have tomorrow new ways of acting in outer space which would lead to a potential space law of salvage.