When to claim salvage for a ship accident in a harbour

29th October 2024

In certain ship grounding situations, a tug owner that has assisted a distressed vessel could claim for salvage or accept tariff rates; each has potential legal, insurance and contractual ramifications. 

I recall a case where a vessel was blown off its berth in South America and although quite lightly aground on the opposite bank, was very definitely in need of assistance and very certainly beyond self-help. The local tugs quickly did what was necessary and the vessel, with its cargo, were returned to the berth without damage. Had they not done so, the vessel would have been stranded just a few hundred metres from its berth. 

These sorts of cases present a dilemma to the tug company and the ship’s operators alike. The operators pay on tariff rates and expect a degree of flexibility when it comes to tug assistance.  

Terms such as the UK standard conditions for towage and other services (UKSCT) used around the globe require tugs to hold, pull or push.  

With harbour tugs commonly presenting with 80 tonnes of bollard pull and significant manoeuvrability, surely these capabilities are there to be put to good use in difficult situations?  

Moreover, these terms provide the tug owner not only with a full indemnity for any damage suffered whilst rendering the services, but also an exemption from liability if at fault, including for delay or detention of the vessel, so they are hardly at risk.  

But a tug owner may have a different opinion on how these services should be paid for. 

From their perspective, it is a question of business philosophy. Either they are willing to step up and provide extraordinary services as part of the rough and tumble of day-to-day business, taking a long-term view on where their bread is buttered, or they are not – in which case, they have thick skins and must be prepared to make themselves a little unpopular.  

In doing so, they may point out that clause 6 of the UKSCT, for example, expressly preserves their rights to claim salvage when the work done crosses the line from the ordinary to the extraordinary.  

They may also point out that it is not just the ship that has benefitted but also the cargo which, under maritime law, going back to the earliest days of General Average, must pay its due share, and is insured accordingly.  

Further, if tug owners are the least bit familiar with the law around the international carriage of goods by sea, they will know that cargo generally has no rights of recovery from a carrier, if the event results from perils of the sea.   

Meanwhile, the tug crew may be hard-working, brave seafarers, but if they are to step up, take risks and go the extra mile in dangerous situations, that needs to be acknowledged somehow, and not discouraged. 

However, a liner operator may consider it outrageous to suggest they should have to throw the tariff rate out of the window just because one of their vessels gets hit by strong gusts and runs into trouble. They could take its business elsewhere. 

“At the same time, they allow the tug community the occasional windfall” 

In the above case, I recall that no ship was arrested or much detained. The shipowners really could not argue that they had not been in trouble and that the tug owners had not quickly got them out of it.  

Of course, there might be arguments or speculation around what would have happened longer term if left aground in such circumstances. But either you test that before a court or arbitrator, or you agree to differ on the issue and settle somewhere between the best and worst case. This would be reflected in an acceptable sum of money changing hands, generally in six figures and generally a miniscule proportion of the values at risk. 

Such cases are the classic, so-called, common-law salvage cases. They are often quietly settled within days. They do not contribute to the annual Lloyd’s Open Form (LOF) statistics. They keep the claims handlers in the marine insurance community busy and up to speed, they provide fuel for the underwriters next year to justify their premiums and they permit the good body of insurance managers to justify their existence by delivering a negotiated solution and not an expensive battle. At the same time, they allow the tug community the occasional windfall. 

Where tug companies do sometimes get it wrong, and this can work to the benefit of owners and underwriters, is their frequent inability to co-ordinate their collective interests where several different tugs are involved, often called in by the harbour master at short notice to intervene.  

In some areas they have got their act together by creating consortia, such as we find in Greece, or working closely together on the River Scheldt, Belgium and the Netherlands, albeit these arrangements are not designed to be an extension of the companies’ individual harbour towing arrangements. Elsewhere, they can end up at loggerheads, embroiled in litigation in the local courts, which really benefits no-one. 

A version of this article first appeared in the publication “Riveria Maritime” – Click here to read it.