Salvage Response under Commercial Pressure from Charterer and Casualty Owner
MV Nordic Trader, a 4,800 TEU container ship on time charter, is 90 nm south of Crete making 19 knots to meet a Suez Canal slot in 44 hours. At 2100 she receives a DSC distress alert and a MAYDAY relay from MV Alba, a 3,200 GT general cargo ship reporting engine-room flooding, loss of main engine and generators, and 11 persons on board. Alba is 5 nm away, drifting at 1.2 knots toward a lee shore 12 nm to the north-east, with a gale warning of 35 knots from the north. Alba's owner comes up on VHF and asks Nordic Trader to take her in tow at "commercial towage rates, US$4,000 per day, contract to follow", stating that he will not agree to any salvage agreement. Nordic Trader's charterer emails that any deviation will be treated as a breach. There is no tug within 30 hours.
1. Is Nordic Trader obliged to proceed? Analyse the duty, the commercial pressure and the limits on that duty.
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The duty is to persons, not to property. SOLAS Chapter V, Regulation 33 obliges the master of a ship at sea which is in a position to provide assistance, on receiving information from any source that persons are in distress at sea, to proceed with all speed to their assistance. UNCLOS Article 98(2) is to the same effect. Eleven persons are on a disabled ship drifting toward a lee shore in a gale: that is distress. The duty is triggered now, before any question of towage money arises.
The commercial pressure is not a defence. The charterer's email cannot override the master's duty to those persons. Deviation to save life is a recognised exception to the contractual route, and the master's overriding authority for the safety of life at sea under the ISM Code is not delegated to the charterer. The charterer should be informed, not asked for permission.
The limit on the duty. The obligation is qualified by "in a position to provide assistance". Nordic Trader must not put herself and her 4,800 containers on a lee shore in 35 knots to save property. The approach should be planned to stand by to windward and to take the tow only if the towage can be done with the ship's own safety assured; if it cannot, the master stands by, takes the persons off if required, and continues to coordinate with the RCC. There is no international legal duty to salvage property, only a duty to persons.
2. Which agreement would you sign, who has authority to sign it, and what are the consequences of each option?
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Refuse the fixed-rate towage. Alba is in serious danger and the service is salvage, not towage. Accepting US$4,000 per day would convert a salvage operation into a cheap tow, expose Nordic Trader to liability for damage to Alba without the protections of a salvage contract, and probably exceed the authority the master holds to bind the owner commercially. It would also remove any SCOPIC safety net if the operation failed.
Sign Lloyd's Open Form 2020 with SCOPIC 2020 incorporated. Under Article 6 of the International Convention on Salvage 1989, and under LOF itself, the master has authority to conclude a salvage agreement on behalf of the shipowner. The master of Nordic Trader signs for Nordic Trader; Alba's master signs for Alba. Both owners are bound.
Consequences. LOF operates on no cure, no pay: if the operation fails and no useful result is achieved, no award. The salvor must use its best endeavours to save the property and prevent pollution. Any dispute goes to arbitration in London under English law, and the salvor is entitled to security before releasing the property. SCOPIC is invoked by the salvor, not by the shipowner, and once invoked the casualty's owners provide a US$3,000,000 guarantee, with the tariff remuneration set off against the Article 13 award. That protects the salvor when the saved value is low - exactly the situation here with a small, old vessel.
3. What notifications, records and post-operation actions would you require?
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Notifications. Inform the RCC of the intended action and the position; inform the company/DPA and the charterer that the ship is proceeding to assist persons in distress; notify hull and machinery and P&I insurers, and the Lloyd's Salvage Arbitration Branch once LOF is signed; and advise the Suez agent immediately, since the canal slot will be lost.
Records. A contemporaneous narrative is the whole case. Record the DSC alert and MAYDAY relay with timestamps; the VHF exchanges verbatim, including the owner's refusal of a salvage agreement and the charterer's email; the position, course, speed and weather at each stage; the time LOF was signed and by whom; the condition of Alba on arrival; every order given during the tow; and the names of witnesses. Keep the original electronic records - VHF recordings, AIS track, echo sounder and course recorder printouts.
Post-operation. Do not release the tow or cast off without instructions; ensure the salvor's security arrangements and the owners' guarantees are documented; submit a statement of facts signed by both masters if possible; report any damage to Nordic Trader through a note of protest; and prepare the master's report to the company covering the deviation, the delay and the salvaged property, so the charterparty and insurance positions are resolved on the facts rather than on reconstruction.