Notes on salvage

Notification to Lloyd’s. – The Contractors shall …

  1. within 14 days notify the Council of Lloyd’s of their engagement and
  2. forward the signed agreement or a true copy thereof to the Council as soon as possible.

(an arbiter is then appointed to oversee the salvage contact)

Lloyds standard form of salvage agreement (LOF 2020) adopts the principle of NO CURE NO PAY

Salvage Contract (LOF)

  1. Parties to the agreement name of salvage contractor to property to be solved 
  2. Property includes freight, bunkers, stores, but no personal property
  3. The agreed place of safety 
  4. Agreed currency for the arbitral award ahead and security if other than US dollars.
  5. Date of the agreement 
  6. Place of the agreement 
  7. Is an option for SCOPIC Clause Included in this agreement. Yes/No.
  8. Person signing for and on behalf of the contractors and 
  9. Captain or other person signing for on behalf of the property.

There are a number of Explicit warranties to LOF contract as below…

  1. Contractors obligation to use best endeavours to solve the property and take to the agreed place or to a space of safety if non-stipulated
  2. Environmental protection – contractors to use best in endeavours to prevent or minimise damage to the environment
  3. Scopic Clause cannot be invoked unless it was part of the original contract and ‘Yes’ had been selected at section 7. (This is only an option and must be invoked by salvor AND agreed by salvaged party)
  4. Effect of other remedies – agreement is subject to English law and the International Convention on Salvage 1989.
  5. Prior services – this agreement covers all previous services rendered. (no doubleclaims)
  6. Duties of property owners – owners to give full assistance and information to the salvors.
  7. Termnation – If there is no possibility of a payout through Art 12 or Art 13 then either party can give written notice and quit the contract.
  8. Performance – Once delivered as agreed there is no requirement to remain.
  9. Arbitration – Lloyds Salvage Arbitration Clauses (LSAC) binds the parties to Lloyds arbiters decision with right of appeal.
  10. Law – English
  11. Scope of authority – Master binds the owner.
  12. Inducements prohibited – No inducements.

No Cure no Pay Art 12

Except as otherwise provided, no payment is due under this Convention if the salvage operations have had no useful result.

What determines the amount to be paid (Art 13)

(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.

Salvage Convention Art 14 – pollution prevention to max 30%

If this service is completed prior to SCOPIC it may involve an additional payment to the hire rate.


This SCOPIC clause is supplementary to any Lloyd’s Form Salvage Agreement

The assessment of SCOPIC remuneration shall commence from the time the written notice is given to the owners of the vessel.  Services rendered before the said written notice shall not be remunerated by SCOPIC payment. (However they can make a claim for prevention of pollution under Art 14 special compensation)

Payments are made for each day hire of towing vessel, crew wages, equipment used, fuel and an element of profit up to 25% on these daily rates.

Guarantee – guarantee or P&I Club letter is posted by ship owner, usually $3m. Within 2days. Full payment of SCOPIC expected within one month.

Contractor total claim cannot exceed 75% of ship and cargo under SCOPIC.

Source SCOPIC 2020