A recent decision of the Genoa Court of Appeal dealt with – among other things – two interesting issues arising under the London International Convention on Salvage 1989:
- whether, for the purposes of fixing the salvage reward under Article 13 of the convention, the judge should consider not only the value of the salvaged vessel, but also that of the cargo on board; and
- the apportionment of a salvage reward between co-salvors under Article 15.1 of the convention where only one salvor brought proceedings for its remuneration.
The judgment will be of interest not only to Italian lawyers, but also to practitioners from all of the states party to the convention.
In the early hours of November 5 2008 a vessel was contemporaneously assisted by two tugs.
One of the salvors brought proceedings against the owner of the assisted vessel, claiming remuneration for salvage.
The Tribunal of Savona held that the value of the cargo on board should also have been taken into account, as it would have been the defendant's responsibility to prove that the cargo did not belong to it, but to third parties.
The tribunal determined the totality of the salvage remuneration as 100, apportioned three quarters to the claimant and one quarter to the other co-salvor on the basis of their respective merits and ordered the defendant to pay 75% of the total amount to the claimant.
The defendant appealed on the ground (among others) that the judge had erred in taking into account the value of the cargo.
The claimant appealed on the ground (among others) that the judge had erred in apportioning a share of the salvage reward to the other co-salvor in the absence of any request from the latter.
With regard to consideration of the value of the cargo on board, the Court of Appeal reversed the tribunal of first instance's decision. The court referred to Article 13.2 of the convention, which provides that "payment of a reward fixed according to paragraph 1 shall be made by all of the vessel and other property interest in proportion to their respective salved values".
Therefore, the court held that it would have been for the claimant to demonstrate that the cargo on board belonged to the defendant. In the absence of any evidence of this, the defendant – as owner of the salvaged vessel – had only to pay a reward on the basis (among others) of the value of the salvaged ship and not of the cargo on board.
With regard to the apportionment of the salvage reward, the Court of Appeal affirmed the tribunal's decision, holding that:
"Art. 15 (headed 'apportionment between salvors') expressly provides that the reward to be determined under Art. 13 shall be apportioned between co-salvors, thus providing that it belongs to each of them in proportion to the utility of their services, it being irrelevant that one of them may not claim it and it not being the case that, in such a situation, the other salvors' share might be increased."
The Court of Appeal's decision is to be welcomed on both counts.
With regard to consideration of the value of the cargo on board, the conclusion reached by the Court of Appeal is certainly in line with the rationale of Article 13.2, which provides that the owner of the ship and the owner of the cargo should not be jointly and severally liable for payment of the salvage reward, but should contribute pro rata to the reward amount. Further, the rule laid down by the Tribunal of Savona – according to which the owner of the salvaged vessel is responsible for rebutting the presumption that it also owns the property on board – seems redolent of a bygone age, when merchants carried their own goods by their own ships.
With regard to the apportionment of the salvage reward, the court clearly followed a literal interpretation of Article 15.1, as it was entitled to do under Article 31.1 of the 1969 Vienna Convention on the Law of Treaties. In fact, Article 15.1 makes reference to 'salvors' in apportioning the reward, and not 'claimants'.
For further information on this topic please contact Marco Manzone at Dardani Studio Legale by telephone (+39 010 576 1816) or email ([email protected]). The Dardani Studio Legale website can be accessed at www.dardani.it.
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