Salvage claims: two years and no more

The Cagliari Court of Appeal recently issued its judgment in Moby SpA v D'Amico Società di Navigazione SpA, in which it addressed and clarified the nature of the two-year time limit for claims stipulated in Article 23 of the Salvage Convention 1989.

Under Italian law, as in most civil law systems, time limits can be applied differently according to the situation. Italian law provides that a time limit may fall under either a prescrizione or decadenza regime. While the former indicates the time limit in which a right must be exercised more generally, the latter stipulates the time limit in which a specific act must be carried out in order to obtain a specific legal effect.

Among the crucial characteristics distinguishing the prescrizione regime from the decadenza regime is that a decadenza can be avoided only by carrying out the specific action requested, while the prescrizione can be interrupted by a mere informal request that a right be protected. Thus, while in the case of decadenza it would be imperative to commence court or arbitral proceedings in order to avoid the time limit, prescrizione time limits may be interrupted by a mere letter of claim, in which case the time limit would restart from the date of receipt of the letter.

In the case at hand, salvage operations were carried out and the salvors commenced legal proceedings for compensation after two years had passed since the operations were concluded. The action was brought on the basis that the two-year time limit was a prescrizione time limit and that consequently, the salvors' rights had already been exercised when the salvors submitted their claim to the interested parties, regardless of when they began court proceedings.

The court, by accepting the defendants' position, held that the two-year time limit provided for under Article 23 of the Salvage Convention must be qualified as decadenza and consequently, limitation can be avoided only by completing that specific act – that is, commencing a legal action. Therefore, any formulation of claim and any other exercise of the salvors' rights would be insufficient to avoid limitation.

Although parts of the reasoning of the judgment have been criticised, the decision is just. Appropriately, the court underlined the rationale of the time limit provided by the convention and stated that in circumstances where salvage operations have been carried out, numerous interests are often involved and the need for certainty is crucial.

If the salvors' letters of claim had been sufficient to interrupt the two-year time limit, each claim could potentially have had different deadlines by which actions could be commenced. Instead, by attributing the decadenza regime to the time limit, the court confirmed that court actions may be brought only within the two years following completion of salvage operations.

For further information on this topic please contact Lawrence Dardani at Dardani Studio Legale by telephone (+39 010 576 1816), fax (+39 010 595 7705) or email (lawrence.dardani@genoachambers.it).