clr/1988/1988_1_713.pdf

(1988)(c)Thevalueofthe cargo,whichwasloadedon theSEAHORSE, was 400,000 U.S. Dollars. However, the parties had agreed to release the cargo from arrest, upon furnishing by the defendants of bankguarantees fora totalsum of C£70,000. Held:

(1)Anoperation inordertobeone of«salvageservices»the following elements must exist: 5 (a)Theservicesgivenmusteithersaveorcontributetotheultimate safety (i)ofa ship,herapparel and cargo, or (ii)ofthelivesofpersonsbelongingtoashipwhenindanger,and 10 (b) The danger to the ship, cargo or life must be real and appreciable, for instance what has tobe considered isthe condition of thesalved ship, the weather conditionsexistingatthe timeof the operation,aswellasthoseexistingwhilsttheshipistowedintoasafe ,^ anchorage.

(2)In the light of the evidence adduced in this case and the aforesaid principles, the conclusion isthat the plaintiffs had, in fact, rendered salvage service tothe defendant cargo.

(3)The amount of the reward for salvage services is in the discretion of the Court. Relevant is section 34 of the Wrecks Law, 20 Cap.298.

(4)In deciding the actual amount of reward the following factors should be taken intoconsideration, i.e. (a)the value of the salvaged property; (b)therisktothe salvor shipand her crew; 25 (c)the weather conditionsexistingatthe rimeoftheoperation till theshipwasbrought to safety; (d)the condition ofthesalvaged ship; (e)theexpensesincurredbytheship(includinganydamagetoher) inorder tosavethe salvaged property; _ (0the time spent for the operation. In the present case the operation for the salvage of the SEA HORSE and the cargo loaded on her was highlydangerous in view of the size of AHSSAN I,the weather conditions existingduring the operation and the condition of the SEA HORSE (broken steering 3 5 714 t 1C.L.R. Kaddoura v.ShipSea Horse gearandwaterenteringoneofherholdsasaresultofwhichtheship wasmadeunstable). Judgmentforthe owners ofAHSSANI for 100,000 U.S. Dollars and for her MasterandCrewfor25,000U.S. Dollars. Casesreferredto: BrasalOffshoreServicesLtd. v. Theship«JUNE»andAnother

(1980)1C.L.R.231; 10 BrancoSalvageLimitedv.Theship«DIMTTRIOS»andhercargoand freight(\968)1 C.L.R. 252; Attorney-Generalv.MotorTanker«KEISSERWAARD*andAnother

(1965)1 C.L.R. 433; Yusra ShippingCo.Ltd.v. The ship*YAMAMA>

(1985)1C.L.R.

1. 15 Admiralty action. Admiralty action for remuneration and salvage services renderedtothetheshipSeaHorseandtheCargoloadedon her. C.Erotocritou, for the plaintiffs Fr. Saveriades, for defendants No.
2. 20 Cur. adv. vult. DEMETRIADESJ.readthefollowingjudgment.Theplaintiffsin thisaction arethe ownerand the crewof theshipAHSSANI,and claim remuneration for salvageservices rendered to theshipSEA HORSE and the cargo loaded on her, that is the first and the 25 second defendants respectively. Onthe21stSeptember, 1985,counselwhorepresented thefirst defendant made a statement in Court, as a result of which judgment was given in favour of the plaintiffs and against the first defendant for£6,000.-,with noorderastocosts.Thestatementof 30 counsel reads: «Weare in the happy position to inform the Court that the claim forsalvageagainstdefendant No.1,thatistheshipSEA HORSE, has been settled on the basis of a calculation of the remuneration of the plaintiffs at 40% of the value of the ship 715 'Demetrtades J. Kaddoura v. Ship S e a Horse

(1988)as ascertained bythesaleatthe publicauction and judgment willbe submitted in the sum of £6,000.-without any order as to costs.» Thesecond defendants, thatisthecargoloaded ontheshipSEA HORSE, contested the action againstthem, alleging thatthe first defendant was not salvaged butwhattheshipAHSSANIdid was to tow her into theport of Limassol. 5 Asitappears from theevidencewhichwasadduced before me, the facts that led to these proceedings and which do not allow a finding thattheSEAHORSEwassimplytowedintoLimassolPort, 10 are, inbrief, the following: At about 08.00 hrs on the 20th April, 1983, Mr. Mohamed Kaddoura,theCaptainof theshipAHSSANI,whoisP.W.4,received a message from his brother, who isthe owner of theship and the firstplaintiff intheseproceedings,bywhichhewasinstructedtofill 15 the ship' stankwithpetrol andafter engagingaChief Engineer, to proceed to a spot about 50 miles away from the Limassol light house in the direction of Port Said in order to tow to the port of Limassol the ship SEAHORSE which was indistress. AHSSAN I left the Limassol port at approximately 10.00 hrs 20 after her Captain had contacted the Captain of the SEA HORSE through VHFchannel 70 and wasgiven byhim herexactposition and information about her problem. Accordingtotheevidence ofthiswitnessfortheplaintiffs, which issupported bythe«SeaProtest»sworn bytheCaptainoftheSEA 25 HORSE and which Ishall later in myjudgment set out, the ship, the cargo and her crew were inimmediate danger asher steering had broken and becauseofbadweatherconditionsassistance was urgently required for their safety. AHSSAN I arrived atthespotwheretheSEAHORSEwaslying 30 at about 16.00 hrs. Atthe time there wasa swell and the force of the winds was4 beauforts. After three attempts were made to get the ropes that were thrown by the SEA HORSE, the crew of the AHSSAN I managed to getandsecure them on both sidesof their ship. The SEA HORSE was a much bigger ship than AHSSAN I 35 and atthe material timewasloaded with timber.Theoperation to secure the ropes took about 90 (ninety) minutes and after that AHSSAN Isafely, butwith difficulty because ofthewindforce and the swell which wasforcing SEAHORSE to rollfrom left toright, 716 1 C.L.R. Kaddoura v.Ship S e a Horse Demetriades J. towed her into Limassol port atabout 06.00 hrs on the following day. According to the Captain of AHSSAN I, whose evidence is supported by that of Mr.Yiannis Karidjis (P.W.2), the Marshal of 5 this Court, who is an experienced and qualified master of the Merchant Navy, the whole operation, having regard to the weather conditions existing atthe time and the size of hisship in comparison to thatof theSEAHORSE, washighlydangerous for thesalvorship. 10 What is the legal position regarding salvage in Cyprus was considered inanumber of casesdealtwithbytheSupreme Court of Cyprus and useful reference may be made to Brasal Offshore Services Ltd. v. The Ship «JUNE» and another,

(1980)1 C.L.R. 231, Branco Salvage Limited v. The ship «DIMTTRIOS» and her 15 cargoand freight,

(1968)1C.L.R. 252,and the Attorney-General of the Republic v. Motor Tanker «Keisserwaard» and another,

(1965)1C.L.R. 433.Reference may, also,bemade tosection 34 of theWrecks Law, Cap.298,which reads:- 20 «34.Indetermininganydisputeastotheamountofsalvage to be paid to any salvor, the Court or Judge determining it • shall award such sum as appears just and reasonable in the circumstances of the case, having regard to(

1. a)the enterprise and promptitude of the salvors in rendering assistance; 25; (
2. b)the degree of damage and distress from which the property is rescued; (c)the degree of labour and skill displayed and the danger incurred bythesalvors; (d)thevalue of the property salved; 30 (e)thetime employed inrendering the services; (f)the successof the effort to savethe property: 35 Provided that no salvage shall be awarded unless the property;in respect of which salvage is claimed shall have been exposed to actual peril threatening itsdestruction save for theassistance rendered bythe salvor.» 717 Demetriades J. Kaddoura v.Ship S e a Horse

(1988)In Halsbury' s Laws of England, 4th ed., vol 43, paras 1027, 1036, 1037, 1038, and 1040, the following are to be found with regard tosalvage: «

1. Meaning of 'salvage' and 'salvage services'. 'Salvage1 may signify either the service rendered by a salvor 5 orthe reward payable tohimfor hisservice. 'Salvage service' in the present sense means that service which saves or contributes to the ultimate safety of a vessel, her apparel, cargo or wreck, or to the lives of persons belongingtoavesselwhen:r.Jinojr atsea,orintidalwaters, 10 or on the shore of the sea or tuia\waters, provided that the service isrendered voluntarily and ..oi in the performance of any legal or official duty or merely in the interests of selfpreservation. The person who tenders the service, that isthe salvor, becomes • entitled to remuneration known as a 15 'salvage reward'.
2. Dangerrequisite. Theessence ofasalvageserviceis that it ;sa service rendered to property or life indanger. The requisitedegree ofdangerisa realand appreciable danger.It must not be merely fanciful, but itneed not be immediate or 20 absolute.Itissufficient ifatthetimeoftheservicethesituation of the subject of the service is such as to cause reasonable apprehension on the part of the person in charge of it. The danger mayarise from thecondition ofthesalvedvessel,orof her crew, from her position, or from the master's wantofskill 25 orhisignoranceofthelocalityoroflocalconditions.Aservice which begins as salvage is not necessarily transformed into towagebecause on thevoyagetheshipistowed past,orinto, ports atwhich she could be in safety.
3. Evidence of danger. The burden of proving the 30 presence ofdangerrestsuponthosewhoclaimassalvors.The conduct ofthose on board the salvedshipin givingsignalsof distress orinaccepting helpmay beevidence ofthe presence of danger. Where signals of distress are wrongfully used, compensation is recoverable for any labour undertaken, or 35 risk or loss incurred, by reason of persons accepting and acting on the signals, and persons who are induced by ambiguous signals to proceed to the assistance of a vessel which is,infact, damaged orindanger areentitledtoclaimas salvors. 40 718 1 C.L.R. 5 Kaddoura v.Ship S e a Horse Demetriades J.
4. Requirement ofpersonal services. The general rule isthatallthose,and onlythose,whorenderpersonal services in the performance of a salvage service are entitled to a salvage reward. To this rule, however, there are certain exceptions.
5. Voluntariness. Subject to certain exceptions the salvor' sservicemustbevoluntaryasbetween thesalvorsand the owners of the salved vessel, but itmay be the subject of special agreement.» 10 From the above, itisclear that an operation inorder tobe one of «salvageservices»the following elements mustexist: (a) The services given must either save or contribute to the ultimate safety - 15 (i)of aship,herapparel and cargo;or (ii)of the lives of persons belonging to a ship when in danger; and (b) The danger to the ship,· cargo or life must be real and appreciable, for instance what has to be considered is the condition ofthesalvedship,theweather conditionsexistingatthe 20 time of the operation, as well as those existing whilst the ship is towed intoa safe anchorage. Inthepresentcasethereisevidencebefore mecomingfrom Mr. Stavros Karamontanis, who is a B.Sc. Engineer, Chartered Engineer registered with the Engineering Council of the United 25 Kingdom,amemberoftheInstitutionofElectricalEngineersofthe United Kingdom, a fellow-of the Institute of Marine Engineers of the United Kingdom, a fellow of the Royal Institute of Naval Architecture and a member of the Society of Naval Architecture and Marine Engineers of the United States of America, an 30 approved and exclusive surveyor for a number of ship classification societies in Cyprus, and who inspected the SEA HORSE, that at the material time the steering gear of the SEA HORSEcouldnotoperateasithadbrokendownandthatbecause of a hole near her keel, water was entering into one of her holds 35 and thismade the shiptorolland lose her stability. The evidence of the Captain of the AHSSAN I as to the immediate danger existing for the SEA HORSE, her cargo and crew, isnotonlycorroboratedbymatofP.W.2Karidjis andP.W. 3 719 DemetriadesJ. Kaddourav.ShipSea Horse

(1988)Karamontanis, but, also,bythe contents oftheSea Protest swom bythe Captain ofthe SEA HORSEand filed intheRegistryof the District Court of Limassol. Thisdocument isexhibit No. 1 before me and itreads: «INTHEDISTRICTCOURTOFLIMASSOL 5 MarineApplication No. 33/

1. INTHEMATTEROFM/V«SEAHORSE»oftheportofBeirut The Registrar, District Court of Limassol, Limassol. 10 Please cause the attached Sea Protest to be filed with the Registry of the DistrictCourtof Limassol. Yours faithfully, Ahmad Kaddourah, TheMaster 15 Limassol this4th day of May,
2. Presented to me at the District Court of Limassol on the 4th day of May,
3. Limassolthe 4th May,
4. m.v. «SEAHORSE» of theport of Beirut S E A 20 P R O T E S T I,theundersigned KADDOURAHAHMAD,Masteroftheship SEA HORSE of the port of Beirut make oath and say as follows:On the 19th April, 1983at 14.20L.T. myship left the portof' 25 Limassol, proceeding to her destination the port of Jeddah, Saudi Arabia. The weather condition wasasfollows:Wind 4-5 Sea swell was high and large due tobad weather (galeforce) 30 on the 17th to 18th of April,
5. At 18.15 hours on the 19th April, 1983 my ship's steering gear came out of order and wasnotworking. 720 1 C.L.R. Kaddoura v.Ship S e a Horse Demetriades J. I and the crew on board did out best to repair the steering gear, even tooperate itbyhand but we didnot succeed. The ship was rolling violently up to 180 each side. She was drifting 2.5 milesper hourtothe shore side. 5 Asthecapsizingangle of the shipwas2 6 0 due tocargo deck itwasclearto me thattheshipcould notstayfor longtimein safety. Irequired assistance urgentlyforthesafety ofmycrew, ship and cargo. 10 Being in distress I contacted my owners and asked for immediate helpto rescuetheship,cargo and crew. 15 At 16.30 hours on 20th April, 1983 the ship AHSSAN I reached my ship and started manoeuvering. Igave my ropes to the said ship tied the SEA HORSE and started sailing towing us to Limassol port where we arrived safely at 6.00 hourson the 21stApril,
6. During the stoppage of the SEA HORSE and her towing to Limassol portshewasverybadlysubjected tohighand abrest swell. "Had itnot been for the help of the shipAHSSAN I there was immediate danger of myshiptosink,the cargotobe lost and our livesand the crew tolose theirlives. 20 Inviewoftrieabove Imakethisseaprotestand reserveallmy ownersrightsagainst all concerned. THEAFFIANT 25 " "* KADDOURAHAHMAD Masterof theship_SEA HORSE Sworn and signed before me this4th dayofMay, 1983 attheD.C.of Limassol, 30 R E G I S T R A R » Fromthetotalityofthe evidence before me,itiscleartomethat salvage services were rendered to the SEA HORSE when there wasdangertoherself,thecrewmanningherandthecargo loaded on her. The owner and the crew of AHSSAN I are, therefore, 35 entitledtoberewarded fortheservicesrenderedforthesalvageof the SEAHORSE. 721 Demetriades J . Kaddoura v.ShipSeaHorse

(1988)Having reached my above finding, the next questions that pose for decision are what isthe amount of reward to which the owner and the crew ofAHSSANI are entitled and whofixesit. In Halsbury' s Laws of England, supra, para. 1056, under the heading «AmountfixedbytheCourt»,itisstated: 5 «General principles. The amount of the salvage reward is limited tothe value ofthe propertyor the interestin property salved. Subject to that limitation, the amount of the reward, unlessitisfixed byagreement, isinthediscretion ofthecourt, and except in casesofabsolute necessitythecourtwhichtries 10 the case should also assess the remuneration. As a general rule, where the owner of the salved property appears, the courtwillnotawardthesalvormorethanone-half ofthevalue ofthesalved property, whether theproperty isderelictornot. Avariation inthe exchangerateofacurrencyisnota relevant 15 factor to take into account in fixing the award for salvage services.The court has power to award intereston a salvage award whether the salvage services were or were not performed under a special contract.» In the case of Brano Salvage Ltd., supra, Josephides J., in 20 deciding the questions in issue, held the following (at pp. 262264):«The general principles are that the amount of the reward, unlessitisfixed byagreement, isinthediscretionoftheCourt. The Court, in assessing the reward, endeavours to combine 25 liberality tothe salvor withjustice to the owner ofthe salved property. It regards not merely the work done in the performance of the salvageservice, but the general interests of navigation and commerce. Thus it looks with favour on salvageservicesrendered bysteamshipsbuiltand maintained 30 for salvage services (35 Halsbury' s Laws of England, 3rd edition, page 749, paragraph 1139). Inassessing the reward the Court takes into account the danger to life, whether on board the salving or the salved vessel, and the danger to property. The value of the salved property is an important 35 consideration intheassessment ofreward; but itwillnot raise the reward out of due proportion to the services rendered.If thevalueislargetheamountoftherewardisusuallyasmaller proportion tothevaluethan ifthevalueissmall(ibid.,atpage 722 1 C.L.R. 5 10 15 20 25 30 35 40 Kaddoura v.Ship S e a Horse Demetriades J. 750, paragraph 1142). Likewise, the value of the property employed isalso an important element in the assessment of the reward. It is not, however, the measure or limit of the reward. Theriskto which the salving property isexposed by the performance of the salvage service is also an important consideration. The length of the salvage operations isnot in general averyimportantelementforconsideration, unlessthe servicesaredangerous orinvokeprotracted exertion; though theadditional lossorexpense incurredbysalvorsbyreasonof the duration oftheirservicesistaken intoconsideration in the assessment of the reward.The labour involved inthe salvage service is an important element only so far as it is accompanied by the exercise of skill, or by danger, or responsibility (ibid., atpages 751-2,paragraphs 1146-8). See alsosection 34 of our Cap.298. In assessing the amount of the salvage reward the expenses and lossesproperly incurred bythesalvorinthe performance of the salvage services are taken into account (section 24 of ourCap.298;and35Halsbury' sLaws,page 752, paragraph 1149).Those lossesandexpensesmaybegivenintheformof a separate award, but the common practice isto include itin the general award. The losses and expenses which are dealt with in this manner include expenses reasonably incurred in bringing the salved property into a place of safety;- and expenses, such as the cost of repairing damage, and depreciation in value of the salving vessel, caused by the performance of the salvage service (ibid,, at page 752, paragraph 1149). These principles are also to be found summarized in Kennedy' sCivilSalvage

(1958),4th edition, atpages 210 to 218, where itisstated (atpage 211)that 'iftheCourtgives the • amount ofthedamage,lossorexpensespecifically, itwilltake care not to give the amount twice over by again considering them when it comes to fix the amount due for salvage remuneration proper, thatis,theremuneration forrisk,etc.,in the service'. It may be taken that, at the present time, the Court will be careful to award a sufficient sum to salvors to cover the expenses they have 'properly incurred' (section 24 of our Cap.298)andtogivethemareasonableadditionalamountas 723 Demetriades J . Kaddoura v. Ship S e a Horse

(1988)compensation for their services. As stated by Kennedy, at pages 217-8: 'The only expenses for which the Court of Admiralty may compensate the salvor inthe award are:

(1)expenses properly incurred by the salvor in the furtherance of the salvage service, and before the vessel assisted hasbeen placed ina position of safety, and 5

(2)expenses directly occasioned bytheperformance of the salvage service, as, e.g. the cost of repairing damage which, without any fault on the part of herofficers orcrew, has been caused to the salving vessel (including, of course, her boats, furniture and tackle) or of replacing damaged clothing' (see casesquoted in footnotes 10and 11,at pages217-8). Finally, as stated in Kennedy, 'claims under the first head of expense are closely scrutinized by the court, and must be strictlyproved' (page 218).» As it appears from the authorities I have quoted above, the provisions of section 34 of Cap. 298, as well as myjudgment in the caseof YusraShipping Co.Ltd. v.Theship Yamama,

(1985)1 C.L.R. 328, the duty to fix the amount of reward to which the salvorshipand her crew are entitled, iscast upon the Court. 20 The next questions I have to decide is what the value of the salved property is and the amount of reward the salvors are entitled to receive. In the present case, as regards the value of the cargo Iam not concerned withthereward thattheplaintiffs areentitledtoreceive 25 withregardtothesalvageoftheSEAHORSE,nordoIbelievethat Iam bound, inrespect of thevalue of the cargo,bythe statement of her counsel that the judgment submitted to on her behalf was based on 40% of the price itfetched atthe publicauction carried out invirtue of a Court Order.To quote from thejudgment inthe 30 Branco case, supra, «the value of the salved property is an important consideration intheassessment ofthereward;butitwill not raise the reward out of due proportions to the service rendered. Ifthe value islarge the amount of the reward isusually a smaller proportion to the value than ifthe value issmall.» 35 Before deciding what the reward the parties involved in the salvageservice tothe SEA HORSE are entitled to,I must first find what wasthe value of the cargo salvaged. 724 10 is 1 C.L.R. Kaddoura v.Ship S e a Horse DemetriadesJ. According tothecontentsoftwoaffidavits which were sworn by. a certain Mr.Tilemachos Kalyvas, insupportofapplicationsfiled on behalf of thecargo for thedischarge of thewarrant of their arrest, itsvalue according totwo BillsofLading wasU.S. Dollars 5 555,987.87, but that when it was unloaded, it was found that timber of thevalue of more than U.S. Dollars 105,000.00 was shortlanded.ThatthequantityoftimberunloadedatLimassol was short ofthat appearing inthe Billsof Lading issupported bythe evidence ofMr. Karidjis. 10 Mr.Kalyvas, in his affidavits stated that he was swearing the affidavits asthe representative of the owners ofthe cargo, which was loaded on theSEA HORSEunderthe two BillsofLading. Having inmindtheevidence ofMr.Kalyvas, Ifind thatthevalue of the cargo which was loaded ontheSEAHORSE duringthe 15 salvageoperationwasU.S. Dollars400,000.00. . Itis perhaps here pertinentto mention thaton the 30thJune, 1983, asaresultoftheapplicationfiled onbehalf oftheownersof thecargofor thedischarge ofthewarrantofitsarrest,itwas agreed ν between theplaintiffs andthedefendants thatthecargo wastobe 20 released upon the defendants furnishing twobank guaranteesin respect of (i) Bill of Lading No. 1 for C£36,462.- and(ii) Billof Lading No.2for C£33,538.-,thatisforatotalsumofC£70,000.-. Infact such guarantees were given and are tobefound in the file of the action.This amountwas, atthe time the Bank guarantees 25 were represented,apercentage intheregion of40% ofthe value of thecargo which wasunloadedatLimassol. In deciding the amountof reward towhich the salvors, thatis the ship" andher crew are entitled to for the salvage services rendered, the following must be considered in addition to the 30 elementofthevalue ofthepropertysalvaged(a)therisktothesalvor ship and her crew; (b)the weather conditionsexisting atthetimeoftheoperation tilltheship wasbrought to safety; (c)theconditionofthesalvaged ship; 35 (d)theexpenses incurredbytheship (includingany damageto her) inorder tosave thesalvaged property; (e)thetimespentfortheoperation. 725 DemetriadesJ. Kaddoura v.ShipS e a Horse

(1988)In the present case, having considered the evidence adduced on. behalf of the salvors, which isuncontradicted, Ifind that the operation forthesalvageoftheSEAHORSEandthecargoloaded on her was highly dangerous inviewof thesizeofAHSSAN I,the weather conditions existing during the operation and the 5 condition of the SEA HORSE (broken steering gear and water entering one of her holds as a result of which the ship was made unstable)and forthisreason Ihavecometotheconclusionthatthe owner ofAHSSAN I isentitled to receive the sum of U.S. Dollars 100,000.00 as reward and the master and her crew the sum of 10 U.S.Dollars25,000.00,outofwhichU.S.Dollars3,200.00 should be paidtothefirstplaintiff, thatistheownerofAHSSANIashehas satisfied me that he has in fact paid, on account ofthe servicesof the crew, the sum of U.S. Dollars 1,000.00 to the Captain, U.S. Dollars700.00totheChief Engineerand U.S.Dollars1,500.00to 15 the other members ofthe crew. Intheresult,there willbejudgment infavour ofthefirst plaintiff for U.S.Dollars 100,000.00 and infavour of thesecond plaintiffs, that isthe Master and the members of the crew ofAHSSAN I,for U.S. Dollars25,000.00. "U Itisfurther ordered that the defendant cargo, that isthe second defendants, paythe costs of this action. ThecostsshallbeassessedbytheRegistrarandapprovedbythe Court. Judgment and order 25 forcostsas above. 726