Lloyd's Maritime and Commercial Law Quarterly
THE 1989 SALVAGE CONVENTION AND ENGLISH LAW
Richard Shaw*
The 1989 Salvage Convention will come into force internationally on 1 July 1996. It has been part of English domestic law since 1 January 1995, and has had contractual force (in part) since its principal Articles were incorporated into Lloyd’s Form of Salvage Agreement in 1990. This article reviews the impact of the Convention on English law, comparing those Articles which derive from the 1910 Salvage Convention with those codifying recent court decisions. It also considers the new remedy of Special Compensation in the light of the judgments of the Court of Appeal in the recent case of The Nagasaki Spirit.
In July 1994 the Merchant Shipping (Salvage and Pollution) Act 19941 received the Royal Assent. This Act (now consolidated in the Merchant Shipping Act 19952) dealt with a number of important matters relating to the prevention of marine pollution, but the most significant is without doubt the ratification by the United Kingdom of the International Convention on Salvage 1989.3 This Convention will come into force on 1 July 1996, 12 months after 15 instruments of ratification have been deposited with the Secretary General of the International Maritime Organization (IMO).4 However, the British Government has already published an Order in Council which has made the terms of the 1989 Convention part of English law with effect from 1 January 1995,5 and from that date the entire Convention automatically became part of Lloyd’s Standard Form of Salvage Agreement (No Cure-No Pay) (LOF), under which most major salvage operations are carried out.6 LOF 90, cl. 1(g) provides that this agreement is governed by English law and the English law of salvage. Similar provisions appear in all the previous editions of LOF.
The principal Articles of the 1989 Convention (Arts 1, 8, 13 and 14) were incorporated contractually into LOF 90, and there have now been about 15 arbitrations in which these Articles have been considered and applied. To that extent, therefore, the terms of these Articles have been tested “in the field”. All these arbitrations are ex hypothesi confidential
* Consultant, Shaw and Croft, London; Senior Research Fellow, Institute of Maritime Law, University of Southampton; adviser to the U.K. delegation to the International Conference on Salvage 1989.
1. Hereafter “the 1994 Act”.
2. S. 224; Sched. 11. Hereafter “the 1995 Act”.
3. Hereafter “the 1989 Convention”. For the full text of the 1989 Convention, the Brussels Salvage Convention 1910 (hereafter “the 1910 Convention”) and other relevant documents, see Brice, Maritime Law of Salvage, 2nd edn (1993) (hereafter “Brice”) and Kennedy’s Law of Salvage, 5th edn (1985) (hereafter “Kennedy”).
4. Arts 28 and 29.
5. Merchant Shipping (Salvage and Pollution) Act 1994 (Commencement No. 2) Order 1994: S.I. 1994 No. 2971.
6. For brevity the 1980, 1990 and 1995 editions of Lloyd’s Standard Form of Salvage Agreement will be referred to as LOF 80, LOF 90 and LOF 95 respectively.
202