This was an application by three claimants, Keynvor Morlift Ltd, Seawide Services Ltd and the Falmouth Docks & Engineering Co (the claimants), for remuneration for salvage services performed to the vessel Kuzma Minin following its grounding on 18 December 2018 off the coast of Falmouth. The grounding was a result of a severe gale and heavy seas which caused the vessel to drag its anchor and ground on a reef and sand in Falmouth Bay. Despite having generator power and the use of its main engine, the vessel was unable to free itself.

There were a number of claims in respect of the casualty. A claim was brought by Glander International Bunkering DMCC and the Court gave judgment and ordered that the vessel be appraised and sold by the Admiralty Marshal. The proceeds of the sale (GBP 1,003,000.00) were paid into Court. In addition to Glander International Bunkering DMCC, there were two other cautioners, namely the Maritime & Coastguard Agency and Redwater NV. The mortgagee bank (PBSJ Sberbank of Russia) was given permission to intervene in the proceedings.

On 18 December 2018, the salvage operation began at 06h45 and the vessel was successfully refloated around 14h30. The vessel was then towed and anchored at a position 1 mile south of Castle Beach, Falmouth where the vessel was redelivered to its master. The claimants put forward the costs associated with performing the salvage services at GBP 118,500.00. They made it clear that the claim was brought by the three claimants acting as a consortium and that they only required the Court to make a single award. The claimants submitted that the right to remuneration for salvage services is governed by s 224 of the Merchant Shipping Act 1995 (UK) (MSA) which incorporates the Salvage Convention 1989. Whether salvage services have been rendered and, if so, the quantification of an award, are governed by arts 1, 12, 13 and 14 of the Salvage Convention 1989.

The claimants submitted that the services provided fell within 'any act or activity undertaken to assist a vessel or any other property in danger in navigable waters'. They were thus salvage operations as defined by art 1.a, and did ‘have a useful result’ as required by art 12.1. The assessment of the award should be considered in accordance with the criteria set out in art 13.

The defendant did not file an acknowledgment of service. As the claimants filed an application in accordance with the Civil Procedure Rules, they submitted that they were entitled to a judgment in default.

Held: Judgment for the claimants in the amount of GBP 450,000.00 as a reward for salvage together with costs of GBP 109,843.12.

The claimants are entitled to a judgment in default. All the procedural requirements for the present application have been satisfied.

The operations performed were salvage operations within the meaning of the Salvage Convention 1989. The casualty was in danger and the operations undertaken by the claimants were successful. As the services were not performed pursuant to a contractual agreement, such as an LOF, the MSA requires that the assessment of the award must be made in accordance with the principles set out in the Salvage Convention 1989.

The relevant provisions are arts 1, 12 and 13 which define salvage operations that give rise to the right to a reward and the criteria that are to be taken into account when fixing the reward. By art 1.a, 'salvage operation means any act or activity undertaken to assist a vessel or any other property in danger in navigable waters or in any other waters whatsoever'. Article 1.b provides that 'vessel means any ship or craft, or any structure capable of navigation'. Article 1.c provides that 'property means any property not permanently and intentionally attached to the shoreline and includes freight at risk'. Article 1.d defines damage to the environment as 'substantial physical damage to human health or to marine life or resources in coastal or inland waters ... caused by pollution, contamination, fire, explosion or similar major incidents'. Payment means 'any reward, remuneration or compensation due under the Convention' (art 1.e).

Article 12 provides that only salvage operations which have had a useful result give a right to a reward. Article 13 sets out that a reward will be fixed with a view to encouraging salvage operations and provides the criteria that are to be taken into account (arts 13.1.a-j).

The salved value of the property (art 13.1.a) put forward by the claimants was GBP 2,413,518.00 including bunkers. However, the sound value put forward is suspect. It is not appropriate to ignore the actual sale price. Taking the value of the nearest comparable vessel, which was newer and larger than the vessel Kuzma Minin, at USD 2.2 million, the Kuzma Minin was probably of lesser value. Its value should be taken as USD 2 million. The vessel suffered significant physical damage while aground. There is uncertainty as to the cost of repairs which may have been more than those estimated by the claimants. A proper salved value should be taken at GBP 1.5 million.

The dangers facing the vessel are to be considered on the basis that no outside assistance would be provided.The report into the incident by the Maritime Accident Investigation Branch indicated the circumstances leading up to the grounding. On the evidence available, the vessel was grounded in a position of considerable danger. The vessel could not have extricated itself from the predicament. The evidence shows that the vessel suffered considerable bottom damage in a relatively short period of time. The grounding occurred at a time of year where bad weather is to be expected. It was only a matter of time before the vessel became a constructive total loss or actual total loss. The risk of oil pollution was high. The area is said to be one of particular interest from a tourist and ecological point of view.

The claimants incurred expenses and losses in the course of the salvage operations. Article 13.1.f specifically provides that the award shall be fixed taking account of expenses and losses incurred by the salvors. That the Court will take account of such expenses and losses is not new and may be traced back to the leading cases of The Sunniside (1883) 8 PD 137; The De Bay (1883) 8 App Cas 559 (PC) and the City of Chester (1884) 8 PD 137. The Court is not bound to award a sum which covers the full costs of expenses or damage claimed and will not do so if the fund available is not sufficient to allow it do so. Nonetheless, the general principle is that parties who assist in salvage services may bring the costs of doing so to the attention of the Court, which should take them into account in reaching an award. The extent to which the Court will do so will depend upon the evidence provided and whether it is considered fair to allow the expense or loss.

The salved fund is GBP 1,226,447.78. The salvage operation was quite short but demonstrates many of the elements which should lead to a particularly encouraging award without being overly restricted by the size of the salved fund. The vessel was in a dangerous predicament. If unassisted, the vessel would probably have been pushed further aground over the high tide period. The vessel had already suffered significant damage, was an older vessel and was not well-maintained, and would have suffered further damage over the successive tides.

The services performed were of the highest order, promptly rendered and at considerable risk to personnel and equipment in very severe sea conditions. The services were successful and timely. The successful outcome was brought about by the co-operation of the three claimants. The fact that they were prepared to co-operate with each other is highly meritorious and deserves encouragement. Given the dangers and the nature of the services rendered, the claimants deserve an award that may represent a substantial proportion of the salved fund without being unjust to the salved interests. An appropriate award to the claimants is therefore GBP 450,000.