Two US Navy ships, the USS Altair and the USS Mercury, were moored to a quay in St George's Bay, Greece. In the vicinity of the ships there were rock formations, a power plant with docks extending into the water, and two fishing boats. At about 20h00 on 29 October 1956, a sudden and violent squall struck in the vicinity of St George's Bay. The storm snapped all the lines holding the ships to the quay. The interlocked ships were swung counterclockwise by strong winds toward the power plant. This rotation was checked by the ships' anchors. Nevertheless, in the interval, the ships had moved some 150 to 200 yards from their original position, missed colliding with the power plant, and the Mercury struck one of the fishing boats, breaking off its yardarm.

The ships radioed for assistance as soon as the lines parted. Half an hour later, their calls reached the tugs Vernicos Manos and Kentavros. When the tugs arrived at 21h10, the winds had diminished, and they found the ships stationary, riding on all anchors, albeit still displaying a distress signal. The waters apparently remained relatively calm, as the tugs encountered no unusual difficulty in obtaining lines from the ships, securing them with the aid of the ships' crew, and, at the request of the Altair's captain, the senior officer present, returning them to their original berths. They were secured to the quay as before, but with reinforced lines. After working for an hour and twenty minutes, the tugs were dismissed and returned to their base. Shortly afterwards, the wind began to pick up again. The Altair's captain, concerned for the safety of the ships, recalled the tugs to stand by, despite the fact that all lines were holding. The tugs reappeared. The wind decreased and the sea was fairly calm. The tugs stood by until 03h15 when, at the request of the Mercury's captain, they pushed against the Mercury's side to relieve the strain on the lines. At 06h35 they were finally discharged.

The tugs' Greek owners sued the US under the Public Vessels Act (46 USC § 781 ff) (the Act) to recover for salvage services that they had allegedly rendered. The US contended that sovereign immunity deprived the Court of jurisdiction over the suit and that the services rendered by the tugs were mere towage and, as such, did not entitle them to a salvage award for salvage.

Held: The tugs' owners, masters and crew were entitled to salvage.

Under the Act, the US waived sovereign immunity and consented to admiralty suits for compensation for salvage rendered to a public vessel, but for foreigner's suits, that consent was subject to reciprocity. Therefore, the right of the tugs' owners to sue depended on whether the Kingdom of Greece allowed nationals of the US to sue in its courts for compensation for salvage rendered to a vessel of the Greece Navy.

The tugs' owner relied heavily upon the Immunity of State-Owned Ship Convention 1926, which was ratified by Greece, but not by the US. Article 6 of this Convention contained the restrictive reservation that its 'provisions ... may be applied in each Contracting State for the benefit of non-Contracting States and their nationals only on the basis of reciprocity.' It was clear from the terms of this Convention that the citizens of signatory States did not automatically reap its favours. Rather, their treatment was left to the discretion of the individual States parties. It was to be noted that this Convention did not preclude recovery by nationals of the US, since the condition of reciprocity relative to non-signatories, found in art 6, was satisfied by the Act.

No Greek judicial decision or legislative enactment expressly allowed or disallowed US salvage suits against the Greek Government. However, the Court's review and analysis of Greek law clearly showed that the Kingdom of Greece had waived the defence of sovereign immunity in other types of actions brought by both foreigners and citizens.

The US relied on the Salvage Convention 1910, which was ratified by both Greece and the US. The US, in particular, called attention to its art 14, which excluded 'ships of war ... [and] Government ships appropriated exclusively to a public service' from the Convention's provisions. It could not be argued that because the signatories excluded their own ships from the purview of this one Convention, they had forever contracted away their right to waive sovereign immunity by some other method, such as domestic law or another international agreement.

Salvage service is to be distinguished from towage services, in that the latter is a service which is rendered for the mere purpose of expediting a vessel's voyage, without reference to any circumstances of danger, although the service in each case may be, and frequently is rendered in the same way: The Emanuel Stavroudis 23 F 2d 214, 216 (D MD 1927). Therefore, in judging whether the services here constituted salvage, it is not sufficient to look at isolated acts. All the surrounding circumstances should be considered.

The evidence clearly demonstrated that the Altair and the Mercury were ships in distress. The tugowners' efforts greatly reduced, if not wholly eliminated, the exposure to disaster.

There was no precise formula for the computation of the salvage award. Salvage is not merely a compensatory award but a traditional bounty generously given to encourage salvors to risk their own lives and property so that the lives and property of others engaged in the maritime venture might be saved. The skills and efficiency displayed by the tugowners during the time of their service were unquestionable. Nevertheless, the services were not of a particularly high order of salvage. The tugowners were professional salvors. Profit was not only their incentive, but their life blood. Therefore, an award of three times the tugowners' expenses in maintaining the ships was fair under all the circumstances. The owners of the salving vessel also sued on behalf of their crews. The master and crew of the tugs were also entitled to award equal to three times their monthly wage.