On 8 August 2011, the plaintiff successfully applied for the defendant's yacht NL to be arrested. In September 2011, the plaintiff filed a salvage claim, stating that the international jurisdiction of this Court was based on art 7.1.e of the Arrest Convention 1952, which provides that the courts of the State in which the ship was arrested have jurisdiction to decide the merits of the dispute if the claim is for salvage. The plaintiff stated that he was the owner of the fishing boat N, flagged in Croatia, and that the defendant was the owner of the yacht NL, flagged in the USA. In January 2011, the plaintiff, with the help of his fishing boat N, rescued the yacht NL. Since the defendant's yacht was towed to a safe harbour with the help of the plaintiff, which meant that the salvage operation yielded a useful result, the plaintiff, as the owner of the salving ship, was entitled to a fair reward under art 771.1 of the Maritime Code, which might not exceed the value of the rescued ship. As the plaintiff's lawsuit was filed before the expiration of one year from the date of the rescue, the plaintiff was the only party actively entitled to file a lawsuit to claim a fair reward for the rescue.

Furthermore, the plaintiff pointed out that the parties had not agreed on a contract to rescue the ship which would determine the amount of the award, so the plaintiff was entitled to an award in accordance with art 774.2 of the Maritime Code determined by the Court. The plaintiff argued that there should be a reward of 10% of the value of the rescued yacht, the value of which at the time of rescue was between EUR 220,000 and EUR 250,000. The plaintiff emphasised the very high degree of success. Considering the nature and degree of danger, the plaintiff pointed out that the defendant's yacht was exposed to a very high degree of danger, that the wind speed was about 65 km/h, that it was raining, and that the sea was very choppy. The skipper of the yacht was injured and incapable of any action, and the owner of the yacht was in shock and was not able to actively participate in the rescue operation. The consequences, without timely rescue action, could have been fatal as for the yacht as well as for its crew. The rescue lasted a full 24 hours from the moment of receiving the call, going to the wrecked yacht, and towing it to a safe port. The boat N is a fishing boat intended for trawling primarily in national waters, but despite its size and low power, it exposed itself to danger, and set out to rescue the defendant's yacht. Since the plaintiff proved the basis and amount of his claim, and the defendant ignored the plaintiff's calls to pay him the requested amount of EUR 25,000, the plaintiff now claims this amount in his lawsuit.

In response to the lawsuit, the defendant pointed out that a dispute is pending before this Court in 9.P-1367/2011 on the lawsuit of another plaintiff, the master of the ship N, against the same defendant, and arising from the same salvage operation. The defendant disputed that EUR 25,000 represented a fair salvage reward. The defendant pointed out that there was no salvage agreement, and that any award should be determined in local currency. The defendant pointed out that he was not running away from his obligation, and that he was grateful to everyone who helped him, but that the amount requested by the plaintiff was exorbitant and beyond the criteria prescribed by the Maritime Code.

Furthermore, the defendant stated that the question arises as to who the rescuer is in the specific salvage operation, since according to the Maritime Code the rescuer is the shipowner of the ship that undertook the rescue, while the ship, as a technical means, performed the rescue thanks to the initiative of its crew. The defendant argued that any award should be distributed among the crew members of the ship who participated in the rescue. According to the defendant, each of the nine participants should be entitled to an equal amount of EUR 1,666.66, which was a fair amount to all the persons who carried out the rescue operation.

Held: The defendant is ordered to pay the plaintiff HRK 148,009.48 as a salvage reward.

It is agreed that the plaintiff is a professional fisher, and the owner of the fishing vessel N, and that the plaintiff as shipowner approved the rescue of the defendant's yacht, and that he and the crew of the ship N acted to rescue the yacht. It is also agreed that the rescue lasted for 24 hours, and that the defendant's yacht was towed by the plaintiff's ship and crew to a safe harbour. It is also agreed that in addition to the ship and the crew of the ship N, the tanker M took part in the rescue operation of the NL, and did not request a salvage award. It is also agreed that the rescue operation had a beneficial outcome because the ship NL and its two crew members were rescued, and that the defendant is the shipowner of the NL.

First, it should be pointed out that according to the provisions of the Maritime Code (Official Gazette No 181/04, 76/07, 146/08, 61/11 and 56/13), salvage operations with an international character are subject to the law chosen by the contracting parties, and if that law cannot be applied or if the parties have not expressly chosen an applicable law, the law of the closest connection, which is determined according to the circumstances of the particular case, shall apply. Furthermore, if it is impossible to establish the closest connection, the law of the State of the port where the rescue ended is applied, ie the law of the first port at which the salvaged ship arrived after the rescue, all within the meaning of art 978 of the Maritime Code. Since the rescue was completed in Croatia, the law of Croatia applies in this case.

The parties claim that they did not enter into a salvage agreement, but this Court finds that the parties did in fact conclude an oral contract to rescue the defendant's yacht. It follows from art 778.1 of the Maritime Code that if the salvage of a ship or other property is performed on the basis of a salvage contract concluded by the master or shipowner of a ship in danger, the salvage award under art 774 of the Maritime Code is payable by the shipowner (here, the defendant).

In relation to the active legitimacy of the plaintiff, in connection with the requested reward for the rescue, it should be noted that art 782 of the Maritime Code, in conjunction with art 781, stipulates that members of the crew of a salving vessel may, once the rescue is completed, file a lawsuit against the salvor or owner of the rescued ship to obtain a salvage award represents their share in the award if the salving vessel did not file a lawsuit for payment of the salvage award.

Since the plaintiff, as the shipowner, filed a lawsuit for the payment of a salvage reward before the expiration of one year from the date when the rescue ended, he is actively legitimised in this litigation. Therefore, a shipowner who files a lawsuit within one year from the day the rescue is completed, excludes others from the salvage award. Only if the shipowner does not file a lawsuit within that time, do the rescuing crew members become legally active in relation to the shipowner of the rescued ship and acquire the right to sue. So the defendant's objection to the lack of active legitimacy of the plaintiff is unfounded.

In relation to the amount of the requested compensation in terms of art 774 of the Maritime Code, the Court decided on the same after conducting an expert examination by a court expert and maritime assessor. The Court quantifies that reward in the amount of 10% of the value of the rescued ship, or the equivalent in HRK of EUR 19,737.00, which amounts to HRK 148,009.48. The Court determined the stated amount taking into account all the elements prescribed by art 774.2 of the Maritime Code, namely: the saved value of the ship and other saved property; the skill and efforts of the salvor; the degree of success achieved by the salvor; the nature and degree of danger; the time spent and the costs invested; the risks to which the salvor was exposed; the speed with which the rescue was provided; and the state of readiness and effectiveness of the salvor.

Here, the defendant's yacht was completely rescued; there was no danger for the salvor; the operation lasted one hour, and the rescue was completed within 24 hours; the salvor's skill was in throwing a rope to the rescued vessel; and the risk was low. In respect of this sort of salvage, rewards range from 7.5% to 15% of the value of the rescued ship. The Court considers 10% of the value of the rescued ship to be a fair reward for salvage, or compensation for labour and rescue efforts.