M/V 28' Spencer (Spencer), a vessel owned by Martin Pilafian (Pilafian), capsized near the coast of Miami-Dade, Florida, after it encountered high seas. Tow Tell Marine Service LLC (Tow Tell), a professional salvage assistance company, heard the distress call and dispatched two vessels from its rescue fleet to respond. In its complaint for a salvage award against the vessel and the vessel owner, Tow Tell alleged that, by righting the vessel, de-watering the hull and safely towing the vessel, it prevented the release of approximately 250 gallons of gasoline and oil into the surrounding ecosystem, and was therefore entitled to a salvage award and to 'special compensation' under art 14 of the International Convention on Salvage 1989 (the Salvage Convention 1989). The defendants moved to dismiss Tow Tell's complaint for failure to state a cause of action.

Held: The Court dismissed Tow Tell's claim for special compensation. The Court noted that, although a salvor is entitled to 'special compensation' under art 14 of the Salvage Convention 1989 where the salvor has carried out salvage operations of a vessel which has 'threatened damage to the environment', art 1 of the Salvage Convention 1989 defines 'damage to the environment’ as ‘substantial physical damage’ to the environment caused by ‘pollution, contamination … or similar major incidents'.

Interpreting art 1 of the Salvage Convention 1989, the Court noted that the emphasis on 'major' and 'substantial' indicates that drafters of the Salvage Convention 1989 were not concerned with 'small-scale' pollution, but only events of a more widespread nature. Therefore, the Court concluded that while it was reasonable to believe the grounding and subsequent leakage of the vessel would have caused some environmental damage, the potential spill of merely 250 gallons of gasoline and oil did not rise to the level of 'substantial physical damage' that classified as environmental damage under art 14 of the Salvage Convention 1989. Accordingly, Tow Tell's claim for special compensation was dismissed.

The Court further concluded that art 13.3 of the Salvage Convention 1989 provides that the salvage award shall not exceed the salved value of the vessel. Therefore, Tow Tell was entitled to a salvage award only for the 'value of the res as it was recovered', even if Tow Tell Marine’s expenses exceeded that amount.