Salvors Remuneration as Settled by Turkish Courts
Dr. Metin Uğur Aytekin
Senior Associate Lawyer
It occurs very frequently that the salvage reward is determined excessively as a global problem in shipping law. Most of the time initial claim figures could be negotiated down. However, when the arrest opportunity is factored into the equation, the salved ship's owners and their insurers may be in deep water without a chance to make a proper negotiation. They may be forced to put up excessive guarantees to save the ships from arrest even if the initial claims are not corresponding to a factual calculation.
In case TOF is not accepted and signed by the master, Turkish Commercial Act’s (TCA) rules shall be practiced in the determination of salvage reward and its securities. TCA’s salvage provisions introduce two important principles that the courts and salvors must adhere to which may be deployed in handling a salvage claim. In this article we will focus on them herebelow:
a. Independency between claims and securities
In a salvage of a laden vessel, there will be salvage claim for the cargo on board and the vessel. The salvors would demand arrest on the ship for the total amount of the salvage claim. However, according to the TCA the vessel is only responsible for the part that falls on the vessel. This means that the guarantees to be placed to release the vessel from arrest must cover only for the vessel's share. Otherwise, the salvors would be forcing to obtain security from the ship interests for a debt of a third party, i.e. cargo interest.
b. No solidarity between the payees of the salvage reward:
In most of the situations where the claimant puts forward compensation claim against multiple payees, there is solidarity principle, meaning that the payees are responsible together to the claimant. This allows the claimant to discharge the whole amount from any of the payees regardless of the percentage of the individual shares of such different payees in the claim. TOF also deploys this principle, but according to the TCA, in claims for the salvage reward the shipowners and their insurers must be aware that the salvors cannot force them to pay or put up security for the whole amount of the salvage reward, including the cargo interests' share in the said reward. Knowing these two principles, will add a dimension in the negotiations with the salvors and would be helpful to discuss on the actual salvage reward with more facts.