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Petitioner: ALEXANDER G. TAAVLIRIS & SONS VS Respondent: RICE TRADER
1988 C L C 2377
1988 C L C 2377
[Karachi]
Before Saleem Akhtar, J
Messrs ALEXANDER G. TAAVLIRIS & SONS‑‑Plaintiff
versus
m.v. 'RICE TRADER' and 2 others‑‑Defendants
Admiralty Suit No 316 of 1984, decided on 4th July, 1988
(a) Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)‑‑
‑‑‑S. 3‑‑Salvage award‑‑Entitlement to‑‑Person rendering salvage service would be entitled to a salvage award‑‑Such service entitling an award should be performed at sea to a distressed vessel by one, who was under no duty to do so.
Charlotte (1848) 3. W. Rob 68(71), Civil Salvage 3rd Ed., at p.21, TROILUS 83 L.L.. Rep. 195; and Carver in Carriage by Sea Vol. 2, 12th Edn. ref.
(b) Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)‑‑
‑‑‑S. 3‑‑Salvage reward‑‑Guiding principles for determining‑‑Foremost amongst such principles would be to evaluate degree of peril to which the derelict vessel was exposed and the imminent danger of loss, damage or destruction of ship, cargo and life.
The value of salved property and the risk undertaken by the salvers in risking their property, the prompt action, energy and skill shown by the salvers and the time and labour spent by them in rendering the salvage service are taken into account for determining the fair amount of salvage reward. One has to take into consideration all these elements and cannot pick up only one factor for assessing the award. Where the element of risk to derelict vessel was imminent and the danger involved and faced by the salver was high he will be entitled not only to a proper and fair but a generous award. Likewise only an attempt made unskilfully and without any result may not entitle any reward. The question of granting a generous, moderate or low award mostly depends upon all the aforestated factors. The degree of peril from which the property has been successfully secured should not be the ordinary peril of the sea. It should be extraordinary peril and danger requiring extraordinary skill. The peril should be beyond the expected and normal action of wind and wave. If the derelict ship, cargo and life on board are in imminent danger of being damaged or destroyed and the salvers have made efforts by risking their life and property they will be entitled to a generous award. The weather conditions at the time of rendering salvage service may be taken into consideration while granting an award as from this factor one can gather the degree of danger or risk to the distressed property which may be imminent or normal at sea. A normal and fair weather during the period when the service was rendered may be an appreciable factor in decreasing the quantum of award. The instances and particulars which may be taken into consideration while determining "he quantum of reward may be summarised as follows:‑
"(1) The degree of danger from which the lives and property are rescued.
(2) The value of the property saved
(3) The risk incurred by the salvers in securing the property from the impending peril.
(4) The promptitude, skill and energy displayed by the salvers in rendering the service and saving the property.
(5) The value of the property employed by the salvers in rendering the service and the danger to which such property was exposed.
(6) The time and labour expended by the salvers in rendering the salvage service."
The value of the salved property is an important element in determining the salvage award but this is not the only criterion on which award can be passed. All the aforestated elements involved in higher or lower degree must be considered before fixing the quantum of award or decree.
Law of Salvage by Martin J. Norris rel.
(c) Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)‑‑
‑‑‑S.‑‑Quantum of salvage reward‑‑Mode for determining.
If the service is negligible or slight or where the various elements which enhance the value of the service are lacking, the award should be low but adequate, although the salved values are high. Likewise, although the salved value is low, the award can be appropriately high, if the salvage service is highly meritorious one.
Devonian 150 F 831 ref.
(d) Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)‑‑
‑‑‑S.3‑‑Salvage reward‑‑Quantum, determination of‑‑While fixing quantum of salvage reward, salved value of ship and cargo has to be determined being an important factor in such determination.
(e) Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)‑‑
‑‑‑S. 3‑‑Generous remuneration‑‑When entitled to‑‑Award filed by plaintiff‑‑Legal affect‑‑Where service rendered to distressed vessel at high sea, was not risky, meritorious or of dangerous nature, such service would not call for generous remuneration‑‑Award filed by plaintiff in suit could be taken as a piece of evidence like any other evidence‑‑Such award having been filed like ordinary piece of evidence, decree could not be passed merely on that basis unless Court on appreciation of evidence comes to the conclusion that plaintiff's claim had been legally and factually established‑‑Considering nature and extent of service, and the salved value, Court awarded a specified amount as damages.
(f) Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)‑‑
‑‑‑S. 3‑‑Salvage amount, apportioning of‑‑Salvage amount could be apportioned amongst cargo owners and the vessel on basis of proportionate value of cargo and the vessel‑‑Normally salvage award is paid or recovered from the ship which realises the share of cargo owners from them.
(g) Admiralty Jurisdiction of High Courts Ordinance (XLII of 1980)‑‑
‑‑‑S. 3‑‑Civil Procedure Code (V of 1908), S.34‑‑Interest on basis of award‑‑Claim for‑‑Interest on basis of award could not be granted where suit had not been filed to enforce the award‑‑Question of granting interest in terms of salvage agreement or from the date of filing of suit till recovery, would not arise, where distressed ship to whom service had been rendered by plaintiff had been sold at the earliest opportunity within three months of filing of suit and sale proceeds were deposited in Court‑‑Fact that suit remained ,ex‑parte would also be taken into consideration while declining interest.
S.A. Sarwana for Plaintiff.
Noor Muhammad, M.H. Kazim and Nasimuddin Shaikh for Defendants.
Date of hearing: 30th May, 1988.
JUDGMENT
The plaintiff has filed this suit for recovery of salvage money for services rendered in salving the defendant No.1. The plaintiff is the owner of the Salvage Tug 'Apollon'. On 25‑1‑1984 at about 6‑50 hours it picked up message. from m.v. Rice Trader, the defendant No.l, that she was facing machinery abnormalities. The tug waited for further development and on 27‑1‑1984 at about 1‑45 hours urgent distress call was received from m.v. Rice Trader, the defendant No.l, that her engines have been damaged which has rendered her out of command and she was drifting dangerously towards North‑East rocky shores of Socotra Island and needed immediate assistance. The Master of Tug Apollon contacted the Master of defendant No.l over radio telephone and offered to render service under Lloyds Open Standard Form of Salvage (no cure no pay basis) and proceeded towards the defendant No.l. This offer was accepted by the Master of the defendant No.l. The tug approached the defendant No.l and on 27‑1‑1984 made fast tow line and towed the defendant No.l towards Djibouti Port. As permission to enter the port was not granted, the defendant No.l anchored in the international waters on 1‑2‑1984. From 2‑2‑1984 onwards the plaintiff rendered service by providing engineers, technicians and other specialised personnel who carried out repair of the machinery, engines, generators, refrigerators and other equipments. The plaintiff also supplied provisions, potable water, gas, oil and arranged inspection by surveyors to maintain the defendant No.l in a fit and safe condition. These operations and services continued upto February 15, 1984, when the defendant No.l was delivered to her Master who signed a Certificate of Safe Delivery.
In terms of clause 4 of the Salvage Agreement soon after the termination of the salvage service, the plaintiff notified its claim of remuneration for all expenses, costs and interest amounting to US $ 250,000 to the Committee of Lloyds, London for which amount the defendant No.1 had to furnish security within 14 days of salvage service. The defendant No. 1 however failed to furnish such security. The defendant No. 1 carried cargo of various cargo owners under bills of lading Nos. 2, 3, 5 & 7 who also neglected 'and failed to furnish security to the Committee of Lloyds, London. Besides these cargo owners the other cargo owners as mentioned in paragraph 12 of the plaint have failed to furnish security. According to the plaintiff the cargo owners were to furnish security in the sum of US $ 75,000 or 25% of the value of their goods. As the defendant No.1 and the cargo owners failed to furnish security, the plaintiff filed a petition under section 20 of the Arbitration Act praying that the defendant be directed to furnish security as aforestated and the defendant No.l which was anchored at Karachi should be arrested and out of the sale proceeds the claim of the plaintiff be satisfied. On an application filed by the plaintiff, by an order passed on 25‑4‑1984 the defendant No.1‑was arrested. It was also noted that the vessel had been arrested in other Admiralty suits pending in this Court. By order' dated 28‑5‑1984 passed in all suits the vessel was ordered to be sold and sale proceeds were to be deposited in Court.
The office raised an objection that the petition filed by the plaintiff under section 20 of the Arbitration Act which was registered as suit according to the rules, was not maintainable. This objection was heard and by order dated 18‑12‑1984 it was held that an application under section 20 of the Arbitration Act filed by the plaintiff is not maintainable under the Admiralty Jurisdiction. Two weeks time was allowed to the plaintiff to amend the petition. The plaintiff accordingly amended the petition by adding a prayer for recovery of specified amount claimed by it. The matter thereafter proceeded as an Admiralty Suit. During the pendency of the suit from time to time, the Court had released the cargo on furnishing security to the extent of 25$ of the value of cargo.
The defendants in spite of service have remained absent but the claimants who have filed several other Admiralty Suits including cargo owner, mortgagee supplier of bunker and necessaries and crew members of other vessel alleging her to be the sister vessel of defendant No.l have intervened in the proceeding and all these suits have proceeded together. The witness examined by the plaintiff has been cross‑examined by those advocates but no evidence has been produced either by the defendants or any one of those claimants who have intervened in the proceeding. It was however agreed between the advocates of the plaintiff that so far evidence of ownership of m.v. Rice Trader is concerned the evidence recorded in any Administrative suit shall be treated as evidence in all other suits. Such evidence of ownership has been recorded in Admiralty Suit No.304/1984 and Admiralty Suit No.448/1984. The following issues arise:‑
(1) To what remuneration the plaintiff is entitled for the service rendered by it and from which defendant?
(2) What should the decree be?
The plaintiff had referred the matter to the Arbitrator in terms of Salvage Agreement. On 22‑1‑1985 the Arbitrator has awarded as follows:‑
"I award and adjudge that the Respondents do pay to the Contractors for the salvage services so rendered the sum of 294,107 (two hundred and ninety‑four thousand one hundred and seven pounds) together with interest thereon at the rate of 16 per centum per annum from the 15th day of August, 1984 until the date on which this my award is published by the Committee of Lloyd's which sum shall be paid by each of the Respondents in the same proportions as their respective values bear to the total salved value.
And I further award and direct that any interest payable upon this award pursuant to the provisions of Clause 12 of the said agreement shall be at the rate of 14 per centum per annum.
and that the Respondents do each bear and pay their own costs of this arbitration and shall pay in the aforesaid proportions the Contractors' costs of this arbitration and the fees and costs charged by the Committee of Lloyd's for their services in connection therewith and the cost of this my award and my services in this arbitration which amounts to I; 1,355 (one thousand three hundred and fifty‑five pounds).
As witness my hand this 22nd day of January, 1985."
The plaintiff has this simultaneously proceeded with the present proceeding as well the arbitration proceeding before the arbitrator to London. The plaintiff has filed Judicial Miscellaneous No. 38 of 1986 under section 6 of the Arbitration (Protocol and Convention) Act, 1937 for making award rule of the Court. Mr. Kazmi the learned Advocate for one of the claimants has contended that the plaintiff is not entitled to proceed with both the actions at the same time. According to Mr. Kazmi the proceeding for making the award rule of the Court is barred by the principle of res judicata. It may be noted that when this suit was filed the arbitrator had not made the award. I enquired from Mr. Sarwana, Advocate, which matter he wants to proceed and he stated that he would like to proceed with Suit No.316/1984 first as according to him this includes the plaintiff's claim in respect of the ship as well as the cargoes. I would, therefore, proceed to decide this suit first.
ISSUES NOS. 1 and 2:
The plaintiff .has examined the present Master of Tug 'Apollon' but he was not ehgaged in salvage operation. The plaintiff has also filed the documents which were produced before the arbitrator which include Salvage Agreement, Certificate of Delivery, general statement of the Captain of Salvage Tug Apollon, photo copy of Log Book and photo copy of extract of chart as marked by Captain Apollon. He has also filed the award and reasons given by the arbitrator together with the copy of the correspondence of the advocates to show that the award has become final and made rule of the Court in London.
From the evidence on record it is clearly established that the defendant No.l had requested the plaintiff for salvage service and it was performed in terms of Lloyd's Standard form on no cure no pay basis.
The entire salvage operation as described by the plaintiff is as follows: ‑
The defendant No. 1. sent Radio message which was picked up by the plaintiff on 25‑1‑1984 at 6‑50 hours. At that time the defendant No.l had reported that the vessel was facing machinery abnormalities and the plaintiff was requested to send this message to the owner of defendant No.l. This was done by the plaintiff and the Tug remained in the same position expecting that situation may arise when it may be required' to render service to the defendant No.l. On 27‑1‑1984 at 0145 hours the plaintiff received an urgent distress call from the defendant No.l that she has suffered machinery damage which has rendered her out of command and she was drifting dangerously towards rocky shores. The plaintiff communicated with the Radio Telephone with the defendant No.l and offered service on Lloyd's Open Standard Form no cure no pay basis and also advised that the plaintiff was at a close distance and can reach there. At 1215 hours the master of the defendant No.l accepted the service in terms of no cure no payment conditions and requested to make efforts to reach as quickly as possible as she was in a very precarious position close to the rocky shore drifting dangerously towards it. It was also stated that she was unable to anchor due to the excessive depth of the water. The plaintiff proceeded at the maximum speed at the risk of over heating the Tug. The plaintiff's master continued contacts with the master of the defendant No.l and advised him the manner in which the two line would be engaged to avoid delay. At 0335 hours the plaintiff spotted the defendant No.l and prepared the tow lines. At 0455 hours the plaintiff arrived close to the defendant No.l. The plaintiff's crew members made efforts to make fast the tow line. According to the plaintiff the prevailing bad weather and the proximity of the rocks and reverse waves were creating dangerous conditions to both the tug and the vessel with collision risk. At.0510 hours the plaintiff succeeded in passing a heaving line and commence connection of tow line. The waves broke through the deck of the plaintiff and it was risky for the crew members attending the tow line. At 0545 hours the defendant No.l was all fast and at 0550 hours towing commenced. The plaintiff in consultation of defendant No.l decided that the safest and only suitable port in the area for repairs was Djibouti. The plaintiff towed the defendant No.l and this operation continued. On 1‑2‑1984 when they were near Djibouti the plaintiff received information from its agent that the port authorities had refused to grant permission for towing the defendant No.l to the Port of Djibouti. Therefore it was decided that the defendant No.l should be anchored in the international waters. On 2‑2‑1984 at 11‑30 hours the defendant No.l anchored in a safe position and tow lines were released. The plaintiff anchored close to the defendant No.l. From this time onwards the plaintiff rendered services of providing necessaries bunkers, water, Engineers, Technicians for repair of the engines and such service continued upto 15‑2‑1984, when the defendant No.l was delivered in the safe custody of her Master. A certificate to this effect was issued by him. This was the entire service which was rendered by the plaintiff. This statement of facts is contained in the extracts of the log book of the plaintiff.
It is clear that the salvage operation commenced on 27‑1‑1984. No doubt the defendant No.l was drifting towards the shore loaded with cargo and was likely to be damaged or destroyed. The plaintiff reached the defendant No.l and started salvage operation as stated in the log book. The defendant No. l was in deep water and unable to anchor there. The plaintiff passed heaving line and commencing connection of tow line. The only dangerous situation stated in the log book is that the waves broke over the plaintiff's tug and there was risk to crew members attending the tow line. But no one was injured as such information is not found in the log book. These are usual risks involved in such operation and are expected in the normal course on high seas. No extraordinary risk has been mentioned in commencing connection of tow line. The plaintiff started its operation at 0455 hours and succeeded in making fast the tow line by 0545 hours. At 0550 hours the towing started therefore it had taken hardly one hour to heave and connect the tow line. In the log book the entries pertaining to this time force of wind has not been mentioned and therefore it cannot be ascertained whether at that time the wind speed was high with high and rough swelling waves making the sea and operation risky and dangerous. Therefore from the fact stated in the log book it can safely be concluded that the fasting of tow line was not a risky or dangerous job nor did it take longer time than was necessary, in the normal course. Thereafter the towing started which continued till 1130 hours on 2‑2‑1984 when the defendant No.l anchored at a safe position in the international water. After 0550 hours on 27‑1‑1984 except towing no other service was rendered. No rough sea was experienced during towage. The sea swell and wind faced by the plaintiff was not abnormal, risky or hazardous. After the vessel had anchored the only service rendered by the Plaintiff was to supply provisions, necessaries, bunker and arrange or engineers and technicians who were brought on board by defendant No.l for repairing' the engine and generator. These services do‑ not render the salvage operation risky or dangerous. The exercise, after connecting the tow line from 27‑1‑1984 to 3‑2‑1984 was only a glorious towage operation. There is no evidence to show that the operation had caused danger, risk or damage to the plaintiff. In my view the entire operation was performed in normal conditions without experiencing any excessive danger or rough weather. The fact that the wind was blowing does not make the operation dangerous because normally wind and wave at sea are experienced. To establish that the operation was risky requiring special skill, the plaintiff has to prove by cogent evidence the abnormal force of wind, boisterous sea and rough weather which required more energy and skill to control and continue the operation at high seas. No such evidence has been produced by the plaintiff. Even its log book on which I have relied does not prove the operation to be risky, dangerous and skilful.
Before proceeding further let us understand what is a salvage service. In this regard reference can be made to the classic observation in the Charlotte (1848) 3. W. Rob 68 (71) by Dr. Lushington which has been adopted by Lord Justice Kennedy in his book Civil Salvage 3rd Ed. at page 21. In that case the ship came to anchor by error of her Master in an exposed position off the coast in bad weather and started to drag her anchors. Accordingly, crew cut away her masts, which went overboard with all her sails and rigging, and her anchors then held. The salvers towed her the following day to a place of safety. Dr. Lushington observed:‑
"Looking to these facts????.I cannot but think that the service of bringing this vessel to anchor in Long Island Channel was prima facie a service of salvage. According to the principles which are recognized in this Court in questions of this description, all services rendered at sea to a vessel in danger or distress are salvage services. It is not necessary, I conceive, that the distress should be actual or immediate, or that the danger should be imminent and absolute; it will be sufficient if at the time the assistance is rendered, the vessel has encountered any damage or misfortune which might possibly expose her to destruction if the services were not rendered."
In the Troilus 83 L.L. Rep. 195 Lord Justice Denning observed:‑
"The obligation on ship and cargo to pay for salvage services is imposed by law irrespective of any contract, express or implied, to that effect; whereas the obligation to pay for towage services arises, if at all, from a contract, express or implied, to pay for them. This difference points the way to the true distinction between the nature of the services. Salvage services arise when the ship is in such danger that the Master has no real choice in the matter, but must, as a reasonable man, accept them from somebody or lose his ship, or leave it in some remote place; whereas towage services rise when the ship has reached such a position of safety that the shipowner has a freedom of choice either to refuse the services or to have repairs done locally or to contract for towage to get his ship home. In order to encourage the rescue of ships which are in danger, the law,' without the necessity of any contract, provides for handsome remuneration for the salvers if they succeed, but nothing if they do not; and this remuneration is based, not only on the time, labour and risk involved, but also for the value of that which is saved ,and it is charged on it."
A person who has rendered salvage service is entitled to a salvage award. Salvage service entitling an award should be performed at sea to a distressed vessel by one who is under no duty to do so.
Carver in Carriage by Sea Vol. 2, 12th Ed. observed:‑
"One who saves or helps in saving a vessel to which he is a stranger, from danger at sea, is entitled to a reward for his services; and if he has obtained possession of the vessel, he may retain possession until he has been paid the due reward."
Martin J. Norris in the ?The Law of Salvage defined salvage service as under:‑
"In its simplest form salvage can be described as a service voluntarily rendered in relieving property from an impending peril at sea or other navigable waters by those under no legal obligation to do so."
The persons engaged in salvage service can claim reward for their service. This entitlement is distinguishable from common law right where usually such claim arises under a contract. However, in salvage claim even a voluntary service rendered by a salver entitles him to an award provided other conditions necessary for grant of award are present. Grant of award to such voluntary service is based on public policy to encourage all persons in a position to render help to come forward to save a distressed vessel, cargo and life. ‑It may be mentioned that now‑a‑days it is common that…
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