Understanding ancillary contracts 1 - Marlaw introduction. Describe the legal implication of a master-pilot relationship. The Respective Roles and Responsibilities of the Pilot and the Master The compulsory state pilot directs the navigation of the ship, subject to the master’s overall command of the ship and the ultimate responsibility for its safety. The master has the right, and in fact the duty, to intervene or displace the pilot in circumstances where the pilot is manifestly incompetent or incapacitated or the ship is in immediate danger (“in extremis”) due to the pilot’s actions.

With that limited exception, international law requires the master and/or the officer in charge of the navigational watch to “cooperate closely with the pilot and maintain an accurate check on the ship’s position and movement. ” State-licensed pilots are expected to act in the public interest and to maintain a professional judgment that is independent of any desires that do not comport with the needs of maritime safety. In addition, licensing and regulatory authorities, state and federal, require compulsory pilots to take all reasonable actions to prevent ships under their navigational direction from engaging in unsafe operations.

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Because of these duties, a compulsory pilot is not a member of the bridge “team. ” Nevertheless, a pilot is expected to develop and maintain a cooperative, mutually-supportive working relationship with the master and bridge crew in recognition of the respective responsibility of each for safe navigation. “Pilots hold a unique position in the maritime world and have been regulated extensively both by the State and Federal Government. Some state laws make them public officers, chiefly responsible to the State, not to any private employer.

Under law and custom they have an independence wholly incompatible with the general obligations of obedience normally owed by an employee to his employer. 2. Explain the liability for damages done by a pilot to the ship and to a third party. A modern definition of the role of the pilot is provided by article 102 of the Spanish Law of State Ports and the Merchant Marine. This article provides that pilotage is understood as the service of advising the Masters of ships and floating objects on nautical manoeuvres in order to facilitate their safe entry into and exit from a port.

The classification of the pilot as an advisor is not uncontroversial. There has been a debate in many jurisdictions as to whether the pilot’s role is merely to advise the master, or whether he actually takes charge of the vessel. Although in practice the pilot will normally be in effective control on board, the fact remains that the master may take back control if he believes it necessary to do so, and therefore the classification of the pilot as an advisor to the master seems to be more appropriate.

In the case of a collision, article 5 of the 1910 Brussels Convention for the unification of certain rules of law relating to collision between vessels provides that the owner of the vessel at fault will be liable when the collision was due to the negligence of a pilot, even if pilotage was compulsory. However, the position regarding liability for incidents other than collisions, for example, liabilities to a port authority for damage to the port installations, is not quite as clear. The general position is that the pilot is treated as a temporary crewmember.

Therefore, the owner will be liable for all loss or damage caused by a ship that is due to the negligence of the pilot, even if pilotage was compulsory and the incident giving rise to the damage cannot strictly be classified as a collision. Thus, section 16 of the English Pilotage Act 1987 provides that: “the fact that a ship is being navigated in an area and in circumstances in which pilotage is compulsory shall not affect any liability of the owner or master of the ship for any loss or damage caused by the ship or by the manner in which it was navigated”.

While the owner may be liable towards third parties, he may have the right to recover from the pilot. Thus, article 834 of the Spanish Commercial Code provides that while having a pilot on board will not relieve the master (for which one should read ‘owner’) of a vessel from liability towards the innocent vessel for collision damage, he has the right to be indemnified by the pilot.

In France, article 18 of the Law of 3rd January 1969 provides that, while the pilot is not liable to third parties for damage caused in the course of pilotage operations, he must, within the context of his relations with the owner of the piloted vessel, contribute to the reparation of such damage. However, such a claim will generally be subject to limitation. Section 22(2) of the Pilotage Act 1987 limits the liability of any authorised pilot for any loss or damage caused by any act or omission of his while acting as a pilot to £1,000 plus the amount of the pilotage charges in respect of the voyage during which the liability arose.

While this represented a tenfold increase on the limit provided for by the 1983 Pilotage Act, it would still barely justify the expense of bringing a claim in many cases. Similarly, in France, the liability of the pilot is limited to the amount of the guarantee that must be deposited by anyone who wishes to provide pilotage services pursuant to article 20 of the Law of 3rd January 1969. The International Association of Independent Tanker Owners (INTERTANKO) calls for the increased responsibility of pilots and their organisations for the consequences of pilotage failure.

Even if legislation fails to produce some uniformity on the limits of liability, it is conceivable that, in a freer market, pilots may agree to contractually higher limits than those provided for by law. Accordingly, ship-owners (and their insurers) may, as a consequence of freer market access, have an opportunity to ensure that, when an incident is caused by a pilot, his liability insurers will assume a greater share of the resulting liabilities. 3.

Describe a contract of towage in regards to remuneration to perform towage services such as pushing, shifting, moving, docking, unlocking of a ship and stand-by near a ship for purpose of assisting by towing. In many geographical areas the terms and conditions of towage contracts have been standardized. Perhaps the most widely known standard towing conditions are the U. K. Standard Conditions For Towage and Other Services published by the British Tug Owners Association. These terms are normally used for towage services performed in British Ports but are also used in many other ountries. In Canada, the most widely known standard conditions are the Eastern Canada Standard Towing Conditions (“ECTOW”) published by the Shipping Federation of Canada. These towing conditions are used on the East coast and on the Great Lakes. There is no single set of standard towing conditions that is widely used on the West coast of Canada.

The various tug owners on the West coast have tended to use their own towage conditions or a variation of the conditions used by the larger tug companies. At one time the B. C. Tugowners Association published a set of standard conditions but these were not widely adopted. ) 4. Explain the difference between towage and salvage services. Differences between towage and salvage: Need for a contract No need for success Absence of a lien Danger Voluntariness I. Need for a contract Although there is nothing to prevent one vessel gratuitously giving another a tow, the right of a tug or other towing vessel to payment always depends on contract whether express or implied.

This is not the case with salvage, which does not depend on contract and indeed may be rewarded even though the master of the salved vessel has expressly declined the offer of assistance, which the salvor goes on to give anyway (but the services must have been executed in circumstances such that they should have been accepted. II. No need for success The need for success is a characteristic of salvage, but not of towage. It is a necessary element of a salvage claim because salvage awards are paid out of, and cannot exceed, the value of the salved property.

This is not to say that the tugowner will always be able to claim payment when the towage is not completed, because towage contracts are normally regarded as indivisible and the price only becomes payable when the towage has been completed. But the right to payment will depend on the construction of the contract rather than the success of the venture. III. Absence of lien There is no maritime lien upon the tow for the payment of the price fixed by the towage contract whereas a tugowner has a maritime lien over property salved. IV. Danger

A further distinction is the element of danger. While a situation of danger does not preclude a mere towage contract, the element of danger is crucial to a successful salvage claim. There can be no clear rule as to the exact amount of danger that will, in any particular case, suffice. The danger need not be imminent. It is sufficient if there is a state of difficulty and a reasonable apprehension of danger. A danger which is merely fanciful is not enough, but the state of mind of those on board the vessel in danger is a very important factor.

So in the case of The Smaragd (1927) a salvage award was made after the crew of the casualty abandoned her in the mistaken belief that she was about to blow up. This is not to say that the state of mind of those on board is decisive. The test is objective. Kennedy (Law of Salvage) says that “There must be such reasonable, present apprehension of danger that, in order to escape or avoid the danger, no reasonably prudent and skilful person in charge of the venture would refuse a salvor’s help if it were offered to him upon the condition of his paying a salvage reward. The salvage services last for so long as the master acts reasonably for the combined benefit of ship and cargo. So in the case of The Troilus [1951] where a vessel was taken in tow, having lost her propeller, and towed to Aden (Yemen) and thence via Suez and Port Said (Egypt) to the United Kingdom, the whole of the services were salvage, even though she could have laid in physical safety at any of those ports en route because at none of them could she have had her propeller replaced in safety. V. Voluntariness

The requirement that the services rendered must be of a voluntary character has been an obstacle to several categories of claimant, amongst them tug owners. It is important to note that “voluntariness” in this context, basically means that the service should not be rendered solely under a pre-existing contractual or official duty owed to the owner of the salved property, or solely in the interest of self preservation. As far as towage is concerned, Art. 4 of the Brussels Convention on Salvage 1910 provides as ollows: “A tug has no right to remuneration for assistance to or salvage of the vessel she is towing or of the vessel’s cargo, except where she has rendered exceptional services which cannot be considered as rendered in fulfilment of the contract of towage”. Similarly, Article 17 of the 1989 Salvage Convention provides that: “No payment is due under the provisions of this Convention unless the services rendered exceed what can be reasonably considered as due performance of a contract entered into before the danger arose”. 5.

Explain why under a towage contract the tug owner is exonerated from all liabilities except when damage is caused by negligence on his part. The tug operator often includes a provision limiting liability for any loss, damage, injury or delay the vessel owner may incur as a result of the services provided. The tug operator also refuses liability for acts beyond the operator’s control that hinder service, such as a hurricane or act of terrorism. In general, exculpatory clauses are upheld. However, when the language is in small print or is ambiguous, courts hesitate to enforce them.

In addition to a clause limiting liability, a towage agreement will include an indemnity clause providing that the vessel owner agrees to hold the tug operator harmless for the vessel owner’s negligence or failure to perform as agreed. The tug operator likewise agrees to hold the vessel owner harmless. The effect of this clause is that both the tug operator and the vessel owner are legally responsible for their own behavior in any lawsuit filed as a result of the agreement LEGAL ASPECTS OF MARINE ACCIDENTS

Understanding legal aspects of marine accidents 1. Define collision and allusions John Bouvier described a collision as a term of maritime law as the act of ships or vessels striking together, or of one vessel running against or foul of another. He goes on to describe several varieties of collision, each with their own consequences as to liability: * collision without fault; * by inevitable accident; Each shall bear its own damage. * by mutual fault; Each vessel shall suffer their respective losses but as regards the wners of the cargoes, both vessels shall be jointly and severally liable. * by inscrutable fault; or Each vessel shall suffer its own losses and both shall be solidarily liable for loses or damages on the cargo. (Doctrine of Inscrutable Fault). * by the fault of one of the colliding ships. The ship owner of such vessel shall be liable for all resulting damages. 2. State that in case collision, there are three types possible liabilities a. Criminal b. Disciplinary c. Civil 3.

Outline the rules of liability for personal inquiry and for damage to cargo Damages that may be recovered in maritime personal injury cases include the following: (1) loss of past and future wages; (2) loss of future earning capacity; (3) pain, suffering, and mental anguish; and(4) past and future medical expenses, as well as any other condition related expenses. 360 Prejudgment interest may be recovered if an action is brought in admiralty. 361 At an earlier time some circuits permitted recovery under the general maritime law for loss of consortium or loss of society and punitive damages in appropriate circumstances. 62 Subsequently, in Miles v. Apex Marine Corp. ,363 the Supreme Court held that the surviving (nondependent) mother of a Jones

Act seaman could recover only for pecuniary loss, even though the action was brought under the general maritime law, reasoning that the damages recoverable under the general maritime law could not exceed those available under the Jones Act. In the wake of Miles, some lower federal courts have held that recoverable damages under the general maritime law are restricted to pecuniary losses only. 364 Some courts have refused to extend Miles to other situations. 4.

Define salvage operation The process of recovering a ship, its cargo, or other property after a shipwreck. Salvage encompasses towing, refloating a sunken or grounded vessel, or patching or repairing a ship. Today the protection of the environment from cargoes such as oil or other contaminants is often considered a high priority. “Salvage operation” means any act or activity undertaken to assist a vessel or any other property in danger in navigable waters or in any other waters whatsoever. 5. List and describe the three basic factors that are necessary for a salvage operation to be rewarded. . Salvage operations which have had a useful result give right to a reward. 2. Except as otherwise provided, no payment is due under this Convention if the salvage operations have had no useful result. 3. This chapter shall apply, notwithstanding that the salved vessel and the vessel undertaking the salvage operations belong to the same owner. 6. Explain salvage contract “no cure-no play” principles, performance of salvage operations, duties of the master criteria fixing the reward and special compensation. Salvage contracts 1.

This Convention shall apply to any salvage operations save to the extent that a contract otherwise provides expressly or by implication. 2. The master shall have the authority to conclude contracts for salvage operations on behalf of the owner of the vessel. The master or the owner of the vessel shall have the authority to conclude such contracts on behalf of the owner of the property on board the vessel. 3. Nothing in this article shall affect the application of article 7 nor duties to prevent or minimize damage to the environment. Duties of the salvor and of the owner and master 1.

The salvor shall owe a duty to the owner of the vessel or other property in danger: (a) to carry out the salvage operations with due care; (b) in performing the duty specified in subparagraph (a), to exercise due care to prevent or minimize damage to the environment; (c) whenever circumstances reasonably require, to seek assistance from other salvors; and (d) to accept the intervention of other salvors when reasonably requested to do so by the owner or master of the vessel or other property in danger; provided however that the amount of his reward shall not be prejudiced should it be found that such a request was unreasonable. . The owner and master of the vessel or the owner of other property in danger shall owe a duty to the salvor: (a) to co-operate fully with him during the course of the salvage operations; (b) in so doing, to exercise due care to prevent or minimize damage to the environment; and (c) when the vessel or other property has been brought to a place of safety, to accept redelivery when reasonably requested by the salvor to do so.

Special compensation * If the salvor has carried out salvage operations in respect of a vessel which by itself or its cargo threatened damage to the environment and has failed to earn a reward under article 13 at least equivalent to the special compensation assessable in accordance with this article, he shall be entitled to special compensation from the owner of that vessel equivalent to his expenses as herein defined. If, in the circumstances set out in paragraph 1, the salvor by his salvage operations has prevented or minimized damage to the environment, the special compensation payable by the owner to the salvor under paragraph 1 may be increased up to a maximum of 30% of the expenses incurred by the salvor. However, the tribunal, if it deems it fair and just to do so and bearing in mind the relevant criteria set out in article 13, paragraph 1, may increase such special compensation further, but in no event shall the total increase be more than 100% of the expenses incurred by the salvor.

Salvor’s expenses for the purpose of paragraphs 1 and 2 means the out-of-pocket expenses reasonably incurred by the salvor in the salvage operation and a fair rate for equipment and personnel actually and reasonably used in the salvage operation, taking into consideration the criteria set out in article 13, paragraph 1(h), (i) and (j). * The total special compensation under this article shall be paid only if and to the extent that such compensation is greater than any eward recoverable by the salvor under article 13. * If the salvor has been negligent and has thereby failed to prevent or minimize damage to the environment, he may be deprived of the whole or part of any special compensation due under this article. * Nothing in this article shall affect any right of recourse on the part of the owner of the vessel. 7. Describe the features of the 1990 Lloyd’s standard form of salvage agreement.

Using The Lloyd’s Open Form for “No-Cure-No-Pay” salvage contract (1) The Lloyd’s Open Form or “LOF” is the most widely-used “No-Cure-No-Pay” salvage contract. In return for salvage services, the salver receives a proportion of the salved value (the value of the ship, its cargo and bunkers). In the past, if there was no recovery, there was no payment, whatever the expense of the operation. However, this made the salvers shy away from responding to high risk or low value casualties.

This resulted in delays of salvage operation and increased risks of environmental damage. (2) To counteract this, presently there is a choice of 2 incentives to the salvers. The first is “Special Compensation” which becomes payable to the salver when he has prevented or minimized damage to the environment but the value of the salved property is insufficient to provide for a normal salvage award. Alternatively, the salver may choose the SCOPIC (Special Compensation P&I Club Clause) [only if he had opted for this option in the LOF].

The main difference between “Special Compensation” and “SCOPIC” is that in the former, the award is decided by Arbitration, whereas in SCOPIC, the remuneration is based on pre-agreed tariff rates. Certain conditions apply when SCOPIC is used. (3) While actual salvage remuneration is covered by Property Underwriters ( H&M/Cargo), the Special Compensation/SCOPIC is covered by the P&I Club. (4) Usually, the Master will be requested to sign the L. O. F. n the spot but, in principle, he shall, conditions permitting, consult with the Company on whether to sign this form or not taking the following attention into consideration :

“No Cure No Pay” is a basis specifically designed for salvage operations on which prospects for success are not always certain and, therefore, the total cost of salvage including remuneration is usually higher than will be incurred in cases of salvage on any other basis, such as “Daily Hire” basis. Therefore, when there is no doubt that ship and cargo are salvable, L. O. F. s profitable only to salvers so the Master should avoid signing it. (There have been cases where the Master has signed a LOF even though he intended to request mere towage services) Under an L. O. F. contract salvers usually require security for their services upon termination of salvage work. This is the practice but sometimes it happens that salvers request an unreasonably high amount of security and so Ship owners and Cargo owners will be compelled to provide salvers with security as requested but under protest that the amount required is too high.

So, the Master must be prudent in signing L. O. F. (5) Nevertheless, L. O. F. is valuable in most maritime casualty cases and the Nippon Salvage Co. , Ltd. and other Japanese salvers render their salvage services on a “No Cure No Pay” basis. Fixed price contract (1) Under this form of salvage contract, salvers are entitled to be compensated for their services based on the fixed price even if the salvage attempt was unsuccessful. 2) This basis is generally used when the place of the accident is comparatively safe or the services to be performed are relatively simple and easy as when an accident occurs in a bay or a river or towage of a vessel under relatively calm conditions. (3) There are many variations, such as Daily Hire Basis Contract, Lump Sum Basis Contract and so on depending upon circumstances and subject to agreement between the parties FINAL RESEARCH SUBMITTED BY: ALLAN WILSON E. NABONG MONITOR COMPLIANCE WITH LEGISLATIVE REQUIREMENTS

Understanding the principles on how monitor compliance with legislative requirements 1. Explain the basic principles of “general averages” The law of general average is a legal principle of maritime law according to which all parties in a sea venture proportionally share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency. In the exigencies of hazards faced at sea, crew members often have precious little time in which to determine precisely whose cargo they are jettisoning.

Thus, to avoid quarrelling that could waste valuable time, there arose the equitable practice whereby all the merchants whose cargo landed safely would be called on to contribute a portion, based upon a share or percentage, to the merchant or merchants whose goods had been tossed overboard to avert imminent peril. While general average traces its origins in ancient maritime law, still it remains part of the admiralty law of most countries. The first codification of general average was the York Antwerp Rules[2] of 1890. American companies accepted it in 1949.

General average requires three elements which are clearly stated by Mr. Justice Grier in Barnard v. Adams: “1st. A common danger: a danger in which vessel, cargo and crew all participate; a danger imminent and apparently ‘inevitable,’ except by voluntarily incurring the loss of a portion of the whole to save the remainder. ” “2nd. There must be a voluntary jettison, jactus, or casting away, of some portion of the joint concern for the purpose of avoiding this imminent peril, periculi imminentis evitandi causa, or, in other words, a transfer of the peril from the whole to a particular portion of the whole. ” “3rd.

This attempt to avoid the imminent common peril must be successful”. 2. Study briefly the basic statutory regulations such as, load line convention, international convention and prevention of pollution at sea STCW convention, ILO convention, SOLAS convention, ISPS code, GENEVA conventions of 1958 and the united nation convention (UNCLOS) on the law of the sea, PMARRR RA8544 etc. How compliance is controlled of their non-compliance. 3. Enumerate the different organizations, offices and authorities engaged in various controlled activities on vessels (classification societies, flag and port state, inspections, etc)

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