The Nagasaki Spirit

Last updated

The Nagasaki Spirit
Royal Coat of Arms of the United Kingdom.svg
Court House of Lords
Decided1997
Citation(s)[1997] 1 Lloyds Rep 323
Case opinions
Lord Mustill
Keywords
Marine salvage, LOF, SCOPIC

The Nagasaki Spirit [1997] [1] [2] is an English admiralty law case on marine salvage and on the provisions of Article 13 and 14 of the 1989 Salvage Convention.

Contents

The case identified problems with the drafting of the convention, a response to which was the 2000 SCOPIC codicil which may be attached to the Lloyd's Open Form ("LOF") to vary the terms of the salvage reward.

Facts

The case involved a collision in 1992 between the oil tanker Nagasaki Spirit, laden with 40,000 tons of crude oil, and the container ship, Ocean Blessing in the northern part of the Malacca Straits. After the collision some 12,000 tons of crude oil escaped into the sea and caught fire; both vessels were engulfed in flames. All the crew of the Ocean Blessing perished and only two crew on The Nagasaki Spirit survived. Professional salvors agreed to salve the Nagasaki Spirit under LOF 1990 (which included Arts 13 and 14 of the convention). Using several tugs, the fire was extinguished, the cargo transshipped and the vessel safely redelivered to her owners. [3]

It has been speculated that the collision was a result of the vessel having been taken by pirates who then abandoned ship, leaving the vessel still under way yet without any bridge officers in control, or that the Nagasaki Spirit was manoeuvring erratically to avoid a pirate attack. [ citation needed ]

Judgments

The award arbitrator fixed special compensation, stressing the need to encourage environmental salvage.

The appeal arbitrator increased the Art. 13 award, and since that was higher than the Art. 14 award, he held that no special compensation was available.

On appeal, the admiralty judge held that although "fair rate" imported the idea of remuneration, which would normally include a profit element, the appeal arbitrator was right to reject this.

The Court of Appeal agreed with the judge, so that "fair rate" was not to be a "salvage reward".

In the House of Lords, Lord Mustill also agreed that "fair rate" meant "fair rate of expenditure" and did not include any element of profit. [4]

(Because it was interpreting an international convention, the House of Lords had felt constrained to interpret its provisions "literally", rather than "purposively"). [5]

Significance

Following on from the innovations of the LOF 1980, the 1989 International Salvage Convention permitted salvage rewards to be made to salvors who acted to limit damage to the coastal environment after oil spills. Articles 13 & 14 of the convention made provision for "special compensation", but The Nagasaki Spirit revealed that the convention had been poorly drafted, thereby limiting the amount that environmental salvors could be paid to mere out-of-pocket expenses, with no allowance for any profit margin.

Not only the salvors in this case, but the entire salvage industry felt disappointed and let down by this case. As an antidote to this, the marine insurance industry and P&I clubs jointly developed the "SCOPIC clause" ("Special Compensation – P&I Clubs"), which is a codicil that may be appended to an LOF and invoked should the statutory payment provisions prove inadequate. The first SCOPIC clause was in 2000, and there have been several iterations since.[ citation needed ]

See also

Related Research Articles

A double-hulled tanker refers to an oil tanker which has a double hull. They reduce the likelihood of leaks occurring compared to single-hulled tankers, and their ability to prevent or reduce oil spills led to double hulls being standardized for oil tankers and other types of ships including by the International Convention for the Prevention of Pollution from Ships or MARPOL Convention. After the Exxon Valdez oil spill disaster in Alaska in 1989, the US Government required all new oil tankers built for use between US ports to be equipped with a full double hull.

<span class="mw-page-title-main">International Maritime Organization</span> Specialised agency of the United Nations

The International Maritime Organization is a specialised agency of the United Nations responsible for regulating shipping. The IMO was established following agreement at a UN conference held in Geneva in 1948 and the IMO came into existence ten years later, meeting for the first time in 17 March 1958. Headquartered in London, United Kingdom, IMO currently has 175 Member States and three Associate Members.

Admiralty law or maritime law is a body of law that governs nautical issues and private maritime disputes. Admiralty law consists of both domestic law on maritime activities, and private international law governing the relationships between private parties operating or using ocean-going ships. While each legal jurisdiction usually has its own legislation governing maritime matters, the international nature of the topic and the need for uniformity has, since 1900, led to considerable international maritime law developments, including numerous multilateral treaties.

<span class="mw-page-title-main">Shipwreck</span> Physical remains of a beached or sunk ship

A shipwreck is the wreckage of a ship that is located either beached on land or sunken to the bottom of a body of water. Shipwrecking may be intentional or unintentional. There were approximately three million shipwrecks worldwide as of January 1999, according to Angela Croome, a science writer and author who specialized in the history of underwater archaeology.

The International Regulations for Preventing Collisions at Sea 1972 (COLREGs) are published by the International Maritime Organization (IMO) and set out, among other things, the "rules of the road" or navigation rules to be followed by ships and other vessels at sea to prevent collisions between two or more vessels. COLREGs can also refer to the specific political line that divides inland waterways, which are subject to their own navigation rules, and coastal waterways which are subject to international navigation rules. The COLREGs are derived from a multilateral treaty called the Convention on the International Regulations for Preventing Collisions at Sea.

Protection and indemnity insurance, more commonly known as P&I insurance, is a form of mutual maritime insurance provided by a P&I club. Whereas a marine insurance company provides "hull and machinery" cover for shipowners, and cargo cover for cargo owners, a P&I club provides cover for open-ended risks that traditional insurers are reluctant to insure. Typical P&I cover includes: a carrier's third-party risks for damage caused to cargo during carriage; war risks; and risks of environmental damage such as oil spills and pollution. In the UK, both traditional underwriters and P&I clubs are subject to the Marine Insurance Act 1906.

Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination. Cargo insurance is the sub-branch of marine insurance, though marine insurance also includes onshore and offshore exposed property,, hull, marine casualty, and marine liability. When goods are transported by mail or courier or related post, shipping insurance is used instead.

<span class="mw-page-title-main">Marine salvage</span> Recovering a ship or cargo after a maritime casualty

Marine salvage is the process of recovering a ship and its cargo after a shipwreck or other maritime casualty. Salvage may encompass towing, lifting a vessel, or effecting repairs to a ship. Protecting the coastal environment from oil spillages or other contaminants from a modern ship can also be a motivator, as oil, cargo, and other pollutants can easily leak from a wreck.

<span class="mw-page-title-main">Piracy in the Strait of Malacca</span> Piracy in the China Sea

Piracy in the Strait of Malacca has long been a threat to ship owners and the mariners who ply the 900 km-long sea lane. In recent years, coordinated patrols by Indonesia, Malaysia, Thailand, and Singapore along with increased security on vessels have sparked a sharp downturn in piracy.

<span class="mw-page-title-main">Arbitration</span> Method of dispute resolution

Arbitration is a form of alternative dispute resolution (ADR) that resolves disputes outside the judiciary courts. The dispute will be decided by one or more persons, which renders the 'arbitration award'. An arbitration decision or award is legally binding on both sides and enforceable in the courts, unless all parties stipulate that the arbitration process and decision are non-binding.

Salvage diving is the diving work associated with the recovery of all or part of ships, their cargoes, aircraft, and other vehicles and structures which have sunk or fallen into water. In the case of ships it may also refer to repair work done to make an abandoned or distressed but still floating vessel more suitable for towing or propulsion under its own power. The recreational/technical activity known as wreck diving is generally not considered salvage work, though some recovery of artifacts may be done by recreational divers.

<span class="mw-page-title-main">UNGERIN</span> Maritime special operations squad in the Royal Malaysia Police

The Marine Assault Team (MAST), formally known as the UNGERIN is a maritime counter terrorism and tactical unit of the Royal Malaysia Police's Marine Operations Force. Fully operational in 2007, the UNGERIN conducts anti-piracy and counter-terrorism operations in the coastal waters surrounding Malaysia and assists the marine police to respond swiftly.

The Lloyd's Open Form, formally "Lloyd's Standard Form of Salvage Agreement", and commonly referred to as the LOF, is a standard form contract for a proposed marine salvage operation. Originating in the late 19th century, the form is published by Lloyd's of London and is the most commonly used form for international salvage. Innovations in the LOF 1980 have engendered a major change in environmental salvage.

The law of salvage is a principle of maritime law whereby any person who helps recover another person's ship or cargo in peril at sea is entitled to a reward commensurate with the value of the property saved.

Piracy in Indonesia is not only notorious, but according to a survey conducted by the International Maritime Bureau, it was also the country sporting the highest rate of pirate attacks back in 2004, where it subsequently dropped to second place of the world's worst country of pirate attacks in 2008, finishing just behind Nigeria. However, Indonesia is still deemed the country with the world's most dangerous water due to its high piracy rate. With more than half of the world's piracy crimes surrounding the South-East Asia aquatic regions, the turmoil caused by piracy has made the Strait of Malacca a distinct pirate hotspot accounting for most of the attacks in Indonesia, making the ships that sail in this region risky ever since the Europeans arrived. The term 'Piracy in Indonesia' includes both cases of Indonesian pirates hijacking other cargo and tanks, as well as the high rate of practising piracy within the country itself. The Strait of Malacca is also one of the world's busiest shipping routes as it accounts for more than twenty-five percent of the world's barter goods that come mainly from China and Japan. Approximately 50,000 vessels worth of the world's trade employ the strait annually, including oil from the Persian Gulf and manufactured goods to the Middle East and Suez Canal. The success that stems from this trade portal makes the Strait an ideal location for pirate attacks.

Investor-state dispute settlement (ISDS) or investment court system (ICS) is a system through which countries can be sued by foreign investors for certain state actions affecting foreign direct investment (FDI). This system most often takes the form of international arbitration between a foreign investor and the nation receiving the FDI.

Bas v. Tingy, 4 U.S. 37 (1800) was a case in maritime law, argued before the United States Supreme Court in 1800. The parties were John Bas, owner of the private vessel Eliza which was captured by French privateers at sea, and Tingy, commander of a public armed vessel—the Ganges—which recovered the Eliza.

<span class="mw-page-title-main">Piracy in the 21st century</span> Piracy by period

Piracy in the 21st century has taken place in a number of waters around the world, including the Gulf of Guinea, Strait of Malacca, Sulu and Celebes Seas, Indian Ocean, and Falcon Lake.

The International Convention on Salvage is a treaty that was concluded in London on 28 April 1989 that replaced the Brussels Convention on Assistance and Salvage at Sea as the principal multilateral document governing marine salvage.

International piracy law is international law that is meant to protect against piracy. Throughout history and legal precedents, pirates have been defined as hostis humani generis, Latin for "the enemy of all mankind". The United Nations has codified much of the law in the United Nations Convention on the Law of the Sea (UNCLOS), which defines different types of piracy and ways to combat it.

References

  1. The Nagasaki Spirit [1997] 1 Lloyds Rep 323
  2. Case report
  3. "China Daily" news report 1992
  4. Madaraka-Sheppard, Aleka (2007). Modern Maritime Law & Risk Management (2nd ed.). Informa.
  5. Unlike the EU which has the ECJ as the sole interpreter of its treaties and acquis communautaire , the Salvage Convention provides for no single arbiter. Ratifying countries thus feel cautious when interpreting the treaty.