Claims for Salvage and General Average

Claims for Salvage and General Average involve shipments of goods by sea. The concept behind each of these type of claims is that the carriage of goods on a vessel is a “common venture” which is for the benefit of both those interested in the vessel and those interested in the cargo. Therefore, if a vessel incurs a problem that might prevent completion of the voyage, it should be mutually beneficial to both the vessel and cargo interests to try to ensure that the problem is resolved on the best possible basis. Accordingly, the losses and costs reasonably incurred in completing the voyage should then be apportioned amongst beneficiaries of the “common venture”.

Salvage Claims

Salvage claims occur when a vessel requires assistance as a result of an incident to try to complete a voyage and/or, in more serious incidents, minimise the extent of losses and pollution arising. For example, a vessel may require a tow as a result of an engine or machinery breakdown during a voyage. More seriously, a vessel may require assistance as a result of a fire on board or a collision. The party providing such assistance can then seek a reward for the services provided from those interested in the voyage. Sometimes this may just be from the vessel interests. However, generally, it will be from those both interested in the vessel and the cargo. The salvor will usually seek provision of suitable security to cover their potential salvage claim for the assistance they have provided and can refuse to release the vessel and cargo until such security is provided.

The value of assistance provided by the salvor is then quantified or determined based upon factors including the value of the vessel and cargo salved, as well as the risks faced and alternatives available if the salvor had not assisted. The value of these salvage services is then apportioned amongst vessel and cargo interests’ dependant upon the salved value of the vessel and cargo interests. For example, if the salvage services were valued at USD 1,000,000, the salved value of the ship was USD 10,000,000 and the salved value of the cargo was USD 2,000,000, then the salvor would be due USD 800,000 from ship interests and USD 200,000 from cargo interests.

The assistance provided by a salvor may have arisen due to factors that should ultimately be solely the liability of the vessel interests. For example, they may be attributable to un-seaworthiness of the vessel. If so, although cargo interests may still be obliged to initially pay the salvor for their proportion of the salvage services, they can then seek to recover this payment from the vessel interests. Such salvage recovery claims will then commonly involve security, liability, limitation and jurisdiction issues.

General Average Claims

General Average claims are for recompense of extraordinary costs that have been incurred or reimbursement of any sacrificial losses incurred as a result of a vessel suffering a problem during a voyage that threatens completion of the “common venture”. If such an incident occurs and GA is declared by the vessel, possession of the cargo can be retained until suitable GA security is provided to cover the potential GA claim. A GA Adjuster is usually used to evaluate the quantum of the GA expenditure and losses as a result of an incident. They then apportion these amongst the vessel and cargo interests dependant upon their respective values. In some circumstances, if cargo has been lost due to a sacrificial act for the good of the common venture, such as jettison of cargo to prevent a vessel sinking, the party interested in that particular cargo can receive compensation through the GA. However, generally, some level of GA contribution will be sought from cargo interests.

GA claims represent somewhat of a role reversal with vessel interests having to establish that they have a valid GA claim and that the incident claimed did not arise due to factors that should be solely the liability of the vessel interests. For example, the GA incident may have been attributable to un-seaworthiness of the vessel and the onus would be upon vessel interests to establish that this was not the case. Until vessel interests have satisfied these requirements, any GA claim should be resisted.

Stean Shaw LLP can help in resolving Salvage and General Average claims and our team has extensive experience and expertise the handling of these types of claim. We have close links with the vessels P&I clubs and other parties involved with the handling of these claims, as well as our extensive network of contacts around the world. Stean Shaw LLP will only charge in the event of a successful outcome, which is very beneficial as these types of claim can invariably involve considerable time, trouble and complexity to be finalised.


	If you have any enquiries about Stean Shaw LLP, our services and fees, or questions on salvage or general average claims, our team would be happy to hear from you through our listed contact details. Alternatively, to e-mail us, please click here.