Nagasaki

Semco Salvage, the contractors, agreed to salve Nagasaki Spirit and her cargo on the terms of LOF 90. The contractors mobilized a number of tugs and extinguished the fire on Nagasaki Spirit on 22 September. The Malaysian police ordered the contractors to tow the vessel away from the Malaysian coast and the Nagasaki Spirit was anchored off Belawan in Indonesia. The Indonesian government gave permission for cargo from the Nagasaki Spirit  to be transhipped into another vessel.  This was done and the Nagasaki Spirit was redelivered to her owners in Singapore. The contractors’ claim against the owners for salvage remuneration was referred to arbitration; the contractor’s claim against the cargo owners having already been settled. ‘A fair rate for equipment and personnel actually and reasonably used in the salvage operation’ in Article 14.3 means a fair rate of expenditure and did not include any element of profit. This was clear from the context and in particular from the references to ‘expenses’ in Article 14.2 and the definition of ‘salvors’ expenses’ in Article 14.3; the computation prescribed by Article 14.3 required the fair rate to be added to the ‘out of pocket’ expenses, as clear an instance as one could find of a quantification which contained no element of profit. The ascertainment of the fair rate had necessarily to be performed with a fairly broad brush. Article 14.3 is not concerned with the remuneration, but with a more restricted basis of recovery. In the context of Article 14, the word ‘rate’ simply denoted an account attributable to the equipment and personnel used. Resort to the travaux preparatoires was not strictly justified, as the meaning of Article 13 was clear enough. The analysis of the travaux, however, reinforced the view formed of the words in Article 14, read in their context.