Maritime Law Salvage and Towage Law 2 — Questions and Answers
Question 1: Lloyd's Open Form (LOF) is used in salvage primarily because it allows:
- Salvage to commence immediately without negotiating detailed contract terms (Correct answer)
- The salvor to claim a fixed percentage of the salved value automatically
- Cargo interests to opt out of salvage liability
- The vessel owner to set the salvage award amount in advance
Correct answer: Salvage to commence immediately without negotiating detailed contract terms
LOF is a widely used standard form salvage contract that allows salvage operations to begin on a 'no cure, no pay' basis without delay, with the award amount determined by Lloyd's arbitration afterward.
Question 2: In towage contracts, the key distinction from salvage is that towage services are provided:
- Under a pre-existing contract when the vessel is not in peril (Correct answer)
- On a contingency basis when the vessel is in imminent danger
- Only by licensed harbor tugs operating in port waters
- Exclusively to vessels under 500 gross tons
Correct answer: Under a pre-existing contract when the vessel is not in peril
Towage is a contracted service provided to a vessel not in peril, whereas salvage arises from a voluntary service to a vessel in genuine danger.
Question 3: The standard towage contract clause that transfers liability for damage from the tug to the tow owner during harbor towage is known as the:
- United Kingdom Standard Conditions for Towage (UKSTC) negligence exception (Correct answer)
- Inchmaree clause extension
- Jason clause incorporation
- Running down clause exclusion
Correct answer: United Kingdom Standard Conditions for Towage (UKSTC) negligence exception
Under UK Standard Towage Conditions, the tow owner assumes risk of damage caused by the tug's negligence during harbor towage, effectively reversing the normal tortfeasor liability rule.
Question 4: A key requirement for a service to qualify as 'salvage' under the 1989 Salvage Convention is that the vessel or property must be in:
- Danger or peril from which it cannot extricate itself without assistance (Correct answer)
- International waters beyond the 12-mile territorial sea
- A state of actual or constructive total loss
- An area covered by a recognized maritime emergency zone
Correct answer: Danger or peril from which it cannot extricate itself without assistance
The danger requirement is fundamental to salvage — the vessel must face a real threat from which it needs outside assistance, though the danger need not be immediate or certain.
Question 5: In the United States, wreck removal obligations for vessel owners in navigable waters are primarily governed by:
- The Rivers and Harbors Act and the Wreck Act (33 U.S.C. § 409) (Correct answer)
- The Clean Water Act exclusively
- State maritime safety statutes
- The International Convention on Wreck Removal (Nairobi WRC 2007)
Correct answer: The Rivers and Harbors Act and the Wreck Act (33 U.S.C. § 409)
33 U.S.C. § 409 (Wreck Act, part of the Rivers and Harbors Act) requires the owner of a sunken vessel to mark and remove it from navigable waters and imposes liability for obstruction.
Question 6: A salvage lien on a vessel or cargo is classified as which type of maritime lien under U.S. law?
- A preferred maritime lien with high priority (Correct answer)
- A contractual lien subordinate to ship mortgages
- A statutory lien under OPA 90 only
- A non-maritime state law lien
Correct answer: A preferred maritime lien with high priority
Salvage liens are preferred maritime liens under 46 U.S.C. § 31301 and rank ahead of most other claims, including preferred ship mortgages, in the order of priority.
Maritime Law Salvage and Towage Law 2
Lloyd's Open Form (LOF) is used in salvage primarily because it allows: