''The Nagasaki Spirit''

997 Year 997 (Roman numerals, CMXCVII) was a common year starting on Friday (link will display the full calendar) of the Julian calendar. Events By place Japan * 1 February: Empress Teishi gives birth to Princess Shushi - she is the first ...

is an

English English usually refers to: * English language * English people English may also refer to: Peoples, culture, and language * ''English'', an adjective for something of, from, or related to England ** English national ide ...

admiralty law 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 priva ...

case on

marine salvage Marine salvage is the process of recovering a ship and its cargo after a shipwreck or other maritime casualty. Salvage may encompass towing, re-floating a vessel, or effecting repairs to a ship. Today, protecting the coastal environment from ...

and on the provisions of Article 13 and 14 of the 1989 Salvage Convention. The case identified problems with the drafting of the Convention, a response to which was the 2000

SCOPIC 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 ...

codicil which may be attached to the

Lloyd's Open Form 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 b ...

("LOF") to vary the terms of the salvage reward.

Facts

The case involved a collision in 1992 between the

oil tanker An oil tanker, also known as a petroleum tanker, is a ship designed for the bulk transport of oil or its products. There are two basic types of oil tankers: crude tankers and product tankers. Crude tankers move large quantities of unrefined crud ...

''Nagasaki Spirit'', laden with 40,000 tons of crude oil, and the

container ship A container ship (also called boxship or spelled containership) is a cargo ship that carries all of its load in truck-size intermodal containers, in a technique called containerization. Container ships are a common means of commercial intermodal ...

, ''Ocean Blessing'' in the northern part of the

Malacca Straits The Strait of Malacca is a narrow stretch of water, 500 mi (800 km) long and from 40 to 155 mi (65–250 km) wide, between the Malay Peninsula (Peninsular Malaysia) to the northeast and the Indonesian island of Sumatra to the southwest, connec ...

. 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. It has been speculated that the collision was a result of the vessel having been taken by

pirate Piracy is an act of robbery or criminal violence by ship or boat-borne attackers upon another ship or a coastal area, typically with the goal of stealing cargo and other valuable goods. Those who conduct acts of piracy are called pirates, v ...

s 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.

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 A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much of t ...

agreed with the judge, so that "fair rate" was not to be a "salvage reward". In the

House of Lords The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...

Lord Mustill Michael John Mustill, Baron Mustill, PC, FBA (10 May 1931 – 24 April 2015) was an English barrister and judge. He was a Lord of Appeal in Ordinary from 1992 to 1997. Life and career The son of Clement William and Marion Mustill, he was ed ...

also agreed that "fair rate" meant "fair rate of expenditure" and did not include any element of profit. (Because it was

interpreting Interpreting is a translational activity in which one produces a first and final target-language output on the basis of a one-time exposure to an expression in a source language. The most common two modes of interpreting are simultaneous inter ...

an international convention, the House of Lords had felt constrained to interpret its provisions "

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", rather than " purposively").Unlike the EU which has the

ECJ The European Court of Justice (ECJ, french: Cour de Justice européenne), formally just the Court of Justice, is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European Un ...

as the sole interpreter of its treaties and ''

acquis communautaire The Community acquis or ''acquis communautaire'' (; ), sometimes called the EU acquis and often shortened to acquis, is the accumulated legislation, legal acts and court decisions that constitute the body of European Union law that came into b ...

'', the Salvage Convention provides for no single arbiter. Ratifying countries thus feel cautious when interpreting the treaty.

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 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 ...

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.

References

{{reflist, 2 Admiralty law Court of Appeal (England and Wales) cases 1997 in case law 1997 in British law

Facts

Judgments

Significance

See also

References