Keynvor Morlift Ltd v The Vessel "Kuzma Minin"

Salvage remuneration is assessed under the Salvage Convention 1989 where services have assisted property in danger and produced a useful result. The award must encourage salvage operations and must take account of all the Article 13 criteria, with appropriate weight given to the circumstances of the individual case. A precise figure proposed by the salvors should not be used to influence the tribunal’s assessment. In an in rem default application, the court must be satisfied both that the claim is proper and that the amount sought is appropriate. A quantum meruit claim is not a general alternative for gratuitous services. It requires an express or implied contract for non-salvage services, unless the services are otherwise recognised as salvage.

Three claimants sought default judgment in an in rem salvage claim concerning the vessel The Vessel "Kuzma Minin". They had assisted in refloating the vessel after it grounded near Falmouth during severe weather. The owners did not acknowledge service. PJSC Sberbank of Russia, the mortgagee, intervened to make submissions on quantum because the vessel had been sold and the proceeds paid into court.

The court had to decide whether the services were salvage operations, whether the procedural requirements for default judgment were satisfied, the appropriate salved fund and salvage award, and the treatment of costs and interest.

1. Salvage and default judgment. The operations were salvage operations within the Salvage Convention 1989 as enacted by the Merchant Shipping Act 1995. The vessel was in danger and the services had a useful result. The claimants were therefore entitled to a salvage award assessed under Article 13. The alternative quantum meruit claim did not need to be decided.
2. Quantum meruit. In the absence of salvage, a claimant cannot obtain remuneration merely because gratuitous services benefited another’s property. Recovery may be available where there is an express or implied contract for other services, such as towage. The court relied on the principle stated in Falcke v Scottish Imperial Insurance Co. (1886) 34 Ch D 234.
3. Procedure. Under CPR 61.9, the owners’ failure to acknowledge service, proper service of the claim, filing of the application and evidence, and service on the cautioners satisfied the procedural requirements. The court was required to assess both liability and quantum in open court.
4. Assessment. The award was fixed with a view to encouraging salvage operations, taking account of all Article 13 criteria without treating any as automatically predominant. The vessel was in considerable danger, further damage and pollution were likely without assistance, and the claimants’ co-operative operation was highly skilful and successful. Their status was relevant only as one factor. They were commercial maritime organisations with salvage capability, rather than dedicated salvors maintaining salvage station.
5. The court treated the actual Admiralty Marshal’s sale price as relevant evidence of value, while recognising that the proper salved value had to be assessed at the place and time when the services ended. It assessed the salved fund at £1,226,447.78.
6. Proved expenses and losses included the charter of the tug “CANNIS”, damaged towlines and replacement of the “ST PIRAN” winch, totalling £90,877.12. Other inadequately proved items were taken into account generally. The appropriate salvage award was £450,000, with interest at 1.75% from termination of the services and judgment interest at 8% from hand-down.
7. The claimants were entitled to recover reasonable costs against the fund. PJSC was to bear its own intervention costs. The recoverable costs were provisionally limited to £109,843.12.

First-instance Admiralty Court decision on an application for default judgment in an in rem salvage claim. The owners did not acknowledge service. PJSC Sberbank of Russia intervened on the assessment of the salvage award.