UK: Salvage Before The High Court – Evidence And Procedure; Principles And Practice Keynvor Morlift Ltd v Kuzma Minin, ("The Kuzma Minin") [2019] EWHC 3557 (Admlty)

This was a rare example of a salvage case before the High Court. It arose from an application for default judgment by the salvors (a local consortium of maritime service providers which salved the Vessel – which had grounded on the Cornish coast after dragging its anchor - speculatively, rather than under the terms of a contract). The judgment sought (by way of an award for salvage services) was resisted not by the Owners of the Vessel, but by their mortgagee bank (intervening, by consent). The Vessel was arrested (by other parties) and sold by judicial auction 3 months after the services (for a sum significantly less than the salved value for which the Salvors contended).

The case gave rise to a number of valuable observations, as follows.

Salvage cases: the suggestion of a level of award

The Court emphasised that, in salvage cases, it is inappropriate for the salvors to suggest to the tribunal a particular level for an award. The salvors may address the factors which are relevant to an award, and may submit that the services warrant a particular approach to encouragement, but they should not propose a specific figure: see [38]-[39].

Values: the approach to evidence

The Court expressed a reluctance to rely upon algorithmic assessments of value, rather than an active valuation by an individual sale and purchase broker: see [44]-[48].

The Court also addressed (by detailed reference to authority) the relevance of the price achieved by judicial sale, concluding that, while the value of the salved fund is to be assessed as at the place where and the time at which the salvage is terminated, a subsequent sale value may be weighed in the evidence: see [41]-[43] and [50]-[53]. The Court also addressed the approach to be taken as regards deductions: see [54]-[55].

Services and dangers: the admissibility of the MAIB Report

The Court concluded that, for the purposes of considering the quality and scope of the salvage services and dangers in issue, it was permissible to have regard to the MAIB Report which had been prepared and published in relation to the Casualty. It concluded that the Report's admissibility was only specifically proscribed in proceedings with the purpose of attributing or apportioning liability or blame. As the instant proceedings dealt only with issues of salvage, the Report could be admitted in evidence (with the weight to be placed on its contents being a matter for the decision of the tribunal): see [28]-[29].

Salvage award: a claim for a quantum meruit as an alternative

The Court determined that, in the absence of salvage, by agreement or otherwise, a salvor may be able to recover on the basis of quantum meruit but, only where it can establish an express or implied contract for the provision of some services other than salvage, for example towage. Thus, it did not accept that it is open to a salvor simply to assert a right to a recovery based upon quantum meruit as an alternative claim if it fails to establish that the circumstances are such as to render the case one of salvage: see [31]-[32].

Award: the sum awarded

The Court found a salved fund of £1,226,447.78 (net of deductions), which was "modest by modern standards". It accepted that, while the services endured for only 9 hours, they were of high intensity. It concluded that the salvage operation demonstrated many of the elements which should lead to a particularly encouraging award without being overly restricted by the size of the salved fund. It awarded £450,000: see [72]-[77].

Costs: the intervention of the mortgagee bank

The Court concluded that the Salvors were entitled to recover their own costs (including those incurred by the Bank's intervention) against the fund representing the res, while the Bank was to bear its own costs of the intervention: see [81].

Nevil Phillips acted for the Salvors, instructed by Alex Kemp and Thomas Dickson at HFW. James M Turner QC acted for the Interveners, instructed by Linklaters.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.