Recently most of salvage is carried out based on a salvage contract; in using a salvage contract, so called Lloyd`s Open Form or LOF is most widely used. Salvage industry met great change around 1960 and 1970 when great disasters were brought by large...
Recently most of salvage is carried out based on a salvage contract; in using a salvage contract, so called Lloyd`s Open Form or LOF is most widely used. Salvage industry met great change around 1960 and 1970 when great disasters were brought by large size tankers. Consequently, salvage under the changed circumstances, i.e. risky circumstances came to discourage salvors to participate in salvage of such distressed vessels. As a result, for the first time, LOF 1980 introduced concept of safety net whereby salvors could get certain level of expenses incurred in salvage work even if salvage ends up in failure. Despite the invention of the LOF 1980, there are lots of factors which made salvors hesitate to participate in the salvage, for instance, unclear meaning of fair rate as a result of which profit was not accepted in assessment of expense, insufficient security for salvors, insufficient protection of P&I Clubs whose interests are greater than any other entities in salvage. To cure such problems, LOF 2000 was introduced to the salvage industry. Under LOF 2000, there is a series of clauses titled SCOPIC meaning SPECIAL COMPENSATION P&I CLUBS CLAUSE. SCOPIC was invented in 1999 before LOF 2000. However, it is beyond imagination that we treat the two separately since most major characteristic of LOF 2000 is derived from SCOPIC. Technically speaking, salvors have option to invoke SCOPIC and therefore incorporate such clauses as part of salvage contract. However, invention of SCOPIC was to protect salvors from the above mentioned problem. It is regarded that SCOPIC is properly protecting interest of all the parties engaged in salvage. If SCOPIC is invoked by salvors, SCOPIC would replace role of Article 14 in so called 1989 Salvage Convention`s Special Compensation. Under SCOPIC, P&I Club is required to provide security in the beginning stage to salvors; in calculating the expenses incurred for the purpose of assessing special compensation amount, fixed amount (pre-set uniform tariff) instead of salvor`s respective and different tariff is applicable; In return for P&I Club`s assuming heavier responsibility, P&I Club may have its superintendent titled SCR attend the salvage site; SCR is entitled to consult with Salvage Master on what is best operation, and to review first the SCOPIC remuneration that is submitted by salvors. As a result of introduction of LOF 2000 and SCOPIC, it appears that nearly most interested parties are satisfied with form of the salvage contract by and large, albeit there are still points to be improved. Meantime, the author feel regret that for most of salvage work to be conducted by Korean salvors in Korean territorial seas, based on lump sum basis salvage contract rather than more reasonable form like LOF 2000. Such brings vicious circle in regard to salvage. To break vicious circle, author believes that LOF 2000 or similar reasonable form should be used in Korean industry. In that respect, Japanese version (equivalent) of LOF 2000 is suggesting lots. To that end, the author would suggest that we should make bench marking Japanese Shipping Exchange which would up grade lots of pending issues our shipping industry is meeting as well as salvage issue.