Lloyd's Maritime and Commercial Law Quarterly


The Voutakos

A ship suffers a main engine breakdown 100 miles or so out to sea. She is in no danger of closing the coast or sinking and so is simply immobilized until assisted. She is not engaged in a time-critical voyage such as a liner service. A local tug comes out and tows her into port. It is a fairly common situation and it is commonly known, with or without additional refinements, as a “rescue tow”. The shipowner might have been able to contract the tug on commercial rates or he might only have been able to contract on salvage (probably LOF) terms or he might have had a choice between the two.
In a series of decisions in the 1990s, John Franklin Willmer QC as LOF Appeal Arbitrator stated that a salvage award in such a case “should not be wholly out of line with commercial rates”,1 so that owners and underwriters should not be discouraged from contracting on LOF in such a case. His successor, Nigel Teare QC (now Teare J), agreed.2 The guidance has become known as “the disparity principle” and is discussed in some detail in Brice on Maritime Law of Salvage .3 The present Appeal Arbitrator, John Reeder QC, has not only strongly disagreed with his predecessors but has gone further and held that repeated application of this misconceived “disparity principle” had led to a “stagnation” in the level of salvage awards in simple towage cases and that this had had a knock-on effect so as to restrain the level of awards in cases where there was physical risk but the essential service was that of towage.4
The Voutakos 5 was not about a rescue tow. A very large bulk carrier laden with some 175,000 tonnes of coal broke down in the Western Approaches to the English Channel. She required professional salvage assistance and a powerful salvage tug. Weather conditions were difficult and the tow of some 560 miles through one of the world’s busiest shipping lanes was especially difficult.
It was surprising in these circumstances that the second of the four questions on which the shipowners were given leave from the award of the Appeal Arbitrator to appeal to the court was whether, if there was a “disparity principle”, it applied to the facts of this case. Plainly it did not. That easily disposed of that question.



The rest of this document is only available to i-law.com online subscribers.

If you are already a subscriber, click Log In button.

Copyright © 2024 Maritime Insights & Intelligence Limited. Maritime Insights & Intelligence Limited is registered in England and Wales with company number 13831625 and address 5th Floor, 10 St Bride Street, London, EC4A 4AD, United Kingdom. Lloyd's List Intelligence is a trading name of Maritime Insights & Intelligence Limited.

Lloyd's is the registered trademark of the Society Incorporated by the Lloyd's Act 1871 by the name of Lloyd's.