Merchant Shipping Code of Ukraine (Edition of July 04, 2013)

SECTION IX. Marine Casualties and Emergencies.

Chapter 6. Remuneration for Salvage at Sea.

Clause 326. Scope of Application.

The rules of this Chapter shall apply to salving sea vessels in distress as well as to salving inland navigation vessels or any floating or towed craft or objects by sea vessels, irrespective of the fact in which waters the salving took place in cases when salvage disputes are considered in Ukraine.

The rules of this Chapter shall not apply to anchored (secured) or floating platforms, coastal drilling installations when said platforms are located in place of work connected with surveying, operating or extracting mineral resources of sea bottom.

Clause 327. Application of Law to Salvage.

If the salving and the salved vessels fly the flag of the same state, the Law of this state shall apply. When distributing remuneration for salving between the owner and the crew of the salving vessel the Law of the flag state of the vessel shall apply.

Clause 328. Right for Remuneration.

Any action having a useful effect relating to salving a vessel in danger, the cargoes and other objects located on board as well as to salving freight and fare for carrying passengers and baggage or other property or, equally, to conserving the environment shall give a right for getting a certain remuneration.

Clause 329. Prohibition of Salving.

The salving services rendered regardless of clear and reasonable refusal by the Owner or the Master of the vessel in danger of said services aimed at salving the vessel and any other property on board, shall not give the right for remuneration.

Clause 330. Rescue of People.

Rescued people shall not have to pay remuneration therefore. However, the party who has rescued people while rendering his services in connection with the casualty that brought about the need of rescue, shall have the right for a fair share in remuneration for solving the vessel or other property as well as preventing lowering the damage to the environment.

Clause 331. Salvage of Vessel Belonging to Same Shipowner.

The remuneration shall be paid in that case as well when the vessel that rendered salvage services belongs to the owner of the salved vessel.

Clause 332. Amount of Remuneration.

The amount of remuneration shall be determined by agreement of the parties and, in the absence of said agreement, by Court, Arbitration or Marine Arbitration Commission. Any salvage agreement concluded at the moment and under the influence of danger may be, on demand of one of the parties thereto, recognized invalid or changed by court decision, if said agreement conditions have been found unjust. The amount of remuneration may be lowered or the remuneration itself may be denied if the salvor, by his own fault, caused the need for salving or committed a theft, misappropriated a property or performed other wrongful actions.

Clause 333. Criteria for Determining Remuneration.

A remuneration shall be awarded with the aim of encouraging the salvage operations with due consideration of the following criteria (irrespective of the order wherein they are given):

  1. salved value of the vessel and other property;
  2. skill and labour of the Salvor in preventing or lowering the damage to the environment;
  3. extent of Salvor's achievement;
  4. nature and extent of danger;
  5. skill and labour of the Salvor in salving the vessel and other property as well as in rescuing people;
  6. time spent by Salvor, his expenses and losses;
  7. risk, liability or other dangers which were encountered by the Salvor or his property (equipment);
  8. speed of the rendering salving services;
  9. presence and extent of use of the vessel or other equipment designed for salvage operations;
  10. degree of availability and effectiveness of Salvor's equipment and its value.

A duly determined remuneration shall be paid out by all parties concerned with the vessel and other property in proportion to its salved value. In case said remuneration is paid out by one of the parties, said party shall have the right of regression towards other parties concerned in the amount of their respective shares.

Clause 334. Maximum Amount of Remuneration.

The remuneration amount less any interest and reimbursed court or arbitrage dues related to salvage dispute, if any, shall not exceed the value of salved vessel and other property.

Clause 335. Distribution of Remuneration Among Salvors.

Distribution of remuneration among several salvors shall be by their agreement and, in the absence of same, by decision of the Court or Arbitration, following the criteria indicated in Clause 333 of this Code.

Clause 336. Distribution of Remuneration Among Shipowner, Crew Members and Other Parties.

The remuneration shall be distributed among the Shipowner, crew members and other persons taking part in solvage operations with due consideration of each party's personal contribution to positive results of salvage, by mutual agreement of all parties concerned, or, in the absence of said agreement - by decision of the Court, Arbitration or Marine Arbitration Commission of Ukraine.

The rules of the first part of this Clause shall not apply to distribution of remuneration for salvage carried out by the vessels for which salvage is a professional duty.

Clause 337. Currency of Remuneration.

Remuneration for salvage is paid out in that currency in which it has been received.

Clause 338. Special Compensation.

In case a salvor undertakes salvage operations regarding the vessel which in respect of herself or her cargo presented a threat of causing environment pollution and, in doing so, has not acquired the rights for remuneration, he shall have the right for receiving from the owner of said vessel a special compensation which may be increased by up to 30 % of the expenses incurred by the Salvor. However, if the Court, Arbitration or Marine Arbitration Commission, having considered appropriate criteria given in Clause 333 of this Code, deems it just and reasonable to increase henceforward said special compensation, said increase shall not exceed 100 % of said expenses.

Clause 339. Cargoes Belonging to State.

Without due consent of the state that is the owner of cargoes concerned, no rule in this Chapter shall be used as grounds for withdrawal, arrest or detention of non-commercial cargoes owned by the state and having, at the time of salvage, a sovereign immunity in accordance with commonly accepted principles of International Law.

Clause 340. Obligation to Provide Security.

The party responsible for paying out salvage remuneration shall undertake, on request of the Salvor, to provide an appropriate security for same, including interest and court or arbitration dues of the Salvor, if any.

The owner of the salved vessel shall undertake all measures for providing a guaranty that the cargo owners produce, by the time of its delivery, sufficient security for demands thereto, including interest and court or arbitration dues of the Salvor, if any.

Without due consent of the Salvor, the salved vessel or other salved property shall not be moved from the port or the place wherein it has been initially delivered on completion of salvage operations until sufficient security is provided regarding the demands of the Salvor of said vessel or cargo.