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

• Published date: 03 August 2020
• Subject Matter: Finance and Banking, Litigation, Mediation & Arbitration, Transport, Charges, Mortgages, Indemnities, Fund Management/ REITs, Marine/ Shipping, Trials & Appeals & Compensation
• Law Firm: Quadrant Chambers
• Author: Mr Nevil Phillips

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...