Wednesday, May 23, 2012

Salvage successful but no remuneration - Chennai Port Trust & OSM Arena


There is the oft quoted ‘Ships are safe in harbour – but that is not what they are not built to be’. Every act other than charity is done with the purpose of getting remuneration; sometimes even jobs well done, do not fructify into payments due to various other aspects beyond the control …………….

Some ships might encounter rough weather and would require the assistance of others, for getting back to safety.  There is something known as Marine Salvage, a process of recovering a ship, its cargo, or other property after a shipwreck. Salvage encompasses towing, refloating a sunken or grounded vessel, or patching or repairing a ship.  Those who render assistance at sea are called ‘Salvors’.  The act of salvage generally occurs under a contract, codified clearly.  The act of salvaging is extremely difficult as it happens at high seas, inaccessible places and under extremely turbulent conditions.  Yet salvage does happen.   And when they succeed,  they have to be remunerated.  The right to be rewarded for salvage at sea under common law is based both on equitable principles and public policy and is not contractual in origin.

The property owner who had benefit of the salvor's efforts must make remuneration, regardless of whether he had formed a contract or not. The assumption here is that when faced with the loss of his vessel and cargo, a reasonable prudent owner would have accepted salvage terms offered, even if time did not permit such negotiations.  The vessel in murkier waters, South Korean flagged Bulk carrier OSM Arena had faced storms, financial crunch, subject matter of litigation,  overdues, staff salaries not paid properly and more…. The crew reportedly had no food, drinking water or fuel on board. Pathetic were the conditions as the vessel had  arrived at Chennai in Feb 2010 and  was arrested on orders of the Calcutta high court in the matter of a business dispute with a Kolkata-based firm. The vessel owner then declared bankruptcy and abandoned the vessel – nothing right for the  forlorn vessel as it remained  unattended, has not sailed out for months together;  the crew who are supposed to sail are all at sea, having not ventured in to the land – it must be a ghostly living on a dead vessel off the Port – so near the land and yet so far.

Then came the ‘cyclone Thane’ – a severe cyclonic storm which initially developed as a tropical disturbance within the monsoon trough to the west of Indonesia in end Dec 2011.  As it was named, Thane started to turn towards the west under the influence of a subtropical ridge of high pressure before its development slowed down during December 27, as a strong outflow, became a Very Severe Cyclonic Storm during December 28, as it approached Tamil Nadu and Andhra Pradesh, it weakened slightly. Thane then made landfall early on December 30, on the north Tamil Nadu coast between Cuddalore and Pondicherry and rapidly weakened into a depression, causing devastation in Pondy and Cuddalore areas. 

Cyclone Thane uprooted trees and structures and caused devastation in its trail and ….. moved the unfortunate OSM Arena from the outer anchorage.. fortunately, it id not run aground but got dangerously closer to the shore, as its anchor failed to hold it firmly.  The vessel could not have been left there nearer the Navy quarters closer to the embankment of river Coovum.  Chennai Port Trust  swung into direct action.  They did not seek the aid of any professional salvors but chose to try their own hand and succeeded in salvaging the vessel.  Utilising two tugs, two pilots and a small team of professionals, the Korean vessel m.v. OSM Arena could be salvaged on 2nd Jan 2012 afternoon from nearer INS Adyar. 

Had it been good times, the vessel would have been keen to pay out the salvage charges and continue its voyage exploring the high seas, moving cargo places, earning and distributing wages to the crew and profit to its owners.  Nothing from this ship which is not moving and has already become trouble for everyone associated with it.  ChPT officials reportedly had spent more than 50 hours in pushing it to anchorage about 3.5 NM from the coast at depth of 22 meters.  

Chennai Port would already be cursing its fate of allowing the vessel and then securing its arrest – now the vessel it under their control with no end in sight – no money flowing – when it would ever be sold and when will the parties would get their rightful dues.  With such debts mounting, Chennai Port felt its pinch in another new direction, as having salved the vessel, they are entitled to their remunerative fees – but who  would pay and when would the payment come at all ?? – sure any professional would have charged the ship in lakhs !!

Recently, the Calcutta High Court has permitted the Chennai Port Trust (ChPT) to take steps for recovering dues.  Reports suggest that ChPT would raise a demand and later seek arrest of the vessel (how manyeth time ?) even as possibility of parking the vessel in the anchorage is being discussed.  There is no point in keeping the vessel in Wharf as this would contribute to loss of berth and the charges of berthing and anchorage would themselves run into crores of rupees.  

ChPT sure would claim from the Owners writing to them and to the Embassy Officials but there surer would be claims from more interesting parties, the crew, those who had supplied fuel, food and others amongst other things.  There are also fears that OSM Arena when continued to lay dormant might pose danger to other vessels in bad weather…………..

So, Salvage was successful but remuneration may not be forthcoming, as found out by Chennai Port Trust, despite a Court Order

With regards – S. Sampathkumar.
22nd May 2012.

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