B-140736, DEC. 4, 1959
Highlights
SINCE THE VESSEL WAS GROUNDED. THE VESSEL WAS REFLOATED DUE TO THE LIGHTENING AND DREDGING ACTIVITIES OF THE SALVORS. THE RATE OF EXCHANGE WAS FIGURED AT $2.80 TO THE POUNDS STERLING THE ARBITRATOR AWARDED 27. IT IS STATED IN THE LETTER FROM THE MILITARY SEA TRANSPORTATION SERVICE THAT THIS AMOUNT APPEARS REASONABLE. IT IS ALSO REPORTED IN THE MILITARY SEA TRANSPORTATION SERVICE'S LETTER THAT NO GENERAL AVERAGE STATEMENT HAS BEEN PREPARED AS YET. THAT THE SHIPMENT WAS UNDER AN MSTS SHIPPING CONTRACT WHICH PROVIDES FOR THE PAYMENT OF GENERAL AVERAGE AND SALVAGE. THAT THE INCIDENT CONCERNS A FOREIGN SALVOR WITH RESPECT TO WHICH IT IS TO THE GOVERNMENT'S INTEREST TO ESTABLISH A REPUTATION FOR FAIR DEALING AND EXPEDIENT PAYMENT.
B-140736, DEC. 4, 1959
TO THE SECRETARY OF THE NAVY:
ON NOVEMBER 5, 1959, UNDER FILE REFERENCE (GA-478) SER 870M7, COUNSEL, MILITARY SEA TRANSPORTATION SERVICE, REQUESTED AUTHORITY FOR THAT SERVICE TO MAKE AN INTERIM PROVISIONAL PAYMENT IN THE AMOUNT OF $9,800 FOR SALVAGE PRIOR TO THE FINAL COMPUTATION OF THE GOVERNMENT'S CONTRIBUTORY SHARE OF GENERAL AVERAGE AND SALVAGE ARISING OUT OF THE STRANDING OF THE S.S. NEWBERRY VICTORY ON MAY 2, 1957, IN THE AEGEAN SEA, SOUTHWEST OF AKR. VARDARIS. SINCE THE VESSEL WAS GROUNDED, THE MASTER REQUESTED ASSISTANCE OF THE VESSEL'S AGENTS IN SALONIKA, GREECE. THE VESSEL'S AGENTS ON BEHALF OF THE VESSEL AND ITS CARGO, ENTERED INTO A "NO CURE-NO PAY" LLOYD'S SALVAGE CONTRACT WITH THE NICOLACS E. VERNICOS AND CO., LTD. THE VESSEL WAS REFLOATED DUE TO THE LIGHTENING AND DREDGING ACTIVITIES OF THE SALVORS.
THE ARBITRATOR'S FINDINGS DISCLOSE THAT THE AGREED TOTAL VALUE OF THE SALVED PROPERTY AMOUNTED IN STERLING TO 989,955 POUNDS STERLING AND THAT OF THIS TOTAL VALUE THE GOVERNMENT CARGO AMOUNTED TO $318,575. THE RATE OF EXCHANGE WAS FIGURED AT $2.80 TO THE POUNDS STERLING THE ARBITRATOR AWARDED 27,000 POUNDS STERLING FOR THE SALVAGE SERVICE OF WHICH THE GOVERNMENT'S PROPORTION WOULD BE 3,508 POUNDS STERLING OR APPROXIMATELY $9,800. IT IS STATED IN THE LETTER FROM THE MILITARY SEA TRANSPORTATION SERVICE THAT THIS AMOUNT APPEARS REASONABLE.
IT IS ALSO REPORTED IN THE MILITARY SEA TRANSPORTATION SERVICE'S LETTER THAT NO GENERAL AVERAGE STATEMENT HAS BEEN PREPARED AS YET; THAT THE SHIPMENT WAS UNDER AN MSTS SHIPPING CONTRACT WHICH PROVIDES FOR THE PAYMENT OF GENERAL AVERAGE AND SALVAGE; THAT THE INCIDENT CONCERNS A FOREIGN SALVOR WITH RESPECT TO WHICH IT IS TO THE GOVERNMENT'S INTEREST TO ESTABLISH A REPUTATION FOR FAIR DEALING AND EXPEDIENT PAYMENT; AND THAT THE SALVAGE AWARD APPEARS REASONABLE. NO DEFENSE TO THE SALVAGE CLAIM HAS BEEN ESTABLISHED.
SINCE THE AWARD APPEARS TO BE REASONABLE, THE MILITARY SEA TRANSPORTATION SERVICE IS ANXIOUS TO MAKE AS PROMPT A PAYMENT TO THE SALVOR AS POSSIBLE. IT IS EXPLAINED THAT IF THE PROVISIONAL PAYMENT IS AUTHORIZED, SUCH PAYMENT WILL BE MADE SUBJECT TO A FINAL ACCOUNTING AND WITH THE RESERVATION TO THE GOVERNMENT OF ALL RIGHTS. IN THIS REGARD, IT IS STATED THAT THE MILITARY SEA TRANSPORTATION SERVICE WILL TAKE THE NECESSARY PRECAUTIONS TO SEE THAT THE MONEY IS NOT PAID TO THE SALVOR UNTIL ASSURANCE HAS BEEN RECEIVED OF A RELEASE BY THE SALVOR OF ALL LIENS AGAINST THE VESSEL AND CARGO. IT IS FOR THIS REASON THAT THE MILITARY SEA TRANSPORTATION SERVICE REQUESTS AUTHORIZATION TO MAKE THE PAYMENT ITSELF RATHER THAN HAVE THE GENERAL ACCOUNTING OFFICE MAKE THE PAYMENT AND CHARGE IT TO MSTS FUNDS.
IT IS RECOGNIZED THAT SALVORS ARE ENTITLED TO COMPENSATION FOR THEIR SERVICES AND POSSESS THE RIGHT TO HOLD THE PROPERTY SALVED UNTIL THE PAYMENT IS RECEIVED, OR OTHERWISE SECURED.
IN VIEW OF THE ABOVE, WE HAVE NO OBJECTION TO THE MILITARY SEA TRANSPORTATION SERVICE MAKING INTERIM PROVISIONAL PAYMENT FOR THE SALVAGE UNDER THE CONDITIONS SET FORTH IN THE LETTER OF NOVEMBER 5, WHICH WILL ASSURE THE SAFEGUARDING OF ALL GOVERNMENT RIGHTS.