B-140736, OCT. 26, 1959
Highlights
SINCE THE VESSEL WAS DEAD IN THE WATER. THE VESSEL WAS TOWED BY THE SALVORS TO BEIRUT. THE ARBITRATOR'S FINDINGS DISCLOSE THAT THE AGREED TOTAL VALUE OF THE SALVED PROPERTY WAS 1. ALTHOUGH THE GOVERNMENT CARGO WAS NOT INITIALLY CONSIDERED BY THE ARBITRATOR. THE ARBITRATOR STATES THAT A PROPER AWARD IN RESPECT TO THE GOVERNMENT-OWNED CARGO WOULD HAVE BEEN 9. IT IS STATED IN THE LETTER FROM MSTS THAT THIS AMOUNT APPEARS REASONABLE. IT IS REPORTED IN THE MSTS LETTER THAT NO GENERAL AVERAGE STATEMENT HAS BEEN PREPARED AS YET. THAT THE SHIPMENT WAS UNDER A 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, OCT. 26, 1959
TO THE SECRETARY OF THE NAVY:
ON SEPTEMBER 10, 1959, UNDER FILE REFERENCES (GA-428) SER 708M7, COUNSEL, MILITARY SEA TRANSPORTATION SERVICE, REQUESTED AUTHORITY FOR THAT SERVICE TO MAKE AN INTERIM PROVISIONAL PAYMENT IN THE AMOUNT OF 9,200 POUNDS STERLING BRITISH CURRENCY FOR SALVAGE PRIOR TO THE FINAL COMPUTATION OF THE GOVERNMENT'S CONTRIBUTORY SHARE OF GENERAL AVERAGE AND SALVAGE ARISING OUT OF THE MACHINERY BREAKDOWN OF THE S.S. NEWBERRY VICTORY ON AUGUST 24, 1956, IN THE MEDITERRANEAN SEA ABOUT HALFWAY BETWEEN THE ISLANDS OF RHODES AND CYPRUS. SINCE THE VESSEL WAS DEAD IN THE WATER, THE MASTER REQUESTED ASSISTANCE OF THE OWNER'S AGENTS IN 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 NICOLAOS VERNICOS COMPANY, LTD. THE VESSEL WAS TOWED BY THE SALVORS TO BEIRUT, LEBANON, THE CLOSEST POINT OF REPAIR.
THE ARBITRATOR'S FINDINGS DISCLOSE THAT THE AGREED TOTAL VALUE OF THE SALVED PROPERTY WAS 1,011,200 POUNDS STERLING, AND THAT OF THIS TOTAL VALUE THE GOVERNMENT CARGO REPRESENTED ABOUT 46 PERCENT AND THE SALVED VALUE OF THE SHIP, NON-GOVERNMENT CARGO AND FREIGHT AT RISK ABOUT 54 PERCENT. ALTHOUGH THE GOVERNMENT CARGO WAS NOT INITIALLY CONSIDERED BY THE ARBITRATOR, J. V. NAISBY OF LLOYD-S, IN MAKING THE AWARD, THE ARBITRATOR STATES THAT A PROPER AWARD IN RESPECT TO THE GOVERNMENT-OWNED CARGO WOULD HAVE BEEN 9,200 POUNDS STERLING. IT IS STATED IN THE LETTER FROM MSTS THAT THIS AMOUNT APPEARS REASONABLE.
IT IS REPORTED IN THE MSTS LETTER THAT NO GENERAL AVERAGE STATEMENT HAS BEEN PREPARED AS YET; THAT THE SHIPMENT WAS UNDER A 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. DEFENSE TO THE SALVAGE CLAIMS HAS BEEN ESTABLISHED.
SINCE THE AWARD APPEARS TO BE REASONABLE, THE MILITARY SEA TRANSPORTATION SERVICE IS ANXIOUS TO MAKE AS PROMPT 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 SEPTEMBER 10, WHICH WILL ASSURE THE SAFEGUARDING OF ALL GOVERNMENT RIGHTS.