The Ever Given Salvage Case – Would the Judgement Be Similar Under Norwegian Law?

The case is between SMIT Salvage B.V and others (“SMIT”) and Luster Maritime S.A and others (“Luster”), on the refloating of the Ever Given and whether a contract on remuneration for the salvors’ services had been established. Alternatively, if the salvors were entitled to claim salvage under the 1989 International Convention on Salvage or common law.

The Court Ruling and Its Implications

In short, the Court of Appeal ruled that no contract on remuneration had been finalized. The court emphasized that determining the existence of a legally binding contract requires considering the entire negotiation process. Even if a formal document contains terms yet to be agreed upon, a binding contract can still be formed. The determining factor of whether this is the parties’ intended approach is based on an objective evaluation of the parties’ words and actions, with the burden of proof falling on the party asserting the contract’s existence.

On the refloating of the Ever Given, it was noted that performance of services by salvors does not automatically imply a contract. Further, while agreeing on remuneration terms is crucial during negotiations, it does not inherently create a binding contract. In this case, fundamental issues remained unresolved, including the specific services SMIT would provide, the standard of care, and payment terms.

Would the Norwegian Courts Have Rendered a Corresponding Judgement?

The recent judgement sparks the question on whether Norwegian courts would have rendered a corresponding judgement, had the refloating been subject to Norwegian law. Like English law, the rules on salvage set out in the Norwegian Maritime Code (“NMC”) are based on the 1989 International Convention on Salvage, entailing that the rules do not apply to the extent otherwise agreed between the parties. To predict a Norwegian judgement we must look to the conditions for obtaining a salvage award concluded in a similar case.

Kvitnos vs. Boa Sund

In 2017, the Agder Court of Appeal dealt with a similar question. The case was on whether a contract was concluded for the towing of the vessel Kvitnos in the Oslo fjord back in 2015 with the towing vessel Boa Sund (respective representatives are hereinafter referred to as “Kvitnos” and “Boa Sund”) (LA-2017-41631).

The court emphasized that the NMC’s provision on salvage remuneration serves as the general rule across legislation, conventions and practice. And that asserting the existence of a deviating agreement requires clear indications. Whether a binding agreement has been reached depends on an overall assessment of the facts. Particular weight is given to whether the parties have agreed on essential contract points, and whether one party has reasonable grounds to believe that an agreement has been concluded.

In exceptional circumstances, parties may be deemed to have an agreement even if significant questions remain for subsequent discussions. Notably, no formal requirements apply to agreements related to towing assistance or salvage, and such agreements can be made orally. On assistance at sea, the court emphasized that it is not uncommon for agreements to be concluded orally and later put in writing.

The court concluded that Kvitnos and Boa Sund had reached an agreement on essential contract points. Specifically, the parties had agreed that the Boa Sund would handle the towing, practical details would be worked out directly between the captains, the timing and duration of services were clarified, and Boa Sund would arrange for a pilot to board Kvitnos. Remuneration on commercial terms had been discussed, as well as an approximate number, however, the Boa Sund representative would revert on a final amount. This left Kvitnos with a reasonable expectation that Boa Sund would object if the salvors opted for a “no cure, no pay”-arrangement, instead possibly entitling them to a salvage claim under the NMC.

The court held that Kvitnos had reasonable grounds to perceive the representative of Boa Sund in such a way that a binding agreement to tow the vessel on commercial terms was reached, however, that the hourly rate to be paid to Kvitnos would be finally determined in the subsequent paperwork.

Comparing the English vs. Norwegian Perspective

The judgements from Courts of Appeal in the UK and Norway indicate that conclusion of a salvage agreement calls for agreement on various points. In the Ever Given case, agreeing solely on remuneration did not constitute an agreement under English law. Considering the emphasis placed on essential points being agreed in the Kvitnos case, it is likely that Norwegian courts would have reached a similar judgment had the refloating been subject to Norwegian law.

Do you have any questions regarding the cases mentioned, or other concerns regarding salvage claims? Contact one of our lawyers specialized in shipping.