If the rescue party performs rescue of the ship but fails, will salvor receive remuneration for rescue operations in Vietnam?

If the rescue party performs rescue of the ship but fails, will salvor receive remuneration for rescue operations in Vietnam?

According to the provisions of Article 264 of the Vietnam Maritime Code 2015, the provisions on marine rescue are as follows:

1. Marine rescue refers to any act of saving ships or property of the ship from dangers or any act of providing relief to ships in distress at sea, within a port water area which is performed under a marine rescue contract.

2. A marine rescue contract refers to the contract signed between the rescuing and rescued party to perform rescue operations. The master of the ship in distress shall be allowed to act on behalf of the ship owner to enter into a marine rescue contract. The master or owner of the ship in distress shall be permitted to act on behalf of owners of property on board a ship to sign such rescue contract.

3. The marine rescue contract shall be concluded in the form agreed between parties.

4. Parties to a marine rescue contract shall be entitled to request any cancellation or change of unsound contractual agreements to the extent that these agreements are concluded in an emergency state and impacted by such state or it is proved that any fraudulent or abusing act is committed upon effecting thereof or an amount of remuneration paid for rescue activities is either much less or greater than the amount that a party is actually provided.

According to this Article, maritime rescue will be based on a contract to save ships and goods on board. All rescue actions bring results to receive remuneration even if the ship or cargo on board cannot be saved. In the event that the rescue action is contrary to the clear and reasonable instructions of the ship's master, no rescue remuneration shall be paid. Thus, in case the rescue party tries to save the ship but fails, it will still be entitled to rescue wages if the rescue action and expenses are reasonable in Vietnam.

Can rescue remuneration be agreed to exceed value of the rescued ship and property in Vietnam?

According to Article 267 of the 2015 Vietnam Maritime Code, rules of determination of rescue remuneration are as follows:

1. Rescue remuneration is agreed upon in the rescue contract on condition that it is reasonable and does not exceed value of the rescued ship or property.

2. In the event that rescue remuneration is not either agreed upon in the contract or reasonable, rescue remuneration shall be determined by the following elements:

a) Value of the rescued ship or property;

b) Skills and efforts of the salvor in prevention or mitigation of loss or damage resulted from environmental pollution;

c) The rescue party’s effectiveness of rescue operation;

d) Dangerous nature and level of an accident;

dd) Skills and efforts of the salvor in rescuing ships, people and property on board the ship;

e) The salvor’s time, related cost and loss or damage;

g) Liability-related risks and other risks to the salvor or equipment;

h) Timeliness of rescue operations performed by the salvor;

i) Readiness and capacity of the ship and other equipment used for rescue purposes;

k) Readiness, effectiveness and value of rescue equipment.

3. Rescue remuneration may be reduced or not recognized to the extent that the emergency situation in which rescue activities are required is created by the salvor, or the salvor commits theft or fraud offences during execution of the rescue contract.

Thus, the two parties can agree on the amount of rescue remuneration in the contract, but this amount must be reasonable and must not exceed value of the rescued ship or property in Vietnam.

Do salvage costs have priority over maritime liens in Vietnam? 

In Article 42 of the Vietnam Maritime Code 2015, priority order of handling of maritime claims leading to the maritime lien is as follows:

1. Maritime claims leading to the maritime lien shall be handled in the priority order stated in Article 41 hereof; in the event that any claim on remuneration paid for rescue of a ship comes after other maritime claims leading to the maritime lien, it shall take higher position than these maritime claims.

2. Maritime claims leading to the maritime lien provided for by the same paragraph in Article 41 hereof shall take equal positions in the priority order; in the even that distributed remuneration amount is not affordable to pay for value of each maritime claim, the ratio of value of a maritime claim to value of all claims shall be considered as the basis for such payment.

3. Maritime claims that may arise out of the same event shall be considered as those which arise at the same time.

4. Maritime claims leading to the maritime lien against a ship in relation to its final voyage shall be given priority to be settled prior to maritime claims leading to the maritime lien in relation to other voyages.

5. Maritime claims that may arise out of the same employment contract in relation to multiple voyages shall be settled along with those in relation to the final voyage.

6. With respect to maritime claims on rescue remuneration amount as defined in paragraph 4 Article 41 hereof, the maritime claim that may arise after others shall be settled prior to other maritime claims.

Article 41 of the Vietnam Maritime Code 2015 provides for maritime claim leading to maritime lien as follows:

1. Maritime claims on salary, repatriation cost, social insurance contribution cost and other monetary amount paid to the master, officer and other seafarers that belong to crew members aboard a ship.

2. Maritime claims on compensation for life, disability or other injury to human health in association with operations of a ship.

3. Maritime claims on deadweight tonnage charge, marine safety charge and other seaport fees or charges.

4. Maritime claims on ship rescue remuneration.

5. Maritime claims on non-contractual property loss and damage directly relating to operations of a ship.

According to the above regulations in Vietnam, rescue costs related to the remuneration for rescuing ships will be given priority, giving rise to maritime liens but must ensure the order of priority according to Article 41 of the Vietnam Maritime Code 2015.

Best Regards!