DOSSIER

 

Complex salvage of blazing container ship


by Simon Tatham


Regular columnist Simon Tatham describes container ship Maersk Honam’s salvage, the LOF considerations and legal elements that followed

One of the significant casualties of recent times, many readers will recall, and one that claimed five lives was 15,000-TEU MAERSK HONAM , which was immobilised, abandoned and heavily ablaze in March 2018 around 644 km from nearest land in the Arabian Sea. This 2017 South Korea-built vessel was en route from Singapore to Suez with 7,860 mostly laden containers on board when a fire was detected in cargo hold 3, located just forward of the accommodation, and soon that was ablaze as well.

All available CO2 was released but was ineffective, particularly against declared dangerous goods containers located in that hold. Salvors Smit were engaged, together with Ardent, the next day under Lloyd’s Open Form (LOF) and eventually, 83 days later, the vessel was redelivered at Jebel Ali, the salvors having incurred self-funded expenditure of US$22.5M. The multi-phase salvage operation was a complex one. First, having mobilised to scene, the team boarded, established a towing connection and started fire-fighting while searching for missing crew members. The casualty was then towed towards Jebel Ali, but prior to port entry, was taken to a holding location. The fire was largely brought under control and its systems restored, with temperatures monitored and hotspots addressed by man-riding operations using the crane of a sister-ship brought alongside, operating as a command and accommodation vessel, and to assist in dewatering by ship-to-ship transfer. Debris was cleared and fuel removed by hot tapping. Excluding crews of the numerous tugs and craft engaged, 82 specialist salvage and subcontracted personnel were involved, dealing with numerous tasks. Close liaison with the relevant authorities was necessary, alongside close co-operation with supportive shipowners who provided various assets, naval architecture assistance, assisted salvors in obtaining permits and provided a US$50M letter of undertaking to Dubai Ports to facilitate port entry. Salvage security was collected directly, and with the assistance of average adjusters, retained likewise to assist with the collection of general-average security on behalf of the vessel’s owners. Given their very high out-of-pocket expenditure, the salvors first legal step was to make an application to the LOF arbitrator and they were given permission to collect a payment on account of 10% of the value of the salved property. The ship’s owners reached a commercial settlement with the salvors for their share, along with certain of the cargo, for which Maersk had provided security. As is often the case, much of the cargo was unrepresented, requiring the LOF arbitrator to still make a full salvage award. The value of the salved property, including ship and bunkers valued at around €20.0M (US$22.3M), was assessed at €267.0M against which a global reward of €67.5.0M was awarded before currency adjustments, interest and costs. This was all done and dusted within three years of the incident. Pretty good going by any standards, although inevitably the resolution of interest and costs along with collection of final contributions took somewhat longer. Of course, that is not the end of the matter with parallel proceedings, including limitation of liability proceedings, taking place in the London courts involving the owners, cargo and charterers as the stakeholders battled it out over who is ultimately liable to pay for all (or any) of this. Just about every Admiralty firm of solicitors in London has been involved, some more than others. I do declare an interest having agreed financially to help my old English gardener whose Tunisian cousins had a couple of uninsured containers on board and who were required to provide general average security. In return, my yew hedges for a while were cut for free. One never knows where the next case will come from in this job.

 

 

 

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