Salvage Contracts - SCOPIC Clause

Article 14 of the 1989 Salvage Convention ('Article 14') provided that salvors ('Contractors') could receive Special Compensation (ie their expenses and a fair rate for tugs and equipment used in salvage operations) in certain circumstances where the salved fund was insufficient to allow them to recover adequate remuneration under Article 13 of the Salvage Convention 1989 ('Article 13').

The SCOPIC clause ( (Special Compensation P & I Club) endorsed this concept but introduced a tariff to calculate the Contractor's Special Compensation together with an uplift fixed at 25%. Traditional Article 13 Awards will be discounted by 25% of the amount by which any Article 13 Award exceeds the SCOPIC remuneration. Special Casualty Representatives (SCR) and Representatives for hull and cargo were introduced and marine property underwriters' access to information about the services was improved. SCOPIC was warmly welcomed by the maritime community but experience gained through its use identified a number of matters which needed clarification to confirm the original intent behind SCOPIC and a number of gaps which needed to be filled in the wording of SCOPIC, particularly in Appendix A (Tariff Rates). To this end the SCOPIC drafting sub-committee produced an amended version of SCOPIC ("SCOPIC 2000") which came into effect on 1 September 2000. 

 

The SCOPIC Clause is meant to be an alternative option for the contracting parties to agree to replace the salvage convention article 14 when signing a Lloyd’s open form salvage contract

 

As a shipowner's liability for special compensation is customarily insured in the P&I market these developments may not be thought by property underwriters to have any immediate relevance. However, London property underwriters were involved in the SCOPIC negotiations and there are aspects of SCOPIC which will concern all property underwriters if the shipowners and the contractor involved agree to add a SCOPIC clause to their LOF contract.

Once a SCOPIC clause is agreed between a contractor and a shipowner the latter is entitled to appoint a Shipowners' Casualty Representative  (SCR) to attend the salvage operation who must be a member of the SCR Panel. This will comprise a number of surveyors selected by a SCR committee consisting of 12 persons representing ISU, the Clubs, IUMI and the International Chamber of Shipping.

Documentation:

- Lloyd's Standard From of Salvage Agreement

- SCOPIC Clause
- SCR Guidelines