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Difference Between Towage & Salvage

21 March 2019

What is Towage??

Towage is the act of having one ship or boat pull (tow) another. The puller is referred to as
the tug, while the vessel pulled is referred to as the tow. Ships specialized for towing are
called tugboats. Ships without motive power, which can only be moved by towing, are called
barges.

As defined in English law, it is in essence a service by one vessel to another vessel for a fixed
remuneration. The most common reason for requiring this service is the lack of its own
motive power. Conventionally, towage is defined as "the employment of one vessel to
expedite the voyage of another, when nothing more is required than the accelerating of her
progress". Apart from accelerating vessels, acquiring towage service is a common practice
for towing barges, platform of drilling oil, floating ship yards, etc. Along with the
development of sea carriage business and oil drilling business, many towage service
providers are set up nowadays.

Towage is based upon the employment of one vessel by another which means a contract to
employ that vessel. In most cases, contract will be in a standard form and part of this work
will be taken up by a detailed consideration of the standard form contracts in most common
use.

Towage contract characteristics

1. Tugs are not common carriers in respect of the vessels they tow.

Is defined as Common Carrier the one who runs the business of trade of carrying goods and
is usually employed by shippers. Common carriers for reward are absolutely responsible for
the goods they carry. However, no English or Commonwealth decision has held a tug owner
liable as a common carrier in respect of the vessel towed. So, in case of any loss or damage
to the tow, the burden of proving fault lies on the tugs owner.

2. Towage contracts are not contracts.

Ordinary principles of contract law are applied to towage contracts. The towage contracts
are not contracts in which one party is under a fundamental duty to disclose all material
facts within the parties' knowledge and surrounding circumstances.

However, admirality court still retains a general equitable jurisdiction to declare invalid and
to refuse to enforce certain towage agreements if it is considered to be seriously inequitable
to one party or the other. This jurisdiction has been applied to some cases where there has
been a lack of disclosure.

These principles were taken up and considered in somewhat unusual case of The Unique
Mariner. The Unique Mariner ran aground off the coast of Indonesia and her owners cabled
the master notifying him that a suitable tug was to be dispatched from Singapore. By
chance, the defendants’ tug Salvaliant was in the area already and approached the other
vessel. The master of the Unique Mariner, mistakenly believing that the Salvaliant was the
tug sent by the owners, signed the Lloyd’s Standard Form of Salvage Agreement: “No Cure
No Pay”. On learning that another tug (the one arranged by the owners) was on its way, he
ordered the master and crew of the Salvaliant to stop work. The owners then sought to
dispute the validity of Agreement. This is an example of the exercise by the Admiralty Court
of its equitable power to treat as invalid, by the reason of serious unfairness to one party.

3. Authority of the master to enter into a contract to be towed.

The shipmaster is ordinarily authorised to enter into towage contracts which would bind his
principals and towage service providers. However, there are some exceptional cases in the
specific field of towage, Steamship Co. v. Anderson, It is held that a captain cannot bind its
owners by every towage contract which he may think fit to make; it is binding upon them
only when the surrounding circumstances are such to make it reasonable to be made, and
also where its terms are reasonable.

4. Authority of the master to enter into a contract to tow.

The shipmaster of an ordinary ship carrying cargo or performing a charter must be very
circumspect in committing his owners to the performance of a towage contract. The interests
of cargo owners or other parties involved in the contract of affreightment must be
considered. Whenever a tug towing a vessel under contract, the original voyage is
interrupted which means it will amount to a breach of contract by the shipowner, unless it is
allowed by the terms and condition of the bill of lading or charterparty. The principals of the
shipmaster are entitled to either authorize his shipmaster to enter a towage contract or to
limit his authority to certain extent.

5. Jurisdiction

Any claim in the nature of towage in respect of a ship is within the jurisdiction of the
Admiralty Court. The plaintiff can take advantage of the special feature of Admiralty
jurisdiction, it is the right to proceed in rem, which means the plaintiff can sue against the
ship itself. However, actions in respect of towage are capable of being “true” actions in rem.
A true action in rem is one which may be brought against the ship no matter who the owner
is and these kinds of actions therefore survive a change of ownership after the cause of
action has accrued, even though the new owner may have bought in good faith without
notice of the claim. True actions in rem include cases in which there is a maritime lien on the
ship for the amount claimed, but towage confers no such right.

What is Salvage??
When a ship suffers a casualty, or is otherwise in a position of peril, the master must decide
as a matter of urgency and request for towage services, where it is contract it is towage and
where LOF is accepted its known as salvage

Distinction between towage and salvage

1) The purpose of contract:

The purpose of towage contract is to offer towing service to a vessel by tugs, while the
purpose of salvage is to save vessels which are in danger.

2) The tugged vessels are in different conditions

In towage contract, the tugged vessel should be in normal condition without certain extent of
risk; while in salvaged, the salved vessel or other maritime property are usually under risk.

3) Remuneration/reward difference

In towage contract, the hirer’s reward of providing towage service depends mainly on the
condition of towed vessels and the distance of towage. The towage fee and payment are
usually mentioned in the contract in advance. However, in salvage, the reward of a salvor is
based on “No Cure No Pay”, “reward less than the value of the salved ship or property”
principals. In general, the reward of salvage is higher than the remuneration of towage.

4) Need for a contract

Although there is nothing to prevent one vessel gratuitously giving another a tow, the right
of a tug or other towing vessel to payment always depends on contract whether express or
implied. But in salvage, it does not totally depend on contract and may be rewarded even
though the shipmaster of the salved ship has declined the offer of assistance.

5) No need for success

The need of success is a feature of salvage, but not of towage. It is a necessary element of a
salvage claim because salvage awards can not exceed the value of the salved vessel or
properties. The right to payment on towage will depend on the construction of the contract
rather than the success of the venture.

6) Absence of lien

There is no maritime lien on the tow for the payment of the towage price fixed in the towage
contract whereas a tugowner has a maritime lien over property salved.

Collision liabilities of tug and tow

Collision at sea which give rise to damage on the part of one or more of the vessels involved
are actionable on proof of negligence. The problem of liability may arise due to the collision
between tug, tow and a third vessel or in situation in which no third vessel is involved. The
Inter-Governmental Maritime Consultative Organization (“IMCO”) has set up the Collision
Regulations and Regulations For Preventing Collisions At Sea 1972. It is used to determine
the negligence problem of ship collisions.

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