Salvage And The Disparity Principle: How Much Is Enough?

The 'disparity principle' has re-emerged as a hot topic following the Admiralty and Commercial Court decision in the appeal proceedings in the "VOUTAKOS" (2008).

The Voutakos was bound for Rotterdam when she suffered a main engine breakdown in the South Western Approaches to the Channel. Pursuant to a Lloyd's Open Form ("LOF") salvage agreement entered into between her owners and salvors Tsavliris, salvors undertook a successful tow covering some 560 miles and delivering her safely at Rotterdam.

Salved interests and salvors could not reach agreement on salvage remuneration and the matter was referred to arbitration under LOF/LSSA rules. The first instance arbitrator awarded salvors US$1,750,000 against a salved fund of US$42,469,777.27. On appeal, the award was substantially increased to US$2,700,000 by the LOF Appeal Arbitrator.