A salvage fee at sea is determined according to the legal conditions of the activity carried out to salvage a ship or other property in danger. A tug towing a ship does not necessarily mean that the service is salvage. Ordinary towage, salvage, special compensation aimed at preventing environmental damage, and the security provided must be assessed separately. For a foreign shipowner and insurer, the type of contract, the applicable law, the fee criteria and the place where the dispute will be heard must be determined at an early stage.
How Is Salvage Distinguished from an Ordinary Towage Service?
Article 1298 of the Turkish Commercial Code (TTK) is based on activities carried out to salvage a watercraft or other property in danger in navigable waters. For this reason, the first question is not whether the craft providing the service is a tug, but the situation in which the ship or property being assisted finds itself. Engine failure, drifting, fire, taking on water and grounding may be taken into account in assessing a concrete danger. Not every breakdown or adverse weather condition, taken alone, leads to the same result.
A planned relocation within a safe port, a voyage tow agreed in advance or routine berthing assistance is mostly assessed within the framework of the ordinary service under the contract. On the other hand, a danger that develops during the service and a new task undertaken may exceed the limits of the existing contract. In that case, the point from which, and the conditions under which, the activity changed must be determined from the records. Writing “salvage” on the invoice afterwards does not by itself create a salvage fee.
The activities that TTK Article 1298 leaves outside its scope, and the performance of obligations that arose beforehand, are particularly important. Re-invoicing as a salvage fee an ordinary job already undertaken by contract gives rise to dispute. On the other hand, under TTK Article 1299, the existence of a statutory duty to assist, or the salvor and the salved ship belonging to the same owner, does not in every case prevent the application of the salvage provisions. A broad generalization such as “without voluntary assistance there can never be salvage” misses these distinctions.
| Operation | Basic examination | Consequence for fee or payment |
|---|---|---|
| Ordinary towage | Subject of the contract, tariff and performance of the service | Agreed towage price and the relevant contract provisions |
| Salvage of property in danger | The danger, the activity and the useful result | Salvage provisions and the applicable contract, if any |
| Special activity against an environmental danger | TTK Article 1312 or an applicable contractual arrangement | Examination of special compensation, which differs from the ordinary salvage fee |
| Security for collection | Scope, amount and conditions of the security | Security that does not mean that the debt has been paid or the fee accepted |
Who Can Sign a Salvage Contract?
TTK Article 1300 gives the master authority to enter into a salvage contract on behalf of the ship’s owner; the master or the ship’s owner may also enter into a contract on behalf of the owner of the property on board. The article states that this authority also extends to jurisdiction and arbitration agreements. For this reason, a signature given in an emergency should not be treated merely as an operational instruction. The parties to the form, the values to be salved, the safe place of delivery and the dispute provisions must be recorded.
Even where the operation cannot be delayed in terms of safety of life and the environment, the owner, the operator, the H&M insurer and the relevant P&I club must be informed as soon as possible. Presenting ship and cargo interests, which have different insurance interests from one another, as a single payment debtor may cause problems. In what status the person who signed acted, which parties that person represented, and the instructions given afterwards must be clear in the file.
Not every contract signed under danger is invalid automatically. TTK Article 1301 regulates, under certain conditions, the annulment or modification of a contract made under deception or the influence of danger and containing terms contrary to equity, and intervention where the agreed price is excessively high or low in relation to the service. This assessment is based on the concrete facts. It is therefore important to preserve the alternatives, the communications and the bargaining conditions as they stood at the time of the incident.
How Is the Salvage Fee Determined?
Under TTK Article 1304, salvage operations that produce a useful result give rise to a right to a fee. If there is no useful result, the exceptions to the general rule, in particular special compensation and valid contract provisions, are examined separately. The upper limit of the salvage fee, excluding interest and expenses, is the value of the salved ship and other property. This limit does not mean that the fee will be the whole of the salved value in every case.
Is There a Fixed Salvage Percentage?
The law does not provide a single percentage applicable to all cases. TTK Article 1305 takes into account, in addition to the salved value, the nature and degree of the danger, success, the effort to prevent environmental damage, the salvor’s skill, the time spent, expenses, the risk incurred and the state of readiness of the craft used. Leaving aside a valid price arrangement in the contract, automatic calculations such as “ten percent of the ship’s value is paid” are not reliable.
For example, even if two ships have the same market value, the conditions of salvage may differ. Bringing one to safety in a short time in favorable weather and salvaging the other under a long-lasting fire, an explosion and an environmental risk do not call for the same fee assessment. The calculation must be based not only on the value of the ship but on the documented characteristics of the operation. Listing equipment that was not used is also not the same as explaining the equipment that was actually kept ready and was necessary for the operation.
How Are Ship and Cargo Interests Liable?
Under TTK Article 1306, the debtors of the salvage fee are the owners of the salved ship and other property when the operation ends; the fee is apportioned in proportion to the salved values. The law does not provide for joint and several liability among these debtors. However, an independent guarantee, security undertaking or different contract given afterwards is separately assessed according to its own scope. A party’s having provided security should not automatically lead to the conclusion that it has ultimately assumed the fee debt of all the other interests.
Where more than one entity takes part in an uninterrupted salvage operation, duplicate claims for the same result must be examined. TTK Article 1308 regulates the apportionment among several salvors. The actual contribution of each participant, the engagement relationship and, if there is one, the contract they made with each other are determined. The salvor’s own fault or bad-faith conduct may also affect the fee within the framework of TTK Article 1311.
What Is the Relationship Between Special Compensation, SCOPIC and LOF?
Using these three concepts in the same sense can distort both the payment calculation and the insurance notification. Special compensation under TTK Article 1312 is the statutory regulation relating to a salvage operation carried out in respect of a ship or property that carries a danger of environmental damage. LOF is a contract form. SCOPIC, on the other hand, is a separate contractual mechanism that must be properly incorporated into the contract and activated. A letter of guarantee does not take the place of any of these.
Special Compensation in Case of Environmental Danger
TTK Article 1312 regulates a salvor’s claiming from the ship’s owner, in certain cases where the ordinary salvage fee does not reach the required level, special compensation based on its reasonable expenses. Success in preventing or reducing environmental damage may, under the conditions in the law, affect the application of an additional amount to expenses. Special compensation is not a second full fee added to the ordinary salvage fee without any deduction; the relationship of comparison and offsetting provided by the law applies.
For this reason, the environmental risk, the measures taken, the personnel and craft used, the time and the expenses must be documented separately. The conditions of special compensation cannot be skipped on the idea that “every salvage at sea protects the environment.” The effect of the salvor’s fault on preventing or reducing environmental damage may also be assessed. The debtor and the calculation method of a special compensation claim differ from the contribution of the ship and cargo to the ordinary salvage fee.
LOF 2024 and the SCOPIC Entry
The LOF 2024 form, published by Lloyd’s, provides for English law and Lloyd’s arbitration in London. This should not be equated with any London maritime arbitration clause, or automatically with LMAA procedure. The version of the form used in the specific case and the Lloyd’s Salvage Arbitration Clauses to be applied must be read separately. It is possible for the fee dispute of an operation carried out in Turkish waters to be subject to foreign arbitration; the need for interim protection in Türkiye is examined separately.
In LOF 2024, the provision in the box relating to the incorporation of SCOPIC into the contract and the later activation of SCOPIC by notification are different transactions. The presence of the relevant option on the form does not prove that the required activation notice was sent. Incorporation, notification, the applicable tariff version, and the conditions of security and settlement of accounts must be filed separately. A standard SCOPIC amount cannot be calculated from the general explanation in this article.
How Are Salvage Security, Ship Attachment and Insurance Managed?
TTK Article 1314 regulates the provision of security, on request, for the relevant share of the salvage fee together with interest and expenses. Within the scope of TTK Article 1315, the maritime lien on the ship and the right of retention (hapis hakkı) over other property are different forms of legal security. The same article also contains a restriction concerning departure from the first safe place without sufficient security or the salvor’s consent. These provisions do not grant an unlimited and irregular power of de facto retention over all assets.
Salvage and towage claims are included in the list of maritime claims in TTK Article 1352. However, the presence of a claim on the list does not mean that any ship can be attached without any additional condition. The link between the ship in question and the debtor, the competent court, counter-security and the other conditions of precautionary attachment are assessed separately. Attachment does not replace the court or arbitration examination of the merits of the fee.
In negotiating security, it is not only figures that should be discussed. Which events and interests the security covers, whether it includes interest and costs, the payment conditions, the period of validity, the applicable law and the competent authority must be determined. It cannot be assumed that a P&I club letter will be accepted unconditionally by every creditor or court. Security for general average is also not the same as salvage security; this distinction is separately emphasized in the LOF form.
Which payment item H&M insurance, cargo insurance and P&I coverage correspond to is determined according to the policies. The ordinary salvage fee, special compensation relating to the environment, the SCOPIC payment and the costs of providing security should not be automatically charged to the same insurer. Timely notification to the insurer is required, and important contract or settlement decisions must be carried out in conformity with the relevant conditions. It should also not be assumed that the entity providing security has waived all its defenses concerning the underlying debt.
How Should Time Limits and the Operation File Be Monitored?
With respect to a salvage claim under Turkish law, TTK Article 1319 provides for a two-year statute of limitations starting from the end of the salvage operations. Extension is possible, in the manner stated in the article, by a declaration made by the debtor while the period is running. By contrast, the same provision cannot be applied directly to an ordinary towage fee merely because the service was rendered at sea. The contract, the type of claim, the applicable law and the arbitration conditions require a separate examination of time periods.
Sending a notification, issuing an invoice or continuing to negotiate security is not an act that protects the period for the principal claim in every case. The court or arbitral body before which, and the act by which, the fee dispute will be raised must be determined in advance. The party, the claim, the end date and the scope must be written clearly in the document extending the period. A document signed by an unauthorized agent in place of the debtor may also give rise to dispute.
A good operation file brings together the following documents:
- The towage or service contract in place before the incident and the salvage form used afterward.
- Weather, navigation, breakdown and communication records showing the beginning and nature of the danger.
- Statements of personnel, craft, equipment, time and expenses, together with their supporting documents.
- Surveys showing the condition of the salved ship and other values at the end of the operation.
- The place and time of delivery, securities, insurance notifications and documents extending time periods.
If the argument in a dispute is built only on “the fee is too high,” an effective comparison cannot be made. Which work was already within the scope of the contract, which additional risk was undertaken, which equipment was found necessary and how the salved value was determined must be shown separately. For the salvor as well, documenting the contribution and the reasonable expenses in good time provides a firmer basis than a claim assembled afterwards from approximate figures.
Conclusion
In disputes over salvage and towage at sea, the legal nature of the service must be determined first, followed by the fee, the debtor and the security. One cannot proceed on the assumption of a single standard percentage for salvage or a single insurance that covers all costs. The TTK provisions, the LOF or other contracts used, and the applicable international rules must be assessed together. A common record and time plan set up by the foreign shipowner, the cargo interest and the insurer facilitates both the conduct of the operation and the later settlement of accounts.
Related articles: Preservation of evidence in ship accidents; General average and security; Marine casualty claims under P&I insurance; Arrest of a ship and release against security.
Frequently Asked Questions
Is every ship towed by a tug considered salvaged?
No. Whether the ship is in danger, the scope of the work done and the contractual obligations undertaken beforehand are determined. A planned port tow and bringing a drifting ship out of danger may call for different assessments. The name of the service or the wording on the invoice is not decisive by itself.
Can a salvage contract signed by the master bind the owner?
TTK Article 1300 gives the master authority to enter into a contract on behalf of the ship’s owner; the provision is also important with regard to a contract on behalf of cargo interests and with regard to jurisdiction and arbitration clauses. The scope of the form signed must therefore be examined without delay. It should not be thought that every emergency signature will easily be treated as invalid afterwards.
Is the salvage fee a certain percentage of the ship’s value?
The law has no single percentage applicable to all cases. The valid contract and the criteria in TTK Article 1305, namely danger, success, skill, time, expenses and others, are assessed. The salved value is both one of the criteria and plays a role in the calculation of the statutory upper limit; it is not directly a standard invoice amount.
Is adding SCOPIC to the form enough for it to apply?
Incorporation into the contract and the proper activation of the mechanism are separate. The LOF version used, the SCOPIC text, the required notification, and the tariff and security conditions must be examined together. Ticking the box or the presence of the standard form does not by itself show that all the subsequent steps have been completed.
Does providing security mean acceptance of the salvage fee?
As a rule, security and acceptance of the final debt are separate matters; however, the provisions of the text given are decisive. The reservation of defenses, the scope, the payment conditions and the jurisdiction arrangement must be clear. Which ship or cargo interest the security secures must also be shown separately.
How long is the period for bringing an action for a salvage fee?
Under Turkish law, TTK Article 1319 provides for a two-year statute of limitations starting from the end of the salvage operations. Extension, the applicable law and the arbitration conditions must be examined in the specific file. This period does not automatically apply to all towage invoices; it should also not be assumed that merely sending a formal notice (ihtar) will protect the period.
Sources and legal bases
- Law No. 6102, Turkish Commercial Code — Ministry of Trade copy, in particular Arts. 1298–1319, 1352 and 1369.
- IMO — explanation of the 1989 International Convention on Salvage.
- IMO — Status of conventions, September 30, 2026, the 1989 Salvage Convention and Türkiye’s reservations. The applicability of the convention to a specific case is assessed separately.
- Lloyd’s Open Form 2024 — official contract form, in particular Box 7, provisions I–J and the important notes.
- Lloyd’s Salvage Arbitration Branch, LOF, arbitration and SCOPIC resources.
Source access and preparation date: October 14, 2026. For the dated copy of the law, the current consolidated text; for contracts, the version used in the incident must be checked. This article is general legal information.