Special Compensation

Special Compensation in Maritime Law

Note: There is more information on maritime/admiralty law here.

The following is a definition of Special Compensation, produced by Tetley, in the context of admiralty law: [Translation of Special Compensation in French: “indemnité spéciale”] [Translation of Special Compensation in Spanish: “compensación especial”] [Translation of Special Compensation in Italian: “indennità (compenso) speciale”] [Translation of Special Compensation in German: “Besondere Aufwandsentschädigung”] – Compensation payable under art. 14 of the International Convention on Salvage, 1989, adopted at London, April 28, 1989 (the Salvage Convention 1989 (see this maritime law term in this legal dictionary), in respect of salvage operations carried out in respect of a vessel which by itself or its cargo threatened damage to the environment. This special compensation covers the salvor’s expenses, defined at art. 14(3) as “the out-of-pocket expenses reasonably incurred by the salvor in the salvage operation and a fair rate for equipment and personnel actually and reasonably used in the salvage operation, taking into consideration the criteria set out in article 13, paragraph 1(h), (i) and (j).” Special compensation is only payable if the salvor failed to earn a salvage reward under art. 13 of the Convention at least equivalent to special compensation as defined (art. 14(1)). It is payable, however, regardless of whether or not the salvor succeeded in salving any of the ship or cargo. Where the salvor’s exertions to prevent or minimise damage to the environment were successful, the amount of the special compensation may be increased by up to 30% of his expenses, with the tribunal also having the right to grant an increase up to 100% where it deems it fair and just to do so, bearing in mind the relevant criteria in art. 13(1) (art. 14(2). The total special compensation is paid only to the extent that it exceeds a salvage reward payable under art. 13 (art. 14(4)). See Tetley, Int’l. M. & A. L., 2003 at pp. 341-342.

Special Compensation in Admiralty Law

For information on special compensation in this context, see the entry on special compensation in the maritime law encyclopedia.