The Yacht Law Podcast
The Yacht Law Podcast
Yacht Salvage: A Salvor's Tale of Saving the Sunken
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Yacht salvage is a complex field that intertwines legal, environmental, and practical challenges. While the subject was a topic for a podcast in our first season, that episode led to more in-depth questions--as did the subsequent sinking iof the superyacht Bayesian. Therefore, in this episode, we explore notable incidents, including that of the Bayesian, and the layers of responsibility and coordination crucial for effective salvage operations with the legendary salvor Nick Sloane.
A former president of the International Salvage Union, Nick learned early lessons during his first major operation on a Spanish tanker in 1983. He gained further expertise thanks to the staggering complexities of one of the most high-profile cases in modern times, specifically the Costa Concordia salvage, Ever wondered what it takes to tackle marine emergencies and avert disaster in trying to raise a yacht or other vessel? You're about to find out. Nick shares captivating stories and profound insights that reveal the layers of responsibility, coordination, and quick decision-making required.
This episode explores the procedural and legal intricacies that make or break a yacht salvage operation. Dive into a riveting case where quick action saved a sunken yacht, and unravel the challenges of lifting these colossal vessels from the depths. Learn about how mitigating environmental damage became significantly more important following yet another high-profile salvage. Additionally, you'll hear straight from Nick why mastering buoyancy and preserving structural integrity, all the while monitoring weather windows, is just as crucial.
Join us for an eye-opening discussion that underscores the essential role of skilled salvors in protecting both the environment and financial assets.
Have a yacht law question? Email it to info@megayachtnews.com or michael@moore-and-co.com for your chance to have it answered on our podcast. All requests for confidentiality and/or anonymity are respected.
Hiring a lawyer is a big decision. Visit Moore & Company for the legal team's qualifications and experience. And, to learn the latest about superyacht launches, shipyards, designs, and destinations, visit Megayacht News.
Welcome everybody. Michael, good to see you.
Speaker 2:Thank you, diane, always good to see you.
Speaker 1:You know, you had a really good idea to revisit the subject of yacht salvage when you and I were speaking a couple of weeks ago In our first season of this podcast. We had covered it because just prior to that there was the grounding of the vessel Nakoa the yacht Nakoa in Hawaii, which turned out to be a disastrous situation on many, many levels. So it was good to use that as kind of an introduction overall to talk about yacht salvage. But clearly there is so much to this subject, so many layers, so many complexities in terms of who is responsible for what, which governing bodies and other bodies need to get involved, who is the coordinator of everything, how the actual salvage takes place. We could probably fill an entire season with this subject, but I really liked the idea of revisiting it, especially with someone who does this for a living. So why don't you introduce our guest and explain why you wanted to bring him on?
Speaker 2:Absolutely my pleasure. Our guest today is Sloan. He's also known as Nick. I think of him as really the most well-known salvador in the world. I think he was elected by his peers as president of the International Salvage Union, which is the global organization. These are the big dogs, these are the ones that do, the vessels carrying a multi-million dollars, a million tons, I should say, of potentially polluting cargo and fuel, among other things. So they are the biggest of the big. But our world is the yacht world, which also has a lot of salvage opportunities and it seems to be increasingly so. So it's a great pleasure that I welcome today with you, diane, nick, sloan, salvage Master, extraordinaire Nick today.
Speaker 3:Well, thanks very much for that, michael, and very nice to meet you, diane, and it is a pleasure and an honor to be here on your podcast.
Speaker 1:Yeah, delighted to have you. This is going to be very educational, I'm sure, for a lot of people, and certainly me. I am a student. Every single time that I have a conversation with Michael, and especially when we have somebody on such as you.
Speaker 2:Well, thank you, right, I bring the lick, we can jump in, and I think you're right when you're up in comments, diana, that salvos. You want them standing by, you want them available, you want them really beautifully compensated so they will have some incentive to be on standby and positioned to assist when you know, when it's the most critical nature. We're not talking about treasure salvage, by the way, just to be clear. We are talking about a type of salvage that really affects all of us. Usually in our world, regrettably, the salvage event has already happened. I think that's where Nick comes in. But, nick, why don't we start? Tell us a bit about your background, tell me where you were born, how you grew up, but don't go past 1967, which is the Torrey Canyon disaster. That, I think, is kind of the start of modern-day salvage and the global treaties and so forth that govern it. Yeah, well.
Speaker 3:Thank you, Michael. Yeah, so I was born in northern Rhodesia, which is now known as Zambia, so a bit of a landlocked country, Grew up out in the bushes riding horses and disappearing into the bushes rather than attending school, and I was sent down to South Africa for my high schooling and that's where I started sailing small dinghies and just fell in love with sailing and the sea and, of course, I've been doing it ever since. So yeah, definitely after the Torrey Canyon, it's just over 40 years, 41 years since my first salvage operation.
Speaker 3:What was your first salvage operation, if I may ask, it was a Spanish tanker, 272,000 tons of crude oil and she was coming around the Cape in winter in the southern hemisphere winter and the South African coast is notorious for having some really bad storms in winter and she came around the last week of July and she had a really bad storm off the east coast. She kept on going and it was the first week of August. She was 85 miles off Cape Town when all things went wrong. She had some leaks and the inner gas that they had generated had leaked out and with the movement of ship there was a lot of sparks and she actually caught fire. So that was August of 1983, so just over 41 years ago and what happened was that the fire spread across the midship of the ship, where the manifold is, and it burned for about three days with more and more oil tanks being exposed and eventually the off section, or the after half of the ship broke and with the weight of the engine she went down stern first, but when she went down she released about a hundred thousand tons of oil and created an incredible fireball and the sea was burning for miles around it. The bow section actually was upright, with just the anchors high in the sky and all of the buoyancy trapped up in the folks in the four peak tanks holding the bow section, which had about 70 to 80,000 tons of oil.
Speaker 3:And of course we weren't sure what to do in those days. We waited for the fire to burn itself out, we towed the bow section 200 miles offshore, we placed some explosives on the bow by the use of helicopters to get us up there and blew out all the buoyancy and that was it. But obviously in those days you know salvage is no cure, no pay. So if you don't actually recover any value, you don't get paid. So after six weeks' work we came back ashore, having had a really incredible experience but actually didn't make a cent, yeah. So I was hooked and I transferred to the salvage division the next year, full time, and I've loved it ever since Outstanding.
Speaker 2:Now let me ask you a question. I'm sure that you remember a little situation that involved not a few hundred thousand barrels but 1.26 million barrels, the Exxon Valdez. Were you, what was your impression of how from the? If you can focus on legal issues, but any thoughts on exxon valdez and how that worked?
Speaker 3:out, certainly for american population, was a milestone incident and, of course, pristine environmental location and what? What we learned from that was that they divided the response area into different sectors and they used different techniques to actually try and clean up the oil and deal with the oiled shoreline. Obviously we had all sorts of things from toxic detergents to steam cleaning and some of the areas that I didn't get to were just left and the crude oil biodegraded naturally. And if you look at all those different sectors up in that area, there was a huge learning curve for everyone of how or what not to do when you have a crude oil spill and also what you should do. But obviously the major thing was that Open 90, the Oil Pollution Act of 1990, came into force where every vessel coming and trading into America needs to have a nominated response responder and a response plan that's approved by the Coast Guard. So yeah, certainly a major milestone in American legislation and certainly for the response to any incident in America.
Speaker 2:Do you, when you, when we look in the yacht world? I think we just reached our intersection, as Diane well knows, cause she used to run the most famous I think it's fair to say an issue of a magazine called Power and Motor Yacht. It creeped me. If I'm wrong, diane, sometimes they say the mind's the first thing to get, but didn't you run the article on the large yacht, the issue they did every year?
Speaker 1:Yeah, I did it for 16 years for the magazine. It was the first listing of that kind. There are lots of them now, of course, but the first time the magazine did it was actually 1985, and I picked it up in the early 1990s and it was fascinating to compile not just the size of them but the complexity Right as yachts continue to grow.
Speaker 2:And now, nick and this is the part that I think that the three of us are destined to meet under I don't know more fun circumstances, because Open 90, which was the usual response to after the horses leave the barn you know you want to close the door they passed Open 90, the Oil Pollution Act of 1990. And that law applies to any vessel over 300 gross tons, and that is not an unusual marker or threshold for yachts today.
Speaker 2:And of course, yachts go to literally the most pristine and beautiful places on planet earth. And the second thing I wanna mention just while I'm thinking about it, nick, is you cannot enter US waters on a yacht of more than 300 gross tons if you don't have a what is called a COFR or Certificate of Financial Responsibility. That means you have insurance for oil spills and the like. So, having said that, tell us a little bit about I think it would be interesting to our listeners. Tell us a little bit about, I think it'd be interesting to our listeners.
Speaker 2:But tell us about when you were involved in the Costa Concordia situation. I mean, we know that's a mega rollover, but we see things like that in the R world now almost every day We'll see some incident of a beautiful yacht loses steerage, it loses propulsion, it loses its bearing, the radar goes out. You know the usual. Everything that happens on a Costa Concordia, our vessel of that size, happens in the yacht world and there are a lot of yachts out there above 300-gauge tons. So tell us about Costa Concordia, because that's a fascinating project that you were involved in.
Speaker 3:Yeah, so that definitely was one of the largest ones involved in. Yeah, so that definitely was one of the largest ones. So if you think of a mega cruise ship, four and a half thousand people lying on their side and finally balanced on two pinnacles, sort of a hundred inches apart, so the size of a football field apart, and finally balanced, and obviously in the tragedy, 32 people lost their lives. They recovered this year than before we got on to do the wreck removal or let's say the recovery, and obviously you're dealing with a crime scene, are you dealing with the grave site and there's still bodies to be recovered. So all those complexities add to the challenges and you work underneath the jurisdiction of the state prosecutors. So in this case it was the island of Gilead, which falls part of the Tuscan Acapulco and it's also part of the start of the sanctuary. So environmentally it's a very sensitive area Because of the deaths and the whole incident. The state prosecutor was in charge of whatever we did had to be approved so that we didn't interfere with anything that could interfere with their investigation to try and find out what happened and find out was there someone to be blamed? So that adds a whole dimension to if you, let's say, if you're dealing with a bulk carrier in the South Atlantic on an atoll where there's no sign of life and no one really owns that atoll, and you get out there and you carry on to do the best you can to minimize damage to the environment but also you work in. Obviously there you're in a far more hostile sea than in the Mediterranean.
Speaker 3:But the CrossFit and Quartier because of the sensitivity of the case, it was a flagship of the Italian cruise industry, one of the larger carnival ships, so it had a lot of global attention, multinational crew, multinational passengers and and, of course, unfortunately, multinational nationalities in those who perished. So there was a lot of international concern. The insurance market was highly concerned because if she fell off those two pinnacles into deeper water, then the costs would go up even more than they were and the costs were really really high. So that's most of the at the moment, the largest and most complex and expensive salvage operations being carried out. But yeah, I hate the sensitivity to the coastal states, or let's say Italy. So when something happens, the coast states is, or let's say Italy. So when something happens, the coast states is definitely going to be involved. And if you have a loss of life, even more so. And then, of course, everything you do in your recovery plan has to be approved by all the parties, so it actually adds more layers to the complexity of the operation.
Speaker 2:You have the Kostik and Kordia situation, where the vessel rolled over on its side, and I'd like to discuss that. But also go back to what I think of as the classic situation, which is the vessel's in distress, it's drifting. Just imagine it's a motor yacht, you render your services, you do have success. And let's go back how do they? How do they find their way to your door? How do they find their way to your door for competent salvage services? Yeah, so for the Custodian Cordia.
Speaker 3:they had eight international consortiums that tendered for the removal and one of the objectives was can you recover her in one piece?
Speaker 3:So, that minimizes any damage and allow them to carry out the investigations. The Titan Macropery Consortium was the only one that said it can be done in one piece without cutting the ship up by adding external buoyancy. So it's pretty bizarre to add water wings onto a giant ship that's three football fields long and the whole thing was done with external water wings that. You know, when you throw a baby into the swimming pool you've got a couple of armbands on the arms, but this, this was picking up a 150,000 ton ship with external buoyancy. So yeah, we had a couple of close calls of you know, with excellent buoyancy.
Speaker 2:Beautiful.
Speaker 3:Yeah, we had a couple of close calls of you know, we just made it and obviously the more you prepare and practice, the luckier you get, and we certainly pushed our luck on it and I think we were lucky to get away with it.
Speaker 2:I know you did well, because we don't have any reports of, you know, media attention after the fact. I mean, every now and then we heard about Mr I think it was his captain, shatino who the entire world will never forget the expression Shatino, get back on that ship. As we watch this thing unfolding and the whole world is asking do you think he's going to get back on the ship? I'm thinking he's not getting back on that ship. This man's in shock right now. He's going to be making a lot of bad decisions before the constables arrive and then he's going to pay dearly and I think he did pay dearly, but anyway, that's another subject.
Speaker 3:Most of the responses. So there's two parts of a response. There's an emergency response which is time critical. So you have a small window of opportunity to get the yacht reflow, to get the fire out, stop her sinking, et cetera, and that's called the emergency response side of it. Okay, not only there's a typical contract that you would try and use, lloyd's Open 4. There's no cure, no pay.
Speaker 3:So you respond, you add all of the professional services that you can to maximize the recovery and minimize the exposure and if you're successful, then you send all your details to Lloyd's and an arbitrator, maybe a year or two years later, will adjudicate the award and so, based on your professional services, the risk and how successful was the response, then you only get an award of the recovered value, so not the original value. It's only the sound value or recovered value that you actually get a partial award on. So that's the emergency response side. When that fails, then you go into what rec removal or rec recovery and that's to remove the rec, and then obviously that gives them more time to actually adjudicate have a tender process. So you'll have four, five, six, seven responders saying that we would like to offer to recover this and then they adjudicate that and they use something called a PIMCO contract, which is PIMCO standard, rec-high or REC-STAGE contract.
Speaker 3:Yeah, these contracts are all managed and acceptable in the world of salvage. So you've got the time-critical lowest open form and even if you don't get the lowest open form, you're acting under common law salvage, which means that you're using your best endeavors to actually recover value and you can still claim salvage just based on that basis where, when it comes to wreck removal, the sensitivity of the environment becomes a priority. How do you minimize further exposure, mitigate any further exposure and then recover it without doing damage and maximize recovery value if you can, obviously, if you look at the value of super yachts these days, I would say that, yeah, the larger super yachts are more expensive than 80% of the world's shipping tonnage. You know, you've got cruise ships and gas ships and tankers, right? No, I think that's right.
Speaker 2:Yeah.
Speaker 1:Fair point for sure.
Speaker 2:Let me ask you why are the captains? It's the answer. We've more often than not, or quite often, we see these captains who are afraid to sign the Lloyd's Open Forum and they waste critical time with a salvor standing by. You know, they're usually okay with the invitation to assist, but they're just terrified of signing the ocean, signing the contract, the Lloyds Open Form. What is your view on that?
Speaker 3:Yeah, so about 15 years ago there was a bit of a backlash against the Lloyds Open Form contract format and one of the insurance companies said it's forbidden to sign it unless we say so. Just over during COVID, lloyds actually had a look at the LOF contract no cure, no pay and they said is it still fit for purpose?
Speaker 3:So they went out into the industry to the insurance market, both hull property, cargo liability, the reinsurance market, coastal states, all the maritime authorities so US Coast Guard, SOZREP in the UK, the Italian Coast Guard and governments, and there was a resounding feedback that listen, you know it works in an emergency, we need it so do not get rid of it.
Speaker 2:It seems like it works beautifully. Actually, it's a fair process and what I can see, whether we're representing owners, underwriters or or salvors, it just seems like a balanced presentation with the, with the knowledgeable people making decisions using all of the normal factors. Value the things, shall the success you achieve. What did you prevent? I had, but I just case in point, I have a judge who basically asked me point blank what do you think? This is perfectly normal for a salvage operation, where the salivor you'll laugh at this just threw trash into the hole. He'd gone over the, he'd gone over the side of his little boat and threw hefty bags and wooden pieces of wood to fill a hole and stem the inflow of water on a gash was which was on the side of the, the vessel which was not unlike the costa concordia, from what I understand, and he stemmed the flow of water, then went inside and finished the patch and the judge, you know, asked me what I thought it was worth. He says well, you know, it's your client. So what do you think? I said $125,000. He goes. I think the testimony was like 37 minutes of work. I said no, it's 37 minutes of solid movement and effort. Quick response.
Speaker 2:The guy came out from his house, which is on the waterway, to meet the vessel. He heard on the air putting out the call for help that we will sink and we will roll over. And the judge says no, I think that sounds like a fair award, and gave $125,000. The other side was we think $30,000 would be adequate. It's like no, no, that's not the way it works. If that boat had turned over you would have had the boat would still be there for months maybe, and the oil would come out of it and it would be a disaster. It was a yacht that had somehow caught an underwater underwater obstruction. No one really ever quite knew what. What did it? But there was a piece of metal. That much the experts knew. I had gouged the book. I already get back to it, so don't nine, I know you want to talk about Bayesian, so can we move into that now?
Speaker 1:Yeah, bay's end is a situation that has become incredibly high profile around the world, to people who aren't even involved in yachting, simply because of who the passengers were and the nature of the sinking. Certainly, within the yachting industry, though, there are a lot of questions as to how a salvage like this would take place, why it would last so long like this would take place, why it would last so long. We're talking about a yacht that's, of course, about 50 meters below the surface of the water, sitting on our side. So not asking you to give a step-by-step explanation, nick, but what are some of the complexities that would be involved in trying to bring her to the surface? The depth certainly seems to me to be one of the biggest issues. It's not like, say, the Costa Concordia, where she's in relatively shallow water and you can see half of the boat sitting above the surface. Nothing is above the surface in this case.
Speaker 3:Yeah, so definitely a real tragic event. And you find some of these water spouts and abnormal storms in the Mediterranean, and especially the warmer parts of the Mediterranean, in late summer, so August, and you get these water spouts. You get these very short but very severe storms that come through. And I think the week before that there was a storm that hit off the coast of Ibiza and 14 yachts were ran aground and literally, if you look at all of the social media, people were saying but they didn't say there was going to be a chance of abnormal storm activity on that side of the island. And I think some of the things is are you aware of the severity of these storms and what they can do to your yacht? Obviously, in the Bayer sense, she's a large yacht and she's really a super yacht. She's got an extremely high modest, which a lot of people say might have contributed to it. But I think if you get hit by these abnormal storms, and especially if it was a water spout there are thousands of tons of water in a water spout and if that comes across you, anything that's open is literally going to be like a drain. So obviously they're going to do a thorough investigation of what actually happened. But she went over really quickly and went down. There was some talk that her mast had been broken in half up at the third spreader. So now she's lying at 50 meters plus minus and it's a crime scene so it falls under the state prosecutor of Sicily. So they're very nervous about any recovery. So you're not going to go in there with a crane and a grab and just bring it up piecemeal. They want it in pristine condition from the seabed to the surface.
Speaker 3:And I think mentioned earlier that if you look at what happened in North Hawaii you know you refloat the vessel. But that last 10 meters that you come to the surface, the last 33 feet, that's where all of your buoyancy and any bubble that's inside you can actually lose control of the whole situation. So that is a critical phase. So the first phase is to break out of the mud and then the second one is to get her through that 10-meter interface under control and bring her gently onto either a barge or maybe even a submersible vessel that you put it on and then bring her up inside a bund. So she's still got some pellucidates on board but so far there hasn't been much leakage.
Speaker 3:So those tanks on board seem to be sound and obviously you've got two choices. You're going to have to cut the mast and the rigging off. But wherever you do that cut, you've got to get the approval from all parties to make sure that you're not going to impact the investigation. So that would be the easy part. To recover would be the mast and the rigging, and then the critical one is the actual yacht itself.
Speaker 3:And how do you do that? As gently as possible, but you've got to be confident that when you do start the lift, that from the time you start the lift until the time you have it safely afloat, that you've actually looked at all of the, let's say, possible challenges and you have a plan and a backup plan and a backup plan for that. Once you start, you don't want to stop, because if you stop and you have to put it back down, things go wrong and they go wrong quickly. So, yeah, it's a real sad event such a beautiful yacht and, of course, with the personalities involved, it's really high profile and, of course, happening off the coast of Sicily with seven loss. You know so it's a crime scene and it's all declared otherwise. You know so it's a crime scene and it's all decayed otherwise.
Speaker 1:Yeah, with this specific case too, I realize US law is different from Italian law, different from English law, etc. Etc. But it seems like there's some extra complexities involved with this particular salvage situation, simply due to it happening in Italian territorial waters. Can you?
Speaker 3:explain some of the things that are very specific to Italy. Well, so, basically, anything that occurs within the territorial waters with a loss of life, then the state prosecutor immediately takes control and obviously that will delay the initial response. So some people have said why is it taking so long? But obviously it's winter so you don't want to try and rush into it and then behind that you are wasting time and money trying to do it in the worst weather. So you actually want to wait till the new year and hopefully they're looking at February, march, whenever they get a suitable weather window, to carry out the operation.
Speaker 3:But if you had a similar situation in India, japan, china, south Africa, any of these coast states and America, the coastal authority are going to be very prominent in agreeing and dictating what their demands are. And of course, I think with this one, due to the personalities involved, there's going to be a lot of interest into well, was there any type of negligence or was it just a freak accident? You know those sort of things will take a long time to conclude, and you know those sort of things will take a long time to conclude and I think a lot of insurance companies will be worried about which way that outcome will happen. It obviously impacts the crew. It impacts all of the insurance policies on everyone. So yeah, Right.
Speaker 3:A real sensitive case. I know they've had some good submissions on the different offers and ways and methodologies to be used. So I think in the next week or two we will find the shortlist of responders and then they'll go to the Italian authorities and say this was the preferred methodology. What do you think They'll get feedback from that and maybe put in more mitigating factors to satisfy the Italian authorities and then wait for a suitable weather window to go ahead?
Speaker 2:It's ongoing. It's not by any means. It's very much even preliminary efforts here.
Speaker 3:Yes, yeah, yeah preliminary efforts here?
Speaker 2:Yes, yeah, do you see an issue with how, I guess, in that particular state, the harm was done? The vessel was down, it was in a more or less static position, if anything. I guess nothing's really static when it's underwater and the water's moving around it, but reality is more static than I guess a lot of situations. But you think that everything's been handled properly with respect to the response of the Italian government to the Bayesian sinking and how they're going about it.
Speaker 3:So they've got a really well-oiled department called Civil Defense and they respond to earthquakes, fires, all sorts of things you know when they had a major bridge collapse in Genoa 10 years ago. So they take care of those type of responses and they were involved in this type of response, their judicial mentoring or, let's say, management from the state prosecutor. They'll be very specific on what they want to see happen and what they'll agree to see happen. So there'll be a lot of close cooperation between the owners, underwriters, the liability underwriters, the P&I club, and then, once the solvers are there, they'll go and present their plans and they'll get feedback and before they start they'll have to especially look after the environment.
Speaker 3:That's very sensitive in that part of the world. As you say, it's a beautiful part of the world. We have heard that he's resting in relatively soft mud, so she will have started to sink into the mud. That means you just need to be more patient with that initial lift. You have to break it out, the mud, and that's a very slow, careful operation just to get rid of that suction from the mud. But yeah, I think the owners, underwriters, liability underwriters and the authorities are going to make sure that whatever happens, they don't damage the yacht unnecessarily, so they can carry on the investigation.
Speaker 1:Yeah, good information. Thank you, Nick. I'm sure we could go for another hour of going through all the complexities and all the situations that need to be assessed, how carefully the equipment is applied, but we're actually running right up against our recording time and, nick, this has been so eye-opening, so educational, a really, really fascinating discussion. Thank you so much for your insight.
Speaker 3:Yeah, thank you, Diane. It's been a pleasure being here and great to chat with you again, Michael.
Speaker 2:Always a pleasure. In closing podcast, perhaps I shouldn't say something about the sinking of the Basie and I'll refer that to later, but thank you for your comments. I thought they were spot on and all of your comments were spot on. It's been a great pleasure having you with us here today, nick, and hope to have other many pleasurable interactions with you going forward. Diane, that's all I have.
Speaker 1:Yeah, 100% I agree. Maybe we can have you on a subsequent episode to dive into some more questions. I'm certain we'll get some questions from some of the listeners. But everybody, thank you for listening to this episode. We hope you have learned a lot, just as we have. If you have a suggestion for a topic for us to cover in a future episode of the Yacht Law Podcast, you can contact Michael or me. Our contact information is in the show notes included with each episode. That's all for now. Take care everybody.
Speaker 3:Thank you All the best.
