Salvage Arbitration Branch

The Salvage Arbitration Branch administers Lloyd’s Open Form of Salvage Agreement (“LOF”) which has been the preferred contract of the professional salvage industry since its introduction in 1908. It provides a framework for determining the amount of remuneration to be awarded to salvors for their services in saving property at sea and minimizing or preventing damage to the environment. It is today the most widely used international salvage agreement of its kind.

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We are pleased to announce the introduction of LOF 2024 and the Lloyd’s Salvage Arbitration Clause (LSAC) 2024.

The new LOF and LSAC are the culmination of many months of consultation with the users and potential users of the Form and we would like to thank all those involved for their contributions.

The main changes to the LOF are captured in the new Important Notice No. 5, which, for the first time, requires the Contractors and owners of the property to provide to the Council of Lloyd’s the following data relevant to the services rendered under the Agreement:-

(i) ESG Data. Within 60 days of the termination of the services under this Agreement a completed Environmental, Social & Governance data collection form.

(ii) Salved Values. Within 60 days of the termination of the services under this Agreement details of the value of the property salved (the “salved values”)

(iii) Settlement Data. Within 60 days of a settlement concluded with any or all of the parties to this Agreement details of the settlement.

These requirements, which are set out in further detail in clause 15.2 of the new LSAC, are designed to enable Lloyd’s to collect and publish, in aggregated and anonymous form, data/information relating to all LOF services, whether proceeding to an arbitration or settled amicably between the parties.

Perhaps the biggest change to the LOF arbitration procedure for many years sees the old Fixed Cost Arbitration Procedure (FCAP) replaced by the new Fast Track Documents Only (FTDO) procedure which is set out in clauses 8, 9 and 11 of the LSAC.

LSAC clause 8.1 directs that “every arbitration where the security demand is US$10 million or less will be dealt with on a fast-track documents-only (“FTDO”) basis unless the Arbitrator orders otherwise”, but the FTDO procedure will not apply in those cases where, upon application by one or more parties, the Arbitrator considers that an oral hearing is needed or appropriate.

Further LSAC clause 8.3 states that “every arbitration where the security demand is more than US$10 million shall be dealt with in accordance with the Oral Hearing procedure unless the Arbitrator orders that it should be dealt with under the FTDO procedure.”

If you have any questions regarding the LOF 2024 or LSAC 2024 please direct them to the Salvage Arbitration Branch.

Lloyds-salvage@lloyds.com