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Lloyd's Open Form

1. LOF provides a regime 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. Originating from the late 1800s, it is probably the most widely used international salvage agreement of its kind in the world today.

2. It is a standard legal document for a proposed salvage operation.

3. It should be used when a marine environment is at risk and the master has insufficient time to request the owner to arrange salvage services on a pre-agreed rate of sum.

4. It is a single sheet(2 pages) document in a simple format(LOF 2000 form).

5. LOF 2000 form contains numbered boxes as below
  • Name of the salvage contractors
  • property to be salved (vessel name)
  • agreed place of safety
  • agreed currency
  • date of agreement place of agreement
  • Is SCOPIC clause is incorporated-- yes/no
  • name and signature of contractor
  • name and signature of master / on behalf of property
6. Lloyd‘s Open Form of Salvage Agreement or ―LOF, as it is more commonly known, has been revised ten times since it was first introduced in 1892.

7. The latest revision of the form is regarded as one of the more radical revisions which have so far occurred. It comprises a single sheet of paper incorporating a box lay-out in which essential information such as the name of the ship and the identity of the salvage contractors is to be inserted.

8. Below the box lay-out and on to the reverse side of the document, there are 12 lettered clauses and 2 information notices. Therefore the LOF 2000 is a more manageable document and easier to read and understand.

9. The LOF is basically ―No Cure No Pay‖ agreement. Article 13 deals with the criteria for the claims. The claims depend upon
  • Saved value
  • Skill and Effort applied
  • Measure of success
  • Nature and degree of danger
  • Time / Expense
  • Risk / Liabilities
  • Promptness of service
  • State of readiness
  • If any other vessels in operation Etc.
10. Article 14 talks about the special compensations to be paid to the salver even if they are not successful in their operation, as a measure of saving the environment. As per the article 14 the minimum special compensation will be ―out of pocket expenses plus 30% of that.

11. In any case article 13 can be duplicated, i.e, Award as per article 14 is more than article 13, and then the total award will be article 13 plus the difference between two. Claims as per article 13 are a part of GA and article 14 will be paid by P&I.

12. LOF -2000 has a supplementary clause called SCOPIC. SCOPIC is done as per tariff. It is a choice to the salver, but owner can deny. As per the SCOPIC when the salver gives a notice, owner has to give a bank guarantee to the salver to perform. The owner will appoint a Ship casualty representative (SCR) at the location for logging down all the day to day works and machinery operations done under SCOPIC.

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