The survival of the Lloyd’s Salvage Arbitration Branch
In our briefing in May 2021, we advised that Lloyd’s had announced that it was considering whether to close its Salvage Arbitration Branch (LSAB) and thereby leave the future administration of its Standard Form Salvage Agreement and the ultimate survival of the Lloyd’s Open Form (LOF) in the balance. Further to a message to stakeholders released by Lloyd’s today (21 July), the wider international maritime community will be no doubt pleased to learn that, following its review of agency services - and specifically the LSAB - Lloyd’s will:
- Continue to operate the LSAB and LOF
- Amend the charging structure for use of LOF with effect from 1 October 2021.
At the time of the initial announcement that Lloyd’s was placing the LSAB (which provides crucial administrative support to how the LOF operates) under review, it had been understood that Lloyd’s no longer considered the LSB to be ‘core’ to its business.
However, following substantial feedback and representations understood to have been received from the Admiralty Solicitors Group, The International Group, the LMA, the SCR panel, LOF Arbitrators, Maritime London, the Minister for Shipping, and the SCOPIC Committee, Lloyd’s has recognised the international maritime community’s support of LSAB and LOF and is “determined to increase the use of the form and highlight the benefits that its use can bring.”
Details relating to the proposed amendments to the charging structure for the use of LSAB and LOF have not however been made available at this stage.
This announcement from Lloyd’s can be seen as a welcome development for the international marine market, protecting the LOF contract which has been recognised and utilised since its earliest days. The administration of LOF continues to be a service of paramount importance to the marine and shipping industry, and Lloyd’s announcement securing its status is likely to ward off any threat of an alternative ‘no cure, no pay’ contract and awards systems rising to prominence.
Lloyd’s will seek to harness the recent backing of its platform to establish an ‘LOF Market Working Group’ to review and support the Lloyd’s Salvage Group in developing the LSAB and the LOF going forward. This will be something that we will continue to monitor very closely and keep all updated by way of further briefings.
Related item: Is Lloyd’s Open Form on borrowed time?