SCOPIC 2020

SCOPIC CLAUSE

1. General
This SCOPIC clause is supplementary to any Lloyd’s Form Salvage Agreement “No Cure - No Pay” (“Main Agreement”) which
incorporates the provisions of Article 14 of the International Convention on Salvage 1989 (“Article 14”). The definitions in the Main
Agreement are incorporated into this SCOPIC clause. If the SCOPIC clause is inconsistent with any provisions of the Main Agreement
or inconsistent with the law applicable hereto, the SCOPIC clause, once invoked under sub-clause 2 hereof, shall override such other
provisions to the extent necessary to give business efficacy to the agreement. Subject to the provisions of sub-clause 4 hereof, the
method of assessing Special Compensation under Convention Article 14(1) to 14(4) inclusive shall be substituted by the method of
assessment set out hereinafter. If this SCOPIC clause has been incorporated into the Main Agreement the Contractor may make no
claim pursuant to Article 14 except in the circumstances described in sub-clause 4 hereof. For the purposes of liens and time limits the
services hereunder will be treated in the same manner as salvage.

2. Invoking the SCOPIC Clause

The Contractor shall have the option to invoke by written notice to the owners of the vessel the SCOPIC clause set out hereafter at
any time of his choosing regardless of the circumstances and, in particular, regardless of whether or not there is a “threat of damage
to the environment”. The assessment of SCOPIC remuneration shall commence from the time the written notice is given to the owners
of the vessel and services rendered before the said written notice shall not be remunerated under this SCOPIC clause at all but in
accordance with Convention Article 13 as incorporated into the Main Agreement (“Article 13”).

3. Security for SCOPIC Remuneration

(i) The owners of the vessel shall provide to the Contractor within 2 working days (excluding Saturdays and Sundays and
holidays usually observed at Lloyd’s) after receiving written notice from the contractor invoking the SCOPIC clause, a bank
guarantee or P&I Club letter (hereinafter called “the Initial Security”) in a form reasonably satisfactory to the Contractor
providing security for his claim for SCOPIC remuneration in the sum of US$3 million, inclusive of interest and costs.
(ii) If, at any time after the provision of the Initial Security the owners of the vessel reasonably assess the SCOPIC remuneration
plus interest and costs due hereunder to be less than the security in place, the owners of the vessel shall be entitled to require
the Contractor to reduce the security to a reasonable sum and the Contractor shall be obliged to do so once a reasonable sum
has been agreed.
(iii) If at any time after the provision of the Initial Security the Contractor reasonably assesses the SCOPIC remuneration plus
interest and costs due hereunder to be greater than the security in place, the Contractor shall be entitled to require the owners
of the vessel to increase the security (hereinafter called “the Increased Security”) to a reasonable sum and the owners of the
vessel shall be obliged to do so once a reasonable sum has been agreed.
(iv) In the absence of agreement, any dispute concerning the proposed Guarantor, the form of the security or the amount of any
reduction or increase in the security in place shall be resolved by the Arbitrator.

4. Withdrawal and Termination by the Contractor

(i) If the owners of the vessel do not provide the Initial Security within the said 2 working days, the Contractor, at his option, and
on giving notice to the owners of the vessel, shall be entitled to withdraw from all the provisions of the SCOPIC clause and
revert to his rights under the Main Agreement including Article 14 which shall apply as if the SCOPIC clause had not existed.
PROVIDED THAT this right of withdrawal may only be exercised if, at the time of giving the said notice of withdrawal the
owners of the vessel have still not provided the Initial Security or any alternative security which the owners of the vessel and
the Contractor may agree will be sufficient.
(ii) If the owners of the vessel do not provide the Increased Security within 2 working days of the date upon which the reasonable
sum for such Increased Security has been agreed between the Contractor and the owners of the vessel or has otherwise
been determined by the Arbitrator, the Contractor, at his option, and on giving notice to the owners of the vessel, shall be
entitled to terminate the services under both the SCOPIC clause and the Main Agreement. The Contractor will in that event be
entitled to payment of all SCOPIC remuneration due up to and including the date of such termination. The assessment of
SCOPIC remuneration shall take into account all monies due under the tariff rates set out in Appendix A hereof including a
reasonable time for demobilisation after the date of such termination.

5. Tariff Rates
(i) SCOPIC remuneration shall mean the total of the tariff rates of personnel; tugs and other craft; portable salvage equipment;
out of pocket expenses; and bonus due.
(ii) SCOPIC remuneration in respect of all personnel; tugs and other craft; and portable salvage equipment shall be assessed on
a time and materials basis in accordance with the Tariff set out in Appendix “A”. This tariff will apply until reviewed and
amended by the SCOPIC Committee in accordance with Appendix B(1)(b). The tariff rates which will be used to calculate
SCOPIC remuneration are those in force at the time the salvage services take place.
(iii) “Out of pocket” expenses shall mean all those monies reasonably paid by or for and on behalf of the Contractor to any third
party and in particular includes the hire of men, tugs, other craft and equipment used and other expenses reasonably
necessary for the operation. They will be agreed at cost, PROVIDED THAT:
(a) If the expenses relate to the hire of men, tugs, other craft and equipment from another ISU member or their affiliate(s),
the amount due will be calculated on the tariff rates set out in Appendix “A” regardless of the actual cost.
(b) If men, tugs, other craft and equipment are hired from any party who is not an ISU member and the hire rate is greater
than the tariff rates referred to in Appendix “A” the actual cost will be allowed in full, subject to the Special Casualty
Representative (“SCR”) being satisfied that in the particular circumstances of the case, it was reasonable for the
Contractor to hire such items at that cost. If an SCR is not appointed or if there is a dispute, then the Arbitrator shall
decide whether the expense was reasonable in all in the circumstances.
(c) Any out of pocket expense incurred during the course of the service in a currency other than US dollars shall for the
purpose of the SCOPIC clause be converted to US dollars at the rate prevailing at the termination of the services.
1.8.1999 (iv) In addition to the rates set out above and any out of pocket expenses, the Contractor shall be entitled to a standard bonus of
1.9.2000
1.1.2005
25% of those rates except that if the out of pocket expenses described in sub-paragraph 5(iii)(b) exceed the applicable tariff
1.7.2007 rates in Appendix “A” the Contractor shall be entitled to a bonus such that he shall receive in total
1.1.2011 (a) The actual cost of such men, tugs, other craft and equipment plus 10% of the cost, or
1.1.2014 (b) The tariff rate for such men, tugs, other craft and equipment plus 25% of the tariff rate whichever is the greater.
1.1.2017
1.8.2018
1.1.2020

Classification: Confidential
6. Article 13 Award
(i) The salvage services under the Main Agreement shall continue to be assessed in accordance with Article 13, even if the
Contractor has invoked the SCOPIC clause. SCOPIC remuneration as assessed under sub-clause 5 above will be payable
only by the owners of the vessel and only to the extent that it exceeds the total Article 13 Award (or, if none, any potential
Article 13 Award) payable by all salved interests (including cargo, bunkers, lubricating oil and stores) before currency
adjustment and before interest and costs even if the Article 13 Award or any part of it is not recovered.
(ii) In the event of the Article 13 Award or settlement being in a currency other than United States dollars it shall, for the purposes
of the SCOPIC clause, be exchanged at the rate of exchange prevailing at the termination of the services under the Main
Agreement.
(iii) The salvage Award under Article 13 shall not be diminished by reason of the exception to the principle of “No Cure - No Pay”
in the form of SCOPIC remuneration.

7. Discount
If the SCOPIC clause is invoked under sub-clause 2 hereof and the Article 13 Award or settlement (before currency adjustment and
before interest and costs) under the Main Agreement is greater than the assessed SCOPIC remuneration then, notwithstanding the
actual date on which the SCOPIC remuneration provisions were invoked, the said Article 13 Award or settlement shall be discounted
by 25% of the difference between the said Article 13 Award or settlement and the amount of SCOPIC remuneration that would have
been assessed had the SCOPIC remuneration provisions been invoked on the first day of the services.

8. Payment of SCOPIC Remuneration

(i) The date for payment of any SCOPIC remuneration which may be due hereunder will vary according to the circumstances.
(a) If there is no potential salvage award within the meaning of Article 13 as incorporated into the Main Agreement then,
subject to Appendix B(5)(c)(iv), the undisputed amount of SCOPIC remuneration due hereunder will be paid by the
owners of the vessel within 1 month of the presentation of the claim. Interest on sums due will accrue from the date of
termination of the services until the date of payment at the US prime rate plus 1%.
(b) If there is a claim for an Article 13 salvage award as well as a claim for SCOPIC remuneration, subject to Appendix
B(5)(c)(iv), 75% of the amount by which the assessed SCOPIC remuneration exceeds the total Article 13 security
demanded from ship and cargo will be paid by the owners of the vessel within 1 month and any undisputed balance
paid when the Article 13 salvage award has been assessed and falls due. Interest will accrue from the date of
termination of the services until the date of payment at the US prime rate plus 1%.
(ii) The Contractor hereby agrees to give an indemnity in a form acceptable to the owners of the vessel in respect of any
overpayment in the event that the SCOPIC remuneration due ultimately proves to be less than the sum paid on account.

9. Termination
(i) The owners of the vessel may at any time terminate the obligation to pay SCOPIC remuneration after the SCOPIC clause has
been invoked under sub-clause 2 hereof provided that the Contractor shall be entitled to at least 5 clear days’ notice of such
termination. In the event of such termination the assessment of SCOPIC remuneration shall take into account all monies due
under the tariff rates set out in Appendix A hereof including time for demobilisation to the extent that such time did reasonably
exceed the 5 days’ notice of termination.
(ii) The termination provisions contained in Clause 4(ii) and sub-clause 9(i) above shall only apply if the Contractor is not
prevented from demobilising his equipment by Government, Local or Port Authorities or any other officially recognised body
having jurisdiction over the area where the services are being rendered.

10. Duties of Contractor

The duties and liabilities of the Contractor shall remain the same as under the Main Agreement, namely to use his best endeavours to
salve the vessel and property thereon and in so doing to prevent or minimise damage to the environment.

11. Article 18 – 1989 Salvage Convention

The Contractor may be deprived of the whole or part of the payment due under the SCOPIC clause to the extent that the salvage
operations thereunder have become necessary or more difficult or more prolonged or the salved fund has been reduced or
extinguished because of fault or neglect on its part or if the Contractor has been guilty of fraud or other dishonest conduct.

12. Special Casualty Representative (“SCR”)

Once this SCOPIC clause has been invoked in accordance with sub-clause 2 hereof the owners of the vessel may at their sole option
appoint an SCR to attend the salvage operation in accordance with the terms and conditions set out in Appendix B. Any SCR so
appointed shall not be called upon by any of the parties hereto to give evidence relating to non-salvage issues.

13. Special Representatives

At any time after the SCOPIC clause has been invoked the Hull and Machinery underwriter (or, if more than one, the lead underwriter)
and one owner or underwriter of all or part of any cargo on board the vessel may each appoint one special representative (hereinafter
called respectively the “Special Hull Representative” and the “Special Cargo Representative” and collectively called the “Special
Representatives”) at the sole expense of the appointor to attend the casualty to observe and report upon the salvage operation on the
terms and conditions set out in Appendix C hereof. Such Special Representatives shall be technical men and not practising lawyers.

14. Pollution Prevention

The assessment of SCOPIC remuneration shall include the prevention of pollution as well as the removal of pollution in the immediate
vicinity of the vessel insofar as this is necessary for the proper execution of the salvage but not otherwise.

15. General Average

SCOPIC remuneration shall not be a General Average expense to the extent that it exceeds the Article 13 Award; any liability to pay
such SCOPIC remuneration shall be that of the Shipowner alone and no claim whether direct, indirect, by way of indemnity or
recourse or otherwise relating to SCOPIC remuneration in excess of the Article 13 Award shall be made in General Average or under
the vessel’s Hull and Machinery Policy by the owners of the vessel.

16. Any dispute arising out of this SCOPIC clause or the operations thereunder shall be referred to Arbitration as provided for under the
Main Agreement.

Classification: Confidential
 SCOPIC 2020

APPENDIX A (SCOPIC)

1. PERSONNEL

(a) The daily tariff rate, or pro rata for part thereof, for personnel reasonably engaged on the contract, including any necessary time
in proceeding to and returning from the casualty, shall be as follows:

Office administration, including communications US$1,498

Salvage Master US$2,232
Naval Architect or Salvage Officer/Engineer US$1,862
Assistant Salvage Officer/Engineer US$1,492
Diving Supervisor US$1,492
HSE qualified diver or his equivalent but excluding saturation or mixed gas drivers US$1,339
(whose rate should be agreed with the SCR or determined by the Arbitrator)
Salvage Foreman US$1,116
Riggers, Fitters, Equipment Operators US$ 893
Specialist Advisors – Fire Fighters, Chemicals, Pollution Control US$1,498

(b) The crews of tugs, and other craft, normally aboard that tug or craft for the purpose of its customary work are included in the tariff
rate for that tug or craft but when because of the nature and/or location of the services to be rendered, it is a legal requirement
for an additional crew member or members to be aboard the tug or craft, the cost of such additional crew will be paid.

(c) The rates for any personnel not set out above shall be agreed with the SCR or, failing agreement, be determined by the
Arbitrator.

(d) For the avoidance of doubt, personnel are “reasonably engaged on the contract” within the meaning of Appendix A sub-clause
1(a) hereof if, in addition to working, they are eating, sleeping or otherwise resting on site or travelling to or from the site;
personnel who fall ill or are injured while reasonably engaged on the contract shall be charged for at the appropriate daily tariff
rate until they are demobilised but only if it was reasonable to mobilise them in the first place.

(e) SCOPIC remuneration shall cease to accrue in respect of personnel who die on site from the date of death.

2. TUGS AND OTHER CRAFT

(a) (i) Tugs, which shall include salvage tugs, harbour tugs, anchor handling tugs, coastal/ocean towing tugs, off-shore
support craft, and any other work boat in excess of 500 b.h.p., shall be charged at the following rates, exclusive of
fuel or lubricating oil, for each day, or pro rata for part thereof, that they are reasonably engaged in the services,
including proceeding towards the casualty from the tugs location when SCOPIC is invoked or when the tugs are
mobilised (whichever is the later) and from the tugs position when their involvement in the services terminates to a
reasonable location having due regard to their employment immediately prior to their involvement in the services and
standing by on the basis of their certificated b.h.p.:

For each b.h.p. up to 5,000 b.h.p. US$3.29

For each b.h.p. between 5,001 & 12,000 b.h.p. US$2.35
For each b.h.p. between 12,001 & 20,000 b.h.p. US$1.65
For each b.h.p. over 20,000 b.h.p. US$0.82

(ii) Any tug which has aboard certified fire fighting equipment shall, in addition to the above rates, be paid:

US$810 per day, or pro rata for part thereof, if equipped with Fi Fi 0.5
US$1,616 per day, or pro rata for part thereof, if equipped with Fi Fi 1.0

for that period in which the tug is engaged in fire fighting necessitating the use of the certified fire fighting equipment.

(iii) Any tug which is certified as “Ice Class” shall, in addition to the above, be paid US$1,616 per day, or pro rata for part
thereof, when forcing or breaking ice during the course of services including proceeding to and returning from the
casualty.

(iv) For the purposes of paragraph 2(a)(i) hereof tugs shall be remunerated for any reasonable delay or deviation for the
purposes of taking on board essential salvage equipment, provisions or personnel which the Contractor reasonably
anticipates he shall require in rendering the services which would not normally be found on vessels of the tugs size
and type.

(b) Any launch or work boat of less than 500 b.h.p. shall, exclusive of fuel and lubricating oil, be charged at a rate of US$4.88 for
each b.h.p.

(c) Any other craft, not falling within the above definitions, shall be charged out at a market rate for that craft, exclusive of fuel and
lubricating oil, such rate to be agreed with the SCR or, failing agreement, determined by the Arbitrator.

(d) All fuel and lubricating oil consumed during the services shall be paid at cost of replacement and shall be treated as an out of
pocket expense.

(e) For the avoidance of doubt, the above rates shall not include any portable salvage equipment normally aboard the tug or craft
and such equipment shall be treated in the same manner as portable salvage equipment and the Contractors shall be
reimbursed in respect thereof in accordance with Appendix A paragraphs 3 and 4(i) and (ii) hereof.

(f) SCOPIC remuneration shall cease to accrue in respect of tugs and other craft which become a commercial total loss from the
date they stop being engaged in the services plus a reasonable period for demobilisation (if appropriate) PROVIDED that such
SCOPIC remuneration in respect of demobilisation shall only be payable if the commercial total loss arises whilst engaged in the
services and through no fault of the Contractors, their servants, agents or sub-contractors.
1.8.1999
1.9.2000
1.1.2005
1.1.2006
1.7.2007
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1.1.2014
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Classification: Confidential
3. PORTABLE SALVAGE EQUIPMENT

(a) The daily tariff, or pro rata for part thereof, for all portable salvage equipment reasonably engaged during the services, including
any time necessary for mobilisation and demobilisation, shall be as follows:

Equipment Rate – US$ Equipment Rate – US$

Generators Protective Clothing/Safety Equipment

Up to 50 kW 88 Breathing Gear 75
51 to 120 kW 186 Hazardous Environment Suit 148
121 to 300 kW 297 Cooler; Evaporative; 36”, 9800 Cfm, 110v 118
Over 301 kW 520 Heater 55,000/110,000 Btu 294
Gas Monitor; Four Gas Types 206
Compressors Nitrogen Generator – 1500 SCFH @ 96%, 220v 2,879
PPE; Ascending/Descending package: 4 Man 411
185 Cfm 223 PPE; Bunker Gear Pkg: 1 Man 147
600 Cfm 373 PPE; Chemical Suit Pkg: Class A: 1 Man 170
1200 Cfm 595 PPE; Chemical Suit Pkg: Class B: 1 Man 30
Air Manifold 15 PPE; Cold Weather 1st Response Kit 41
Blower; 1,500m³/min. 1,264 PPE; Confined Space Entry 2 Man package, with 617
Communications
Distribution Boards PPE; Survival Suit, Immersion 12
Ventilation Pkg: Vane Axial: 1,500 Cfm 118
Up to 50 kW 88 Ventilation Pkg: Venturi Type: 4,000 Cfm 135
51 to 120 kW 186
121 to 300 kW 297 Pollution Control Equipment
Over 301 kW 520
Hot Tap Machine, including support equipment 1,486
Hoses: Per 6 Metres or 20 Feet Oil Boom, 24”, per 10 metres 46
Oil Boom, 36”, per 10 metres 148
Air Hose Oil Boom, 48”, per 10 metres 289
¾” 6 Ballast/Fuel storage Bins upto 10,000 litres 88
2” 12 Ballast/Fuel storage Bins 10,000 to 25,000 litres 118
Layflat Ballast/Fuel storage Bins 25,000 to 50,000 litres 148
2” 16
4” 22 Pumping Equipment
6” 30
Rigid Air
2” 22 1” 76
3” 25 2” 112
4” 30 3” 130
6” 37 Diesel
8” 45 2” 75
4” 134
Miscellaneous Equipment 6” 178
Electrical Submersible
Air Bags, less than 5 tons lift 58 2” 75
Air Bags 5 to 15 tons lift 297 4” 223
Air Lift 4” 148 6” 891
Air Lift 6” 297 Hydraulic
Air Lift 8” 445 3” 587
Air Tugger, up to 3 tons 112 6” 891
Chain Saw 30 8” 1,486
Container handling package 235
Communications package 235 Lighting Systems
Damage Stability Computer and Software 370
Echo Sounder, portable 37 Halogen system 118
Extension Ladder 30 Lighting String, per 50 feet 37
Hydraulic Jack, up to 50 tons 58 Light Tower 75
Hydraulic Jack, up to 120 tons 112 Underwater Lighting System, 1,000 watts 112
Hydraulic Powerpack up to 40kW 70
Hydraulic Powerpack 75kW 112 Winches
Pressure washer, water 372
Pressure washer, steam 669 Up to 5 tons, including 50 metres of wire 176
Rigging Package, heavy 595 Up to 10 tons, including 50 metres of wire 206
Rigging Package, light 297 Up to 20 tons, including 50 metres of wire 294
Steel band Saw 30
Tirfors, up to 5 tonnes 16 Fenders
Thermal Imaging Camera 372
Tool Package, per set 258 Yokohama
Ventilation Package 30 1.00m. x 2.00m. 112
VHF Radio 16 2.50m. x 5.50m. 223
Z Boat, including outboard up to 14 feet 297 3.50m. x 6.50m. 373
Z Boat, including outboard over 14 feet 520 Low Pressure Inflatable
3 metres 104
Diving Equipment 6 metres 104
9 metres 223
High Pressure Compressor 3500 psi/17 Cfm 235 12 metres 372
High Pressure Compressor 5500 psi/5 Cfm 135 16 metres 372
Decompression Chamber with Medical Lock 381
Decompression Chamber: Two Man, including compressor 742 Shackles
Decompression Chamber: Four Man, including compressor 1,040
Hot Water Diving Assembly 372 Up to 50 tonnes 15
Underwater Magnets 30 51 to 120 tonnes 30
Underwater Drill 30 121 to 200 tonnes 46
Shallow Water Dive Spread 335 Over 200 tonnes 75

Classification: Confidential
 Equipment Rate – US$ Equipment Rate – US$

Welding & Cutting Equipment Storage Equipment

Bolt Gun 446 12’ Container 37

Oxy-acetylene Surface Cutting Gear 37 20’ Container 58
Underwater Cutting Gear 75
Underwater Welding Kit 75
250 Amp Welder 223
400 Amp Welder 297

(b) Any portable salvage equipment engaged but not set out above shall be charged at a rate to be agreed with the SCR or, failing
agreement, determined by the Arbitrator.

(c) The total charge (before bonus) for each item of portable salvage equipment, owned by the contractor, shall not exceed the
manufacturer’s recommended retail price on the last day of the services multiplied by 2.0.

(d) Compensation for any portable salvage equipment lost or destroyed during the services shall be paid at the replacement cost.
(Provided that the total of such compensation and the daily tariff rate (before bonus) in respect of that item does not exceed the
actual cost of replacing the item at the Contractor’s base with the most similar equivalent new item multiplied by 2.5.)

(e) All consumables such as welding rods, boiler suits, small ropes etc. shall be charged at cost and shall be treated as an out of
pocket expense.

(f) The Contractor shall be entitled to remuneration at a stand-by rate of 50% of the full tariff rate plus bonus for any portable
salvage equipment reasonably mobilised but not used during the salvage operation provided

(i) It has been mobilised with the prior agreement of the owner of the vessel or its mobilisation was reasonable in the
circumstances of the casualty, or

(ii) It comprises portable salvage equipment normally aboard the tug or craft that would have been reasonably mobilised
had it not already been aboard the tug or craft.

(g) SCOPIC remuneration shall cease to accrue in respect of portable salvage equipment which becomes a commercial total loss
from the date it ceases to be useable plus a reasonable period for demobilisation (if appropriate) PROVIDED that such SCOPIC
remuneration in respect of demobilisation shall only be payable if the commercial total loss arises while it is engaged in the
services and through no fault of the Contractors, their servants, agents or sub-contractors.

4. DOWNTIME

If a tug or piece of portable salvage equipment breaks down or is damaged without fault on the part of the Contractor, his servants, agents
or sub-contractors and as a direct result of performing the services it should be paid for during the repair while on site at the stand-by rate of
50% of the tariff rate plus uplift pursuant to sub-clause 5(iv) of the SCOPIC clause.
If a tug or piece of portable salvage equipment breaks down or otherwise becomes inoperable without fault on the part of the Contractor, his
servants, agents or sub-contractors and as a direct result of performing the services and cannot be repaired on site then:

(i) If it is not used thereafter but remains on site then no SCOPIC remuneration is payable in respect of that tug or piece of portable
salvage equipment from the time of the breakdown.

(ii) If it is removed from site, repaired and reasonably returned to the site for use SCOPIC remuneration at the standby rate of 50%
of the tariff rate plus bonus pursuant to sub-clause 5(iv) of the SCOPIC clause shall be payable from the breakdown to the date it
is returned to the site.

(iii) If it is removed from the site and not returned SCOPIC remuneration ceases from the breakdown but is, in addition, payable for
the period that it takes to return it directly to base at the stand-by rate of 50% of the tariff rate plus bonus pursuant to sub-clause
5(iv) of the SCOPIC clause.

Classification: Confidential
 SCOPIC 2020
APPENDIX B (SCOPIC)

1. (a) The SCR shall be selected from a panel (the "SCR Panel") appointed by a Committee (the "SCOPIC
Committee”) comprising of representatives appointed by the following:

3 representatives from the International Group of P and I Clubs

3 representatives from the ISU
3 representatives from the IUMI
3 representatives from the International Chamber of Shipping

(b) The SCOPIC Committee shall be responsible for a triennial review of the tariff rates as set out in Appendix A.

(c) The SCOPIC Committee shall meet once a year in London to review, confirm, reconfirm or remove SCR
Panel members.

(d) Any individual may be proposed for membership of the SCR Panel by any member of the SCOPIC
Committee and shall be accepted for inclusion on the SCR Panel unless at least four votes are cast against
his inclusion.

(e) The SCOPIC Committee may also set and approve the rates of remuneration for the SCRs.

(f) Members of the SCOPIC Committee shall serve without compensation.

(g) The SCOPIC Committee’s meetings and business shall be organised and administered by the Salvage
Arbitration Branch of the Corporation of Lloyd’s (hereinafter called “Lloyds”) who will keep the current list of
SCR Panel members and make it available to any person with a bona fide interest.

(h) The SCOPIC Committee shall be entitled to decide its own administrative rules as to procedural matters
(such as quorums, the identity and power of the Chairman etc.).

2. The primary duty of the SCR shall be the same as the Contractor, namely to use his best endeavours to assist in the
salvage of the vessel and the property thereon and in so doing to prevent and minimise damage to the environment.

3. The Salvage Master shall at all times remain in overall charge of the operation, make all final decisions as to what he
thinks is best and remain responsible for the operation.

4. The SCR shall be entitled to be kept informed by or on behalf of the Salvage Master or (if none) the principal
contractors’ representative on site (hereinafter called "the Salvage Master"). The Salvage Master shall consult with
the SCR during the operation if circumstances allow and the SCR, once on site, shall be entitled to offer the Salvage
Master advice.

5. (a) Once the SCOPIC clause is invoked the Salvage Master shall send daily reports (hereinafter called the
“Daily Salvage Reports") setting out:-

• the salvage plan (followed by any changes thereto as they arise)

• the condition of the casualty and the surrounding area (followed by any changes thereto as they arise)

• the progress of the operation

• the personnel, equipment, tugs and other craft used in the operation that day.

(b) Pending the arrival of the SCR on site the Daily Salvage Reports shall be sent to Lloyd's and the owners of
the vessel. Once the SCR has been appointed and is on site the Daily Salvage Reports shall be delivered to
him.

(c) The SCR shall upon receipt of each Daily Salvage Report:-

(i) Transmit a copy of the Daily Salvage Report by the quickest method reasonably available to Lloyd's,
the owners of the vessel, their liability insurers and (if any) to the Special Hull Representative and
Special Cargo Representative (appointed under clause 12 of the SCOPIC clause and Appendix C) if
they are on site; and if a Special Hull Representative is not on site the SCR shall likewise send copies
of the Daily Salvage Reports direct to the leading Hull Underwriter or his agent (if known to the SCR)
and if a Special Cargo Representative is not on site the SCR shall likewise send copies of the Daily
Salvage Reports to such cargo underwriters or their agent or agents as are known to the SCR
(hereinafter in this Appendix B such Hull and Cargo property underwriters shall be called "Known
Property Underwriters”).

(ii) If circumstances reasonably permit consult with the Salvage Master and endorse his Daily Salvage
Report stating whether or not he is satisfied and
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Classification: Confidential
 (iii) If not satisfied with the Daily Salvage Report, prepare a dissenting report setting out any objection or
contrary view and deliver it to the Salvage Master and transmit it to Lloyd's, the owners of the vessel,
their liability insurers and to any Special Representatives (appointed under clause 12 of the SCOPIC
clause and Appendix C) or, if one or both Special Representatives has not been appointed, to the
appropriate Known Property Underwriter.

(iv) lf the SCR gives a dissenting report to the Salvage Master in accordance with Appendix B(5)(c)(iii) to
the SCOPIC clause, any initial payment due for SCOPIC remuneration shall be at the tariff rate
applicable to what is in the SCR's view the appropriate equipment or procedure until any dispute is
resolved by agreement or arbitration.

(d) Upon receipt of the Daily Salvage Reports and any dissenting reports of the SCR, Lloyd's shall distribute
upon request the said reports to any parties to this contract and any of their property insurers of whom they
are notified (hereinafter called "the Interested Persons") and to the vessel’s liability insurers.

(e) As soon as reasonably possible after the Salvage services terminate the SCR shall issue a report
(hereinafter call the "SCR's Final Salvage Report”) setting out:

• the facts and circumstances of the casualty and the salvage operation insofar as they are known to
him.

• the tugs, personnel and equipment employed by the Contractor in performing the operation.

• A calculation of the SCOPIC remuneration to which the contractor may be entitled by virtue of this
SCOPIC clause.

The SCR's Final Salvage Report shall be sent to the owners of the vessel and their liability insurers and to
Lloyd's who shall forthwith distribute it to the Interested Persons.

6. (a) The SCR may be replaced by the owner of the vessel if either:

(i) the SCR makes a written request for a replacement to the owner of the vessel (however the SCR
should expect to remain on site throughout the services and should only expect to be substituted in
exceptional circumstances); or

(ii) the SCR is physically or mentally unable or unfit to perform his duties; or

(iii) all salved interests or their representatives agree to the SCR being replaced.

(b) Any person who is appointed to replace the SCR may only be chosen from the SCR Panel.

(c) The SCR shall remain on site throughout the services while he remains in that appointment and until the
arrival of any substitute so far as practicable and shall hand over his file and all other correspondence,
computer data and papers concerning the salvage services to any substitute SCR and fully brief him before
leaving the site.

(d) The SCR acting in that role when the services terminate shall be responsible for preparing the Final Salvage
Report and shall be entitled to full co-operation from any previous SCR’s or substitute SCR’s in performing
his functions hereunder.

7. The owners of the vessel shall be primarily responsible for paying the fees and expenses of the SCR. The Arbitrator
shall have jurisdiction to apportion the fees and expenses of the SCR and include them in his award under the Main
Agreement and, in doing so, shall have regard to the principles set out in any market agreement in force from time to
time.

8. Any SCR appointed pursuant to this Agreement shall not be called by any of the parties hereto to give evidence
relating to non-salvage issues.

Classification: Confidential
SCOPIC 2020
APPENDIX C (SCOPIC)

The Special Representatives

1. The Salvage Master, the owners of the vessel and the SCR shall co-operate with the
Special Representatives and shall permit them to have full access to the vessel to
observe the salvage operation and to inspect such of the ship's documents as are
relevant to the salvage operation.

2. The Special Representative shall have the right to be informed of all material facts
concerning the salvage operation as the circumstances reasonably allow.

3. If an SCR has been appointed the SCR shall keep the Special Representatives (if any
and if circumstances permit) fully informed and shall consult with the said Special
Representatives. The Special Representatives shall also be entitled to receive a copy of
the Daily Salvage Reports direct from the Salvage Master or, if appointed, from the SCR.

4. The appointment of any Special Representatives shall not affect any right that the
respondent ship and cargo interests may have (whether or not they have appointed a
Special Representative) to send other experts or surveyors to the vessel to survey ship or
cargo and inspect the ship's documentation or for any other lawful purpose.

5. If an SCR or Special Representative is appointed the Contractor shall be entitled to limit

access to any surveyor or representative (other than the said SCR and Special
Representative or Representatives) if he reasonably feels their presence will substantially
impede or endanger the salvage operation.

01.08.1999
01.09.2000
01.01.2014
Classification: Confidential
 CODE OF PRACTICE BETWEEN INTERNATIONAL SALVAGE UNION
AND INTERNATIONAL GROUP OF P&I CLUBS
In the spirit of co-operation, the following Code of Practice is agreed between the International Salvage Union and the
International Group of P&I Clubs in relation to all future salvage services to which Article 14 of the 1989 Salvage
Convention is applicable or under Lloyd’s Form where the Special Compensation P&I Club’s (SCOPIC) Clause has been
invoked by the Contractor.

1. The salvor will advise the relevant P&I Club at the commencement of the salvage services, or as soon thereafter
as is practicable, if they consider that there is a possibility of a Special Compensation claim arising.

2. In the event of the SCR not being appointed under the SCOPIC clause, the P&I Club may appoint an observer to
attend the salvage and the salvors agree to keep him and/or the P&I Club fully informed of the salvage activities
and their plans. However, any decision on the conduct of the salvage services remains with the salvor.

3. The P&I Club, when reasonably requested by the salvor, will immediately advise the salvor whether the particular
Member is covered, subject to the Rules of the P&I Club, for any liability which he may have for Special
Compensation or SCOPIC Remuneration.

4. The P&I Clubs confirm that, whilst they expect to provide security in the form of a Club Letter either in respect of
claims for special compensation (under Article 14 of the 1989 Salvage Convention) or SCOPIC remuneration
(under the SCOPIC Clause), as appropriate, it is not automatic. Specific reasons for refusal to give security to the
Contractor will be non-payment of calls, breach of warranty rules relating to classification and flag state
requirements or any other breach of the rules allowing the Club to deny cover. The Clubs will not refuse to give
security solely because the Contractors cannot obtain security in any other way.

5. In the event that security is required by a port authority or other competent authority for potential P&I liabilities in
order to permit the ship to enter a port of refuge or other place of safety, the P&I Clubs confirm that they would be
willing to consider the provision of such security subject to the aforementioned provisos referred to in para. 4 above
and subject to the reasonableness of the demand.

6. The Contractors will accept security for either special compensation or SCOPIC remuneration by way of a P&I
Club letter of undertaking in the attached form - “Salvage Guarantee form – ISU 5” - and they will not insist on the
provision of security at Lloyd’s.

7. The P&I Club concerned will reply to any request by the salvors regarding security as quickly as reasonably
possible. In the event that salvage services are being performed under Lloyd’s Form incorporating the SCOPIC
clause, the P&I Club concerned will advise the Contractor within two (2) working days of his invoking the SCOPIC
Clause whether or not they will provide security to the Contractor by way of a Club Letter referred to in para. 6 above.

8. In the event that salvage services are being performed under Lloyd’s Form incorporating the SCOPIC clause, the
P&I Clubs will advise the owners of the vessel not to exercise the right to terminate the contract under SCOPIC
Clause 9(ii) without reasonable cause.

9. It is recognised that any liability to pay SCOPIC remuneration is a potential liability of the shipowner and covered
by his liability insurers subject to the Club Rules and terms of entry. Accordingly, in the event of such payment of
SCOPIC remuneration in excess of the Article 13 award, neither the shipowner not his liability insurers will seek
to make a claim in General Average against the other interests to the common maritime adventure whether in their
own name or otherwise and whether directly or by way of recourse or indemnity or in any other manner whatsoever.

10. The P&I Clubs, if consulted, and the ISU will recommend to their respective Members the incorporation of the
SCOPIC clause in any LOF.

11. The P&I Clubs and the ISU will not agree to any variation of the terms, including the tariff rates, of the SCOPIC
Clause except in accordance with the provisions of the SCOPIC Clause itself, particularly Appendix B.

12. This is a Code of Practice which the ISU and the International Group of P&I Clubs will recommend to their
1.8.1999 Members and it is not intended that it should have any legal effect.
1.9.2000
1.1.2005
22.6.2005
 CODE OF PRACTICE BETWEEN INTERNATIONAL GROUP OF P&I CLUBS
AND LONDON PROPERTY UNDERWRITERS REGARDING THE PAYMENT OF THE FEES
AND EXPENSES OF THE SCR UNDER SCOPIC.

The following understanding has been reached between the International Group of P&I Clubs (hereinafter
called “Liability Underwriters”) and members of the Lloyd’s Underwriters’ Association and the International
Underwriters Association of London (hereinafter called “Property Underwriters”) in relation to all future salvage
services under Lloyd’s Form where the Special Compensation P&I Clubs (SCOPIC) Clause has been invoked
by the Contractor.

1. Whereas the primary liability for paying the fees and disbursements of the Shipowner’s Casualty
Representative (“SCR”) rests upon the owner of the vessel, it is agreed that the owner of the vessel
shall be reimbursed such fees and disbursements, subject always to the Club Rules and the terms and
conditions of Club cover and the terms of any insurance policy or policies covering the salved property,
in the following proportions:-

· 50% by Liability Underwriters;

· 50% by Property Underwriters (subject to Clause 2 hereof).

2. (a) Property Underwriters shall pay for 50% of the SCR’s fees and disbursements in proportion to
the salved value of the subject matter insured.

(b) Should 50% of the SCR’s fees and disbursements exceed the salved value of the ship and cargo
less the Article 13 award, Liability Underwriters agree to reimburse such excess proportion of
the said SCR’s fees and disbursements to the owners of the vessel.

3. This is a Code of Practice which Liability Underwriters and Property Underwriters shall recommend to
their Members and it is not intended that it should have any legal effect.

1.8.1999
1.9.2000
1.1.2005
 SALVAGE GUARANTEE FORM ISU 5

(SCOPIC REMUNERATION)

To: [See Note 1]

Dear Sirs,
“ ........................................... ” (the “Vessel”) [See Note 2] Salvage
Lloyd’s Form of Salvage Agreement incorporating the
SCOPIC Clause dated ........................................... . (the “LOF”)

1. In consideration of, and upon condition that, you refrain from arresting, re-arresting or
otherwise detaining the Vessel or any other vessel, property or asset in the same
beneficial or associated ownership or management in connection with your claim
for SCOPIC remuneration for services rendered to the Vessel under the terms of the
LOF, we hereby undertake to pay to you on demand any liability on the part of the
Registered/Bareboat Owners of the Vessel, …….[See Note 3] (the “Owners of the
Vessel”) for SCOPIC remuneration, to the extent that it exceeds any actual or potential
Article 13 award, together with interest and costs in relation thereto, which may be
due to you whether by final un-appealable award or judgment or by written agreement
between you, the undersigned and the Owners of the Vessel.

2. Any monies paid by the undersigned hereunder shall be deemed to have been paid by
the undersigned as surety for the party or parties hereby guaranteed, provided that,
notwithstanding anything hereinbefore contained, the liability of the undersigned as
between the undersigned on the one hand and you on the other hand shall be that of
principal debtor, and the undersigned shall not be released by time being given or
other indulgence shown to the party or parties hereby guaranteed or by any other
act, matter or thing whereby the undersigned, if liable as a surety only, would or
might have been released.

3. This security shall be governed by and construed in accordance with English law and
we undertake, when called upon to do so, to give irrevocable instructions to English
 solicitors to accept service of proceedings issued by you against us in relation to this
undertaking.

4. Provided always that our liability under this security shall not exceed the sum of
US$….[See Note 4] (US Dollars ……) including interest and costs.

5. Acceptance of this security is without prejudice to your right under 3(iv) of the
SCOPIC Clause to seek an order from the Arbitrator that the Owners of the Vessel
provide increased security and we are authorised by the Owners of the Vessel, to
confirm to you that any right you may have to arrest, re-arrest or otherwise detain the
Vessel or any other vessel, property or asset in the same beneficial or associated
ownership or management will again become enforceable, notwithstanding the
provisions of clause 1 of this security, in the event that the Owners of the Vessel do
not promptly comply with an order from the Arbitrator for the provision of additional
security.

6. The above undertaking is issued on the basis that the underlying salvage contract is
currently and will remain on the current edition of Lloyd’s Open Form with SCOPIC
incorporated and invoked and without any agreement whatsoever that varies its
standard provisions or terms. In the event that that is not the case, all obligations
contained within this undertaking are void unless we confirm otherwise to you in
writing.

Signed this ............ .day of ..................20

By ..........................................................

Authorised signatory of.........................

SEE OVER FOR NOTES ON COMPLETION OF THIS GUARANTEE FORM

 GUIDANCE NOTES ON THIS
COMPLETION OF SALVAGE GUARANTEE ISU 5

N.B. The wording of this security (updated 1 August 2018) has been agreed between the
International Group of P&I Clubs and the International Salvage Union in accordance with
clause 6 of the Code of Practice between them dated 1.8.99

1. The security should be addressed to the contractors named in the LOF.

2. Insert the name of the vessel or property which is the subject of the LOF.

3. Insert the full name of the Registered Owners or Bareboat Owners of the vessel
subject of the LOF and delete either the word Registered or Bareboat, as appropriate.
[NB The Guarantor Club will wish to ensure the party it is securing is its member
while the Contractor will wish to ensure it is the party to whom the LOF service is
being provided].

4. Article 3(i) of the SCOPIC Clause requires the owner of the vessel to provide Initial
Security in the sum of USD3m, inclusive of interest and costs, within two working
days of invocation. Articles 3(ii), (iii) & (iv) together provide the mechanism by
which the Initial Security can be revised.

5. In the event the terms of the LOF have been amended by a side-agreement, side –
letter or otherwise in a manner that has the potential to change the amounts payable
by one or more interested party, the amendment(s) must be disclosed to the P&I Club
before security is issued, or if security has already been issued, then before the side-
agreement is entered into so they can advise whether they are able to provide SCOPIC
security or confirm its continued validity. Failure to make disclosure will result in the
security becoming void in accordance with Clause 6. This provision is particularly
directed to ensure that P&I are entitled to void and rescind a guarantee where they
discover that a side-agreement has been agreed which has the potential to change the
amounts payable by one or more interested party.