Towage contracts (TOWCON, TOWHIRE)

A drilling rig to move from the North Sea to West Africa, a floating dock to deliver from Asia, an engineless hull to bring to the breakers. Ocean tows like these are almost always signed on a BIMCO form. TOWCON sets a lump sum for the operation, partly payable on departure and earned whatever happens afterward; TOWHIRE charges by the day, and the hirer then carries the risk of weather and delay. In ports, tug assistance with maneuvers is usually done on the UK Standard Conditions for Towage and Other Services and their national equivalents. These put most of the risk on the towed ship, even when the tug is at fault. The BIMCO forms rely on the knock-for-knock clause: each party bears damage to its own vessel, personnel and property, whatever the other's fault. Each answers for its own third parties under rules set in the contract. It is a cross waiver of recourse, which lets each side insure what it owns without arguing over who was wrong. The hull insurer of the tow must therefore know it has lost its recourse against the tug. The tug's P&I club covers contractual liabilities only if the terms were submitted to it or appear among those it accepts in advance. The question that keeps coming back in claims is the boundary with salvage. As long as the tug performs the promised service, it earns the contract price. If an unforeseen danger arises and it renders services nobody could reasonably have expected of it, the job can turn into salvage, paid on the salved value. That puts the bill in another order of magnitude. Not to be confused with a salvage contract on Lloyd's Open Form, signed under the pressure of danger and on the no cure, no pay principle.