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DNY (Marakei) Shipping Services v Keanginiman Shipping Line [2025] KIHC 78; Civil Case 16 of 2018 (23 December 2025)

IN THE HIGH COURT OF KIRIBATI
CIVIL JURISDICTION

HIGH COURT CIVIL CASE 16 OF 2018

BETWEEN: DNY (MARAKEI) SHIPPING SERVICES
Plaintiff

AND: KEANGINIMAN SHIPPING LINE

Defendant

Date of Hearing: 1 September, 11 September 2025
Date of Judgment: 23 December 2025

Appearances: Ms Elsie Karakaua for the Plaintiff

Mr. Banuera Berina for the Defendant

JUDGMENT

Introduction:

1. By Writ of Summons filed on April 05, 2016, the plaintiff seeks damages against the defendant for savage service in the amount of $48,414, together with general damages of $5000, interest, and costs of this action.
   
2. Both parties operate shipping businesses. In November 2015, the defendant’s vessel, MV Tinanteraoi, experienced engine failure near Aranuka Island. They sent a distress call to the Marine Guard, who instructed the plaintiff’s vessel, MV Naman Nei Raoi, being the closest vessel, to rescue the defendant’s vessel. The plaintiff successfully towed the defendant’s vessel to Tarawa for 31.5 hours. An agreement was made that the defendant would pay for the plaintiff’s services. The plaintiff billed the defendant after completing the service, but the defendant refused to accept the amount charged, claiming it was excessive.
   

Issues

3. The plaintiff raises the following issues for determination;
   1. Whether the plaintiff’s charges are excessive and unreasonable.
   2. Whether the plaintiff is entitled to damages or any losses resulting from the salvaging services afforded to the Defendant.
      

Submissions and Analysis

4. Parties relied on section 18 of the Wreck and Savages Ordinance (Cap 103), which states the following;
   

“Payment to salvors for services rendered

18. When-

(a) any vessel is stranded or wrecked or otherwise in distress services on or near the shore of any sea or tidal water within the rendered limits of the Gilberts Islands and services are rendered by any person-

(i) in assisting such vessel; or

(ii) in saving the lives of the persons belonging to such vessel ;or

(iii) in saving the cargo or apparel of such vessel or any portion thereof; and

(b) when any wreck is saved by any person other than the receiver within the islands,

There shall be payable by the owners of such vessel, cargo, apparel or wreck to the person by whom such services or any of them are rendered or by whom such wreck is saved a reasonable amount of savage with all expenses properly incurred by him in the performance of such services or the saving of such wreck, the amount of such savage and expenses (which expenses are hereinafter included under the term savage) to be determined in case of dispute in manner hereinafter mentioned.

5. The plaintiff’s witness, Atannara Anetoka, the vessel’s bosun, testified that before agreeing to assist the defendant’s vessel, their vessel had unfinished business because they needed to go to Kuria and Aranuka to pick up passengers and cargo. Therefore, the plaintiff initially refused to help, but due to the desperate situation of the defendant’s vessel, they eventually agreed to assist.
   
6. The defendant, through their witness, Tokintekai Eneri, acknowledged that the plaintiff’s assistance had saved their vessel; otherwise, it would have been lost at sea. The plaintiff offered to tow the vessel to the nearest island, Aranuka, as it would be much less costly and less risky. Still, the defendant refused and insisted on going to their base in South Tarawa, with the assurance that they would be responsible for all costs involved. The defendant did not accept that there was a discussion about towing to Aranuka.
   
7. Witness Atannara Anetoka further stated that when the defendant's vessel was involved in the accident and being towed, the weather was stormy, with rough seas and strong winds, making the operation highly risky. The plaintiff’s second witness, Mr. David Yeeting, deposed in his affidavit that the defendant’s vessel was larger than theirs, measuring 23.37 meters in length, 5.5 meters in width, and with a gross tonnage of 110 tons. Their vessel was only 18.50 meters long, 5.58 meters wide, and had a gross tonnage of 79 tons.
   
8. The plaintiff’s witness, Anetoka, also asserted that the vessel was towed to South Tarawa with some passengers and cargo aboard, and that the defendant’s vessel was heavy, with its waterline barely above the water surface. As a result, the towing speed was reduced from its normal 8-10 knots to 4 knots or less, and the tow took 31.5 hours. The charges they submitted, which the defendant rejected, were similar to those used for comparable salvage services on the MV Maaman Taiwan of Abemama Shipping, which were accepted and paid. No supporting invoice was provided, so this comparison holds little weight.
   
9. The claim that the sea was rough during the towing was challenged by the defendant through their witness, Tokintekai Eneri, who stated that the sea was not rough, as he heard from their Captain. I agree with the plaintiff that this evidence is hearsay and should be disregarded. The witness was not on board the vessel. He also stated that the vessel did not carry any cargo or passengers at the time of the accident. This seems to contradict the plaintiff’s witness's evidence mentioned above; however, for the same reason, the plaintiff’s evidence is more convincing because he was a bosun on board the vessel during the towing.
   
10. The defendant submitted that the charges are unreasonable. At that time, the plaintiff indicated they only needed fuel and water for towing. These were provided by the defendant, enabling the towing to commence. According to the defendant, there was no discussion of the towing cost, but the defendant anticipated being charged a fair amount.
    
11. The defendant contended that the plaintiff failed to specify how to determine the reasonableness of their charge or how to calculate it. For fuel consumption, the plaintiff must demonstrate the amount of fuel used. Regarding the loss of business time, the defendant pointed out that the plaintiff’s other witness, Anetoka, did not mention the unfinished business trips to Kuria and Aranuka. The opportunity cost should also include a component for the business time lost. For the risk involved, the invoice must show that it was charged for and explain how the charge was calculated. Regarding wear and tear, there was no evidence to support the claim that the vessel suffered damage resulting from the savage service.
    
12. The defendant offers to pay $5500; according to them, this amount would cover the plaintiff’s expenses and profit, including opportunity cost. The defendant proposes using the plaintiff’s normal daily rate of $1800, which equals $75 per hour. This rate would have entitled the plaintiff to $2,362.50 ($75 x 31.5 hours). The $1,800 hourly rate is based on the plaintiff’s charter service rate used for the Parliament. The defendant considered this amount reasonable compared to the plaintiff’s proposed charge of $48,414, which averages $1534 per hour. The plaintiff distinguishes this charter rate from their salvage costs.
    
13. The plaintiff referred this court to Lu’s Marine invoice for rescuing LC Linnix in 2018, totaling $91,730, which reflects the standard charges for salvage services. The court also received from the defendant another invoice, also issued by Lu’s Marine, for salvage services provided by their vessel for the same distress vessel in this case at hand, amounting to $7,000. Lu’s Marine vessel is larger than the defendant's vessel, so the defendant assumes it would consume more fuel during towing. In response, the plaintiff argued that this comparison is not valid because Lu’s Marine vessel is significantly larger and more powerful than the plaintiff’s vessel, enabling it to provide towing services more efficiently. The plaintiff further clarified that, although the defendant’s vessel is bigger than theirs for towing, it was the only option available at that time. The plaintiff was initially hesitant to offer salvage services, but the defendant assured them that they would cover all costs and pay the charges.
    
14. The plaintiff also claims for general damages of $5000 following the cases of Tebetanga v Betio Town Council [2014] KIHC 43 and Koru v Tabiteuea Meang Island Council [2020] KIHC 30. The High Court in those cases accepted that the plaintiff provided some evidence to prove general damages.
    
15. The question is what constitutes a reasonable charge for the services provided under the circumstances of this case. I agree with the plaintiff that the relevant legislation, the Wreck and Salvage Ordinance, does not offer a definition. To determine what is unreasonable, the plaintiff also cited the ‘Wednesbury unreasonableness’ definition used in the case of Lambourne v Mamau [2025] KICA 5 at paragraph 20 as follows.
    

“In local authority rating cases, the Court of Appeal has adopted the full range of expressions for Wednesbury unreasonableness; “outside the limits of reason “, so outrageous in defiance of logic or accepted moral standards”, a pattern of perversity”, and “so absurd that he must have taken leave of his senses.”

16. Counsel for the plaintiff argued that the factors used to justify their charges are reasonable, given the comparable local rates charged by Kiribati shipping companies such as Lu’s Marine, and emphasized that the plaintiff is entitled to profit from these charges as it operates as a shipping business. In support, the High Court in our local case of Kiribati Ports Authority v Dojin Co Ltd [2021] KICA 5 at paragraphs 13 and 14 of the High Court decision, the court states;
    

“13. I accept that [the Authority] is entitled to recover its costs of providing port services. Such costs must be reasonable. I also accept that [the Authority] is entitled to make profits on its investment in port service business. However, such profit must not be earned at the unjust expense of the customers, such as [Dojin].

14. Having stated what I feel are the general principles in determing what is reasonable when setting rates to be imposed on customers for services provided by utilities providers such as [the Authority], I find it difficult to say that the [Authority’s] action of imposing “per day” rate on port dues is unlawful, being excessive and unreasonable for two reasons. First, by law, [the Authority] was entitled to impose a “per day” rate for port dues under the Port Tariff 2010. Secondly, while it was argued that other countries in the region, such as Fiji, have used the “per call” rate instead of “per day”, it does not necessarily follow that Kiribati should do the same. Comparison in rates with other neighboring port services providers is but only one factor and is not decisive in my view.”

17. After reviewing the evidence and submissions, I agree that there is a distinction between salvage and charter services. Charters are typically well-planned schedules that are part of standard business operations, whereas salvage services are usually unplanned and disruptive to normal operations. Because salvage services are disruptive, they are likely to cause business losses that must be compensated in the charge against the distressed vessel. In situations where towing occurred during rough seas, the risk was high.
    
18. I also agree that the plaintiff is entitled to profit from its services, specifically the salvage service it provided to the defendant. The defendant must accept this, since it also operates a shipping line.
    
19. I am willing to extend the use of the Wednesbury unreasonableness definition to this case, since the definition provides a general understanding of the word's meaning in its broad sense. The definition includes;
    

- “outside the limits of reason“,

- “so outrageous in defiance of logic or accepted moral standards”,

- “a pattern of perversity”, and

- “so absurd that he must have taken leave of his senses.”

20. Aside from the legislation proposed by both parties (Wreck and Salvages Ordinance), I also found another relevant law that defines the reasonableness of salvage awards by using certain criteria. This law, the Salvage Convention 1989, is given force in our country through Schedule 1 of the Maritime Act of Kiribati 2017, which lists applicable International Conventions under that legislation. The Salvage Convention 1989 is listed as number 12. Its relevant article is 13, quoted below.
    

“ARTICLE 13

Criteria for fixing the reward

1. The reward shall be fixed with a view to encouraging salvage operations, taking into account the following criteria without regard to the order in which they are presented below:

(a) the salved value of the vessel and other property;

(b) the skill and efforts of the salvors in preventing or minimizing damage to the environment;

(c) the measure of success obtained by the salvor;

(d) the nature and degree of the danger;

(e) the skill and efforts of the salvors in salving the vessel, other property and life;

(f) the time used and expenses and losses incurred by the salvors;

(g) the risk of liability and other risks run by the salvors or their equipment;

(h) the promptness of the services rendered;

(i) the availability and use of vessels or other equipment intended for salvage operations;

(j) the state of readiness and efficiency of the salvor's equipment and the value thereof.

2. Payment of a reward fixed according to paragraph 1 shall be made by all of the vessel and other property interests in proportion to their respective salved values. However, a State Party may in its national law provide that the payment of a reward has to be made by one of these interests, subject to a right of recourse of this interest against the other interests for their respective shares. Nothing in this article shall prevent any right of defence.

3. The rewards, exclusive of any interest and recoverable legal costs that may be payable thereon, shall not exceed the salved value of the vessel and other property.”

21. The total charge of $48,414 lacks a detailed breakdown but was calculated based on fuel use, business time lost, opportunity costs, risks involved, and wear and tear. As previously mentioned (para 17 above), I acknowledge that salvage services carry risks, especially during rough sea conditions, and that the distressed vessel was not only large but also heavy, as its waterline was barely above the water level. These factors generally contribute to the wear and tear of the plaintiff’s vessel, particularly when towing a heavy, larger vessel for 31.5 hours. In cases of wear and tear, the effects might not be immediately visible, but they will gradually become evident.
    
22. Opportunity cost is also a factor, as the salvage service disrupted normal operations. The plaintiff explained that their voyage was shortened when they should have traveled to Kuria and Aranuka to pick up cargo. Business time lost is relevant, but it is related to opportunity cost because the plaintiff’s business activities were interrupted while providing salvage services, even though the vessel could have been engaged in other business ventures.
    
23. The exact fuel cost is not specified, but since fuel was definitely used during the operation, this factor must be considered. The defendant merely assumed that larger vessels, like Lu’s Marine vessel, consume more fuel, but this would be more helpful if the defendant had provided the specific amount of fuel consumed by that vessel during the rescue. The invoice from Lu’s Marine only showed a total claimed amount of $7000 with no breakdown. If the towed vessel were smaller, it might not have been fuel-intensive. Conversely, the plaintiff’s claim that the defendant’s vessel was larger and thus consumed more fuel could be valid or not — it remains speculative without concrete evidence. While the parties put forward these arguments, I also consider the evidence the defendant provided regarding the fuel they supplied for the towing, which the plaintiff’s witness opposed, stating that only two, not three, drums of fuel were received from the defendant.
    
24. There was also evidence that the defendant’s vessel carries people and cargo on board. The value of the defendant’s vessel at the time of the incident is not stated; however, there’s evidence from Tokintekai Eneri that they bought the vessel for $300,000. They began operating it in April 2015, and the incident occurred in November 2015, several months later. Eneri also deposed in his affidavit that their Marine Advisor advised them that the vessel’s actual worth was less than $100,000 at the time they bought it. Unfortunately, their Marine Advisor’s evidence was not tendered for proof; I will disregard this piece of evidence.
    
25. Since there is no detailed breakdown of the charge, perhaps this court could evaluate its reasonableness by comparing it with other local salvage service charges. Unfortunately, only two invoices for salvage services, both from LU’s Marine, were submitted. One invoice listed a charge of $7000, but it is unclear how many hours or days this covered or the size of the towing vessel involved. However, Counsel’s submission (see para 13 above) clearly indicates that LU’s Marine vessel is significantly larger than the defendant’s vessel, which was the same vessel rescued in the case currently before this court. The second invoice, totaling $91,730, also lacks the necessary details about vessel sizes and towing hours.
    
26. As discussed in paragraph 12 above, the defendant proposed to pay a sum of $5500 for the rescue service. The defendant also submitted the use of the plaintiff’s daily rate of $1800, as per the plaintiff’s charter rate with Parliament. I have stated that a charter rate must not be used as a rescue or towing rate for the reasons I’ve outlined in paragraph 17 above. Therefore, I do not accept this argument.
    
27. Referring back to the criteria listed in Article 13 of the Salvage Convention 1989, I notice that not all of these criteria are supported by evidence. Considering the purpose of this article—to provide a reward that encourages salvage operations but does not exceed the value of the rescued vessel, goods and casualties saved—my best approach is to approve an award that is both reasonable and consistent with this Convention’s goal. I consider the following factors with the existing evidence in support as follows;
    
    • (a) the salved value of the vessel and other property:

As noted in paragraph 24 above, the vessel was initially purchased for $300,000, and the incident occurred only a few months later. I think it is safe to estimate its value just before the incident at slightly less than $300,000. There is no additional evidence indicating its exact value at the time of the incident, that is, in its damaged but saved condition. In the absence of proof, it is reasonable to estimate a 25% decrease in value, resulting in an estimated worth of $225,000 after the incident. There is also no evidence regarding the value of the cargoes on board or the total number of passengers and crew. Taking their values into account indicates that the total value to be considered is well over $225,000.

(b) the skill and efforts of the salvors in preventing or minimizing damage to the environment;

The master and crew of the plaintiff’s vessel were not professional salvors, but they managed to safely tow the defendant’s vessel to South Tarawa using their vessel and equipment.

© the measure of success obtained by the salvor;

The defendant’s vessel was successfully towed back to shore; otherwise, it would have drifted away. This was confirmed by the defendant’s witness, Tokintekai Eri, during cross-examination.

(d) the nature and degree of the danger;

There was a risk that the defendant’s vessel would have drifted away with its crew, cargo, and passengers, as referred to in paragraphs 8 and 9 above.

(e) the skill and efforts of the salvors in salving the vessel, other property and life;

The same answer as in (b) above.

(f) the time used and expenses and losses incurred by the salvors;

The distressed vessel was towed for 31.5 hours.

(g) the risk of liability and other risks run by the salvors or their equipment;

The risk is that the sea was rough with strong winds, and the vessel was heavier and larger than the plaintiff’s vessel; refer to paragraph 21 above for a detailed explanation.

(h) the promptness of the services rendered;

The plaintiff was initially reluctant because their own trip would be shortened, but then agreed because they were the only vessel available to assist the defendant’s vessel.

(i) the availability and use of vessels or other equipment intended for salvage operations;

Same as in (b) and (c) above.

(j) the state of readiness and efficiency of the salvor's equipment and the value thereof:

The readiness is stated in (h), but there is no evidence to prove the value of any equipment used.

Outcome

28. In light of the evidence and reasons stated in the preceding paragraphs, I find that the amount claimed by the plaintiff as compensation for the salvage service rendered to the defendant’s vessel is reasonable. $48,414 is only 21% of the distressed vessel's estimated value. This does not even account for the value of the cargoes or the lives of passengers and crew saved on board.
    
29. The plaintiff also seeks $5,000 in general damages for the delay in paying the salvage claim. Such delays are typically addressed as interest rather than general damages, so I will reject this argument. Additionally, the plaintiff presented further grounds for general damages, including operational costs, losses from customers lost when the voyage was shortened, and the defendant’s assurances to pay, which influenced the decision to perform the rescue. I do not accept these grounds either, as they are based on the same factors already included in their claim for specific damages.
    
30. The plaintiff is entitled to interest at 5% per annum from the date of judgment until payment in full.
    
31. Cost of this suit is also awarded to the plaintiff, to be agreed upon or taxed.
    

Order accordingly.

THE HON TETIRO SEMILOTA MAATE MOANIBA
Chief Justice