The House of Lords’ judgment in Semco Salvage and Marine Pte Ltd v. Lancer Navigation Co. Ltd (The Nagasaki Spirit)1 was awaited with much interest by salvors and shipowners’ Protection and Indemnity (P. & I.) Clubs, not least for the reason that it would unlock a backlog of other salvage arbitration cases stayed pending the outcome.2 In his opening argument before their Lordships, Geoffrey Brice, Q.C., leading counsel for the appellant Singaporean salvage company, rightly described the appeal as “a test case of international importance on a point which has not so far been considered elsewhere”.3 This was indeed the case, because the appeal was concerned with the “Montreal compromise”, the agreement reached between the representatives of hull and cargo insurers and the P. & I. Clubs that (i) provision should be made for a “safety net” to compensate salvors in those instances where they had prevented or minimized damage to the environment, by means of an “enhanced” award or “special compensation”; (ii) the costs of an “enhanced” award should be borne by hull and cargo insurers in the usual way and that the cost of “special compensation” should be borne by the P. & I. Clubs.4 The principal issue in this appeal was the interpretation of “fair rate for equipment and personnel actually and reasonably used in the salvage operation” in the Salvage Convention 1989, Art. 14.3.5 A secondary issue, a cross-appeal by the respondent