CAP413 says;
States of Emergency
8.2 The states of emergency are classifed as follows:
1. Distress A condition of being threatened by serious and/or imminent danger and of requiring immediate assistance.
2. Urgency A condition concerning the safety of an aircraft or other vehicle, or of some person on board or within sight, but does not require immediate assistance.
8.3 The pilot should start the emergency call with the appropriate international RTF pre x as follows:
1. Distress ‘MAYDAY, MAYDAY, MAYDAY’
2. Urgency ‘PAN PAN, PAN PAN, PAN PAN’
There does not appear to be a facility to call MAYDAY on behalf of a third party though this is specifically allowed for in a PAN call.
As there is no mention of MAYDAY RELAY it implies that if a state of urgency/emergency is observed involving a third party then a PAN call is appropriate.
Notwithstanding that MAYDAY RELAY is standard maritime RT phreaseology it does not appear to be available in aviation-speak. I can see that this might present difficulties in states that do not recognise the use of PAN and MAYDAY RELAY is pretty clear in it's intention to a good speaker of English but it might well cause confusion in places where English is poorly understood. The risk is the controller, hearing MAYDAY $%^^&* and naturally assumes you yourself have an emergency (that is, after all, the sole and only meaning of the word MAYDAY in aviation speak) assigns a 7700 squawk and begins to act accordingly. Suddenly you've become the emergency and it'll take a great deal of effort to explain your way out of that and get the correct message across. Beware non-standard phraseology for this reason. Call PAN if you can, if not don't use any prefix, just pass a clear message. eg, "In this position I have observed..."
Further, if I heard "MAYDAY RELAY..." I'd assume someone had heard a MAYDAY go unanswered and was relaying it thus perhaps causeing further confusion - such as a call to the D & D cell to get the unheard non-existent call triangulated.
Surely the answer to this most unlikely scenario is to make a judgement at the time. Isn't that what you're there for?