General Average
There is a General
Average act when and only when any extraordinary or expenditure is
intentionally and reasonably made or incurred for the common safety, for the
purpose of preserving from peril, the property involved in a common maritime
adventure.
Extraordinary
Sacrifice in a General Average
Below are examples
for an extraordinary sacrifice, though not limited to:
1. Damage done to the engine to refloat the vessel
after grounding.
2. Jettisoning of cargo under Deck.
3. Jettisoning of Cargo on Deck as per Custom of the
trade.
4. Slipping of Anchor and Cable to avoid Collision.
Extraordinary Expenditure in a General Average
Below are examples
for an extraordinary expenditure, though not limited to:
1. Cost of Hiring a Tug to refloat a Ship with cargo
onboard.
2. Cost of discharging Cargo in order to refloat a
ship.
3. Port of Refuge Costs.
4. Salvage Costs
Calculations for General Average
General Average
Loss: is any
expense/sacrifice which is allowed as general average and can be recovered.
Contributory
Value: is the value of
the property on arrival at the place of safety + G.A loss made up for that
property. Consider a vessel whose worth is 1 million (1,000,000 $) and carrying
cargoes A, B and C.
Cargo A worth: 50,000 $
Cargo B worth: 120,000 $
Cargo C worth: 200,000 $
Vessel catches fire in the hold where
now Cargo B is affected by the fire. Water is used for the firefighting which
partially damages Cargo C as it gets wet. Free surface effect affects the
stability and the Master decides to beach the ship. The vessel was
subsequently refloated and the cost incurred and damages as follows:
|
Lost Value of Cargo B |
30,000 $ |
|
Arrived Value of Cargo C |
180,000 $ |
|
Ship arrived Value |
950,000 $ |
|
Cost of Repairs |
50,000 $ |
|
Cost of Refloating |
150,000 $ |
|
Port of Refuge Charges |
50,000 $ |
Thus the General
Average (G.A.) Losses are as follows:
|
For Ship |
50,000 $ |
|
For Cargo C |
20,000 $ |
|
For Refloating & Port
of Refuge Cost |
150,000 $ + 50,000
$ |
|
TOTAL G.A. Loss |
270,000 $ |
Please note the
damage caused to Cargo B was purely due to the Fire which was an accident,
hence the Lost Value of the cargo and will not be considered as General Average
Loss.
Contributory Value
|
Ship |
950,000 + 50,000 |
1,000,000 $ |
|
Cargo A |
50,000 + 0 |
50,000 $ |
|
Cargo B |
90,000 + 0 |
90,000 $ |
|
Cargo C |
180,000 + 20,000 |
200,000 $ |
|
TOTAL: |
1,340,000 $ |
G.A. Loss to make
good = 270,000 $
|
Contribution of Ship |
 |
|
Contribution of Owner of Cargo A |
 |
|
Contribution of Owner of
Cargo B |
 |
|
Contribution of Owner of
Cargo C |
 |
Thus, the total of
the contribution will work out to be 270,000 $ which is the
General Average loss to be made good.
Particular
Average: It is a
partial loss caused by a peril insured against e.g. damage to cargo, damage to
ship due to weather etc.
Particular Charges: Expenses incurred by or on behalf of the insured
for the safety or preservation of the property insured. It excludes general
average and salvage charges.
York Antwerp Rules
( 2004 )
YARs are a set of
rules set out by Ship Owners, Merchants, Underwriters and Adjusters for the
benefit of the settlement of General Average.
It has to be mentioned in the Charter Party or Bill of Lading that G.A. will be as per York Antwerp Rules.
Evolution of York Antwerp Rules
There are 7
Lettered Rules ( A ~ G ) which are general rules and 23 Numbered Rules ( I ~
XXIII ) which are specific to a particular average act/sacrifice/damage and
used for determining the calculation of the General Average.
Rule of Interpretation
In the adjustment
of general average, the YARs shall apply to the exclusion of any law and
practice inconsistent therewith.
Except as provided by the Rule Paramount and the Numbered Rules, general
average shall be adjusted according to the Lettered Rules.
Rule Paramount
In no case shall
there be any allowance for sacrifice or expenditure unless reasonably made or
incurred. For example War, Strikes, Civil War, Labour Disturbances holds no
cover.
Lettered Rules (A
~ G)
Rule A
1. There is a general average act when, and only when,
any extraordinary sacrifice or expenditure is intentionally and reasonably made
or incurred for the common safety for the purpose of preserving from peril the
property involved in a common maritime adventure.
2. General average sacrifices and expenditures shall
be borne by the different contributing interests on the basis hereinafter
provided.
Rule B
1. There is a common maritime adventure when one or
more vessels are towing or pushing another vessel or vessels, provided that
they are all involved in commercial activities and not in a salvage operation.
When measures are taken to preserve the vessels and their cargoes, if any, from
a common peril, these Rules shall apply.
2. If the vessels are in common peril and one is
disconnected either to increase the disconnecting vessel’s safety alone or the
safety of all vessels in the common maritime adventure, the disconnection will
be a general average act.
3. Where vessels involved in a common maritime
adventure resort to a port or place of refuge, allowances under these Rules may
be made in relation to each of the vessels. Subject to the provisions of
paragraphs 3 and 4 of Rule G, allowances in general average shall cease at the
time that the common maritime adventure comes to an end.
Rule C
1. Only such losses, damages or expenses which are the
direct consequence of the general average act shall be allowed as general
average.
2. In no case shall there be any allowance in general
average for losses, damages or expenses incurred in respect of damage to the
environment or in consequence of the escape or release of pollutant substances
from the property involved in the common maritime adventure.
3. Demurrage, loss of market, and any loss or damage
sustained or expense incurred by reason of delay, whether on the voyage or
subsequently, and any indirect loss whatsoever, shall not be allowed as general
average.
Rule D
Rights to
contribution in general average shall not be affected, though the event which
gave rise to the sacrifice or expenditure may have been due to the fault of one
of the parties to the common maritime adventure, but this shall not prejudice
any remedies or defences which may be open against or to that party in respect
of such fault.
Rule E
1. The onus of proof is upon the party claiming in
general average to show that the loss or expense claimed is properly allowable
as general average.
2. All parties to the common maritime adventure shall,
as soon as possible, supply particulars of value in respect of their
contributory interest and, if claiming in general average, shall give notice in
writing to the average adjuster of the loss or expense in respect of which they
claim contribution, and supply evidence in support thereof.
3. Failing notification, or if any party does not
supply particulars in support of a notified claim, within 12 months of the
termination of the common maritime adventure or payment of the expense, the
average adjuster shall be at liberty to estimate the extent of the allowance on
the basis of the information available to the adjuster. Particulars of value
shall be provided within 12 months of the termination of the common maritime
adventure, failing which the average adjuster shall be at liberty to estimate
the contributory value on the same basis. Such estimates shall be communicated
to the party in question in writing. Estimates may only be challenged within
two months of receipt of the communication and only on the grounds that they
are manifestly incorrect.
4. Any party to the common maritime adventure pursuing
recovery from a third party in respect of sacrifice or expenditure claimed in
general average, shall so advise the average adjuster and, in the event that a
recovery is achieved, shall supply to the average adjuster full particulars of
the recovery within two months of receipt of the recovery.
Rule F
Any additional
expense incurred in place of another expense which would have been allowable as
general average shall be deemed to be general average and so allowed without
regard to the saving, if any, to other interests, but only up to the amount of
the general average expense avoided.
Rule G
1. General average shall be adjusted as regards both
loss and contribution upon the basis of values at the time and place when and
where the common maritime adventure ends.
2. This rule shall not affect the determination of the
place at which the average adjustment is to be prepared.
3. When a ship is at any port or place in
circumstances which would give rise to an allowance in general average under
the provisions of Rules X and XI, and the cargo or part thereof is forwarded to
destination by other means, rights and liabilities in general average shall,
subject to cargo interests being notified if practicable, remain as nearly as
possible the same as they would have been in the absence of such forwarding, as
if the common maritime adventure had continued in the original ship for so long
as justifiable under the contract of carriage and the applicable law.
4. The proportion attaching to the cargo of the
allowances made in general average by reason of applying the third paragraph of
this Rule shall be limited to the cost which would have been borne by the
owners of cargo if the cargo had been forwarded at their expense. This limit
shall not apply to any allowances made under Rule F.
Differences
Between 1994 / 2004 / 2016 YARs
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