INTRODUCTION TO GENERAL AVERAGE
Average adjuster Bjørn Slaatten, Oslo
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Bjørn Slaatten
P. O. Box 1252 Vika
0111 Oslo
Telephone
Mobile
Email
+47 2301 1440
+47 9587 0831
adjuster@online.no
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Literature.
Lowndes and Rudolf:
General Average and York-Antwerp Rules
Geoffrey Hudson:
The York-Antwerp Rules
MarIus 214 (1994 Rules)
MarIus 329 (2004 Rules)
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General average.
What is General Average?
Sacrifice in order to save ship and cargo from a
common peril. Apportionment over the interests –
Normally ship, cargo, bunkers and freight.
Particular average – damage to ship or goods.
”The loss stays where it falls”.
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General average – long traditions
Rhodian Law – More than 2000 years old.
”If in order to lighten a ship merchandise has been
thrown overboard, that which has been given for all
should be replaced by the contribution of all”.
Glasgow Rules 1860, revised in 1864 ”York-Rules”
Antwerp 1877 (”York-Antwerp Rules”)
1890, 1924, 1950, 1974, 1990, 1994 and 2004.
Focus on the 1994 Rules.
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General average
General average – average adjustment.
Average adjuster
Norway - Felleshavari – Dispasje - Dispasjør
Denmark – Havari Grosse – Dispache - Dispacheur
Sweden – Gemensamt haveri – Dispasch - Dispachör
Finland – As Sweden
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General average
Not insurance, but a provision in the freight contract.
Private set of rules administrated by CMI.
Incorporated in Norwegian Maritime Law Chapter 17.
In most countries the average adjustment can
be tried in court.
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General average
Lettered rules A - G
Numbered rules I – XXII
Rule of interpretation:
In the adjustment of general average the following
Rules 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.
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Rule Paramount
In no case shall there be allowance for sacrifice
or expenditure unless reasonably made or incurred.
Court case ”Alpha” 1991
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Common safety / Common benefit.
Rule A – Common safety
Numbered Rules – Common benefit
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Rule A
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.
General average sacrifices and expenditures shall be
borne by the different contributing interests on the
basis hereinafter provided.
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Perils
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GA situations
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GA situations
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GA situations
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GA situation?
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”Crew negligence”?
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Rule C
Only such losses, damages or expenses which are
the direct consequence of the general average act shall
be allowed as general average.
Exclusions:
• Damage to the environment.
• Loss of market, due to delay etc.
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Rule D, E and F.
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Rule D – Fault on one of the parties to the adventure
does not affect right to contribution.
Rule E – Onus of proof is on the party claiming in G.A. to
show that the loss or expense claimed is properly
allowable.
Rule F – Expense versus expense. Often ”abused”
provision. Not expense versus damage.
Substituted expenses.
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Rule G.
•
•
General average shall be adjusted as regards both
losses and contribution upon the basis of values at the
time and place when and where the adventure ends.
Section 2 – ”Non separation agreement”.
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General average – practical steps
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Who is involved, what has happened?
B/L / Freight contract – YAR version? Place for issuance
of GA statement.
Notification to cargo owners that GA is declared.
Concerned in cargo – B/L.
Manifest of cargo.
Cargo insurers? Non-insured – Cash deposit?
Guarantees – Average bond / average guarantee.
Carriers obligations under the freight contract.
Forwarding of the cargo?
Non-Separation Agreement.
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Average bond / average guarantee
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Collection of security.
Copy of the B/L and the commercial invoice.
Power of signing guarantees
Insured / uninsured cargo – collection of deposits - Rule
XXII
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The numbered rules.
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Special rules – Conflict with the lettered rules - See Rule
of interpretation.
Rule III Extinguishing Fire on Shipboard.
Rule VI Salvage Remuneration.
Rule VII Damage to Machinery and Boilers.
Rule X Expenses at Port of Refuge etc.
Rule XI Wages and maintenance of crew and other
expenses bearing up for and in Port of Refuge.
Rule XVII Contributory values.
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Rule III Extinguishing Fire on Shipboard.
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Fire onboard will normally be a particular damage but
damage done to ship and or cargo in extinguishing the
fire shall be made good in general average.
Also beaching or scuttling a burning ship.
No compensation for:
 Damage by smoke however caused
 Damage by heat of the fire
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Rule VI Salvage Remuneration
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Salvage remuneration is redistributed in GA.
2004 Rules – The costs stays were it falls
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Rule VII Damage to Machinery and Boilers
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Refloating – damage to machinery.
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Afloat - no compensation howsoever caused.
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Rule X Expenses at a Port of Refuge etc.
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”Port or place” – not defined in the Rules.
Loading port can be port of refuge.
In consequence of accident, sacrifice or other
extraordinar circumstances.
Must be for the common safety.
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Section (a) – Costs of entering and leaving the port.
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Rule X Expenses at a Port of Refuge, etc.
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Section (b) – Costs of handling on board or discharging
cargo, fuel or stores.
Necessary for the common safety, or
to enable repair of damage caused either by sacrifice or
accident.
Necessary for the safe prosecution of the voyage.
Damage discovered in port of loading or call.
Section (c) Reloading and storage costs.
When ship is condemned or voyage is abandoned.
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Rule XI Wages and Maintenance of Crew and other
Expenses bearing up for and in a Port of Refuge,
etc.
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Wages and maintenance of crew
Fuel and stores consumed
During deviation to / from the port (section a) and in the
port of refuge (section b).
Section (c) – definition of ”wages”.
Section (d) – The cost of measures undertaken to
prevent or minimise damage to the environment.
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Damage to cargo, ship etc.
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Rule XII Damage to cargo in Discharging
Rule XIII Deduction from Cost of repairs
”New for old” – >15 years – deduction of 1/3.
No deductions in way of anchors and chain cables,
provisions and stores.
Drydock and slipway dues – allowed in full.
Painting of bottom – Paint not older than 12 months –
50% allowed.
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Rule XIV Temporary repairs.
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Temporary repairs at a port of loading, call or refuge shall
be admitted if
Necessary for the common safety, or
Of damage caused by general average sacrifice.
Section 2:
Temporary repairs of particular damage in order to
complete the voyage
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Rule XVII Contributory values
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Contribution to a general average shall be made upon
the actual net values of the property at the termination of
the adventure (ref Rule G).
Cargo – the commercial invoice or shipped value
including freight and insurance.
Including freight and insurance? Freight contract / sales
terms. FOB, CIF CIP etc.
Ship - value to be assessed without taking into
consideration any effect of a charterparty.
Freight
Bunkers
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Rule XX Commission
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2 % commission on general average disbursements.
Except crew wages and maintenance and fuel and stores
not replaced during the voyage.
Section 3 – Average disbursements insurance.
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Rule XXI Interest on Losses made good in General
Average.
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Interest rate is 7 % p.a.
Until three months after the date of issue of the GA
adjustment.
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York-Antwerp Rules 2004
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IUMI – Working Group - ”How should it be changed”?
Proposal - Limit the rules to ”Common safety” situations.
IUMI - Vancouver meeting 2004
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York-Antwerp Rules 2004
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The exclusion of salvage from general average
Rule XI – Crew wages would no longer be allowed while
at a Port of Refuge
Rule XIV – Temporary repairs
Commission
Interest rate
Time bar
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General average – Hull policies
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G.A. – salvage costs
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The Norwegian Plan § 4-8
ITCH 1.10.83 – Section 11
International Hull Clauses 01/11/02 - Section 8
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General average ”Absorption Clauses”
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NSPL § 4-8,3 (a).
”Any loss, damage, liability or costs which would have
been recoverable in the general average up to a fixed
sum stipulated in the policy”
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General average – Hull adjustment
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GA adjustment - Implemented in the PA adjustment
Cargo’s contribution deducted
Interest on GA contributions falling on hull insurers –
YAR 1974, 1994
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Introduction to general average
Thank you for your attention.
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