GENERAL AVERAGE General Average Act from the York Antwerp Rules is defined as “Any extraordinary sacrifice or expenditure intentionally and reasonable in time of peril for the purpose of preserving the property imperilled in common maritime adventure” Terms to be considered
- Sacrifice or Expenditure
- Common maritime adventure
This can be seen as something very unusual or remarkable, something that normally doesn’t happen. Now a loss must be ‘extraordinary’ before it can be considered under general average. This is declared in York Antwerp Rules rule A and in the Marine Insurance Act section 66(2). This been said, losses made from ordinary voyage incidents cannot therefore bring about general average. It isn’t always easy to draw a line between extraordinary and ordinary, it all depends on the facts of the case. Example of cases: SociA©tA© Nouvelle d’Armement v. Spillers & Baker
In 9171, the French barque Ernest Legouve was towed from Ireland to England across the Irish Sea during the First World War in order to reduce the danger of enemy submarines. The extra cost on towage wasn’t allowed as general average after taking the case to court because the risk of attack from the U-boats isn’t something extraordinary for a time of war. Robinson v. Price
A ship had a leak and would sink without constant pumping out of the water. The ship used up all the fuel (coal) supplies she had because of this situation. On a usual voyage, this wouldn’t have been the case. So the ship’s spars and cargo had to be used as fuel in order to complete this voyage. This incident wasn’t a usual on the voyage therefore the cost of the spars and cargo used was allowed in general average.
SACRIFICE OR EXPENDITURE
Sacrifice can be defined as the act of letting something valued go for the sake of something considered as more important or worthy. Also, expenditure can simple be seen as money spent. Sacrifice in the context of general average revolves around cargo being jettisoned or used (most times used as fuel) in the voyage and expenditures on services or supplies. For this to be allowed as general average, this must happen in time of real danger (peril) or imminent risk of danger. Example of cases: The case Robinson v. Price
previously discussed were the cargo was used as fuel in time of peril to keep water out of the ship to avoid sinking will definitely allow general average claims. Watson v. Fireman’s Fund
Sophie Frankel in 1922, had a cracked steam pipe. Steam escaped from the fracture overheating the cargo (rosin) which gave off a vapour. The master confused the vapour for smoke and concluded that the hold was on fire. Steam was now put into the hold damaging the cargo and the cargo was damaged. General average wasn’t allowed on the sacrifice because there wasn’t any real danger.
Something intentional can be seen as something deliberate, consciously done on purpose or something done voluntarily. The sacrifice or expenditure made must be voluntarily, and not a situation one couldn’t control. Taking an illustration of a fire incident on board. Any damage caused from the water used to extinguish the fire will be allowed under general arrange because the act of using the water was voluntary. The damage caused from the fire will be considered as partial average as the fire was an accident. But any damage caused from the smoke will not be allowed as general average since the smoke cannot be extinguished. Any voluntary act must be that of the master or authorised by him. Losses that come from an act forced on the master won’t be allowed as general average Example of cases: Athel Line v. London and Liverpool Insurance
In 1944 during the war, the Athelbeach and the Athelqueen were to take molasses from West Indies to the United Kingdom. Because of the fear of attack, they joined other vessels to form a convoy. The convoy commodore received a signal from the Admiralty that another convoy had been attached earlier, so he ordered the convoy back to Bermuda. Athel line vessels later made the voyage without the convoy. The cost incurred from the delay and deviation weren’t allowed as general average because from the defence regulations, the Admiralty and commodore has authority over the masters of the vessels and even the ship owners. Their acts weren’t voluntary but forced. It was a legal duty to obey the commodore.
Something reasonable can also be seen as something sensible, having sound judgement or logical. Sacrifice or expenditure must also be reasonably made to be covered under general average. And unreasonably expensive way of solving a problem will certainly not be allowed as general average. If the master’s act is done in the interest of all on the voyage, first considering life (crew and passengers), and then the vessel and cargo, then losses incurred will be allowed as general average even if the act is hazardous From The Seapool a ship at anchor was suddenly attacked by a gale and was faced with the risk of breaking her back and losing her propellers. The master engage in a very risky manoeuvre which was actually designed to get the ship out to sea and not exactly for a situation like this. All to avoid the gale. Though master was successful, the ship and pier were damaged. The decision the master made was reasonable enough and the losses made was allowed as general average.
Peril can be seen as serious danger, or an immediate risk or hazard. Every intentional and reasonable sacrifice must only be made in time of real danger for losses to be allowed as general average. If the master is wrong about a peril and takes an action, any losses generated from this act will not be considered under general average. Example of cases: Looking at a previously discussed case of Watson v. Fireman’s Fund
in 1922, it’s clear that the reason why the losses made from the damaged cargo were not allowed as general average was because the danger which prompted the master to act didn’t exist. No real danger. The danger doesn’t really have to be immediate but it has to be real enough and also the possibility of it happening, very high. Like in this next case Vlassopoulos v. British and Foreign MI Co
The vessel involved was taken to port to fix a fouled propeller. If that propeller wasn’t brought in for repair, it would have caused a problem or failed during a voyage. And the possibility of that happening was very high. A potential danger was avoided so therefore, the resulting expenses for the repair is allowable as general average.
COMMON MARITIME ADVENTURE
Any expenditure or sacrifice must be made for the safety of a common maritime adventure before it can amount to general average. Looking at the common maritime adventure, two conditions are considered. Firstly, sacrifices or expenditures made after an interest has been brought to safety cannot be allowed as general average. Case: Royal Mail Steam Packet v. English Bank of Rio de Janeiro A ship ran aground and a valuable but light weighted cargo of specie was removed into a lighter all for the purpose of preserving the cargo. Taking it that the cargo of specie got damaged. It was concluded that that specific cargo couldn’t come under general average because it didn’t contribute in any way to the refloating of the ship. Secondly, the ultimate success of the adventure is very important when considering general average. Case: Chellew v. Royal Commission for Sugar Supply A ship incurred port refuge expenses. And both the ship and cargo were lost, never making it to the discharge port. In this situation where no form of success was made, no claim in general average can be made in respect to those expenses made.
Simon Baughen (2012) Shipping Law, 5th edition, Oxon: Routledge. Robert Grime (1991) Shipping Law, 2nd edition, London: Sweet & Maxwell Limited https://www.google.co.uk/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=sacrifice+meaning [12 Aug 2014].
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