commentary on the york antwerp rules 2004 2nd edition

8/10/2019 Commentary on the York Antwerp Rules 2004 2nd Edition

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COMMENTARY

ON THE

YORK-ANTWERP RULES 2004

(2ndedition)


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INTRODUCTION

On 4thJune 2004 in Vancouver, the York-Antwerp Rules 2004 were approvedby the Comite Maritime International (CMI).

This commentary sets out the background to the new Rules, summarises themain changes and includes a comparison between the 1994 and 2004 Rules inthe Appendix.

For further information regarding General Average you can visit our website atwww.rhlg.comand under Downloads section you can view and download:

- A Guide to General Average which deals with the practical aspects ofGeneral Average.

- The Road to Vancouver an article outlining the development of the York-Antwerp Rules.

The website also includes contact details for all RHL offices and a link to theCharles Taylor website.

R.R. Cornah

Chairman, Richards Hogg Lindley.Fellow of the Association of Average Adjusters.

29thAugust 2013


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BACKGROUND TO THE CHANGES

General Average is a concept that is peculiar to maritime transport and has itsorigin in the earliest days of sea-borne trade in the Mediterranean. The basicprinciple was recognised by sea-faring nations in similar terms: any sacrifice of

property, such as jettison, or any extraordinary expenditure that is made for thecommon safety of ship and cargo is contributed to by the surviving property onthe basis of arrived values. In the 18thCentury, divergence between Englishand European/US law and practice in the application of this principle became aserious inconvenience to commercial interests; from 1860 onwards there was aconcerted international effort towards greater uniformity, culminating in theYork-Antwerp Rules of 1890, which became operative by insertion into contractsof affreightment.

Since the 1924 revision of the Rules, their custodian has been the ComitMaritime International (CMI). CMI is a non-governmental internationalorganisation dedicated to the unification of maritime law in all aspects, andmade up from National Maritime Law Associations.

The International Union of Marine Insurers (IUMI) expressed dissatisfaction withthe last revision of the Rules in 1994 and in their 1998 conference in Berlin, aWorking Group submitted a paper entitled 'General Average - How should it bechanged?'. This resulted in a formal request to CMI the following year forfurther reform of the York-Antwerp Rules to be given consideration. IUMI feltthat the concept of General Average reflected in the current York-AntwerpRules was outdated. Their proposed solution (recognizing the difficulties of

completely abolishing a concept embedded in the law of most maritime nations)was to restrict the categories of loss or expense that would be made good byGeneral Average contributions between the parties; more losses would beallowed to lie where they fell.

The York-Antwerp Rules recognize two main types of allowance:

i) 'Common safety' allowances: Sacrifice of property (such as flooding acargo hold to fight a fire) or expenditure (such as salvage or lightening avessel) that was made or incurred while the ship and cargo were in thegrip of peril. Since the early 19thCentury, English law and practice largelyrecognized only this category of General Average.

ii) 'Common benefit' allowances: Once a vessel was at a port of refuge,European countries and the United States generally viewed expensesnecessary to enable the ship to resume the voyage safely (but not thecost of repairing accidental damage to the ship) as also being GeneralAverage; for example, the cost of discharging, storing and reloading cargoas necessary to do repairs, port charges, and wages etc. during detentionfor repairs and outward port charges.


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BACKGROUND TO THE CHANGES(continued)

These changes were not supported by the representatives of Shipowninginterests at the conference. Speaking also on behalf of BIMCO, Intertanko andIntercargo, the International Chamber of Shipping (ICS) delegate told the

conference that they considered it premature to produce a new set of rules afteronly ten years and before the 1994 version had become the norm. WithGeneral Average Absorption clauses in hull policies (whereby the hull insurerspay all General Average expenses up to a specified limit) removing some 50%of general average cases and improvements in shipping standards, many of theproblems highlighted by IUMI had fallen away. ICS therefore felt that the 2004Rules were an unhelpful source of confusion.

The York-Antwerp Rules are not a Convention and only take effect by beingincorporated into individual Contracts of Affreightment. The process of adoptionis therefore relatively slow with many contracts of affreightment currently in usestill specifying the penultimate 1974 set of Rules. The 2004 Rules representedthe first occasion when a new set of Rules have been approved without aconsensus between Shipowning and other interests.

It was agreed at the Vancouver conference, in both the International sub-committee and Plenary sessions, that the new Rules should be given the title of"York-Antwerp Rules 2004" to make it clear that these were not simply anamendment to or modification of the 1994 Rules (as happened with the 1990amendment of the 1974 Rules in respect of Rule VI). Where contracts ofaffreightment such as Congenbill 1994 refer to "York-Antwerp Rules 1994 or

any subsequent modification thereof." the 1994 Rules will remain applicable.

At the IUMI Conference in September 2004 in Singapore, the delegates wereurged to consider inserting clauses in hull policies that would restrict liability forgeneral average sacrifice or expenses to those allowable under the new 2004Rules, and to recommend that major cargo interests press for the inclusion ofthe new rules in contracts of affreightment. However, there has been noindication since that date that this has in practice occurred.

In 2005, BIMCO issued a bulletin confirming its position that it remainedunconvinced about the need for change. It was stated that all new and revised

BIMCO charterparties would refer only to York-Antwerp Rules 1994 and theadditional text to the effect of or any subsequent modification thereto would nolonger be used to avoid any possible misinterpretation.

CMI were concerned that this situation was contrary to the objective ofuniformity and, during the latter part of 2011, began preliminary discussions withinterested parties to see if a compromise set of rules could be sanctioned at thethen forthcoming 2012 CMI meeting in Beijing. In the event, compromiseproposals put forward by a CMI working group and the British Marine LawAssociation, which modified or put to one side the more contentious aspects ofthe 2004 relating to salvage and crew wages, were not supported at the

meeting. Many Maritime Law Associations and industry bodies felt there hadbeen insufficient time for consultation. However many present, including


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BACKGROUND TO THE CHANGES(continued)

shipowners representatives, felt that the compromises suggested would providea framework for a new set of rules that could meet with general acceptance.

The CMI working group therefore recommended to the CMI Executive Councilthat it should appoint a new International Working Group on General Average,with a mandate to carry out a general review of the York-Antwerp Rules onGeneral Average, and, noting that the York-Antwerp Rules 2004 had not foundacceptance in the ship-owning community, to draft a new set of York-Antwerprules which met the requirements of the ship and cargo owners and theirrespective insurers, with a view to their adoption at the 2016 CMI Conference.

The new working group was formed during early 2013 and includedrepresentatives from the International Chamber of Shipping and IUMI, andothers attending in an individual capacity, including senior insurance claimshandlers, lawyers and average adjusters from. Given the time that is nowavailable the working group has the opportunity to carry out a ground upreview of all aspects of general average, and this has been reflected in thedetailed questionnaire that was sent out to CMIs member Maritime LawAssociations and other interested parties in May 2013.


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THE 2004 CHANGES

Rule VI - Salvage.

As noted in Lowndes and Rudolf (13 edition para. 6.05) in all maritime countries

other than the United Kingdom, salvage has generally been treated as GeneralAverage and has, together with other General Average losses, beenapportioned over values at destination. The divergence of British practiceoccurred during the latter part of the 19th century when adjusters began todistinguish, on grounds of principle, between salvage and General Average,with salvage being apportioned over values pertaining at the place where theservices ended, rather than at destination.

In 1926 the British Association of Average Adjusters passed a Rule of Practicethat permitted the allowance of commission and interest on salvage awards, butthe divergence in practice regarding inclusion of salvage awards in GeneralAverage was not finally resolved until a further Rule of Practice in 1942.

During the 1974 revision of the YAR, the old Rule VI was removed and the firstversion of the current Rule VI was inserted in order to ensure that internationalpractice was uniform on this point.

The IUMI proposal was based on the view that the re-distribution of salvagewas not necessary and gave rise to additional expense. The arguments for andagainst were set out as follows in the Working Party Report.

"6.2.1 Argumentsfor exclusion

of salvage from General Average:

- Inclusion of salvage involves unnecessary duplication of theapportionment of the salvage remuneration betweencontributing interests.

- In most cases the proportions are not changed significantlybut the cost of readjustment may be relatively high.

- It requires collection of two sets of security to cover basicallythe same moneys.

- It prolongs the whole operation, sometimes for years.

- It involves additional hassle for cargo underwriters.

6.2.2 Arguments for inclusionof salvage in General Average:

- It produces a fairer result at the end of the case.


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Rule VI - Salvage. (continued)

- In some cases to leave salvage where it falls after salvagesettlement or arbitration can cause serious injustice; e.g.sacrifices made good in General Average are added back in

computing the values under Rule G. Take for example, avessel with a sound value of $1,500,000 and a cargo of$1,000,000. The vessel is intentionally run aground for thecommon safety and suffers damage of $500,000. She isthen salved. After deducting the cost of damage repairs forthe purpose of arriving at the salved values at thetermination of the salvage service, ship and cargo wouldeach pay 50% of the salvage award, assuming that it wassettled separately and not included in General Average.However, the shipowner will ultimately receive an allowancein General Average for the sacrificial damage. If salvage isincluded in General Average, as it is at present, and theamount made good is added to the arrived value of thevessel at the completion of the voyage, then the contributoryvalue of the vessel would be $1,500,000, and ship wouldpay 60% of the salvage, which is more equitable in thecircumstances.

- A second casualty can also materially affect the values atthe end of the adventure and thus the apportionment. If, forexample, a vessel carrying cargo under deck and other

cargo on deck receives salvage services, the deck cargocontributes to the salvage award in proportion to its value atthe termination of the salvage. If, after suitable repairs, thevessel proceeds towards destination, but encounters veryheavy weather in which the deck cargo is carried away andlost, the value of the lost deck cargo at completion of thevoyage is nil and that deck cargo will not contribute to thesalvage remuneration if it is readjusted in General Average.

- In some cases the salvage remuneration can be assessedon the basis of rough figures, leaving the fine tuning of the

apportionment to be done later in General Average. Thiscan expedite salvage settlements and save costs.

- Some jurisdictions e.g. Netherlands contain laws, whichrequire the shipowner to pay salvage in full and collect fromcargo in General Average this is recognised by the IUMIproposals.


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- In many serious casualties General Average security will stillbe collected because the shipowners likely financialexposure may not be fully known and the possible extent of

cargo sacrifices cannot be determined without delaying therelease of cargo.

- It redresses the balance if one party to the adventure is ableto use commercial or other pressures to reach a particularlyfavourable negotiated settlement with salvors leaving otherparties to pay the full cost at arbitration.

- Even if salvage is not allowed in General Average, it will stillbe treated as a special charge (which will be deducted incalculating contributory values) therefore the adjustmentcannot be completed until the final amount of the salvagecharges paid by each interest is available."

The majority of delegates in Vancouver favoured the exclusion and the firstparagraph of the existing Rule is replaced with the following:

(a) Salvage payments, including interest thereon and legal feesassociated with such payments, shall lie where they fall and shall not beallowed in General Average, save only that if one party to the salvageshall have paid all or any of the proportion of salvage (including interest

and legal fees) due from another party (calculated on the basis of salvedvalues and not General Average contributory values), the unpaidcontribution to salvage due from that other party shall be credited in theadjustment to the party that has paid it, and debited to the party onwhose behalf the payment was made.

Associated minor amendments are also made to paragraphs b) and c). Theextent to which salvage is re-admitted when paid by one party on behalf ofothers is on very limited terms. It is purely an accounting transaction, so thatcredit is given without the amount being considered as General Average. Noallowance for Interest can therefore be made for the period that the paying party

is out of pocket.

The Association of Average Adjusters of the United States approved a newRule of Practice in October 2005 that deals with this point.

XXII. Salvage Settlements under York Antwerp Rules 2004 Allowance for Interest

(Adopted October 5, 2005)


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When the adjustment is subject to the York Antwerp Rules 2004 andincludes, applying the provisions of Rule VI (a) of those Rules,contribution to salvage paid by one party to the adventure on behalf of

another party to the adventure as well as on its own behalf, theprovisions of Rule XXI of the Rules will apply to the paying partyssalvage payments, including interest thereon and legal feesassociated with such payments, as if they were General Averageexpenditure.

Following the publication of the 2004 Rules questions were raised as to whetherthe rule related only to salvage payments made in respect of salvage chargesas defined by the Marine Insurance Act 1906 and under contracts such asLloyds Open Form (which impose a separate liability on each party) or whetherit extended to contract salvage or similar services which were contracted for andfunded initially by the shipowners. It was noted that historically r.VI hadembraced both categories, referring (in 1994) to expenditure in the nature ofsalvage.

A sub-committee was set up by the Association of Average Adjusters inNovember 2004 which concluded that it was clear that the intention was for therule to relate only to situations where the salvage contract (or relevant lawapplicable in the absence of any contract) already provided for a basis ofdistribution between the salved interests.

Subsequent discussions with insurers confirmed this understanding and thefollowing probationary Rule of Practice was put forward at the AssociationsAnnual General Meeting in May 2005:

For the purpose of applying Rule VI of the York Antwerp Rules 2004the term salvage payments shall be interpreted to mean paymentsmade in respect of salvage services and for which there is contractualand/or legal provision for salvage services independent of the YorkAntwerp Rules 2004.

The likely savings envisaged by IUMI may not in fact be always significant.

With Lloyds Open Form and similar cases, the amount of salvage paid will stillhave to be ascertained and deducted from Contributory Values as a specialcharge. With contract salvages, it may be necessary to calculate separatesalved values in addition to the contributory values at destination, in order tomake the accounting credit in the manner called for by the Rule.

The exclusion of salvage from General Average will in many cases extend theeffectiveness of General Average Absorption Clauses (under which the HullInsurers pay General Average in full up to a specified limit). Previously, incases involving salvage, the Absorption Clause limit has often been exhaustedby an actual payment for contract salvage or by the anticipated award under

Lloyds Open Form, necessitating the collection of General Average security torecover other items of expenditure.


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Rule XI - Wages and Maintenance.

At the Vancouver Conference various proposals were put forward to removeexisting allowances for wages and maintenance, and/or fuel and stores and/orport charges while at a port of refuge. A number of delegates felt particularly

strongly that wages were a loss by delay and should not be singled out for aspecial allowance when Rule C excluded all other such losses. On the otherhand, it was noted that the allowance of wages had been an accepted part ofGeneral Average in many jurisdictions prior to the first York-Antwerp Rules. Acompromise was suggested by the Canadian delegation to exclude wages onlywhile at the port of refuge, retaining the status quo for the deviation to the portand subsequent regaining of position.

Rule XI(a) is therefore unchanged, but all reference to wages is now removedfrom the new XI(c) which was formerly Rule XI(b), a change having been madein the ordering of the paragraphs. The Rule reads as follows:

"(c)(i) When a ship shall have entered or been detained in any port orplace in consequence of accident, sacrifice or other extraordinarycircumstances which render that necessary for the common safety, or toenable damage to the ship caused by sacrifice or accident to be repaired,if the repairs were necessary for the safe prosecution of the voyage, fueland stores consumed during the extra period of detention in such port orplace until the ship shall or should have been made ready to proceedupon her voyage, shall be allowed in general average, except such fueland stores as are consumed in effecting repairs not allowable in general

average.

(ii) Port charges incurred during the extra period of detention shalllikewise be allowed as general average except such charges as areincurred solely by reason of repairs not allowable in general average.

(iii) Provided that when damage to the ship is discovered at a port orplace of loading or call without any accident or other extraordinarycircumstance connected with such damage having taken place during thevoyage, then fuel and stores consumed and port charges incurred duringthe extra detention for repairs to damages so discovered shall not be

admissible as general average, even if the repairs are necessary for thesafe prosecution of the voyage.

(iv) When the ship is condemned or does not proceed on her originalvoyage, fuel and stores consumed and port charges shall be admitted asgeneral average only up to the date of the ship's condemnation or of theabandonment of the voyage or up to the date of completion of dischargeof cargo if the condemnation or abandonment takes place before thatdate."


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Rule XI - Wages and Maintenance. (continued)

XI(d) is unchanged.

Under English law, dating back to Robertson v. Ewer (1786), crew wages are

not allowable in Particular Average and this position is confirmed by the InstituteTime Clauses 1.10.83., the International Hull Clauses 2003 and similarwordings.

Rule XIV - Temporary Repairs.

Under York-Antwerp Rules 1994, temporary repairs to accidental damageeffected for the safe prosecution of the voyage at a port of refuge are allowed toGeneral Average up to the savings in General Average realised thereby. Forexample:

Cost of temporary repairs. US$ 100,000

Savings:

Cost of handling cargo. US$ 50,000

Extra detention if permanent repairs effected. 25,000

US$ 75,000

General Average allowance. US$ 75,000

Under York-Antwerp Rules 1994 the allowance is made "without regard to othersavings". In some cases the effecting of a temporary repair may allow thepermanent repair to be completed after the voyage at a much cheaper location,resulting in a significant saving to ship interests. The amendment to the Rulesought to ensure that the savings to Ship interests are accounted for first,before any allowance in General Average is considered.

Although there was no suggestion that the allowance of temporary repairs forthe common safety or of sacrificial damage should be interfered with, theVancouver delegates voted in favour of changing the position regarding repairs

to accidental damage with the following amendment to the second paragraph ofthe Rule:

(b) Where temporary repairs of accidental damage are effected inorder to enable the adventure to be completed, the cost of such repairsshall be allowed as general average without regard to the saving, if any,to other interests, but only up to the saving in expense which would havebeen incurred and allowed in general average if such repairs had notbeen effected there. Provided that for the purposes of this paragraphonly, the cost of temporary repairs falling for consideration shall belimited to the extent that the cost of temporary repairs effected at the portof loading, call or refuge, together with either the cost of permanentrepairs eventually effected or, if unrepaired at the time of the adjustment,


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Rule XIV - Temporary Repairs. (continued)

the reasonable depreciation in the value of the vessel at the completionof the voyage, exceeds the cost of permanent repairs had they beeneffected at the port of loading, call or refuge.

Thus:

Actual temporary repair cost. US$ 100,000

Actual permanent repair cost. 500,000

US$ 600,000

Estimated permanent repair cost at the port of refuge:

A) US$600,000 - no allowance.

B) US$550,000 this is less than the combined actual costs so thatUS$50,000 can be considered for allowance in General Average, subjectas before to savings. On the basis of the figures used above, theUS$50,000 could be allowed in full, given savings of US$75,000.

It is envisaged that any reduction in General Average allowances under thisnew wording would be met as part of the Particular Average claim, assumingthe vessel to be insured.

Rule XX Provis ion of funds.

The first paragraph is deleted, therefore the allowance under previous versionsfor 2% Commission can no longer be made. Adjusters continue to makeallowances for reasonable out of pocket expenses relating to the GeneralAverage.

Rule XXI Interest .

It was considered by the majority of delegates that the fixed interest of 7% was

too inflexible and that a system that was more responsive to changing economicconditions should be adopted.

The York-Antwerp Rules 2004 Rule provides:

(b) Each year the Assembly of the Comit Maritime Internationaleshall decide the rate of interest which shall apply. This rate shall be usedfor calculating interest accruing during the following year.


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Rule XXI Interest . (continued)

The following guidelines have been set out for fixing the rate:

The Assembly is empowered to decide the rate of interest based upon

any information or consideration, which in the discretion of the Assemblyare considered relevant, but may take the following matters into account:

The rate shall be based upon a reasonable estimate of what is the rate ofinterest charged by a first class commercial bank to a ship owner of goodcredit rating.

Due regard shall be had to the following:

That the majority of all GA adjustments are drawn up in USD.

That therefore the level of interest for one-year USD loans shall begiven particular consideration.

That most adjustments, which are not drawn up in USD, are drawnup in GBP, EUR or JPY.

That, if the level of interest for one year loans in GBP, EUR or JPYdiffers substantially from the level of interest for one year loans inUSD, this shall be taken into account.

That readily available information about the level of interest such asUSD prime rate and LIBOR shall be collected and used.

Any amendment of these guidelines shall be made by a decision of aconference of the CMI.

Rule XXIII Time Bar for Contributions to General Average.

An entirely new Rule was added in order to try and achieve greater certaintyregarding applicable Time Bars.

"(a) Subject always to any mandatory rule on time limitation containedin any applicable law:

(i) Any rights to general average contribution including any rights toclaim under general average bonds and guarantees, shall beextinguished unless an action is brought by the party claiming suchcontribution within a period of one year after the date upon which thegeneral average adjustment was issued. However, in no case shall suchan action be brought after six years after the date of termination of thecommon maritime adventure.

(ii) These periods may be extended if the parties so agree after thetermination of the common maritime adventure.

(b) This rule shall not apply as between the parties to the generalaverage and their respective insurers."


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Rule XXIII Time Bar for Contributions to General Average. (continued)

As recognised in the opening words, some countries have mandatory time barperiods that cannot be varied by contract. However, it was considered that therule would provide a greater degree of certainty in countries where variation is

possible, or in the few countries that have no statutory provision at all.

__________________________

Finally, minor amendments to the Rules were made to "tidy up" the drafting andprovide a more coherent numbering system.

__________________________


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APPENDIX

YORK-ANTWERP RULES 1994

AND 2004 COMPARED

(Areas of difference in the 2004 Rulesare shown in bold type)


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YORK-ANTWERP RULES

2004

York-Antwerp Rules, 1994 York-Antwerp Rules, 2004

RULE OF INTERPRETATION

In the adjustment of generalaverage the following Rules shallapply to the exclusion of any Lawand Practice inconsistenttherewith.

Except as provided by the RuleParamount and the numberedRules, general average shall beadjusted according to the letteredRules.

RULE OF INTERPRETATION

In the adjustment of general averagethe following Rules shall apply to theexclusion of any Law and Practiceinconsistent therewith.

Except as provided by the RuleParamount and the numbered Rules,general average shall be adjustedaccording to the lettered Rules.

RULE PARAMOUNT

In no case shall there be anyallowance for sacrifice or

expenditure unless reasonablymade or incurred.

RULE PARAMOUNT

In no case shall there be anyallowance for sacrifice or expenditure

unless reasonably made or incurred.


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RULE A

There is a general average actwhen, and only when, anyextraordinary sacrifice orexpenditure is intentionally andreasonably made or incurred forthe common safety for the purposeof preserving from peril theproperty involved in a commonmaritime adventure.

General average sacrifices andexpenditures shall be borne by thedifferent contributing interests onthe basis hereinafter provided.

RULE A

1) There is a general average actwhen, and only when, anyextraordinary sacrifice or expenditureis intentionally and reasonably madeor incurred for the common safety forthe purpose of preserving from perilthe property involved in a commonmaritime adventure.

2) General average sacrifices andexpenditures shall be borne by thedifferent contributing interests on thebasis hereinafter provided.

RULE B

There is a common maritimeadventure when one or morevessels are towing or pushinganother vessel or vessels, provided

that they are all involved incommercial activities and not in asalvage operation.

When measures are taken topreserve the vessels and theircargoes, if any, from a commonperil, these Rules shall apply.

A vessel is not in common perilwith another vessel or vessels if by

simply disconnecting from theother vessel or vessels she is insafety; but if the disconnection isitself a general average act thecommon maritime adventurecontinues.

RULE B

1) There is a common maritimeadventure when one or more vesselsare towing or pushing another vesselor vessels, provided that they are all

involved in commercial activities andnot in a salvage operation.

When measures are taken to preservethe vessels and their cargoes, if any,from a common peril, these Rulesshall apply.

2) A vessel is not in common perilwith another vessel or vessels if bysimply disconnecting from the other

vessel or vessels she is in safety; butif the disconnection is itself a generalaverage act the common maritimeadventure continues.


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RULE C

Only such losses, damages orexpenses which are the directconsequence of the generalaverage act shall be allowed asgeneral average.

In no case shall there be anyallowance in general average forlosses, damages or expensesincurred in respect of damage tothe environment or in consequenceof the escape or release ofpollutant substances from theproperty involved in the commonmaritime adventure.

Demurrage, loss of market, and anyloss or damage sustained orexpense incurred by reason ofdelay, whether on the voyage orsubsequently, and any indirect loss

whatsoever, shall not be admittedas general average.

RULE C

1) Only such losses, damages orexpenses which are the directconsequence of the general averageact shall be allowed as generalaverage.

2) In no case shall there be anyallowance in general average forlosses, damages or expensesincurred in respect of damage to theenvironment or in consequence of theescape or release of pollutantsubstances from the property involvedin the common maritime adventure.

3)Demurrage, loss of market, and anyloss or damage sustained or expenseincurred by reason of delay, whetheron the voyage or subsequently, andany indirect loss whatsoever, shall not

be allowedas general average.

RULE D

Rights to contribution in generalaverage shall not be affected,though the event which gave rise tothe sacrifice or expenditure mayhave been due to the fault of one ofthe parties to the adventure, but

this shall not prejudice anyremedies or defences which maybe open against or to that party inrespect of such fault.

RULE D

Rights to contribution in generalaverage shall not be affected, thoughthe event which gave rise to thesacrifice or expenditure may havebeen due to the fault of one of theparties to the adventure, but this shall

not prejudice any remedies ordefences which may be open againstor to that party in respect of such fault.


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RULE E

The onus of proof is upon the party

claiming in general average toshow that the loss or expenseclaimed is properly allowable asgeneral average.

Al l parties claiming in generalaverage shall give notice in writingto the average adjuster of the lossor expense in respect of which theyclaim contribution within 12months of the date of thetermination of the commonmaritime adventure.

Failing such notification, or ifwithin 12 months of a request forthe same any of the parties shallfail to supply evidence in supportof a notified claim, or particulars ofvalue in respect of a contributoryinterest, the average adjuster shall

be at liberty to estimate the extentof the allowance or the contributoryvalue on the basis of theinformation available to him, whichestimate may be challenged onlyon the ground that it is manifestlyincorrect.

RULE E

1)The onus of proof is upon the party

claiming in general average to showthat the loss or expense claimed isproperly allowable as generalaverage.

2) All parties claiming in generalaverage shall give notice in writing tothe average adjuster of the loss orexpense in respect of which theyclaim contribution within 12 months ofthe date of the termination of thecommon maritime adventure.

3) Failing such notification, or if within12 months of a request for the sameany of the parties shall fail to supplyevidence in support of a notified claim,or particulars of value in respect of acontributory interest, the averageadjuster shall be at liberty to estimate

the extent of the allowance or thecontributory value on the basis of theinformation available to him, whichestimate may be challenged only onthe ground that it is manifestlyincorrect.

RULE F

Any addit ional expense incurred in

place of another expense whichwould have been allowable asgeneral average shall be deemed tobe general average and so allowedwithout regard to the saving, if any,to other interests, but only up tothe amount of the general averageexpense avoided.

RULE F

Any additional expense incurred in

place of another expense, whichwould have been allowable as generalaverage shall be deemed to begeneral average and so allowedwithout regard to the saving, if any, toother interests, but only up to theamount of the general averageexpense avoided.


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RULE G

General average shall be adjustedas regards both loss andcontribution upon the basis ofvalues at the time and place whenand where the adventure ends.

This rule shall not affect thedetermination of the place at whichthe average statement is to bemade up.

When a ship is at any port or placein circumstances which would giverise to an allowance in generalaverage under the provisions ofRules X and XI, and the cargo orpart thereof is forwarded todestination by other means, rightsand liabilities in general averageshall, subject to cargo interestsbeing noti fied if practicable, remain

as nearly as possible the same asthey would have been in theabsence of such forwarding, as ifthe adventure had continued in theoriginal ship for so long asjusti fiable under the contract ofaffreightment and the applicablelaw.

The proportion attaching to cargoof the allowances made in general

average by reason of applying thethird paragraph of this Rule shallnot exceed the cost which wouldhave been borne by the owners ofcargo if the cargo had beenforwarded at their expense.

RULE G

1)General average shall be adjustedas regards both loss and contributionupon the basis of values at the timeand place when and where theadventure ends.

2) This rule shall not affect thedetermination of the place at whichthe average statement is to be madeup.

3)When a ship is at any port or placein circumstances which would giverise to an allowance in generalaverage under the provisions of RulesX and XI, and the cargo or part thereofis forwarded to destination by othermeans, rights and liabilities in generalaverage shall, subject to cargointerests being notified if practicable,remain as nearly as possible the same

as they would have been in theabsence of such forwarding, as if theadventure had continued in theoriginal ship for so long as justifiableunder the contract of affreightmentand the applicable law.

4)The proportion attaching to cargo ofthe allowances made in general

average by reason of applying thethird paragraph of this Rule shall notexceed the cost which would havebeen borne by the owners of cargo ifthe cargo had been forwarded at theirexpense.


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RULE I. JETTISON OF CARGO

No jettison of cargo shall be madegood as general average, unlesssuch cargo is carried in accordancewith the recognised custom of thetrade.

RULE I. JETTISON OF CARGO

No jettison of cargo shall be allowedas general average, unless suchcargo is carried in accordance with therecognised custom of the trade.

RULE II. LOSS OR DAMAGE BYSACRIFICES FOR THE COMMONSAFETY

Loss of or damage to the propertyinvolved in the common maritimeadventure by or in consequence ofa sacrifice made for the commonsafety, and by water which goesdown a ship's hatches opened orother opening made for thepurpose of making a jettison for thecommon safety, shall be madegood as general average.

RULE II. LOSS OR DAMAGE BYSACRIFICES FOR THE COMMONSAFETY

Loss of or damage to the propertyinvolved in the common maritimeadventure by or in consequence of asacrifice made for the common safety,and by water which goes down aship's hatches opened or otheropening made for the purpose ofmaking a jettison for the commonsafety, shall be allowed as generalaverage.

RULE III. EXTINGUISHING FIRE ONSHIPBOARD

Damage done to a ship and cargo,or either of them, by water orotherwise, including damage bybeaching or scuttling a burningship, in extinguishing a fire onboard the ship, shall be made goodas general average; except that nocompensation shall be made for

damage by smoke however causedor by heat of the fire.

RULE III. EXTINGUISHING FIRE ONSHIPBOARD

Damage done to a ship and cargo, oreither of them, by water or otherwise,including damage by beaching orscuttling a burning ship, inextinguishing a fire on board the ship,shall be allowedas general average;except that no allowance shall bemade for damage by smoke however

caused or by heat of the fire.

RULE IV. CUTTING AWAY WRECK

Loss or damage sustained bycutting away wreck or parts of theship which have been previouslycarried away or are effectively lostby accident shall not be made goodas general average.

RULE IV. CUTTING AWAY WRECK

Loss or damage sustained by cuttingaway wreck or parts of the ship whichhave been previously carried away orare effectively lost by accident shallnot be allowedas general average.


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RULE V. VOLUNTARY STRANDING

When a ship is intentionally run onshore for the common safety,whether or not she might havebeen driven on shore, theconsequent loss or damage to theproperty involved in the commonmaritime adventure shall beallowed in general average.

RULE V. VOLUNTARY STRANDING

When a ship is intentionally run onshore for the common safety, whetheror not she might have been driven onshore, the consequent loss or damageto the property involved in thecommon maritime adventure shall beallowed in general average.

RULE VI. SALVAGEREMUNERATION

(a) Expenditure incurred by theparties to the adventure in thenature of salvage, whether undercontract or otherwise, shall beallowed in general averageprovided that the salvageoperations were carried out for thepurpose of preserving from perilthe property involved in the

common maritime adventure.

Expenditure allowed in generalaverage shall include any salvageremuneration in which the skill andefforts of the salvors in preventingor minimising damage to theenvironment such as is referred toin Art.13 paragraph 1(b) of theInternational Convention onSalvage, 1989 have been taken into

account.

(b) Special compensation payableto a salvor by the shipowner underArt.14 of the said Convention to theextent specified in paragraph 4 ofthat Article or under any otherprovision similar in substance shallnot be allowed in general average.

RULE VI. SALVAGEREMUNERATION

(a) Salvage payments, includinginterest thereon and legal feesassociated with such payments,shall lie where they fall and shallnot be allowed in General Average,save only that if one party to thesalvage shall have paid all or any ofthe proportion of salvage (includinginterest and legal fees) due from

another party (calculated on thebasis of salved values and notGeneral Average contributoryvalues), the unpaid contribution tosalvage due from that other partyshall be credited in the adjustmentto the party that has paid it, anddebited to the party on whosebehalf the payment was made.

(b) Salvage payments referred to inparagraph (a) above shall includeany salvage remuneration in whichthe skill and efforts of the salvorsin preventing or minimisingdamage to the environment such asis referred to in Art. 13 paragraph1(b) of the International Convention

on Salvage 1989 have been takeninto account.


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(c) Special compensation payableto a salvor by the shipowner under

Art. 14 of the said Convention tothe extent specified in paragraph 4of that Article or under any otherprovision similar in substance(such as SCOPIC) shall not beallowed in General Average andshall not be considered a salvagepayment as referred to inparagraph (a) of this Rule.

RULE VII. DAMAGE TOMACHINERY AND BOILERS

Damage caused to any machineryand boilers of a ship which isashore and in a position of peril, inendeavouring to refloat, shall beallowed in general average whenshown to have arisen from anactual intention to float the ship forthe common safety at the risk of

such damage; but where a ship isafloat no loss or damage caused byworking the propelling machineryand boilers shall in anycircumstances be made good asgeneral average.

RULE VII. DAMAGE TOMACHINERY AND BOILERS

Damage caused to any machineryand boilers of a ship which is ashoreand in a position of peril, inendeavouring to refloat, shall beallowed in general average whenshown to have arisen from an actualintention to float the ship for thecommon safety at the risk of such

damage; but where a ship is afloat noloss or damage caused by working thepropelling machinery and boilers shallin any circumstances be allowed asgeneral average.

RULE VIII. EXPENSES LIGHTENINGA SHIP WHEN ASHORE ANDCONSEQUENT DAMAGE

When a ship is ashore and cargoand ship's fuel and stores or any ofthem are discharged as a generalaverage act, the extra cost oflightening, lighter hire andreshipping (if incurred), and anyloss or damage to the propertyinvolved in the common maritimeadventure in consequence thereof,shall be admitted as generalaverage.

RULE VIII. EXPENSES LIGHTENINGA SHIP WHEN ASHORE ANDCONSEQUENT DAMAGE

When a ship is ashore and cargo andship's fuel and stores or any of themare discharged as a general averageact, the extra cost of lightening, lighterhire and re-shipping (if incurred), andany loss or damage to the propertyinvolved in the common maritimeadventure in consequence thereof,shall be allowedas general average.


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RULE IX. CARGO, SHIP'S

MATERIALS AND STORES USEDFOR FUEL

Cargo, ship's materials and stores,or any of them, necessarily usedfor fuel for the common safety at atime of peril shall be admitted asgeneral average, but when such anallowance is made for the cost ofship's materials and stores thegeneral average shall be creditedwith the estimated cost of the fuelwhich would otherwise have beenconsumed in prosecuting theintended voyage.

RULE IX. CARGO, SHIP'S

MATERIALS AND STORES USEDFOR FUEL

Cargo, ship's materials and stores, orany of them, necessarily used for fuelfor the common safety at a time ofperil, shall be allowed as generalaverage, but when such an allowanceis made for the cost of ship's materialsand stores the general average shallbe credited with the estimated cost ofthe fuel which would otherwise havebeen consumed in prosecuting theintended voyage.

RULE X. EXPENSES AT PORT OFREFUGE, ETC.

(a) When a ship shall have entereda port or place of refuge or shall

have returned to her port or placeof loading in consequence ofaccident, sacrifice or otherextraordinary circumstances whichrender that necessary for thecommon safety, the expenses ofentering such port or place shall beadmitted as general average; andwhen she shall have sailed thencewith her original cargo, or a part ofit, the corresponding expenses of

leaving such port or placeconsequent upon such entry orreturn shall likewise be admitted asgeneral average.

When a ship is at any port or placeof refuge and is necessarilyremoved to another port or placebecause repairs cannot be carriedout in the first port or place, theprovisions of this Rule shall be

applied to the second port or placeas if it were a port or place of

RULE X. EXPENSES AT PORT OFREFUGE, ETC.

(a) (i)When a ship shall have entereda port or place of refuge or shall have

returned to her port or place of loadingin consequence of accident, sacrificeor other extraordinary circumstanceswhich render that necessary for thecommon safety, the expenses ofentering such port or place shall beallowed as general average; andwhen she shall have sailed thencewith her original cargo, or a part of it,the corresponding expenses ofleaving such port or place consequent

upon such entry or return shalllikewise be allowed as generalaverage.

(ii)When a ship is at any port or placeof refuge and is necessarily removedto another port or place of refugebecause repairs cannot be carried outin the first port or place, the provisionsof this Rule shall be applied to the

second port or place of refugeas if itwere a port or place of refuge and the


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refuge and the cost of suchremoval including temporaryrepairs and towage shall be

admitted as general average. Theprovisions of Rule XI shall beapplied to the prolongation of thevoyage occasioned by suchremoval.

(b) The cost of handling on boardor discharging cargo, fuel or storeswhether at a port or place ofloading, call or refuge, shall beadmitted as general average, whenthe handling or discharge wasnecessary for the common safetyor to enable damage to the shipcaused by sacrifice or accident tobe repaired, if the repairs werenecessary for the safe prosecutionof the voyage, except in caseswhere the damage to the ship isdiscovered at a port or place ofloading or call without any accident

or other extraordinarycircumstances connected withsuch damage having taken placeduring the voyage.

The cost of handling on board ordischarging cargo, fuel or storesshall not be admissible as generalaverage when incurred solely forthe purpose of restowage due toshifting during the voyage, unless

such restowage is necessary forthe common safety.

(c) Whenever the cost of handlingor discharging cargo, fuel or storesis admissible as general average,the costs of storage, includinginsurance if reasonably incurred,reloading and stowing of suchcargo, fuel or stores shall likewisebe admitted as general average.

The provisions of Rule XI shall beapplied to the extra period of

cost of such removal includingtemporary repairs and towage shall beallowed as general average. The

provisions of Rule XI shall be appliedto the prolongation of the voyageoccasioned by such removal.

(b) (i) The cost of handling on boardor discharging cargo, fuel or storeswhether at a port or place of loading,call or refuge, shall be allowed asgeneral average, when the handling ordischarge was necessary for thecommon safety or to enable damageto the ship caused by sacrifice oraccident to be repaired, if the repairswere necessary for the safeprosecution of the voyage, except incases where the damage to the ship isdiscovered at a port or place ofloading or call without any accident orother extraordinary circumstancesconnected with such damage having

taken place during the voyage.

(ii) The cost of handling on board ordischarging cargo, fuel or stores shallnot be allowableas general averagewhen incurred solely for the purposeof restowage due to shifting during thevoyage, unless such restowage isnecessary for the common safety.

(c) Whenever the cost of handling ordischarging cargo, fuel or stores isallowable as general average, thecosts of storage, including insurance ifreasonably incurred, reloading andstowing of such cargo, fuel or storesshall likewise be allowed as generalaverage. The provisions of Rule XIshall be applied to the extra period of

detention occasioned by suchreloading or restowing.


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detention occasioned by suchreloading or restowing.

But when the ship is condemned ordoes not proceed on her originalvoyage, storage expenses shall beadmitted as general average onlyup to the date of the ship'scondemnation or of theabandonment of the voyage or upto the date of completion ofdischarge of cargo if thecondemnation or abandonmenttakes place before that date.

But when the ship is condemned or

does not proceed on her originalvoyage, storage expenses shall beallowed as general average only upto the date of the ship's condemnationor of the abandonment of the voyageor up to the date of completion ofdischarge of cargo if thecondemnation or abandonment takesplace before that date.

RULE XI. WAGES ANDMAINTENANCE OF CREW ANDOTHER EXPENSES BEARING UPFOR AND IN A PORT OF REFUGE,ETC.

(a) Wages and maintenance ofmaster, officers and crewreasonably incurred and fuel and

stores consumed during theprolongation of the voyageoccasioned by a ship entering aport or place of refuge or returningto her port or place of loading shallbe admitted as general averagewhen the expenses of enteringsuch port or place are allowable ingeneral average in accordance withRule X(a).

(b) When a ship shall have enteredor been detained in any port orplace in consequence of accident,sacrifice or other extra-ordinarycircumstances which render thatnecessary for the common safety,or to enable damage to the shipcaused by sacrifice or accident tobe repaired, if the repairs werenecessary for the safe prosecutionof the voyage, the wages and

maintenance of the master, officersand crew reasonably incurred

RULE XI. WAGES ANDMAINTENANCE OF CREW ANDOTHER EXPENSES PUTTING IN TOANDATA PORT OF REFUGE, ETC.

(a) Wages and maintenance ofmaster, officers and crew reasonablyincurred and fuel and storesconsumed during the prolongation of

the voyage occasioned by a shipentering a port or place of refuge orreturning to her port or place ofloading shall be allowed as generalaverage when the expenses ofentering such port or place areallowable in general average inaccordance with Rule X(a).

(b) For the purpose of this andthe other Rules wages shall include

all payments made to or for thebenefit of the master, officers andcrew, whether such payments beimposed by law upon theshipowners or be made under theterms of articles of employment.

(c) (i) When a ship shall have enteredor been detained in any port or placein consequence of accident, sacrificeor other extraordinary circumstances

which render that necessary for thecommon safety, or to enable damage


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during the extra period of detentionin such port or place until the shipshall or should have been made

ready to proceed upon her voyage,shall be admitted in generalaverage.

Fuel and stores consumed duringthe extra period of detention shallbe admitted as general average,except such fuel and stores as areconsumed in effecting repairs notallowable in general average.

Port charges incurred during theextra period of detention shalllikewise be admitted as generalaverage except such charges asare incurred solely by reason ofrepairs not allowable in generalaverage.

Provided that when damage to theship is discovered at a port or place

of loading or call without anyaccident or other extraordinarycircumstance connected with suchdamage having taken place duringthe voyage, then the wages andmaintenance of master, officersand crew and fuel and storesconsumed and port chargesincurred during the extra detentionfor repairs to damages sodiscovered shall not be admissible

as general average, even if therepairs are necessary for the safe-prosecution of the voyage.

When the ship is condemned ordoes not proceed on her originalvoyage, the wages andmaintenance of the master, officersand crew and fuel and storesconsumed and port charges shallbe admitted as general average

only up to the date of the ship'scondemnation or of the

to the ship caused by sacrifice oraccident to be repaired, if the repairswere necessary for the safe

prosecution of the voyage, fuel andstores consumed during the extraperiod of detention in such port orplace until the ship shall or shouldhave been made ready to proceedupon her voyage, shall be allowed ingeneral average, except such fuel andstores as are consumed in effectingrepairs not allowable in generalaverage.

(ii) Port charges incurred duringthe extra period of detention shalllikewise be allowed as generalaverage except such charges as areincurred solely by reason of repairsnot allowable in general average.

(iii) Provided that when damage tothe ship is discovered at a port or

place of loading or call without anyaccident or other extraordinarycircumstance connected with suchdamage having taken place during thevoyage, then fuel and storesconsumed and port charges incurredduring the extra detention for repairsto damages so discovered shall not beallowableas general average, even ifthe repairs are necessary for the safeprosecution of the voyage.

(iv) When the ship is condemned ordoes not proceed on her originalvoyage, fuel and stores consumedand port charges shall be allowedas general average only up to the dateof the ship's condemnation or of theabandonment of the voyage or up to

the date of completion of discharge ofcargo if the condemnation or


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(iv) necessarily in connection withthe discharging, storing or

reloading of cargo whenever thecost of those operations isadmissible as general average.

(iv) necessarily in connection withthe discharging, storing or reloading of

cargo whenever the cost of thoseoperations is allowable as generalaverage.

RULE XII. DAMAGE TO CARGO INDISCHARGING, ETC.

Damage to or loss of cargo, fuel orstores sustained in consequence oftheir handling, discharging, storing,reloading and stowing shall bemade good as general average,when and only when the cost ofthose measures respectively isadmitted as general average.

RULE XII. DAMAGE TO CARGO INDISCHARGING, ETC.

Damage to or loss of cargo, fuel orstores sustained in consequence oftheir handling, discharging, storing,reloading and stowing shall beallowed as general average, whenand only when the cost of thosemeasures respectively is allowed asgeneral average.

RULE XIII. DEDUCTIONS FROMCOST OF REPAIRS

Repairs to be allowed in generalaverage shall not be subject todeductions in respect of "new forold" where old material or parts arereplaced by new unless the ship isover fifteen years old in which casethere shall be a deduction of onethird. The deductions shall beregulated by the age of the shipfrom the 31st December of the yearof completion of construction to

the date of the general average act,except for insulation, life andsimilar boats, communications andnavigational apparatus andequipment, machinery and boilersfor which the deductions shall beregulated by the age of theparticular parts to which theyapply.

The deductions shall be made only

from the cost of the new material orparts when finished and ready to be

RULE XIII. DEDUCTIONS FROMCOST OF REPAIRS

(a) Repairs to be allowed ingeneral average shall not be subjectto deductions in respect of "new forold" where old material or parts arereplaced by new unless the ship isover fifteen years old in which casethere shall be a deduction of one third.The deductions shall be regulated bythe age of the ship from the 31stDecember of the year of completion ofconstruction to the date of the general

average act, except for insulation, lifeand similar boats, communicationsand navigational apparatus andequipment, machinery and boilers forwhich the deductions shall beregulated by the age of the particularparts to which they apply.

(b) The deductions shall be made

only from the cost of the new materialor parts when finished and ready to be


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installed in the ship.

No deduction shall be made in

respect of provisions, stores,anchors and chain cables.

Drydock and slipway dues andcosts of shifting the ship shall beallowed in full.

The costs of cleaning, painting orcoating of bottom shall not beallowed in general average unlessthe bottom has been painted orcoated within the twelve monthspreceding the date of the generalaverage act in which case one halfof such costs shall be allowed.

installed in the ship. No deductionshall be made in respect of provisions,stores, anchors and chain cables.

Drydock and slipway dues and costsof shifting the ship shall be allowed infull.

(c) The costs of cleaning, paintingor coating of bottom shall not beallowed in general average unless thebottom has been painted or coatedwithin the twelve months precedingthe date of the general average act inwhich case one half of such costsshall be allowed.

RULE XIV. TEMPORARY REPAIRS

Where temporary repairs areeffected to a ship at a port ofloading, call or refuge, for the

common safety, or of damagecaused by general averagesacrifice, the cost of such repairsshall be admitted as generalaverage.

Where temporary repairs ofaccidental damage are effected inorder to enable the adventure to becompleted, the cost of such repairsshall be admitted as general

average without regard to thesaving, if any, to other interests,but only up to the saving inexpense which would have beenincurred and allowed in generalaverage if such repairs had notbeen effected there.

No deductions "new for old" shallbe made from the cost of temporaryrepairs allowable as general

average.

RULE XIV. TEMPORARY REPAIRS

(a) Where temporary repairs areeffected to a ship at a port of loading,call or refuge, for the common safety,

or of damage caused by generalaverage sacrifice, the cost of suchrepairs shall be allowed as generalaverage.

(b) Where temporary repairs ofaccidental damage are effected inorder to enable the adventure to becompleted, the cost o f such repairsshall be allowed as general average

without regard to the saving, if any,to other interests, but only up tothe saving in expense which wouldhave been incurred and allowed ingeneral average if such repairs hadnot been effected there. Providedthat, for the purposes of thisparagraph only, the cost oftemporary repairs falling forconsideration shall be limited to theextent that the cost of temporary

repairs effected at the port ofloading, call or refuge, together


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freight is at the risk of interestsother than the cargo.

When cargo so damaged is soldand the amount of the damage hasnot been otherwise agreed, the lossto be made good in general averageshall be the difference between thenet proceeds of sale and the netsound value as computed in thefirst paragraph of this Rule.

interests other than the cargo.

(b) When cargo so damaged issold and the amount of the damagehas not been otherwise agreed, theloss to be allowedin general averageshall be the difference between thenet proceeds of sale and the netsound value as computed in the firstparagraph of this Rule.

RULE XVII. CONTRIBUTORYVALUES

The contribution to a generalaverage shall be made upon theactual net values of the property atthe termination of the adventureexcept that the value of cargo shallbe the value at the time ofdischarge, ascertained from thecommercial invoice rendered to thereceiver or if there is no such

invoice from the shipped value.

The value of the cargo shall includethe cost of insurance and freightunless and insofar as such freightis at the risk of interests other thanthe cargo, deducting therefrom anyloss or damage suffered by thecargo prior to or at the time ofdischarge. The value of the shipshall be assessed without taking

into account the beneficial ordetrimental effect of any demise ortime charterparty to which the shipmay be committed.

To these values shall be added theamount made good as generalaverage for property sacrificed, ifnot already included, deductionbeing made from the freight and

passage money at risk of suchcharges and crew's wages as

RULE XVII. CONTRIBUTORYVALUES

(a) (i) The contribution to a generalaverage shall be made upon theactual net values of the property at thetermination of the adventure exceptthat the value of cargo shall be thevalue at the time of discharge,ascertained from the commercialinvoice rendered to the receiver or ifthere is no such invoice from the

shipped value.

(ii) The value of the cargo shallinclude the cost of insurance andfreight unless and insofar as suchfreight is at the risk of interests otherthan the cargo, deducting therefromany loss or damage suffered by thecargo prior to or at the time ofdischarge.

(iii) The value of the ship shall beassessed without taking into accountthe beneficial or detrimental effect ofany demise or time charterparty towhich the ship may be committed.

(b) To these values shall be addedthe amount allowed as generalaverage for property sacrificed, if notalready included, deduction beingmade from the freight and passage

money at risk of such charges andcrew's wages as would not have been


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would not have been incurred inearning the freight had the ship andcargo been totally lost at the date

of the general average act and havenot been allowed as generalaverage; deduction being alsomade from the value of the propertyof all extra charges incurred inrespect thereof subsequently to thegeneral average act, except suchcharges as are allowed in generalaverage or fall upon the ship byvirtue of an award for specialcompensation under Art.14 of theInternational Convention onSalvage, 1989 or under any otherprovision similar in substance.

In the circumstances envisaged inthe third paragraph of Rule G, thecargo and other property shallcontribute on the basis of its valueupon delivery at originaldestination unless sold or

otherwise disposed of short of thatdestination, and the ship shallcontribute upon its actual net valueat the time of completion ofdischarge of cargo.

Where cargo is sold short ofdestination, however, it shallcontribute upon the actual netproceeds of sale, with the additionof any amount made good as

general average.

Mails, passengers' luggage,personal effects and accompaniedprivate motor vehicles shall notcontribute in general average.

incurred in earning the freight had theship and cargo been totally lost at thedate of the general average act and

have not been allowed as generalaverage; deduction being also madefrom the value of the property of allextra charges incurred in respectthereof subsequently to the generalaverage act, except such charges asare allowed in general average or fallupon the ship by virtue of an award forspecial compensation under Art. 14 ofthe International Convention onSalvage, 1989 or under any otherprovision similar in substance.

(c) In the circumstances envisagedin the third paragraph of Rule G, thecargo and other property shallcontribute on the basis of its valueupon delivery at original destinationunless sold or otherwise disposed of

short of that destination, and the shipshall contribute upon its actual netvalue at the time of completion ofdischarge of cargo.

(d) Where cargo is sold short ofdestination, however, it shallcontribute upon the actual netproceeds of sale, with the addition ofany amount allowed as general

average.

(e) Mails, passengers' luggage,personal effects and accompaniedprivate motor vehicles shall notcontribute to general average.


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RULE XVIII. DAMAGE TO SHIP

The amount to be allowed asgeneral average for damage or lossto the ship, her machinery and/orgear caused by a general averageact shall be as follows:

(a) When repaired or replaced,

The actual reasonable cost ofrepairing or replacing such damageor loss, subject to deductions inaccordance wi th Rule XIII;

(b) When not repaired or replaced,

The reasonable depreciationarising from such damage or loss,but not exceeding the estimatedcost of repairs. But where the shipis an actual total loss or when thecost of repairs of the damage

would exceed the value of the shipwhen repaired, the amount to beallowed as general average shall bethe difference between theestimated sound value of the shipafter deducting therefrom theestimated cost of repairing damagewhich is not general average andthe value of the ship in herdamaged state which may bemeasured by the net proceeds of

sale, if any.

RULE XVIII. DAMAGE TO SHIP

The amount to be allowed as generalaverage for damage or loss to theship, her machinery and/or gearcaused by a general average act shallbe as follows:

(a) When repaired or replaced,

The actual reasonable cost ofrepairing or replacing such damage orloss, subject to deductions inaccordance with Rule XIII;

(b) When not repaired or replaced,

The reasonable depreciation arisingfrom such damage or loss, but notexceeding the estimated cost ofrepairs. But where the ship is anactual total loss or when the cost ofrepairs of the damage would exceed

the value of the ship when repaired,the amount to be allowed as generalaverage shall be the differencebetween the estimated sound value ofthe ship after deducting therefrom theestimated cost of repairing damagewhich is not general average and thevalue of the ship in her damaged statewhich may be measured by the netproceeds of sale, if any.

RULE XIX. UNDECLARED ORWRONGFULLY DECLARED CARGODamage or loss caused to goodsloaded without the knowledge ofthe Shipowner or his agent or togoods wilfully misdescribed at timeof shipment shall not be allowed asgeneral average, but such goods

shall remain liable to contribute, ifsaved.

RULE XIX. UNDECLARED ORWRONGFULLY DECLARED CARGO

(a) Damage or loss caused togoods loaded without the knowledgeof the Shipowner or his agent or togoods wilfully misdescribed at time ofshipment shall not be allowed asgeneral average, but such goods shall

remain liable to contribute, if saved.


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Damage or loss caused to goodswhich have been wrongfully

declared on shipment at a valuewhich is lower than their real valueshall be contributed for at thedeclared value, but such goodsshall contribute upon their actualvalue.

(b) Damage or loss caused togoods which have been wrongfully

declared on shipment at a value whichis lower than their real value shall becontributed for at the declared value,but such goods shall contribute upontheir actual value.

RULE XX. PROVISION OF FUNDS

A commission of 2 per cent. ongeneral average disbursements,other than the wages andmaintenance of master, officersand crew and fuel and stores notreplaced during the voyage, shallbe allowed in general average

The capital loss sustained by theowners of goods sold for thepurpose of raising funds to defraygeneral average disbursements

shall be allowed in general average.The cost of insuring averagedisbursements shall also beadmitted in general average.

RULE XX. PROVISION OF FUNDS

(a) The capital loss sustained bythe owners of goods sold for thepurpose of raising funds to defraygeneral average disbursements shall

be allowed in general average.

(b) The cost of insuring averagedisbursements shall also be allowedin general average.

RULE XXI. INTEREST ON LOSSESMADE GOOD IN GENERALAVERAGE

Interest shall be allowed on

expenditure, sacrifices andallowances in general average atthe rate of 7 per cent. per annum,until three months after the date ofissue of the general averageadjustment, due allowance beingmade for any payment on accountby the contributory interests orfrom the general average depositfund.

RULE XXI. INTEREST ON LOSSESALLOWEDIN GENERALAVERAGE

(a) Interest shall be allowed on

expenditure, sacrifices andallowances in general average untilthree months after the date of issue ofthe general average adjustment, dueallowance being made for anypayment on account by thecontributory interests or from thegeneral average deposit fund.

(b) Each year the Assembly of

the Comite Maritime Internationalshall decide the rate of interest


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which shall apply. This rate shallbe used for calculating interestaccruing during the following

calendar year.

RULE XXII. TREATMENT OF CASHDEPOSITS

Where cash deposits have beencollected in respect of cargo'sliability for general average,salvage or special charges suchdeposits shall be paid without anydelay into a special account in thejoint names of a representat ivenominated on behalf of theshipowner and a representativenominated on behalf of thedepositors in a bank to beapproved by both. The sum sodeposited together with accruedinterest, if any, shall be held assecurity for payment to the partiesentitled thereto of the general

average, salvage or special chargespayable by cargo in respect ofwhich the deposits have beencollected. Payments on account orrefunds of deposits may be made ifcertified to in writing by theaverage adjuster. Such depositsand payments or refunds shall bewithout prejudice to the ultimateliability o f the parties.

RULE XXII. TREATMENT OF CASHDEPOSITS

Where cash deposits have beencollected in respect of cargo's liabilityfor general average, salvage orspecial charges, such deposits shallbe paid without any delay into aspecial account in the joint names of arepresentative nominated on behalf ofthe shipowner and a representativenominated on behalf of the depositorsin a bank to be approved by both.The sum so deposited together withaccrued interest, if any, shall be heldas security for payment to the partiesentitled thereto of the generalaverage, salvage or special chargespayable by cargo in respect of which

the deposits have been collected.Payments on account or refunds ofdeposits may be made if certified to inwriting by the average adjuster. Suchdeposits and payments or refundsshall be without prejudice to theultimate liability of the parties.


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RULE XXIII. TIME BAR FORCONTRIBUTIONS TO GENERAL

AVERAGE

(a) Subject always to anymandatory rule on time limitationcontained in any applicable law:

(i) Any rights to general averagecontribution including any rights toclaim under general average bondsand guarantees, shall beextinguished unless an action isbrought by the party claiming suchcontribution within a period of oneyear after the date upon which thegeneral average adjustment wasissued. However, in no case shallsuch an action be brought after sixyears from the date of terminationof the common maritime adventure.

(ii) These periods may be

extended if the parties so agreeafter the termination of thecommon maritime adventure.

(b) This rule shall not apply asbetween the parties to the generalaverage and their respectiveinsurers.

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commentary on the york antwerp rules 2004 2nd edition

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