General average

The law of general average is a principle of maritime law whereby all stakeholders in a sea venture proportionately share any losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency. For instance, should the crew jettison some cargo overboard to lighten the ship in a storm, the loss would be shared pro rata by both the carrier[2] and the cargo-owners.

This article is about the legal principle of maritime law. For generalised average in Maths, see Generalized mean. For the carom billiards term, see Glossary of cue sports terms § general average.
The owners of Hanjin Osaka, seen here transiting the Panama Canal in 2012, declared general average following an explosion.[1]
Admiralty law
History
Features
Contract of carriage/Charterparty
Parties
Judiciary
International conventions
International organisations

Code of Hammurabi Law 238 (c. 1755–1750 BC) stipulated that a sea captain, ship-manager, or ship charterer that saved a ship from total loss was only required to pay one-half the value of the ship to the ship-owner.[3][4][5] In the Digesta seu Pandectae (533), the second volume of the codification of laws ordered by Justinian I (527–565) of the Eastern Roman Empire, a legal opinion written by the Roman jurist Paulus at the beginning of the Crisis of the Third Century in 235 AD was included about the Lex Rhodia ("Rhodian law") that articulates the general average principle established on the island of Rhodes in approximately 1000 to 800 BC as a member of the Doric Hexapolis, plausibly by the Phoenicians during the proposed Dorian invasion and emergence of the purported Sea Peoples during the Greek Dark Ages (c. 1100–c. 750) that led to the proliferation of the Doric Greek dialect.[6][7][8] The law of general average constitutes the fundamental principle that underlies all insurance.[7]

In the exigencies of hazards faced at sea, crew members may have little time in which to determine precisely whose cargo they are jettisoning. Thus, to avoid quarreling that could waste valuable time, there arose the equitable practice whereby all the merchants whose cargo landed safely would be called on to contribute a portion, based upon a share or percentage, to the merchant or merchants whose goods had been tossed overboard to avert imminent peril. General average traces its origins in ancient maritime law, and the principle remains within the admiralty law of most countries.

Ancient through early modern times

It is provided by the Lex Rhodia that if merchandise is thrown overboard for the purpose of lightening a ship, the loss is made good by the assessment of all which is made for the benefit of all.

— Julius Paulus Prudentissimus, Opinions of Paulus (c. 230 AD)[8]

A form of what is now called general average was included in the Lex Rhodia, the Rhodes Maritime Code of c. 800 BC.[9] Julius Paulus Prudentissimus quoted from the law around the turn of the 3rd century, and these quotes are preserved, and an excerpt is included in Justinian's 6th-century Digest of Justinian (part of the Corpus Juris Civilis), although the Lex Rhodia is itself now lost.[8][10]

After the fall of Rome, formal maritime law fell into disuse in Europe (maritime law scholar Jean Marie Pardessus suggests that the Digest of Justinian may have been entirely lost until a copy was discovered in Amalfi around 1135), although informal arrangements similar to the basic concept of general average was probably often followed as a practical matter.[10] The medieval Rolls of Oléron, probably a collection of judgments from a court in Bordeaux, provided (along with much else) guidance on what is now called general average, and was taken as authoritative in many parts of Europe: the Laws of Wisbuy, as well as laws of Flanders, the Hanseatic League, Amsterdam, Genoa, and Catalonia, appear to have been copied from the Rolls of Oléron.[10]

An ordinance published by King Louis XIV of France in 1681 influenced laws in the rest of Europe, with the definition used in the French code followed in similar terms in codes and ordinances promulgated in that century and the next in Hamburg, Prussia, Denmark, Sweden, Spain, Amsterdam, Rotterdam and Middelburg.[11]

York Antwerp Rules

The 1890 Rules

The first codification of general average was the York Antwerp Rules[12] of 1890.[9][11] American companies accepted it in 1949. General average requires three elements which are clearly stated by Justice Grier in Barnard v. Adams:

"1st. A common danger: a danger in which vessel, cargo and crew all participate; a danger imminent and apparently 'inevitable', except by voluntarily incurring the loss of a portion of the whole to save the remainder."
"2nd. There must be a voluntary jettison, jactus, or casting away, of some portion of the joint concern for the purpose of avoiding this imminent peril, periculi imminentis evitandi causa, or, in other words, a transfer of the peril from the whole to a particular portion of the whole."
"3rd. This attempt to avoid the imminent common peril must be successful".

The York-Antwerp Rules remain in effect, having been modified and updated several times since their 1890 introduction.[11]

Modern Rules

The York Antwerp Rules were updated in 1994, 2004 and 2016. The text of the 1994 Rules, those still in widest use, may be found here:[13] A summary of the 2004 changes may be found here.[14]

The 2016 Rules may be downloaded from the website of the Comité Maritime International, the custodian of the York-Antwerp Rules at .

New Jason Clause

US law provides for taking the shipowner's fault into account, in contradiction of Rule D of the York-Antwerp Rules. Therefore, a New Jason Clause is often included in shipping contracts when US law may apply to the contract or trade. Such a clause specifies that shipowners will also be included in the General Average even when the loss was caused by negligence of the shipowner or crew.[15][16]

Modern day

Despite advances in maritime transport technology, General Average continues on occasion to be invoked:

  • The MV Hyundai Fortune declared general average following an explosion and fire in 2006 off the coast of Yemen.
  • The M/V MSC Sabrina declared general average in effect after grounding in the Saint Lawrence river on 8 March 2008.[17]
  • The owners of the Hanjin Osaka declared general average following an explosion in the ship's engine room on 8 January 2012.[1]
  • Maersk declared general average for Maersk Honam after a fire in the Arabian Sea in March 2018.[18]
  • The owners of the Northern Jupiter declared general average following an engine fire on 28 January 2020.[19]
  • Shoei Kisen, the owners of the Ever Given, declared general average following the grounding of the vessel in the Suez Canal on 23 March 2021, resulting in a six-day shutdown of traffic in the canal until it was freed by 11 tugs and two dredgers.[20][21]
  • Evergreen Marine, the owners of the Ever Forward, declared general average on 31 March 2022 following the grounding of the vessel in Chesapeake Bay.[22][23]

References
  1. "General Average Declared After Engine Explosion" (PDF), Western Overseas Corporation Dispatch, vol. 2, no. 2, p. 1, March 2012, retrieved 2012-06-12
  2. Note: the "carrier" is either the shipowner or the charterer.
  3. Hammurabi (1903). Translated by Sommer, Otto. "Code of Hammurabi, King of Babylon". Records of the Past. Washington, DC: Records of the Past Exploration Society. 2 (3): 86. Retrieved June 20, 2021. 238. If a skipper wrecks ... money to its owner.
  4. Hammurabi (1904). "Code of Hammurabi, King of Babylon" (PDF). Liberty Fund. Translated by Harper, Robert Francis (2nd ed.). Chicago: University of Chicago Press. p. 85. Retrieved June 20, 2021. §238. If a boatman sink ... one-half its value.
  5. Hammurabi (1910). "Code of Hammurabi, King of Babylon". Avalon Project. Translated by King, Leonard William. New Haven, CT: Yale Law School. Retrieved June 20, 2021. 238. If a sailor wreck ... its value in money.
  6. "The Civil Law, Volume I, The Opinions of Julius Paulus, Book II". Constitution.org. Translated by Scott, S.P. Central Trust Company. 1932. Retrieved June 16, 2021. TITLE VII. ON THE LEX RHODIA. It is provided by the Lex Rhodia that if merchandise is thrown overboard for the purpose of lightening a ship, the loss is made good by the assessment of all which is made for the benefit of all.
  7. The Documentary History of Insurance, 1000 B.C.–1875 A.D. Newark, NJ: Prudential Press. 1915. pp. 5–6. Retrieved June 15, 2021.
  8. "Duhaime's Timetable of World Legal History". Duhaime's Law Dictionary. Retrieved April 9, 2016.
  9. "York-Antwerp Rules Definition". Duhaime's Law Dictionary. Retrieved April 9, 2016.
  10. Lowndes, Richard (1873). The law of general average: English and foreign. Stevens and Sons (1873), Gale (2010). pp. 1-10. ISBN 978-1240154715. Retrieved April 10, 2016.
  11. Richard Cornah (April–May 2004). "The road to Vancouver – the development of the York-Antwerp Rules" (PDF). Journal of International Maritime Law. Archived from the original (PDF) on 2016-04-23. Retrieved April 9, 2016.
  12. The Association of Average Adjusters of the United States and Canada: YAR Archived September 23, 2009, at the Wayback Machine
  13. The full text of the 1994 Rules
  14. A summary of the 2004 changes
  15. https://securenow.in/insuropedia/new-jason-clause-marine-insurance-policies/ Article including a case study
  16. https://www.standard-club.com/knowledge-news/remember-the-importance-of-the-new-jason-clause-3827/ Explanation by a P&I Club
  17. ""River Rescue"". Cargolaw.com. The Law Offices of Countryman & McDaniel. Retrieved April 10, 2016.
  18. Todd, Stuart (March 15, 2018). "General average declared for stricken Maersk Honam vessel". Lloyd's Loading List. Retrieved March 23, 2018.
  19. "Declaration of General Average AU1/ MV Northern Jupiter Voy.949N" (PDF).
  20. "Lengthy wait for cargo as Ever Given owner declares General Average".
  21. "General Average Declared for Ever Given"
  22. "Evergreen Marine declares General Average on stuck ship - Reinsurance News". ReinsuranceNe.ws. 2022-04-01. Retrieved 2022-04-06.
  23. "Evergreen declares General Average on stricken Ever Forward". The Loadstar. 2022-03-31. Retrieved 2022-04-06.

See also

Further reading
  • Cornah, Richard; Sarll, Richard (2018). Shead, Joshua (ed.). Lowndes & Rudolf: The Law of General Average and the York-Antwerp Rules (15th ed.). Sweet & Maxwel. ISBN 978-0414057043.
  • Cornah, Richard; Reeder, John (2013). Cooke, Julian (ed.). Lowndes & Rudolf: The Law of General Average and the York-Antwerp Rules (14th ed.). Sweet & Maxwel. ISBN 978-0414028463.
  • Rose, Francis (2005). General Average: Law and Practice. Maritime and Transport Law Library (2nd ed.). Informa Law (Routledge). ISBN 978-1843114185.
  • Grime, Robert (1991). Shipping Law. Concise College Texts. Sweet & Maxwell. ISBN 0 421 21130X.
  • Baughan, Simon (2015). Shipping Law (6th ed.). Routledge. ISBN 978 0 415 71219 4.
  • Mandaraka-Shephard, Aleka (2015). Maritime Law (3d ed.). Routledge.
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