The law of general average is a principle of maritime law whereby all stakeholders in a sea venture proportionally 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 and the cargo-owners.
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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, Classical, Medieval, and Early Modern times
A form of what is now called general average was included in the Lex Rhodia, the Rhodes Maritime Code of circa 800 BC. 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.
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. 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.
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.
York Antwerp Rules
The 1890 Rules
The first codification of general average was the York Antwerp Rules of 1890. 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".
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.
- The owners of the Hanjin Osaka declared general average following an explosion in the ship's engine room on 8 January 2012.
- Maersk declared general average for Maersk Honam after a fire in the Arabian Sea in March 2018.
- Note: the "carrier" is either the shipowner or the charterer.
- "Duhaime's Timetable of World Legal History". Duhaime's Law Dictionary. Retrieved April 9, 2016.
- "York-Antwerp Rules Definition". Duhaime's Law Dictionary. Retrieved April 9, 2016.
- 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.
- Richard Cornah (April–May 2004). "The road to Vancouver – the development of the York-Antwerp Rules" (PDF). Journal of International Maritime Law. Retrieved April 9, 2016.
- The Association of Average Adjusters of the United States and Canada: YAR Archived September 23, 2009, at the Wayback Machine
- The full text of the 1994 Rules
- A summary of the 2004 changes
- "General Average Declared After Engine Explosion" (PDF), Western Overseas Corporation Dispatch, 2 (2), p. 1, March 2012, retrieved 2012-06-12
- ""River Rescue"". Cargolaw.com. The Law Offices of Countryman & McDaniel. Retrieved April 10, 2016.
- Todd, Stuart (March 15, 2018). "General average declared for stricken Maersk Honam vessel". Lloyd's Loading List. Retrieved March 23, 2018.
- 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. 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.
- Definition of General Average, Duhaime's Law Dictionary
- Carver, Thomas Gilbert (1911). Encyclopædia Britannica. 3 (11th ed.). Cambridge University Press. . In Chisholm, Hugh (ed.).