Answer
General Average (GA) is an ancient maritime law principle—codified under the internationally recognized York-Antwerp Rules (YAR)—where all parties in a sea venture (Shipowner, Cargo Owners, and Charterer) proportionally share any extraordinary loss or expenditure intentionally incurred to save the venture from common peril.
Under Rule A of the York-Antwerp Rules, a situation qualifies for General Average only if all five conditions are met:
- Extraordinary Nature: The loss or expenditure must not be routine operational expenses.
- Intentional Act: The sacrifice or expenditure must be a deliberate, conscious decision made by the Master or Owner.
- Common Danger: A real, imminent, and common danger must threaten the vessel, cargo, and human lives simultaneously.
- Reasonable Action: The measures taken must be reasonable.
- Success: The overall adventure (or part of it) must be preserved.
Types of General Average Claims
- GA Sacrifice: Physical destruction of equipment, hull, or cargo to save the ship (e.g., jettisoning cargo to refloat, damaging main engines during a refloating attempt).
- GA Expenditure: Direct financial payments made to salvage or preserve the venture (e.g., salvage fees under LOF, tug assistance, port of refuge expenses, discharge/re-loading of cargo for hull repairs).
Case Studies
Case Study 1: Grounding and Refloating (The Ever Given Incident, Suez Canal, 2021)
- The Situation: On March 23, 2021, the 20,000 TEU ultra-large container vessel Ever Given ran aground in the Suez Canal, blocking international shipping traffic and risking structural hull collapse or grounding stress.
- Actions Taken (GA Sacrifices & Expenditures):
- Mobilization of specialized salvage companies (SMIT Salvage) under a salvage agreement.
- Deployment of multiple heavy-duty tugboats and dredgers to clear mud from around the bow.
- Discharge of ballast water and preparation to jettison containers to lighten the vessel.
- High-load engine and winch operations that subjected machinery to excessive stress.
- GA Application:
- Owner Shoei Kisen Kaisha declared General Average on April 1, 2021.
- Sacrifices: Machinery damage from forced refloating maneuvers.
- Expenditures: Millions of dollars in salvage costs, tugboat fees, dredger operations, and canal authority compensation claims.
- Contribution: The total salvage bill and associated expenses were assessed and distributed proportionally across the sound value of the ship, the fuel/bunkers, and the value of all 18,300+ containers on board. Cargo could not be released at destination ports without cargo owners providing a GA Bond and a GA Guarantee (issued by their cargo underwriters).