GENERAL AVERAGE AND

YORK ANTWERP RULES

PRESENTED BY

CAPT M.GAUTAMA
MANAGING DIRECTOR
WILSON SURVEYORS AND ADJUSTERS PVT. LTD.
MUMBAI
 GENERAL AVERAGE
 ORIGIN AND DEVELOPMENT OF GENERAL
AVERAGE

 BASIC PRINCIPLE

 “THAT WHICH HAS BEEN SACRIFIED FOR THE

BENEFIT OF ALL SHALL HE MADE GOOD BY THE
CONTRIBUTION OF ALL”
 INTRODUCTION
 GLASGOW RESOLUTION – 1860

 YORK RULES – 1864

 YAR – 1890,1924,1950,1974, AS
AMENDED 1990, 1994,2004
YORK ANTWERP RULES HAVE RECOGNISED
TWO MAIN TYPES OF ALLOWANCES

 “COMMON SAFETY” ALLOWANCES – SUCH AS

SACRIFICE OF PROPERTY (FLOODING A HOLD
WITH CARGO TO FIGHT THE FIRE, JETTISONING)
OR EXPENDITURE (SUCH AS SALVAGE OR
LIGHTENING A VESSEL) THAT WAS MADE WHEN
VESSEL AND CARGO ACTUALLY IN GRIP OF
PERIL – UK.
 “COMMON BENEFIT’ ALLOWANCES -:
ONCE A VESSEL ENTERED A PORT OF REFUGE
EXPENSES INCURRED TO ENABLE VESSEL TO
RESUME VOYAGE WAS ALLOWING IN GENERAL
AVERAGE SUCH AS COST OF DISCHARGIING,
STORING, RELOADING WAGES DURING
DETETENTION AT PORT OF REFUGE AND
OUTWARD PORT CHARGES PILIFERAGE ETC –
CONTINENT , USA
 ONLY RULES WHICH HAVE NOT BEEN PASSED BY
PARLIAMENT OF ANY COUNTRY, BUT HAVE BECOME
UNIVERSALLY ADOPTED.
 GLASGOW RESOLUTION IN 1860 – DRAFT RULES WERE
MADE.

 1864 YORK -: 11 RULE WERE PASSED AND IT WAS

CALLED THE YORK RULES.

 ANTWERP 1877 -: YORK RULES AMENDED AND A 12TH

RULE ADDED THUS BECOMING “THE
YORK ANTWERP RULES”. (YAR)
 LIVERPOOL 1890-: THE RULES HAD ARRIVED. METHOD
OF ACHIEVING UNIFORMITY HAD BEEN
ESTABLISHED BUT DEVELOPMENT
OF THE RULES TO MEET THE NEED OF
TRADE &SHIPPING.
 PARIS 1924 -: LETTER AND NUMBER RULES WERE
INTRODUCED. LETTER WERE GENERAL
PRINCIPAL AND NUMBER WERE THE
ACTUAL BASIS OF DRAWING THE
GENERAL AVERAGE STATEMENT.
1928 -: MAKIS CASE COURT RULED THAT
LETTER RULES WILL HAVE PRECEDENCE
 AMSTERDAN 1950 -: INTRODUCTION OF THE “RULE
OF INTERPRETATION” TO RESOLVE
THE DIFFICULTY CREATED BY THE
“MAKIS” DECISION.
 HAMBURY 1974 -: AT THIS CONFERENCE EMPHASIS
WAS PLACED ON SIMPLIFICATION OF
RULES AND THE TECHINQUE OF
ADJUSTMENT.
 PARIS 1990 -: INTERNATIONAL CONVENTION ON
SALVAGE 1989, LOF 90 INTRODUCTION
OF SPECIAL COMPENSATION AWARD
INCREASED BY 30%.
 YAR 1974 -: AMENDED 1990 SPECIAL COMP. NOT TO
BE INCLUDED IN GENERAL AVERAGE
STATEMENT.
 SYDNEY 1994 -: UNCTAD REPORT TO SIMPLIFY THE
GENERAL AVERAGE SYSTEM.
 IUMI – TO STEER CLEAR OF TECHNICALITIES AND
TO REALLOCATE THE COST OF CERTAIN
KINDS OF EXPENSES AND LOSS.
 RULE PARAMOUNT THAT NO ALLOWANCE FOR
SACRIFICE OR EXPEDITURE UNLESS REASONABLY
MADE OR INCURRED.
 DEFINITION OF GENERAL
AVERAGE
THERE IS A GENERAL AVERAGE ACT WHEN AND
ONLY WHEN ANY EXTRAORDINARY SACRIFICE OR
EXPEDITURE IS INTENTIONALY OR REASONABLY
MADE OR INCURRED FOR THE COMMON SAFETY
FOR THE PURPOSE OF PRESERVING FROM PERIL
THE PROPERTY INVOLVED IN COMMON MARITIME
ADVENTURE.
 FOUR ESSENTIAL FEATURES
 SACRIFICE OR EXPENDITURE MUST BE
EXTRAORDINARY.
 THE ACT MUST BE INTENTIONAL OR
VOLUNTARY.
 THERE MUST BE PERIL
 ACTION MUST BE FOR THE COMMON SAFETY
AND NOT MERELY FOR THE SAFETY OF PERIL
OF THE PROPERTY INVOLVED.
 EVENTS GIVING RISE TO GENERAL
AVERAGE
CASUALTY TYPE OF SACRIFICE OR EXPENDITURE
 STRANDING DAMAGE TO VESSEL / MACHINERY LOSS
OF OR DAMAGE TO CARGO THROUGH
FORCED DISCHARGE.COST OF
DISCHARGE STORING AND RELOADING
PORT OF REFUGE EXPENSES

 FIRE DAMAGE TO SHIP OR CARGO DUE TO

EXTINGUISHING FIRE PORT OF REFUGE
EXPENSES
 SHIFTING OF CARGO JETTISON OF CARGO PORT
IN HEAVY WEATHER OF REFUGE EXPENSES

 HEAVY WEATHER PORT OF REFUGE EXPENSES

COLLISION, MACHINERY
BREAKDOWN
 “BEFORE THE VOYAGE COMMENCES”
 GENERAL AVERAGE CLAUSE IN BILL OF LADING OR
CHARTER PARTY
 CODE OF ADJUSTMENT
 PLACE OF ADJUSTMENT
 CURRENCY OF ADJUSTMENT

 GENERAL AVERAGE ABSORPTION CLAUSE IN HULL AND

MACHINERY POLICY.

 GENERALLY IN FULL UPTO A SPECIFIED LIMIT

 “CASUALTY OCCURS”
PERSONS TO BE NOTIFIED

 AVERAGE ADJUSTERS
 INSURER – TO ENABLE THEM TO APPOINT A SURVEYOR
 P & I CLUB
 CLASSIFICATION SURVEYOR
 GENERAL AVERAGE SURVEYORS – SHIPOWNER WILL
APPOINT TO ACT IN GENERAL INTEREST
 SOLICITORS
 AGENTS AT PORT OF REFUGE
 CHARTER
IF VESSEL UNDER VOYAGE OR TIME CHARTER,
CHARTERER TO BE INFORMED

“ PORT OF REFUGE”
INFO REQUIRED :-
 DETAILS OF OPERATIONS
 PERIOD OF DETENTION
 EXTENT, CAUSE OF DAMAGE
 DETAILS OF SHIP AND CARGO SURVEYOR
 ITEMISED LIST OF ESTIMATED EXPENSES.
 “AT DESTINATION”
 DELIVERY OF CARGO LIEN ON CARGO FOR GENERAL
AVERAGE SECURITY

 DECLARATION OF GENERAL AVERAGE

 DECISION TO OBTAIN SECURITY

 FORM OF SECURITY REQUIRED

 LLOYD’S FORM OF AVERAGE BOND

 CASH DEPOSIT OR GENERAL AVERAGE GUARANTEE

 CARGO FOR WHICH SECURITY REQUIRED
WHEN SECURITY REQUIRED - BEFORE
DELIVERY OF CARGO

 AVERAGE BOND

 PHOTOCOPY OF INVOICE ATTACHED

 INSURANCE GUARANTEES
 CASH DEPOSITS
 TIME BAR WITHIN 12 MONTHS OF THE DATE OF
TERMINATION OF THE COMMON ADVENTURE
 LIMIT OR THE TIME DURING WHICH CLAIM IN GENERAL
AVERAGE MAY BE MADE.
 DEFENCE OF CARGO UNDERWRITER’S
 UNSEAWORTHINESS
 GENERAL AVERAGE SITUATION MAY ARISE OUT OF
UNSEAWORTHINESS OF THE VESSEL.
 CARGO UNDERWRITERS MAY HAVE A DEFENCE AND MAY
NOT PAY THEIR CONTRIBUTION.
 TO COME INTO EFFECT FROM 1ST DECEMBER 1994

 THREE TIER HIERACHY

 RULE OF INTREPRETATION
 THE NUMBERED RULES
 THE LETTERED RULES

 VANCOVER 2004 -: IUMI EXPRESSED DISSATISFACTION

WITH THE REVISION OF THE RULES IN 1994.
 GENERAL AVERAGE BASIS COMMON SAFETY

 APPROVED BY THE ASSOCIATION OF AVERAGE

ADJUSTER UK, USA, CANADA, EUROPEAN,, AIME,
AMD : INTERNATIONAL ASSOCIATION OF
AVERAGE ADJUSTERS.

 YAR 2004 -:MADE IT CLEAR IT WAS NOT

AMENDMENT OF THE 1994 RULES BUT NEW
RULES.

 TO BE APPLIED TO ALL GENERAL AVERAGE

AFTER 31/12 2004. NO CONSENSUS BETWEEN
SHIPOWNERS AND OTHER INTERESTS.
 BIMCO ISSUED A BULLETIN THAT ALL BIMCO
CHARTERPARTIES WOULD PREFER YAR 1994 ONLY

 YAR RULES 2004

 RULE OF INTERPRETATION
 IN THE ADJUSTMENT OF GENERAL AVERAGE THE
FOLLOWING LETTERED AND NUMBER RULES SHALL
APPLY TO THE EXCLUSION OF ANY LAW AND
PRACTICE INCONSISTENT THEREWITH. EXCEPT AS
PROVIDED BY THE NUMBER RULES GENERAL
AVERAGE SHALL BE ADJUSTED BY ACCORDING TO
THE LETTERED RULES.
 1991 CORFA NAVIGATION V. MOBIL SHIPPING (THE
‘ALPHA’) DAMAGE TO MACHINERY SUSTAINED
DURING ATTEMPTS TO REFLOAT A GROUNDED
SHIP WAS NOT SUBJECT TO THE REQUIREMENT
OF REASONABLENESS IN GENERAL AVERAGE AND
THEREFORE WAS ENTITLED TO SUCCEED EVEN
THOUGH THE ATTEMPTS TO REFLOAT THE VESSEL
BY USING THE SHIPS ENGINE’S HAD BEEN
UNREASONABLE.
 YORK ANTWERP RULES
 PARAMOUNT CLAUSE
 IN NO CASE SHALL THERE BE ANY ALLOWANCE
FOR SACRIFICE OR EXPENDITURE UNLESS
REASONABLY MADE OR INCURRED.
 RULE A
 DEFINITION OF GENERAL AVERAGE
 GENERAL AVERAGE IS NOT A DOCTRINE FORMING
PART OF THE LAW OF INSURANCE, IT BELONGS
TO THE LAW OF CARRIAGE BY SEA.
 FIVE ESSENTIAL FEATURES, ALL OF WHICH
MUST BE PRESENT TO CONSTITUTE A
GENERAL AVERAGE ACT

 INTENTIONAL
 PERIL (COMMON SAFETY)
 COMMON MARITIME ADVENTURE
 EXTRAORDINARY
 REASONABLE
RULE B -: TUG AND TOW

RULE C -: CAUSATION, CONSEQUENCE &

DAMAGE TO THE ENVIRONMENT

RULE D -: RIGHTS TO CONTRIBUTION IN

GENERAL AVERAGE

RULE E -: ONUS OF PROOF

 THE ONUS OF PROOF IN UPON THE PARTY
CLAIMING IN GENERAL AVERAGE TO SHOW THAT
THE LOSS OR EXPENSES CLAIMED IN PROPERTY
ALLOWABLE AS GENERAL AVERAGE
 TIME LIMIT 12 MONTH FROM THE TIME GENERAL
AVERAGE TERMINATES.
 FAILING SUCH NOTIFICATION AVERAGE
ADJUSTERS SHALL BE AT LIBERTY TO ESTIMATE
THE EXTENT OR CONTRIBUTORY VALUE ON THE
BASIS OF INFORMATION AVAILABLE TO THEM.
 RULE F
 SUBSTITIUTED EXPENSES
 INCURRED AT A PORT OF REFUGE

 RULE G
 VALUATION OF LOSSES AND CONTRIBUTORY
VALUES
 NON SEPARATION AGREEMENT
IT IS CONCERNED ONLY WITH THE VALUATION
OF THE PROPERTY INVOLVED IN THE COMMON
ADVENTURE. GENERAL AVERAGE LOSS CONTRIBUTORY
VALUES ARE CALCULATED AT THE TERMINATION OF
THE ADVENTURE.

SACRIFICE AND EXPEDITURE CONTRIBUTORY VALUES

ARE ASSESSED AT THE TERMINATION OF THE
ADVENTURE
RULE 1 -: JETTISON OF CARGO
RULE 2 -: LOSS OR DAMAGE BY SACRIFICES
FOR THE COMMON SAFETY
RULE 3 -: EXTINGUSIHING FIRE ON SHIPBOARD
RULE 4 -: CUTTING AWAY WRECK
RULE 5 -: VOLUTARY STRANDING
RULE 6 -: SALVAGE REMUNERATION
RULE 7 -: DAMAGE TO MACHINERY & BOILERS
RULE 8 -: EXPENSES LIGHTENING A SHIP ASHORE AND
CONSEQUENT DAMAGE
RULE 9 -: CARGO, SHIP’S MATERIALS AND STORES
USED FOR FUEL
RULE 10 -: EXPENSES AT PORT OF REFUGE ETC.
RULE 11 -: WAGES AND MAINTENCES OF CREW AND
OTHER EXPENSES PUTTING IN TO AND AT
PORT OF REFUGE
RULE 12 -: DAMAGE TO CARGO IS DISCHARGE ETC
RULE 13 -: DEDUCTION FROM COST OF REPAIRS
RULE 14 -: TEMP. REPAIRS
RULE 15 -: LOSS OF FREIGHT
RULE 15 -: LOSS OF FREIGHT
RULE 16 -: AMOUNT TO BE ALLOWED FOR CARGO
COST OR DAMAGED BY SACRIFICE
RULE 17 -: CONTRIBUTORY VALUES
RULE 18 -: DAMAGE TO SHIP
RULE 19 -: UNDECLARED OR WRONGFULLY DECLARED
CARGO
RULE 20 -: PROVISION OF FUNDS
RULE 21 -: INTEREST OF LOSSES MADE GOOD IN
GENERAL AVERAGE
RULE 22 -: TREATMENT OF CASH DEPOSIT
RULE 23 -: TIME BAR FOR CONTRIBUTION TO
GENERAL AVERAGE.

PREPARING OF THE ADJUSTMENT

 PRODUCING THE GENERAL AVERAGE

ADJUSTMENT LIES WITH THE SHIPOWNER
 COST OF PREPARING IT ARE A GENERAL
AVERAGE EXPENSES.
 WHERE SHOULD THE ADJUSTMENT BE
PREPARED.
 NO REQUIREMENT IMPOSED BY LAW THAT
THE ADJUSTMENT BE PREPARED AT ANY
PARTICULAR PLACE.
 PLACE OF ADJUSTMENT
 THE PLACE AT WHICH THE VOYAGE
TERMINATES LAW GOVERNING ADJUSTMENT.
 AS MENTIONED IN THE BILL OF LADING
 ADJUSTMENT NOT BINDING IN THE ABSENCE
OF AGREEMENT ON THE SHIP OWNER OR ANY
OF THE OTHER PARTIES.
 AVERAGE ADJUSTER
 HE IS APPOINTED BY THE SHIPOWNER
 HE ACTS ON BEHALF OF ALL THE PARTIES TO THE
ADVENTURE
 HE IS HELD TO OWE TO THEM A DUTY OF CARE IN
RELATION TO STATEMENT OF FACTS CONTAINED IN
THE ADJUSTMENT.
 IN SOME EUROPEAN COUNTRIES, THE ADJUSTER’S
POSITION IS EQUIVALENT TO THAT OF A JUDGE.
 LIEN FOR GENERAL AVERAGE CONTRIBUTION.
EXCESSENCE LIEN ON CARGO SAVED. SHIPOWNER
FAILS TO EXERCISE LIEN HE WILL BE LIABLE IN
DAMAGES TO THE OWNER OF THE CARGO SACRIFICED.
 SECURITY FOR GENERAL AVERAGE
CONTRIBUTION
 CASH DEPOSIT
 CARGO UNINSURED OR GENERAL AVERAGE
GUARANTEE OFFERED BY INSURER IS
CONSIDERED UNSUITABLE.
 BANK GUARANTEE IN LIEU OF CASH DEPOSIT
 LLOYD’S AVERAGE BOND
 LLOYD’S AVERAGE GUARANTEE
 DETERMIINING THE CURRENCY OF ADJUSTMENT
 AS PER THE BILL OF LADING OR CHARTER
PARTY
 NO AGREEMENT CURRENCY IN WHICH
GENEREAL AVERAGE SACRIFICE AND
EXPENDITURE HAVE BEEN INCURRED.
 RATE OF EXCHANGE
 ON THE DATE WHEN THE ADJUSTMENT HAS
BEEN ISSUED
GENERAL AVERAGE ABSORPTION CLAUSES:
 GENERAL AVERAGE CAN BE RECOVERED FROM THE HULL &
MACHINERY UNDERWRITERS ONLY FOR SHIPS PROPORTION.
CARGO OWNER MUST PAY DIRECTLY TO SHIPOWNER
UNDERWRITERS WILL PAY IN FULL.
 CLAUSE 40.1 - GENERAL AVERAGE ACT
 CLAUSE 40.2 - CLAIM TOTAL GENERAL AVERAGE
 CLAUSE 40.3 - ADJUSTER FEES AND EXPENSES
 CLAUSE 40.4 - NOT CLAIM FROM OTHER INTEREST
 CLAUSE 40.5 - CLAIM UNDER YAR 1994
 CLAUSE 40.6 - CLAIM PAYABLE WITHOUT THE APPLICATION
OF DEDUCTIBLE.