i-law

Voyage Charters

Page 1049

Chapter 55

General Average
[Clause 20(b) continued]
(iii) GENERAL AVERAGE. General Average shall be adjusted, stated and settled according to York/Antwerp Rules 1950 and, as to matters not provided for by those rules, according to the laws and usages at the port of New York or at the port of London, whichever place is specified in Part I of this Charter. If a General Average statement is required, it shall be prepared at such port or place in the United States or United Kingdom, whichever country is specified in Part I of this Charter, as may be selected by the Owner, unless otherwise mutually agreed, by an Adjuster appointed by the Owner and approved by the Charterer. Such Adjuster shall attend to the settlement and the collection of the General Average, subject to customary charges. General Average Agreements and/or security shall be furnished by Owner and/or Charterer, and/or Owner and/or Consignee of cargo, if requested. Any cash deposit being made as security to pay General Average and/or salvage shall be remitted to the Average Adjuster and shall be held by him at his risk in a special account in a duly authorized and licensed bank at the place where the General Average statement is prepared.
[Clause 20(b) is continued in the next chapter]

General average

55.1 See for a description of the principles of general average.

“adjusted, stated and settled”

55.2 For the effect of these words, see paragraph 20.52.

“York/Antwerp Rules 1950”

55.3 The development of the York-Antwerp Rules is explained in . The latest version is the York-Antwerp Rules 2018,1 but since the Rules have no legal effect except by agreement, the 1950 Rules will govern any adjustment between the owner and charterer under an unamended Asbatankvoy charter, and the holder of a bill of lading into which this clause is incorporated.

“as to matters not provided for by those rules, according to the laws and usages at the port of New York or at the port of London, whichever place is specified in Part I”

55.4 Part IK2 requires the parties to specify New York or London as the place of adjustment, and the laws and usages of that place will govern the adjustment as to matters not provided for by the Rules. If the Rules do make provision on a particular matter, even though their true interpretation may be difficult, evidence of the usage of average adjusters is inadmissible.3

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“General Average statement”

55.5 In practice a statement is almost invariably necessary. In the absence of such a clause the adjuster may prepare his statement where he pleases, as long as he does so in accordance with the governing law and practice.4 The importance that the clause appears to attach to the place where the statement is prepared is puzzling, since it has no effect on the law governing the adjustment, and the usage of adjusters, many of whom operate internationally, no longer varies from port to port. In any event, the scope for resort to usage is extremely limited where the York-Antwerp Rules apply.5

“an Adjuster appointed by the Owner and approved by the Charterer”

55.6 In the absence of such a provision the owner may appoint whom he pleases, for the person so appointed is merely his agent, and his statement is not binding.6 It seems unlikely that the provision for charterer’s approval of the adjuster would render the charterer bound by the adjustment, any more than the owner is bound by an adjustment prepared by his own appointee. Moreover, where the charterer is not the owner of the cargo, the cargo owners will have considerably greater interest in the outcome of the adjustment than the charterer (who will only be interested to the extent of freight at risk to him), and there is no provision for approval by the owners or consignees of cargo.

“General Average Agreements and/or security”

55.7 When general average is adjusted in England, the usual form of security is either a cash deposit, or an average bond and/or guarantee furnished by cargo insurers or by a bank.7 In the absence of agreement, security can be obtained only by the exercise of a lien or by arrest. This clause obliges all parties to give security “if requested”, but it is not easy to see how the request could be enforced except by lien or arrest.

Cash deposits

55.8 Rule XXII of the York-Antwerp Rules, including the 1950 Rules, makes specific provision for the treatment of cash deposits,8 but applies only to deposits obtained from cargo owners. The last sentence of clause 20(b)(iii) is wide enough to apply to any deposits which may be obtained from owners of ship or freight under the preceding sentence of the clause, but is otherwise slightly less stringent in its protection of the depositor than rule XXII. To the extent of conflict, it would seem that the express provisions of clause 20(b)(iii) must prevail over rule XXII. It should also be noted that the last sentence of the clause extends to deposits in respect of salvage, but not in respect of special charges.

U.S. Law

55A.1 See , above.