York Antwerp Rules

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The Insurance of Average Disbursements


39.01 The main feature which distinguishes the remuneration payable to salvors from other items of general average expenditure is the necessity imposed upon the salved interest by maritime law or by the terms of the salvage agreement to provide appropriate security to the salvors on completion of the salvage services. The effect of this is to place the salved interests at risk for the amount of the salvage remuneration (up to the guaranteed amounts), irrespective of the successful outcome of the adventure. 39.02 The authors believe that this applies in all maritime jurisdictions. However, in examining the consequences which flow from this, and the liability of ship and cargo interests (and their respective underwriters), it should be emphasised that the observations which follow are based on English law and practice, in comparison with the York-Antwerp Rules. These observations may not therefore be applicable in all countries.

Differences between the method of assessment of the liability of the parties to the salvors and their liabilty inter se to contribute in general average

39.03 The liability of the salved interests to pay their proportion of the salvage remuneration is individual, and not joint and several. 39.04 The assessment of the salvage remuneration is based on the value of the salved interests at the termination of the salvage services. 39.05 The obligation of the parties inter se to contribute in general average is determined in accordance with the York-Antwerp Rules, on completion of the adventure. 39.06 The values assessed for salvage purposes may therefore differ from the values ascertained for general average purposes, for a number of reasons:
  • (i) Variation in the market value of the ship between the time the salvage services are concluded and the end of the voyage.
  • (ii) Where the salvage remuneration is determined within the jurisdiction of the courts of England (or where English jurisdiction is agreed by the parties) the value of a ship under a time charter will be assessed taking into account the beneficial (or in some cases the detrimental) effect of the time charter, which consideration is disregarded in assessing the value of the ship for general average purposes under Rule XVII.
  • (iii) Variation between the salved value of the cargo (based on commercial or market values ruling at the time and place where the salvage services terminated) and the value ascertained from the commercial invoice rendered to the receiver, in accordance with Rule XVII.
  • (iv)

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    General average values are assessed with the addition of any amount made good in the adjustment for general average sacrifice, which calculation does not figure in the assessment of salved value.
  • (v) Finally, the value of any interest may be reduced between the time the salvage services are concluded and the end of the voyage, in consequence of loss or damage sustained by a subsequent accident. Indeed, this may have the effect of reducing the values for contribution at the end of the voyage to a sum less than the liabilities incurred to the salvors, and in the event of a total loss of all interests, the values for contribution in general average will be nil, and there will be no general average adjustment at all.

Liability of ship and cargo interests, and their respective underwriters, considered in the event of reduction of extinction of values at the end of the voyage by reason of subsequent accident

39.07 The liability of the salved interests to pay the salvage remuneration is not affected by any reduction or extinction of value by reason of subsequent accident. 39.08 The liability for salvage charges of underwriters insuring the ship or cargo on a standard form of policy in the English market is determined by Section 65(1) of the Marine Insurance Act, 1906:

Subject to any express provision in the policy, salvage charges incurred in preventing a loss by perils insured against may be recovered as a loss by those perils.

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