Several recent marine incidents, including the collision of a large container vessel with the Baltimore bridge in the USA, have raised queries as to when vessel and cargo interests are at risk for general average (GA), writes Irwin Arumubam, an associate at Shepstone & Wylie.With rapid technological advancement, GA has become less known or prevalent. It is nevertheless important to know the concept and the rationale behind it to adequately ensure that all participants in the common adventure of shipping goods are aware of their risk – and the need to have adequate insurance to cover such risk, he advises. “Average” in maritime law is less the total loss or damage to maritime property (a ship or its cargo), caused by the perils of the sea. GA pertains to the contribution to the value of property voluntarily sacrificed to preserve the remainder of the property from destruction (as by throwing cargo overboard or cutting away masts to preserve the ship in a storm). The owners of the property saved must contribute to the owners of the property sacrificed in such an amount that all will have contributed proportionately to the aggregate value of the lost proper t y. For example, if a vessel comes into a storm or severe weather conditions and becomes unstable, the master and or captain of the vessel may opt to throw some of the cargo overboard to steady the vessel to ensure that the vessel makes it through the storm or severe weather safely. For this event to qualify as GA, there must be a general average act (the throwing of the cargo overboard) and for it to be considered as a general average act it must meet a range of requirements. Furthermore, the loss must also be allowable in terms of the latest version of the York-Antwerp Rules.These include either the sacrifice of property in the sense either that property was lost or damaged, or the incurring of expenditure or the act of sacrifice or expenditure must have been performed or incurred by a person authorised to do so. The sacrifice or expenditure must have been extraordinary and must have been made or incurred at a time of imminent, real danger.These are just few of several. If, for example, a ship encounters severe weather and the captain and or master decides to sacrifice some of the cargo to ensure the vessel makes it through the storm or severe weather safely – and if five million worth of cargo was thrown overboard, this loss would be divided between all participants, and every participant would have to contribute 5%. The owner of the jettisoned cargo would also contribute 5% of the amount due out of five million (250 thousand) but should get reimbursed 4 750 000. This is how GA works in that owners of the property saved must help make good the loss.The recent Dali collision with the Francis Scott Key Bridge in Baltimore is said to have occured due to engine failure and would not qualify as a general average act. The act was not intentional and did not occur for the purpose of the safety of the maritime adventure but rather was an accidental occurrence.GA is not covered by standard cargo insurance policies and it is, therefore, imperative for cargo owners, charterers, and all participants in a maritime adventure to examine their insurance policies carefully to ensure that they are covered for GA events. A detailed explanation of GA will be published in our Knowledge Library on our online platform www.freightnews.co.za
