Issues that may arise in General Average disputes

August 3, 2022

When a cargo ship is damaged (due to a grounding or collision with another ship or technical problems it encounters), it will be necessary for the owner to incur significant expense to enable the ship to complete the cargo-carrying voyage or to have this performed by another ship in its place. The cargo owner (and to a lesser extent any time charterer) will be required to contribute to those expenses in general average (GA) when they are incurred for the common good, and the York-Antwerp Rules (YAR) have been produced with amendments over the years to clarify and unify the governing principles.

The GA expenses will be apportioned based on the values of the ship and the cargo at the end of the voyage, and their values may be disputed. The parties may also disagree whether certain expenses should be borne by one of them as ‘special charges’ (mentioned but not defined in the YAR) or contribution in GA is affected by frustration of the cargo carriage contract (now impossible to perform) due to the ship casualty. They may disagree on many more issues.

We recently handled a significant GA dispute in which all three issues above featured. It settled before being decided upon in litigation, but we are intimately familiar with them, and we have a good idea how they would have been decided. If you have a GA dispute, feel free to tap into our knowledge!

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