Description of the legal term General Average:
General Average is a principle of maritime law with a long-standing historical foundation, dating back to ancient maritime codes. It is recognized internationally and forms part of British maritime law through various legislative acts and case law. This principle applies when an intentional and reasonable sacrifice or expenditure is made for the common safety for the purpose of preserving the property involved in a common maritime adventure.
Under General Average, if a ship is in peril and cargo needs to be jettisoned to save the vessel, the losses are shared proportionately by all parties with a financial interest in the voyage. This includes the shipowner, and the owners of the cargo on board. The key element is that the sacrifice or expense must be extraordinary, intentionally made, and successful in its intention to preserve the remaining property.
For an event to qualify under General Average, certain conditions must be met. Firstly, the event must be extraordinary and not the result of an inherent vice or poor stowage. Secondly, it must be intentional – an act of desperation such as jettisoning cargo during a storm. Thirdly, it must be successful – the sacrifice must actually contribute to the safety of the voyage. An adjuster is typically appointed to assess the General Average and determine the contributions from each party.
This principle offers a form of mutual insurance where the pain of the loss is shared, thereby encouraging the parties to take reasonable steps to preserve the voyage without the fear of incurring individual total loss. Although insurance often covers such risks today, General Average remains a critical aspect of maritime law and is frequently declared in situations of marine peril.
The practical implication is that once General Average is declared, those who are to share in the sacrifice are required to contribute to the losses of those who have sacrificed their cargo. These contributions are calculated on the basis of the value of the property saved. The party claiming General Average must substantiate that the loss meets the defined criteria.
Legal context in which the term General Average may be used:
Consider a large container vessel traversing the Atlantic Ocean that encounters a severe storm. In the midst of this storm, the captain, to save the vessel, its cargo, and crew, decides to jettison a portion of the deck cargo, which is deemed to be causing the ship to list dangerously. After the storm, the vessel safely reaches its destination port. The shipowner’s declaration of General Average requires all parties with a financial interest in the voyage, including the owners of the remaining undamaged cargo, to contribute proportionally to the losses sustained by the owner of the cargo that was sacrificed.
Another example involves a vessel whose engine room catches fire. To prevent the entire ship from being consumed by the flames, the crew successfully carries out a controlled flooding of the engine room. Although this action saves the ship and the majority of its cargo, the water causes significant damage to the machinery and to some of the cargo. When docked at a salvage port, General Average is declared, and the cargo owners must contribute to the cost of the engine repairs and the salvage service based on the value of their cargo, which was saved due to these measures.
General Average, as part of maritime law and practice, serves as a key principle that ensures the fair distribution of losses and expenses resulting from voluntary sacrifices made during maritime emergencies. It underscores the shared nature of risks in maritime ventures, reinforcing the cooperative spirit necessary for the common good of all parties involved in sea transportation, making it as relevant today as it was in the past.