GENERAL AVERAGE

The law of general average is a legal principle of maritime law

According to all parties in a sea adventure proportionally share any losses resulting from a voluntary sacrifice of part of the ship or cargo incurred deliberately to save the whole adventure in an event of emergency from a total loss.

In the event of a danger faced at sea, crew members often have precious little time in which to determine precisely whose cargo they are jettisoning ie. to be thrown overboard. Thus, to avoid quarrelling that could waste valuable time, there arose the equitable practice whereby all the merchants whose cargo landed safely would be called on to contribute a portion, based upon a share or percentage, to the merchant or merchants whose goods had been tossed overboard to avert imminent peril.

On arriving at a port of discharge the shipmaster appear before a magistrate or notary public declaring that there occurred and even which led to general average. Extracts from ship logbook are used as evidence.

General average traces its origins in ancient maritime law but it remains part of the admiralty law of most countries.

It is effect as per the York Antwerp rules

For general average to be declared:

1.      There must be a common danger / or risk

2.      The risk must be real

3.      It must be endangering the risk of all cargoes and not one individual

4.      The loss must have been incurred in effort to save adventure from a total loss

5.      The effort must have been successful

When general average occurs, the losses are shared proportionately by all interested parties who include:

1.      Owners of cargoes – shippers

2.      Charterers

3.      Shipowner

4.      Owners of leased in containers

5.      Owners of hired / leased cargo handling equipments on board at the times

The losses are evaluated and calculated by Average adjusters who are specialists in General average.

To obtain cargo, consignee must fulfill or submit the following documents:

-          General average claim form

-          General average valuation form.

-          Bank guarantee / Letter of indemnity

-          Cash deposit if required