General Average Acts - Essay Example

? General Average Acts The owners’ general average act claims limits its ability to claim special damages for delay and loss of income from future charters. According to Rule A of the York-Antwerp Rules 2004, a general average act is one that is an “extraordinary sacrifice or expenditure” that is “intentionally and reasonably made or incurred” in rescuing a distressed ship (York-Antwerp Rules, Rule A). The question is therefore, whether or not the master’s discharge was an extraordinary sacrifice or expenditure that was intentionally and reasonably incurred in rescuing the distressed yacht. The answer to this question is important because pursuant to Rule C of the York-Antwerp Rules, 2004: …only such losses, damages or expenses which are the direct consequence of the general average act shall be allowed as general average (York-Antwerp Rules, Rule C). Complicating matters for the yacht owners and the master, Rule C goes on to state that: …Demurrage, loss of market, and any loss or damage sustained or expense incurred by reason of delay, whether on the voyage or subsequently, and any indirect loss whatsoever, shall not be allowed as general average (York-Antwerp Rules, Rule C). It is therefore clear, that neither the master nor the yacht’s owners may claim as general average acts, the damages sustained upon the master’s discharge of the ship. However, this does not preclude general average acts. It only means that damages for delay and damages related to lost charters are exempted from general average acts. The damages sustained to the ship during the discharge are recoverable because, although those damages were sustained after the salvage operations were conducted they can still be regarded as direct consequence of the salvage operations under Rule A of the Antwerp Rules, 2004. The issue of acts performed after the salvage operations was determined in the case of Australian Coastal Shipping Commission v Green and Others by the Court of Appeal. According to the Court of Appeal, even an indirect consequence of salvaging operations can amount to general average acts. If in the course of performing general average act, the master can reasonably foresee that “a subsequent accident might occur” or foresees that it is possible, “then the subsequent accident does not break the chain of causation” (Australian Coastal Shipping Commission v Green and Others, 357). In such a case, the subsequent accident is a direct consequence of the general average act and is claimable as a general average act. In this regard, having intended to carry the ship to Southampton, the master must have contemplated that a change in those plans, following a fire would have incurred the risk of subsequent accidents. This is particularly so when the ship was placed on dry dock, which was not a part of the original plans and certainly not in contemplation of the master. Now faced with the necessity of having to place a ship on an unplanned dry dock following a fire, the master must have reasonably foreseen that subsequent accidents were possible. Moreover, the yacht was placed on dry dock as a direct consequence of the fire damages incurred while on the original journey. Therefore, the damages sustained in the course of continuing the rescue of the distressed ship was a continuation of the salvage operations and therefore the general average acts continued at that particular point. The owners may therefore claim general average acts in respect of the damages sustained during the master’s discharge. The master however, is unable to claim special damages in respect of delay and loss of earnings as a result of the delay. This is because the concept of general average arises out of the imposed duty for all parties with an interest in a general average act to contribute to the cost of salvaging a distressed ship. The law of general average acts function together with the law of salvage and “sue and labour” and culminate to regulate the act of “saving (Mukherjee, 22). It is possible for the master to make a claim for an award as a salver under the Salvage Convention 1989. The master was operating as a passenger on the carrying vessel and was therefore not officially acting in his capacity as a master. Although a salvage contract was not specifically concluded with the master, the master was working with the consent and knowledge of the owners in helping to secure the yacht. As such he is entitled to be a salver to the extent that the Salvage Convention 1989 applies (The Star Maria, 1423 see also Salvage Convention, Article 6). As a salver, the master is entitled to an award. According to Article 12 of the Salvage Convention, 1989, the slaver is entitled to an award if the ship is salvaged successfully. The salvage award will be fixed “with a view to encouraging salvage operations” and will take account of the “salved value of the vessel and other property”, the slavor’s “skill and efforts”, the “time used and expenses and losses incurred by the slavors” (Salvage Convention, 1989, Article 13). Moreover, the salvage award will be contributed by the “all of the vessel and other property interests in proportion to their respective salved values” (Salvage Convention, 1989, Article 13). It was also ruled that in considering the amount of a salvage award, account should be taken of the value of the ship salved and the cost to the salvor in salvaging the ship (International Towing & Salvage, Inc. v The “Lindsey Jeanette”, 2465). Moreover, the fact that the fire itself could have caused significant environmental damages raises the possibility of special damages (International Towing & Salvage, Inc. v The “Lindsey Jeanette”, 2465 see also Salvage Convention, Article 14). It therefore follows, that although, the owners will not be able to claim the delay and the subsequent loss of charters as average general acts, the master, as a salvor may claim lost earnings from the owners of the vessel who may in turn seek indemnification from their policy underwriters. References Australian Coastal Shipping Commission v Green and Others [1971] 1 All ER 363. International Towing & Salvage, Inc. v The “Lindsey Jeanette” (USDC Middle District of Florida 1999) AMC 2465. Mukherjee, Proshanto, K. “Essentials of General Average: A Synoptic Overview of an Ancient Maritime Law.” WMU Journal of Maritime Affairs, Vol. 6(1), (2007): 21-36. Salvage Convention 1989. The “Star Maria” [2002] EWHC 1423. York-Antwerp Rules 2004. Read More