Maritime Law: Principle of General Average - Term Paper Example

Principle of general average Table of Contents Table of Contents 2 3 Principle of general average 4 Introduction4 York-Antwerp Rules 4 Key elements of York-Antwerp Rules 5 Application of the rule of 2004 6 Rule A 6 Rule B 6 Rule C 7 Application of the rule of 1994 7 Rule D 7 Rule E 7 Rule F 8 Rule G 8 Examples of the York-Antwerp 8 Summary 9 Conclusion 9 References 10 Abstract This is a principle formulated by the ancient Greek in an assumption dealing with questions regarding jettison. However, different philosophers claim that the idea seems to have an ancient origin. All in all, the doctrines develop different losses added to those in jettison. In simpler terms, the crucial step is the recognition that expenditure of funds was in the principle, which was not different from the sacrifice incurred in similar occurrences and purposes. From different records regarding the history of the principle, it is difficult to trace its exact origin, but there are two significant points relating to the origin (Gold, 1999). Principle of general average Introduction First, the principal is a feature of marine commerce, since the beginning of time. We trace the referred time in reference with an idea of protection from financial losses among the merchants and ship-owners by means of insurance. From this, we can depict that general average is totally different from marine insurance. Under modern commercial grounds, underwriters on cargo and ship almost invariably pay amounts of general average contributions and losses under their policies. However, the interest in general average in more of secondary than primary. Secondly, general average has a differing development in different maritime countries. This means that the idea developed in different angles all through; in the beginning of the 19th century, there was a substantial difference regarding the law and practices all around the world. In reference with the international traits of shipping, there are several disadvantages resulting from these diversities. This calls for international uniformity, thus bringing about the implementation of the York-Antwerp Rules (Gold, 1999). York-Antwerp Rules In reference to the law of general average, when cargo is jettisoned in an effort to refloat a grounded vessel, the owner of the owner and the cargo must absorb an equal share of the loss. This is to create a basis to compensate the owner of the cargo. This means that all participants of the maritime venture merge to offset the incurred losses. In this, we can depict that the general average is a design of the marine insurance. From the above argument, we learn that the need for uniformity began in the 19th century. This was in 1890, when the first rules promulgation took place. Previously, there were different amendments. However, there are recent amendments and the most recent being in 1994. These were the result of conferences held in conferences by representatives from different countries around the world. From the results after the last amendment, there was a creation of uniform guidelines on the application of the law of general average. These include both the private and public shipping devices. The new law applies to only those individuals who signed a voluntary agreement, and became a member of the marine community. The key aim of these international rules is to create uniformity relating to the rights and obligations of all parties (White, 2000). Rules in York-Antwerp encompass most bills of landing, contract of affreightment, and marine insurance policies. The rules target to cover different expenses related to an imperilled ship. An ideal example is that the rule makes provision for the recovery of cost repair, loading and unloading cargo, crew maintenance if the expenses are needed for the completion of a safe voyage. These claims are against the insurer of the relevant cargo together with the ship owner’s insurance underwriters (Gold, 1999). Key elements of York-Antwerp Rules After subsequent codification and discussion, American accepted the idea from the rest of the world. There following case designed the key elements for application of York-Antwerp Rules. This was a case ruled between Adams and Barnard by Justice Grier. Below is a short discussion regarding key three elements:- 1. A common danger – there must be a common danger where the cargo, the vessel and the crew participated. The danger must also be apparently inevitable and imminent except by voluntarily incurring losses of a section of the whole, while targeting to save the remainder. This protects liability where a party attempt to cause a loss in order to benefit financially. The element also brings about fairness in reference to the parties involved in the loss; it issues that both parties make an equal contribution, while bringing back the previous financial position. 2. There must be a voluntary jactus, jettison, or casting away of a portion of the joint consideration with the aim of avoiding transfer of peril section from the whole portion. This means that the act must be initiated by nature (White, 2000). 3. Prevention of imminent peril must be successful. This means that the there must be total evasion of the loss by all concerned parties. Application of the rule of 2004 After several adjustments, the last amendment was in 2004. Individuals calling for the amendments ensured that the rules were applicable under all law practices around the world. Except for the provision through the paramount rules, the rules will be applied in reference with the lettered rules. In relation with the Rule paramount, there shall be no allowances for expenditures and sacrifices unless reasonably incurred of made. There are rules A and B in the application of the York-Antwerp (Gold, 2003). Rule A General average act is applicable, when any extra ordinary expenditure or sacrifices is reasonably and intentionally incurred, or made with the aim of ensuring safety and preserving from peril in common marine adventure. GA expenditures and sacrifices will be borne by various contributing interests on the grounds of hereinafter provisions (Gold, 1999). Rule B The rule states that marine time adventure is when any vessels are pushing or towing other vessels, provided that they are all involved in the commercial activity and not a salvage operation. This creates a basis where we can group the rule to care for the commercial activities. In case measures target to conserve the cargos together with the vessel, from any common peril, then the rules are wholly applicable. In instances where the vessel is disconnecting itself from other vessels in safety, the rule is not applicable. However, if the vessel is disconnecting itself on the basis of general average, then maritime adventure continues (Gold, 2001). Rule C The rule states that only expenses, losses, or damages, which are under direct consequences of the general average acts, shall under the grouping of general average. This ensures there are no any allowances for losses, expenses, and damages incurred in respect of losses in the consequences or to the environment pollutant substances in the maritime adventure. In simpler terms understood by the common man, the rule states that there shall be strict interpretation of the occurrences of general average. This is in cases where general loss, demurrage, or loss of market expense or sustained incurred through delay. This includes losses arising from delays on a voyage, or other loss whatsoever, shall not be admitted as G.A (Fernandez, 1999). Application of the rule of 1994 These are the effective rules which gave guidelines before the amendments, which took place in 2004. The amendments in 2004 were to design new rule to accommodate different emerging issues relating to law and maritime. Rule D Contribution rules will not affect the rule of general average. This is through the event giving rise to expenditure or sacrifice in the adventure. However, this should not prejudice any damages that may be open or against the party (Gold, 1999). Rule E The party claiming under general average has to prove that the claims are under the provisions of the general average. Rule F Expenses incurred in place of other expenses, which deemed to have been under general average are also termed as general average. This is to create a basis for compensation and fairness. Rule G The rule states that there is an allowance to accommodate emerging issues. This is because accident happens and brings about an alteration of the set guidelines. Examples of the York-Antwerp Since 1890, the rules were only valid to members only; the rules dealt with certain rules of general average allowances, expenditures, and sacrifices. However, there were practical considerations while adjusting the general average. Law implementers did not lay down general principles (White, 2005). In reference to Anglo-Grecian Stream trading Company and Beynon and company ruled under the rule in year 1890, Roche J, ruled that, the individual claiming compensations in general average was not crucial in proving the facts. However, the general average and general must be in line to ensure, that the ruling is appropriate in accordance with the provisions of the Marine insurance. In 1924, York-Antwerp Rules came up with lettered rules setting, backing the general principles under general average. Nevertheless, there were no instructions regarding the relationship between the two rules. The seriousness relating to the application of the rule was between Foreign Marine Insurance Company and Vlasspoulos. In reference with the case in Bordeaux, the process of repairing the ship was first. This is to clear the damages resulting from off-loading. The crew was also to receive compensation, as they incurred the damages while taking care of the load (Fernandez, 1999). Summary From this legal article, we can learn different issues regarding Maritime Law (General average). General average is a rule that brings about the basis of compensation in marine occurrences. It also states which case grouped under the rule. The article also states conditions under which general average rule are applicable. It further illustrates how these laws apply in different contexts as well as well illustrated examples (White, 2000). Conclusion We have learnt different provisions where York-Antwerp Rules forms a basis of uniformity. By this, it is evident that there are it is one of the crucial rules governing the undertaking in marine commerce. However, there should be further amendments to facilitate different emerging issues such as losses incurred as a result of criminal attacks, as this is one of the significant causes of loss in today’s marine activities. References Derrington, S. 1993. Treasurer, Maritime Law Association of Australian and New Zealand. Donaldson, S. 1975. The Law of General Average and the York-Antwerp Rules. 10th ed. London: Stevens. Fernandez, C. 1999. "Interpreting the Rule of Interpretation in the York-Antwerp Rules." Journal of Maritime Law and Commerce 30 (July). Forrest, C. 2005. Treasurer, Queensland Section, International Law Association, Australian Branch. Gold, E. 1999. Faculty of Law & Marine Affairs. Canada: Dalhousie University. Gold, E. 2001. International Oceans Institute of Canada, Halifax, Canada. Member & Gold, E. 2003. Journal of Maritime Law and Commerce. Maryland, USA: Jefferson Law Book Co. Gold, E. 2004. Maritime Economics and Logistics. London: Palgrave Publications. Senior Research Associate. White, M. 2000. Journal of Maritime Law and Commerce: Maryland, USA: Jefferson Law Book Co. White, M. 2005. Journal of International Maritime Law. UK: University of Wales Swansea. Read More