General average refers to any extraordinary sacrifice or expenditure made during a maritime adventure for the common safety of the ship and cargo. The York-Antwerp Rules provide guidelines but are not binding conventions. General average losses take the form of sacrifices like jettisoned cargo or expenditures like repairs. All interests in the voyage contribute to general average losses based on the net value of their property at destination. Security like bonds or guarantees is required to cover estimated general average costs before cargo is released. Adjusters are appointed to determine sacrifices and expenditures and settle general average claims according to contractual agreements.

1. GENERAL AVERAGE

2. • Any extraordinary sacrifice or expenditure
• Intentionally, reasonably made or incurred
• for the common safety
• for preserving from peril
• property involved in a common maritime
adventure.

3. York Antwerp Rules
• YAR not a convention
• Incorporation by reference in Contract of
Carriage.

4. General Average Loss
… and General Average loss takes the form of:
• SACRIFICE - loss or damage to physical
property
Eg: jettison or cargo / extinguishing fire /
damage to
vessel’s machinery in refloating
• EXPENDITURE - for the purchase of services
Eg: port of refuge expenses, refloating costs.

5. Examples
• SACRIFICE
• Ship: Refloating damage
• Fire extinguishing damage
• Cargo: Jettison
• Fire extinguishing damage

6. Examples
• EXPENDITURE
• Lightening grounded vessel
• Entry to Port of Refuge
• Handling cargo to do repairs
• Detention expenses during repairs

8. Basis Of Contribution
GA Sacrifices / Expenditure are
apportioned over Net Arrived
Values at destination

9. GA Security
• BOND (Receiver)
• AVERAGE GUARANTEE (Insurer) or
• CASH DEPOSIT (Receiver)

10. GA Adjustment - How and Where
• • Average Adjuster needs to be appointed
• • Terms set out in contractual agreement
• • Charter Party and / or Bill of Lading
incorporates York Antwerp Rules and place
where GA to be settled
• • The GA mechanism functions irrespective of
fault or breach of contract, Legal arguments
occur later.

11. Benefits Of GA
• • Universally accepted
• • In major casualties the sharing of costs can
prevent abandonment

13. When the Casualty Occurs
• Obtain details of casualty from the Master
• • Appoint / consult Average Adjuster
• • Inform Hull Underwriters and P&I Club
• • Assess the situation, identify the options and
make decisions
• • Inform Cargo Interests

14. Prior to Arriving at Destination
• • Why is a GA security required?
• • What form of GA security is required?
• • Average Bond ( and commercial invoice)
& Average Guarantee or Cash Deposit