GENERAL AVERAGE: UNDERSTANDING AN ESSENTIAL PRINCIPLE OF MARITIME LAW

General average is a fundamental concept in maritime law. It occurs when a captain, faced with danger, decides to make a sacrifice to save his ship and cargo. This may involve throwing some of it overboard, or incurring unforeseen expenses to avoid a greater loss. In these situations, the loss is shared between the shipowner and the cargo owners.

GENERAL AVERAGE CONDITIONS

In case of a general average, the goods that are salvaged help to compensate for the losses of the sacrificed goods, as well as the additional costs incurred by the vessel.
But for a situation to qualify as general average, certain conditions must be met:

• A real danger must threaten the voyage, creating an emergency.
• A voluntary sacrifice must be made, such as abandoning certain goods or incurring extraordinary expenses. The sacrifice must be both reasonable and proportional to the situation of peril.
• The common interest must guide the decision, seeking to protect all the goods involved in the expedition.
• A useful result must be achieved, i.e. at the very least, part of the cargo or the ship must be saved.

If one of these conditions is not met, we speak of particular average, where losses are not apportioned.

EXAMPLES OF GENERAL AVERAGE

Several historical incidents illustrate the importance of this principle. In 2011, the MV Rena ran aground off New Zealand, resulting in an oil spill and costly salvage efforts. In 2017, the KEA TRADER, carrying toxic products, ran aground on a coral reef, requiring emergency measures. Another notable example is the MOL CONFORT, which cracked following a storm and sank in 2013, resulting in the loss of its 4,293 containers.

PROTECT YOUR INTERESTS AND MAKE SURE YOUR GOODS ARE SAFE

To protect themselves against the risk of general average, companies need to take out adequate insurance. The Free of Particular Average (FPA) insurance policy is often recommended, as it covers losses associated with this type of claim. In addition, a comprehensive insurance may be considered for broader coverage. Understanding general average is essential for any company involved in maritime transport.

If in doubt, consult our experts to ensure the safety of your goods.