Definition
If a master jettisons cargo to save a ship, or the owner pays for a tow to safety after an engine failure, that loss was incurred for everyone on the voyage. General average spreads it: an average adjuster values ship, cargo and freight, and each interest contributes its share. Cargo is released only against security — a GA bond and usually a guarantee from the cargo insurer.
The adjustment follows the York-Antwerp Rules, which the contract of carriage incorporates. The current version, YAR 2016, was adopted by the Comité Maritime International in New York in May 2016 after a four-year review; it keeps salvage allowable in general average at the adjuster's discretion, adds a rule for low-value cargo and abolished the 2% commission. The CMI recommends the 2016 rules, and the International Group of P&I Clubs and BIMCO recommended their use.[1,2]
The CMI made a technical change to the interest provision (Rule XXI) in 2022, so check the version a bill of lading or charter actually incorporates before estimating a contribution.[2]
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Sources
- [1] Skuld — General average: York-Antwerp Rules 2016 adopted by the CMI — https://www.skuld.com/topics/legal/pi-and-defence/general-average-york-antwerp-rules-yar-2016-adopted-by-the-comite-maritime-international-cmi/
- [2] Comité Maritime International — York-Antwerp Rules — https://comitemaritime.org/work/york-antwerp-rules/
A working definition for buyers, not legal advice — the contract, the convention text and your club or class have the last word.