This series of photographs was taken by a crew member of the salvage tug Pacific Worker showing various stages of the Sea-Land Express’s journey to freedom. General average has been declared. Captain Joe Walford, senior master of the Swire Pacific Offshore, shortly after the Sea-Land Express came clear. A very happy moment for him as he had been out there for the most part of a month. He was the first one to get a tow wire to the casualty on Day 1, shortly after she ran aground, but unfortunately the wire broke as the vessel was moving back into the deeper water. Steven Wallace of legal firm Garlicke & Bousfield spells out the implications to shippers A helicopter was used to transfer all the tow wires between the casualty and the tugs. Freedom at last . . . The Sea-Land Express sails into port a month behind schedule. General average in a nutshell THE ROCKY South African coast, together with its stormy weather, have caused many a cargo ship to become a casualty. In many such cases the shipowners have declared “general average”, and this term has been uttered through the market like a dark incantation to charterers, forwarders and cargo owners regardless of whether they are aware of what this entails. Lawyers become involved, average bonds are posted and an average adjuster is appointed. The process is usually completed many months later when the news comes that some people have had to pay various amounts, and others did not. Compensated The basic idea of general average is that a person who has suffered loss or damage ought to be compensated by those whose assets survived. The one who has sacrificed his assets for the good of the others ought to be compensated by those others in proportion to values of the respective assets which were saved as a result of the sacrifice. This idea is clearly reasonable and fair, and is at least 1500 years old. General average may only be declared when there has been an expenditure or loss of a maritime nature, which is out of the ordinary, and voluntarily and reasonably incurred for the common safety. The danger faced must be real and immediate and some part of the ship or the things she carries must be saved. For example, a ship is labouring at sea in a heavy storm and the Master jettisons several marble blocks which belong to one Bongani Smith in order to lighten the vessel. Cargo belonging to other merchants is untouched and the ship now successfully rides out the storm and arrives at a discharge port. To keep the numbers simple, let us say that the cargo belonging to Bongani Smith was worth R100 000. The value of the vessel is, say, USD12 million and the value of the cargo USD8 million. The total value of the assets saved was therefore USD20 million. Bongani Smith would now have a claim against the shipowner in general average for 12/20 x USD100 000 = USD60 000, and the claim against cargo would be 8/20 x USD100 000 = USD40 000. In order to ensure that Bongani Smith is actually paid his money, the vessel and goods which arrived safely might be detained until such time as letters of undertaking called “average bonds” have been provided promising to pay what is awarded. An average adjuster would then make the calculation as to who should pay what amounts. A more complex example may involve a fire on board, where some cargo is destroyed by spraying it with water to stop the fire spreading, and holes are cut in the ship to gain access to the fire. In that case, the cargo owner who had suffered the loss and the ship owner would both have claims for compensation from the other parties whose assets were saved. Further details as to when general average is recoverable, to what extent, and from whom, are dealt with in the York-Antwerp Rules, which most nations would apply, and these are reviewed from time to time by the Comite Maritime International. Some countries have their own rules regarding General Average.
