In June 2004 at the CMI meeting in Vancouver agreement was reached on the form of the 2004 York-Antwerp rules, which incorporate a number of important changes to the 1994 rules. The main changes are as follows-
1.Payments for settlement of salvage claims to third party salvors are no longer a part of the General Average. (Previously it used to be the practice to wait for any salvage claims to be settled before re-adjusting the amounts paid in salvage by the various parties and issuing the General Average adjustment.) This change will avoid the delays and extra costs caused by this process, so General Average adjustments themselves should be faster and less costly.
There is an exception to this new rule where the shipowner pays salvage on behalf of all of the parties. In that case, the salvage will be apportioned as before.
2.Wages and maintenance during periods of General Average detention will not now be recoverable by the shipowners. This should result in a saving for cargo interests.
3.The previously standard 2% commission for advancing funds in GA is now discontinued. As shipowners were normally the beneficiaries of this, it should result in savings for cargo interests
4.Timebar for contributions to GA has now been defined as one year from the date of the adjustment, or six years from the termination of the maritime adventure if this is sooner. Although this can still be subject to variations in national laws, this will bring finality sooner in many cases.
5.There are also a number of minor variations dealing with interest rates and treatment of temporary repair costs.
Overall, the new rules are more favourable to cargo interests and in our view we should see a reduction in the time taken to issue adjustments, the cost of those adjustments and the quantum of the GA claims themselves.
It is important to bear in mind that the parties to a contract of carriage are free to select which rules will govern any General Average claim that may arise. Therefore whilst we expect that some carriers will incorporate the new rules into their contracts of carriage quite soon, others may retain the 1994 or even the 1974 rules either because they are slow to change the printed forms or because they perceive there to be an advantage for the carrier.
In all cases it is vital to remember that early investigations into the casualty can result in evidence being obtained that may result in the complete avoidance of GA in any event. It may also mean an easier and better recovery of any losses. Many GA claims we deal with are legitimately rejected completely on the grounds of unseaworthiness, and others are settled on a compromised basis. If you require our assistance, or if you have any questions, we are at your service.
Casualty & GA Department
