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General average

A maritime institution sharing between ship and every cargo the sacrifice made to save the venture, whatever goods were actually sacrificed.

Definition

General average is one of the oldest institutions of maritime law: where an extraordinary sacrifice or expenditure is intentionally made for the common safety of the venture, whether jettisoning part of the cargo, deliberately grounding or engaging tugs, the burden is shared between all saved interests in proportion to their value. The owner of the jettisoned goods therefore does not bear alone a loss from which everyone benefited, and the rule is also an incentive rule, since it lets the master decide quickly without adjudicating between shippers' interests. Its operation is heavy and slow: an average adjuster values the saved interests, each consignee must post security before recovering its goods, and final settlement often takes years. The York-Antwerp Rules, periodically revised, set out the detail contractually. For cargo insurance, a declaration of general average is a major event, because it immobilizes the goods and engages a cover distinct from that for the damage suffered.

Example

The grounding of the container ship Ever Given in the Suez Canal, from 23 to 29 March 2021, led the owner to declare general average, requiring the thousands of owners of goods on board to post security before recovering their containers.

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Also known as

general average, avarie grosse, York-Antwerp Rules, règles d'York et d'Anvers