Shipping Law

Under the law of general average, if cargo is jettisoned in a successful effort to refloat a grounded vessel, the owners of the vessel and the cargo saved are required to absorb a proportionate share of the loss to compensate the owner of the cargo that has been singled out for sacrifice. All participants in the maritime venture contribute to offset the losses incurred. The law of general average became an early form of marine insurance.

The YORK-ANTWERP RULES of General Average establish the rights and obligations of the parties when cargo must be jettisoned from a ship. These uniform rules on the law of general average are included in private shipping agreements and depend on voluntary acceptance by the maritime community. The rules are incorporated by reference into most bills of lading, contracts of affreightment, and marine insurance policies.

The rules provide for the shipowner to recover the costs of repair, loading and unloading cargo, and maintaining the crew, if these expenses are necessary for the safe completion of the voyage. Claims are generally made against the insurer of the cargo and the shipowner's insurance underwriters.