Chapter VI：General Average
“General Average” refers to the sacrifice and expenditure that is intentionally and reasonably made or incurred directly for the common safety of all property involved in a common peril during the voyage of the ship.
All contributing interests shall bear the general average on the basis of the value of the respective property preserved proportional to the total amount of the general average loss. The property sacrificed by general average act and therefore reimbursed by the contributions to the general average shall also participate in the contribution to the general average.
The contributory value of the properties preserved mentioned in the preceding Article shall be made upon the actual net value of the properties at the time and place of the termination of the voyage or the abandonment of the common adventure, and compute on the following basis:
1. The contributory value of the ship shall be the value at the place and time of arrival. If the ship has undergone repairs during the voyage, the general average sacrifice and other incidental losses not admitted as general average shall be deducted therefor provided that such value shall not be less than its real surplus value.
2. The contributory value of the cargo shall be the value indicated on the commercial invoice given to the last receiver of the cargo or, if there is no such invoice, shall be the value at the time and place of loading, plus the cost of insurance and freight to be paid.
3. The contributory value of the freight shall be the payable amount of the collectable freight less any expenditures incurred not admitted as general average.
The actual net value of the various items in the preceding paragraph shall plus the reimbursements in general average.
The amount of reimbursement for general average sacrifices shall be decided on the basis of the actual net value of the various properties preserved at the time and place where the voyage is terminated or the abandonment of the common adventure, and determined as following:
1. The amount of sacrifice of the ship shall be the reasonable cost of the repairs or replacement of ship’ machinery, gear and equipment actually and necessarily incurred. Where there has not been repaired or replaced, the reasonable depreciation but not exceeding the estimated cost of repairs or replacement.
2. The amount of a general average sacrifice to cargo shall be assessed on the bases of the commercial invoice rendered to the last receiver of the cargo; or if there is no such invoice, shall be the value on the bases of at the time and place of loading, plus the cost of insurance and freight to be paid. Where the damaged cargo has been sold, The amount of a general average sacrifice shall be on the basis of the difference between the net proceeds of sale and the net assessed on the bases of the commercial invoice or at the time and place of loading.
3. The amount of a general average sacrifice for freight shall be assessed on the basis of the lessened or lost amount owing to the damage to or loss of the cargo. Provided however that any expenses therefore saved by the carrier hall be deducted.
The following expenditures may be allowed as general average:
1. Port charges, cargo handling fees, seafarers’ wages and necessary charges for fuel and materials for the maintenance of ship arose for preserving all the properties from common peril.
2. Any extraordinary expenses for continuing the voyage after the occurrence of the general average.
3. A commission of two percent of general average disbursements.
4. Interest accruing on the amount collectible for the general average from the date of occurrence of the general average until this sum was actually received.
Any extra expenses incurred in place of the expenses listed under sub-paragraphs 1 and 2 of the preceding paragraph shall be deemed as the general average expenditure. But the said substituted expenses shall not exceed the general average expenditure might have been incurred.
General average shall still be borne by all parties concerns, though the general average may have been due to the fault of one of the parties, but this shall not prejudice any remedies which may be open to the other interested parties against the liable party for such fault.
No jettison of cargo shall be allowed as general average, unless such cargo is carried in accordance with the recognized custom of trade. However the cargo jettisoned in case being salvaged shall nevertheless contribute to the general average.
Cargo which covered neither by a bill of lading nor master’s receipt, or the equipment and appurtenances not recorded in the ship’s inventory, in case sacrificed, are not be allowed as general average. However the cargo sacrificed in case being salvaged shall nevertheless contribute to the general average.
Currency, negotiable instruments or other valuable articles being sacrificed, unless having been well-declared to the shipmaster, are not being allowed as general average. However the cargo sacrificed in case to be salvaged shall nevertheless contribute to the general average.
The cargo being sacrificed which nature was willfully mis-described at time of shipment shall not be allowed as general average. But such cargo shall remain liable to contribute upon their actual value, if saved.
The cargo being sacrificed which value have been wrongfully declared on shipment at a value which is different from their real value, shall be contributed for at the lower value, but shall contribute upon the higher value.
Ship’s food stores, weapons, crewmembers’ clothing, wages and allowances, mails, and passenger’s luggage and other personal belongings not covered by a Bill of Lading shall not contribute to general average.
The parties concerned shall contribute the loss for which and in the event the items as described in the preceding paragraph were so sacrificed.
Adjustments to general average may be mutually agreed by all parties of interests. It may be submitted for arbitration, or brought to the court for adjudication in case no such agreement was attained.
The carrier or shipmaster may detain his cargo against their owner who has not paid contribution to the general average. However, this provision is not applicable where a guarantee has been furnished.
Any interested parties, who have received the reimbursements and the sacrificed ship or all or part of the cargo are later salvaged, shall refund the said reimbursement to the parties concerned, provided however that the damage suffered and the cost of such salvage may be deducted.
The party obligates to contribute general average may abandon his property so saved to exempt himself from contributing the average.
Claims arising out of general average shall be extinguished if not duly exercised within a period of one year commencing from the date on which the adjustment is concluded.