General Average: When Everyone on Board Shares the Loss

General average is one of the oldest rules in maritime law: when a vessel’s master takes a deliberate, reasonable action to avert peril to the voyage as a whole — jettisoning cargo, incurring salvage costs, seeking a port of refuge — the resulting loss or expense is shared proportionally among the vessel and all cargo interests that benefited, not borne solely by whoever’s cargo was sacrificed.

The mechanics run through the York-Antwerp Rules, incorporated by reference in almost every charterparty and bill of lading, and through an average adjuster’s statement that allocates the loss across the contributory values of the vessel, cargo and freight. Cargo cannot be released at the discharge port until its interests provide a general average bond or guarantee securing their share.

For cargo owners, the practical question is usually whether the declared act genuinely qualifies as general average — the danger must have been real, the action voluntary and reasonable, and the expense extraordinary — before signing on to a contribution. High-profile incidents, including major canal blockages, have put general average adjustments at the center of disputes running for months after the vessel involved was already moving again.

We advise cargo interests, shipowners and their insurers on general average exposure in Egyptian waters, from reviewing the adjuster’s statement to contesting contribution where the declared act does not hold up.