The Rotterdam Rules and General Average

1. The Rotterdam Rules and General Average • Svante O. Johansson • AMD Forum • Marrakesh November 6, 2009

2. Fault concept and General Average • Fault is outside the scope of General Average • Article 84 RR • Nothing in this Convention affects the application of terms in the contract of carriage or provisions of national law regarding the adjustment of general average. • Rule D YAR • Rights to contribution in general average shall not be affected, though the event which gave rise to the sacrifice or expenditure may have been due to the fault of one of the parties to the adventure; but this shall not prejudice any remedies or defences which may be open against or to that party in respect of such fault.

3. No contribution to a party at fault • Even if no loss or damage occur the carrier, as it often is, might be at (actionable) fault • The test is whether the owner, if the GA-act had not been instigated, would have been liable • Exemptions that exclude fault • No legal responsibility arises • “Fault of master always excepted” • Excluding liability (also only loss or damage) • Art. 17.3 RR • Nautical fault exemption not included • Exemptions or limitations that do not exclude fault • Limited monetary liability • Notice of claim • Limitation of action

4. Empiric (but non scientific) data • Causes to 100 cases of General Average Statements • Grounding 38 • Collision 19 • Engine damage 16 • Springing a leak 6 • List 4 • Fire 16 • Other causes 3 • 100

5. Consequences GA caused by grounding • Grounding • Human factors 66 % • Mostly considered as nautical faults • Nature of fairway or other ship 25 % • Remaining (technical faults or unknown) 8 % • Owner can not rely on nautical fault • Multiple factors causes the grounding • Recover part of contribution • Not likely to instigate litigation apart from exceptional circumstances

6. Consequences GA caused by collision • Collision • Normally attributable to nautical fault • If nautical fault, the owner is at fault and cannot recover from cargo interest. • However, GA can be adjusted and the owner can collect contribution from cargo in proportion to the fault of the other ship.

7. Consequences GA caused by Engine damage • Engine damage • Technical failure • Human factors • Fire • On the face of the facts the owner seems to have a good chance to collect contribution from cargo. • However, • Was the ship seaworthy according to 15.5 RR? • The cargo interests are, and will be alert, when an engine damage occurs • Request for explanations • What about contributing events in 17.6 RR? • Probably little more difficult. Seaworthy through out the entire sea leg might also influence.

8. Consequences GA caused by springing aleak or list • A vessel that springs a leak on the high sea normally will be considered unseaworthy • Owner must prove either • Intervening circumstances, or that he or she has • exercised due diligence in making and keeping the ship seaworthy • If he succeed contribution can be collected. As today? • List • Why developed the list? • In many aspects similar to springing a leak • NB! Jettison of goods • Carrier not liable even if unseaworthiness shown? • Art. 17.3(o) and 17.5 cf. art. 16 • Can the owner collect contribution?

9. Challenges • Hard to foresee if and to what extent there will be any fault on the owner ‘s side according to Rotterdam Rules. • The Rotterdam Rules will most likely result in a decline in the numbers of declared General Averages. • Will the General Average disappear because of Rotterdam Rules?