AVERAGE

An extraordinary or accidental expense incurred during the voyage in order to preserve the cargo, vessel or both, and all damages or deterioration suffered by the vessel from departure to the port of destination, and to the cargo from the port of loading to the port of consignment. (Art. 806) The person whose property has been saved must contribute to reimburse the damage caused or expense incurred if the situation constitutes general average. Classes:

1. Particular or Simple Average2. Gross or General Average

Where both vessel and cargo are saved, it is general average; where only the vessel or only the cargo is saved, it is particular average. Expenses incurred to refloat a vessel, which accidentally ran aground, in order to continue its voyage, do not constitute general average. Not only is there absence of a marine peril, common safety factor, and deliberateness. It is the safety of the property, and not the voyage, which constitutes the true foundation of general average. (A. Magsaysay, Inc. vs. Agan, G.R.No. L-6393, Jan. 31, 1955)

PARTICULAR OR SIMPLE

GROSS OR GENERAL

DefinitionDamages or expenses caused to the vessel or cargo that did not inure to the common benefit, and borne by respective owners. (Art. 809)

Damages or expenses deliberately caused in order to save the vessel, its cargo or both from real and known risk. (Art. 811)

Requisites1. common

danger; 2. deliberate

sacrifice; 3. success; 4. proper

formalities and legal steps.

LiabilityThe owner of the goods which gave rise to the expense or suffered the

All the persons having an interest in the vessel and the cargo therein at

damage shall bear this average. (Art. 810)

the time of the occurrence of the average shall contribute to satisfy this average. (Art. 812) The insurers (Art.859) and lenders on bottomry and respondentia shall likewise contribute. (Art.732).

Number of interests involvedOnly one interest involved

Several interests involved

Share in the damage or expense100% share In proportion to

the value of the owner’s property saved

Right to recoverNo reimbursement

There may be reimbursement

Kinds (not exclusive)Art. 809 Art. 811

Procedure for recovery1. Assembly and deliberation2. Resolution of the captain3. Entry of the resolution in the logbook4. Detailed minutes5. Delivery of the minutes to the maritime judicial authority of the first port, within 24 hours from arrival,6. Ratification by captain under oath. (Arts. 813-814)

GOODS NOT COVERED BY GENERAL AVERAGE EVEN IF SACRIFICED

1. Goods carried on deck. (ART.855)2. Goods not recorded in the books

or records of the vessel. (ART.855 (2))

3. Fuel for the vessel if there is more than sufficient fuel for the voyage. (Rule IX, York-Antwerp Rule)

Jettison Act of throwing cargo overboard in order to lighten the vessel. Order of goods to be cast overboard:

1. Those which are on the deck, preferring the heaviest one with the least utility and value;

2. Those which are below the upper deck, beginning with the one with greatest weight and smallest value. (Art. 815)

Jettisoned goods are not res nullius nor deemed “abandoned” within the meaning of civil law so as to be the object of occupation by salvage. (Pandect of Commercial Law and Jurisprudence, Justice Jose Vitug, 1997 ed.) In order that the jettisoned goods may be included in the gross or general average, the existence of the cargo on board should be proven by means of the bill of lading. (Art. 816)

York-Antwerp (Y-A) Rules on Determining Liability for Averages With Regard To Deck Cargo1. Deck cargo is allowed only in domestic/coastwise/inter-island shipping, and is prohibited in international/overseas/foreign shipping.2. If deck cargo is loaded with the consent of the shipper on overseas trade, it must always contribute to general average, but should the same be jettisoned, it would not be entitled to reimbursement because there is violation of the Y-A Rules.3. If deck cargo is loaded with the consent of the shipper on coastwise shipping, it must always contribute to general average and if jettisoned would be entitled to reimbursement. Reason: In domestic shipping, voyages are usually short and the seas are generally not rough. In overseas shipping, the vessel is exposed for many days to perils of the sea.

DOMESTIC INTERNATIONAL

Deck cargo is allowed

Deck cargo is not allowed

With shipper’s consentGeneral average Particular

averageWithout shipper’s consent

Captain is liable Captain is liable