4.1 Legal Context and Overview: General Average and The Hague Rules
Owners declared General Average (“GA”) for the “extraordinary expenditure incurred for re-floating the vessel”.(1) APL (2020) GA is a well-established principle of maritime law, outlined in the York Antwerp Rules, which stipulates that any extraordinary expenses that fall within the scope of GA “shall be borne by the different contributing interests” in the common maritime venture.(2) York Antwerp Rules 2016, Rule A (1) (2) In this case, the expenditure incurred was, by all accounts, reasonably held to fall within the scope of GA. Hence, all contributing interests, including cargo interest, were obliged to contribute to the expenditure incurred for refloating the vessel. Importantly, however, there is an exception: the party whose “actionable fault” resulted in the GA event is not entitled to recover from the other contributing interests.(3) Cornah (2018) at D.02
“Actionable fault” involves any causative breach of the terms of the relevant contract of carriage.(4)Libra [2021], 1. In the current case, the relevant contract of carriage incorporated the Hague Rules. Article III r.1 (a) of the Hague Rules states that the “The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to… make the ship seaworthy».(5) Hague Rules (1924), Article III r. 1(a) Article IV prescribes the rights and immunities of the carrier, emphasizing that the seaworthiness obligation is one of due diligence, stipulating that “Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy…”(6) Ibid, Article IV r.1 Article IV r. 2(a) further prescribes that, “Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from… Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship.”(7) Article IV, r. 2 (a)
Throughout this thesis, it will become clear that the primary task of the Courts in the case at hand was to interpret the scope of the seaworthiness obligation and nautical fault exemption as defined by the Hague Rules. This involves examining the owner’s obligation to ensure the vessel is seaworthy as stated in Article III r. 1 (a), as well as understanding how this obligation interacts with the exemptions listed in Article IV r. 2 (a).