View Russia / Ukraine conflict updates here
Web alert: General Average - revisiting the York Antwerp Rules 2004, more than a decade on
News & Insights 2 March 2015
The latest version of the YAR is 2004, which replaced the 1994 version.
The rules and practices used in the context of general average (GA) have developed over many years, as a separate branch of shipping law. The rules commonly adopted between the parties are the York Antwerp Rules (YAR). These do not constitute an international convention, but apply as matter of express incorporation into contracts including: bills of lading, charterparties and contracts of affreightment.
The YAR are periodically reviewed and updated as appropriate and the Comité Maritime International (CMI) is the body responsible for any revisions and amendments to the YAR. The latest version of the YAR is 2004, which replaced the 1994 version.
These latest rules are generally considered less favourable to shipowners’ interests. Some organisations, in particular BIMCO and the International Chamber of Shipping, advise against the use of the 2004 version in particular in charterparties and bills of lading, considering them to be less advantageous to their members than the 1994 version. Some of the key concerns for shipowners under 2004 YAR include, but are not limited to, the following:
- Salvage is exluded from GA
- Wages and maintenance of the master, officers and crew during detention at a port of refuge are excluded from GA
- Commission of 2% on GA disbursements has been abolished
- The rate of interest to be allowed on GA disbursements will no longer be 7%, but a rate fixed annually by the CMI.
Many in the industry therefore believe that there needs to be further reform of the YAR to address some of these issues. There are also plans to clarify the wording of some of the rules so they are more ‘fit for purpose’.
The International Working Group (IWG), set up by the CMI during its conference in Beijing in 2012, is currently reviewing and re-writing elements of the YAR. The proposals of this IWG are to be debated by the CMI during its next conference in June 2015 in Istanbul with finalised proposals expected to be ready for May 2016 and the CMI conference due to be held then in New York.
It remains to be seen what new revisions will be made. However it is clear that the YAR 1994 will, for the time being, continue to be the default choice for most shipowners and they remain endorsed by the International Group of P&I clubs. To this end, shipowners need to ensure they expressly refer to the 1994 version of the YAR, if they wish for these to apply, so as to avoid any ambiguity as to which version should be incorporated into the contract. The club will continue to monitor developments and keep members advised of any changes.
This article intends to provide general guidance on the issues arising as a matter of English law. It is not intended to provide legal advice in relation to any specific query. Members requiring further information on this topic should direct their enquiries to either their usual contact at the club, or to the authors of this article.