Legal Definitions - general average

General average is a fundamental principle in maritime law that dictates how financial losses are shared when a voluntary sacrifice or extraordinary expense is made to save an entire sea venture from an imminent common peril. This means that if a ship, its cargo, or any part of it is intentionally sacrificed, or if an unusual expense is incurred, to save the ship and the remaining cargo from a serious danger, then all parties whose property was saved (the ship owner and all cargo owners) must contribute proportionally to cover that loss or expense. The sacrifice or expense must be reasonable, successful in averting the danger, and made for the common safety of the entire voyage.

• Example 1: Jettisoning Cargo During a Storm

  A large container ship, carrying various goods for multiple owners, encounters an exceptionally violent storm at sea. The ship begins to list severely, threatening to capsize and sink, which would result in the total loss of the vessel and all its cargo. To stabilize the ship and prevent this catastrophe, the captain makes the difficult decision to jettison (throw overboard) several containers of non-essential cargo, including a shipment of electronics and another of furniture. The ship is successfully stabilized, and the remaining cargo and the vessel itself are saved.

  Explanation: This is a general average act because specific cargo was voluntarily sacrificed (jettisoned) to save the entire venture (the ship and the rest of the cargo) from the imminent peril of capsizing and sinking. The owners of the jettisoned electronics and furniture will be compensated, not solely by the ship owner, but by all other cargo owners and the ship owner, in proportion to the value of their respective property that was saved.

• Example 2: Extraordinary Expense for Salvage Operations

  A bulk carrier, loaded with grain, suffers a mechanical failure in its propulsion system while navigating through a narrow, rocky channel. The ship loses power and begins to drift dangerously towards a reef, threatening to run aground and break apart. To prevent this, the captain immediately calls for emergency tugboat assistance. The tugboats successfully tow the disabled vessel to safety in a nearby port. The cost of this emergency towing operation is substantial.

  Explanation: This scenario represents a general average act because an extraordinary expense (the significant cost of the emergency tugboat assistance) was voluntarily incurred to save the entire venture (the ship and its valuable cargo of grain) from the imminent peril of grounding and destruction. All parties who benefited from this action – the ship owner and the owner of the grain – will contribute proportionally to cover the tugboat costs.

• Example 3: Damage from Fire Suppression

  A cargo vessel carrying various manufactured goods experiences a severe fire in its engine room. The fire quickly escalates and threatens to spread throughout the entire ship, endangering both the vessel and its valuable cargo. To contain and extinguish the blaze and save the ship and its contents, the crew activates the ship's fixed CO2 fire suppression system. While the system successfully puts out the fire, the CO2 gas causes significant damage to the ship's delicate electronic control systems and renders the main engine temporarily inoperable, requiring extensive repairs.

  Explanation: This is a general average act because a voluntary and extraordinary measure (activating the CO2 system, which resulted in damage to the ship's own machinery) was taken to save the entire venture (the ship and all its cargo) from the imminent peril of total destruction by fire. The cost of repairing the damaged engine room electronics and machinery, beyond what would be considered a specific loss, would be shared proportionally by the ship owner and all cargo owners who benefited from the fire being extinguished and their property saved.