A new set of rules, the York Antwerp Rules 2016 (the “YAR 2016”) has been adopted by the Comité Maritime International. They are based on the previous versions of the York Antwerp Rules (the “YAR”) with some notable changes which come with the support of industry bodies, including BIMCO.
The YAR are a codification of the law of general average, the maritime principle that specifies that all parties involved in a common maritime adventure must share any losses proportionately that result from a voluntary sacrifice made to part of the ship and/or cargo in an emergency to save the greater good.
The YAR set out the rules and obligations of parties in respect of general average. They have remained broadly the same in scope and format since 1924, although changes have been made over time to meet the needs of a changing commercial shipping industry. Revised versions of the YAR were agreed in 1950, 1974 (amended 1990), 1994, 2004 and now 2016.
The YAR are made up of a series of lettered rules (A to G) which lay down the general principles and a series of numbered rules which deal with specific instances of sacrifice and expenditure and set out detailed guidelines concerning allowances etc.
Adopting a uniform set of rules achieves a level of certainty and understanding throughout the industry when it comes to how general average operates. The YAR need to be expressly incorporated and almost universally apply to all contracts for the carriage of goods.
The balance between cargo underwriters and shipowners shifted in favour of cargo underwriters in the YAR 2004 which reduced the scope of allowable recoveries. Arguably the most contentious change within the YAR 2004 was made to Rule VI. Under English law, salvage is not recoverable in general average and in order to ensure uniformity of law with civil law countries, a rule was introduced in 1974 (and updated in 1994 to reflect provisions in the Salvage Convention) expressly providing for recovery in cases of salvage. This was however removed in YAR 2004 leaving salvage payments (and interests and legal costs associated with such payments) to lie where they fell.
Salvage payments are allowable in general average under YAR 2016 which will be welcomed by shipowners who would no doubt advocate that it results in a fairer settlement; the avoidance of serious injustices if salvage is allowed to lie where it falls and also addresses the balance where one party achieves a favourable settlement with salvors on behalf of other parties. For this, amongst other reasons, the YAR 2004 were not well received by the industry and resulted in limited adoption with most parties tending to continue to use the YAR 1994 (or YAR 1976).
The YAR 2016 also reverses other items that were introduced by YAR 2004 by:
- reinstating wages and maintenance of master, officers and crew reasonably incurred while a vessel is detained at a place of refuge as allowable in general average (Rule XI(b)(i)); and
- removal of the cap on the cost of temporary repairs of accidental damage at a port of refuge (Rule XIV(b))
The time bar that was introduced in the YAR 2004 (Rule XXIII) has however been retained in the YAR 2016. Subject to any time limits that may apply mandatorily by virtue of applicable law, under YAR 2016 an action must be brought before the expiry of six years from the termination of the common maritime adventure. This provides certainty to the parties that was arguably previous lacking under the YAR 1994.
A number of minor additional changes to the YAR 1994 are reflected in the new version of the rules:
- clarification added to the wording in Rule B (Tug and Tow), including setting out that allowances can be made in relation to each of the vessels in a common maritime adventure
- shifting the focus on a party to supply their particulars of value “as soon as possible” under Rule E (Provision of information & treatment of recoveries) rather than merely within 12 months of the date of the termination of the common maritime adventure. There is also the addition of a two month timescale for challenging an estimate made by the average adjuster where the estimate is manifestly incorrect
- additional clarification wording applies to Rule XI (Wages and maintenance of crew and other expenses putting in to and at a port of refuge, etc. – port charges) including allowing the costs of handling fuel or stores in general average
- in Rule XIII (Deductions from cost of repairs – bottom painting) the costs of bottom cleaning, painting or coating are not allowed in general average unless the bottom has been painted or coated within 12 months. This has been extended to 24 months in the YAR 2016
- additional clarification provisions within Rule XVII (contributory Values – inland destinations; and e-mail, personal effects etc.) including expressly allowing the average adjuster to exclude any cargo from contributing to general average should the adjuster consider that the cost of including it in the adjustment would be likely to be disproportionate to its eventual contribution
- changes to Rule XXI (interest on losses allowed in general average) provide owners with an important new benefit. The 2 per cent commission on owners’ disbursements has been abolished but interest on general average expenditure, sacrifices and allowances will be calculated on a commercial basis at an annual rate of LIBOR plus 4 percentage points
- finally, changes to Rule XXII (Treatment of cash deposits) to reflect modern banking practices and to seek to protect the deposit against the risk of insolvency
The YAR 2016 revoke some of the less popular changes introduced by the YAR 2004. They also provide useful changes (additions and clarifications) to the YAR 1994. In doing so it is hoped that YAR 2016 will be more widely used than its predecessor, the YAR 2004, which was largely overlooked by the industry.
BIMCO’s has decided that all new and revised BIMCO charter parties, bills of lading and waybills will refer to general average being adjusted in accordance with the YAR 2016.
The YAR 2016 and guidelines on general average can be found at www.bimco.org.