General Average and the York Antwerp Rules
The text below addresses activity culminating in the 2004 version of the York-Antwerp Rules, now widely adopted into oil company charter party forms and contracts of carriage that fall under the auspices of the United States government General Accounting Office. Visitors seeking information about a proposed 2012 revision of the Rules are invited to come back from time to time; we will supply what we can as more information becomes public.
This page began as an information resource for those tracking the evolution of the York-Antwerp Rules, culminating in the 2004 version that emanated from the June 2004 CMI conference in Vancouver. Now it has been re-arranged as an archive available to those looking to research the history and development of the 2004 changes and to keep current with subsequent commentary.
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The 1994 version of the York Antwerp Rules can be found here in English, French/Français* and Spanish/Español*.
The 2004 version of the York Antwerp Rules can be found here, also in English, French/Français* and Spanish/Español*.
*The French versions of the York Antwerp Rules available here were produced by the French maritime law association, l'Association Française de Droit Maritime. The Spanish version found here of the 1994 Rules was made by that country's association of average adjusters, the Asociación Española de Liquidadores de Averías (AELA). The Spanish version of the 2004 Rules is based on the 1994 AELA version, incorporating a translation of the 2004 changes published by AELA in July 2010.
A comparison of the York-Antwerp Rules 1994 with those of 1974 (as amended 1990) can be accessed here.
A comparison of the York-Antwerp Rules 2004 with those of 1994 can be accessed here.
Jonathan Spencer's analysis of the changes and comparison of the York-Antwerp Rules 2004 with those of 1994 can be accessed here.
GENERAL AVERAGE INTEREST UNDER THE 2004 RULES
Under Rule XXI of the York-Antwerp Rules 2004, the allowable rate of interest is to be determined each year by the Assembly of the Comité Maritime International, which has established the following rates:
- 1st January 2005 to 31st December 2006: 4.5%
- 1st January to 31st December 2007: 5.5%
- 1st January to 31st December 2008: 5.75%
- 1st January to 31st December 2009: 6%
- 1st January to 31st December 2010: 4%
- 1st January 2011 to 31st December 2012: 3%
These updates are published from time to time on the YAR page of the CMI website.
(On a related topic, the UK Association on February 28th 2012 circulated a response to market concerns about the rate of interest allowable under the 1974 and 1994 YA Rules. There is a link to the paper and a brief comment in my blog.)
DEBATE LEADING UP TO VANCOUVER
IUMI’s position was stated in three principal sources: London underwriter Nick Gooding’s Oslo 1996 paper, the CMI GA Working Group’s 1998 report at Lisbon; and Irish underwriter Eamonn Magee’s CMI Singapore 2000 paper.
Other IUMI papers in 1996 included:
- An analysis of ILU data by Matthew Marshall, an ILU researcher
- Matthew Marshall and Gerfried Brunn's summary of the responses to the 1996 IUMI questionnaire
- Remarks of David Taylor, English lawyer and self-styled "informed neutral"
- The UK Association of Average Adjusters' position paper, published in March 1996, authored by Charles Hebditch, John Macdonald and Phillip Stacey.
Meanwhile work went on at the CMI level and Geoffrey Hudson, an English barrister and average adjuster, commented on the IUMI position for the 2000 Toledo Colloquium, expanded upon for the Singapore conference – find it here. Thereafter a joint international working group was formed under the auspices of the CMI, chaired by Frank Wiswall, whose report embodies the remit to Bent Nielsen's 2002/2003 CMI Working Group. This Working Group’s report was circulated in March 2003 and was addressed by a new International Sub Committee that met during the CMI’s June 2003 Bordeaux Colloquium. Bent Nielsen, Chairman of the Committee, prepared a Summary of that meeting’s conclusions.
That Summary prompted some comment including a “Quick Response” from AIDE, the International Association of European Adjusters, (now AMD, the International Association of Average Adjusters) the tone of which can be inferred from the following passage – “contrary to the opinion voiced by some, general average and the YAR can meet the challenges of today’s sea trade provided the management of general averages is thoroughly modernized and costs are thereby reduced. Whilst the YAR can be improved, the basic principles and allowances should not be substantially modified.” The entire AIDE response of November 15th 03 may be accessed here.
The Summary was the subject of further discussion at a meeting of the ISC in London in November 2003, following which the International Sub Committee’s report was published in final form under date of December 19th 2003 and can be accessed here. This report is the document around which debate leading up to Vancouver revolved.
For the US market, the American Institute of Marine Underwriters organized a Forum in early February, 2004, where Howard McCormack, a lawyer with some average adjusting background and the US member of the ISC, and Fred Pietropola, an average adjsuter, were presenters and offered a potted version of the views embodied in their addresses delivered during their respective chairmanships of the Association of Average Adjusters of the Untied States, to which there are links below from the PAPERS section. On behalf of IUMI, Nick Gooding, a Lloyd's Underwriter, gave a paper comprising largely an historical account of previous unsuccessful attempts to do away with General Average, which can be accessed here. Ben Browne, a London lawyer, sketched out IUMI’s current views and proposals and the bullet points are posted here.
Jonathan Spencer prepared a brief discussion paper on the 2004 proposals. Wider circulation was given to a further position paper from AIDE; a position paper from the Italian Maritime Law Association; and a paper from the International Chamber of Shipping, the only trade association known to have commented on the changes.
Changes were adopted during the CMI’s 38th Conference in Vancouver, BC during May 30th – June 5th, 2004.
The UK Association promptly published a newsletter addressing the new Rules, making the observation that “[t]he 2004 Rules represent the first occasion when a new set of Rules have been published without a consensus between Shipowning and other interests.”
The International Chamber of Shipping gave us permission to post their report on the Conference, the first part of which deals with the General Average work.
Shortly before the Vancouver conference, The Journal of International Maritime Law published, in its April/May 2004 issue, an article by Liverpool average adjuster Richard Cornah, a Fellow of the UK-based Association of Average adjusters, entitled “The road to Vancouver – the development of the York Antwerp Rules”, posted here with the permission of the author. Mr. Cornah demonstrates clearly that the development of the Y/A Rules had been constructively evolutionary until what occurred in Vancouver. More recently, he has authored Richards Hogg Lindley’s Commentary on the 2004 Rules – read it here.
Analysis of the new Rules shortly revealed an unintended consequence of the drafting of the new Rule VI dealing with salvage – parties advancing sums by way of salvage on behalf of other parties to the adventure might no longer receive an allowance for interest on those sums. The Association of Average Adjusters of the United States responded to this circumstance with commendable alacrity, adopting a Rule of Practice to right the apparent wrong. This development and the text of the new Rule are described in a brief paper by Jonathan Spencer, an edited version of which appeared in the Fall 2004 newsletter of the Marine Insurance Committee of the Association of Average Adjusters of the United States.
"General average - English and US law and practice, against the background of the York-Antwerp Rules, 1994", by John Macdonald, originally published in Gard News no. 161, available here as a PDF file.
The then-current state of the YAR debate was synthesized ably in Howard McCormack's 2002 address delivered as outgoing Chairman of the Association of Average Adjusters of the United States, available here as a PDF file.
Fred Pietropola, his successor, provided a continuing review of the YAR debate in his 2003 Chairman’s address to the Association of Average Adjusters of the United States and introduced an innovative and compelling proposal for salvage settlements to take place under the auspices of the P&I Clubs.
BIMCO developed a model General Average absorption clause to be used in hull and machinery policies - click here to see it. Practitioners will recognize that it forms the basis of the GA absorption provisions of the IUA's International Hull Clauses.