A recent UK court decision has concluded that a cargo insurer was not liable for general average contributions as the owner had failed to exercise due diligence, which led to the breakdown of a vessel’s main engine.
The crude oil tanker, “Cape Bonny”, was sailing between Argentina and China when the number 1 main bearing failed catastrophically. The breakdown happened when the vessel was trying to avoid a tropical storm and towage assistance was needed. The shipowner declared general average and contributions were sought from the parties to the common maritime adventure, which naturally included cargo interests. The cargo’s contribution was assessed at about US$ 2.5 million.
General average is governed by the York-Antwerp Rules and is included into charterparties and bills of lading. However, parties to the maritime adventure are not liable to contribute if they can successfully prove a breach of contract.
A breach of contract is possible if the vessel was not fit to sail before and Continue reading “Recent court ruling found cargo insurer not liable for general average contributions”
