Michael Cox
Published: January 19, 2025
Background
The English Commercial Court recently considered a standard clause in the Congenbill 1994 form by which the York Antwerp Rules (“YAR”) were incorporated into the contract of carriage evidenced by the Bill of Lading, although the decision has wider implications for the incorporation of the YAR into any contract of carriage, including charterparties.
As is known to many students and practitioners of English Maritime Law, the principles of General Average date back to Roman times. It is perhaps appropriate that counsel for the Defendants, Mr Richard Sarll, should therefore comment that the issue considered in this case “was an old chestnut, which has been debated for years, and that the present case provided ‘at long last’ the opportunity for clarity”.
In order to assist with deciding what sacrifices or expenses should fall within General Average, and how any apportionment between the parties should be made, the YAR were first agreed in 1877. There have been a number of amendments to it, with the current version being the YAR 2016. It is open to the parties to agree to incorporate the YAR into their contract and, if they do, which version. However, this latter issue – “which version”? – is what the judge in The Star Antares had to decide where Bills of Lading on the Congenbill 1994 form had been issued. The relevant clause read as follows:
“General average shall be adjusted, stated and settled according to York-Antwerp Rules 1994, or any subsequent modification thereof, in London unless another place is agreed in the Charter Party.”
The contentious wording is underlined, since the issue was whether these words applied later versions of the YAR or the 1994 version; more specifically whether later versions of the YAR were a “modification” or were in fact “new”. In this case, the issue was whether the YAR 1994 or the YAR 2016 applied.
The Carriers’ case
The Claimant Carrier relied on various materials in support of its construction that the YAR 1994 applied, including statements in the introductory material to the YAR 2004 and 2016, and also by BIMCO, that these later Rules were “new” and were not to be considered as a “modification or amendment” of the YAR 1994. They argued there were similar comments in text books, although noting the possible ambiguity that, in reality, they were modifications. Therefore, it was argued that if the parties had wanted the YAR 2016 to apply, they could have amended the wording of the Congenbill 1994 form to make this clear.
The Cargo Insurers’ case
The Defendant Cargo Insurers relied on the fact that each subsequent version of the YAR was intended to ensure that the adjustment of GA be updated to reflect developments in the shipping industry. They argued that the drafters of the Congenbill 1994 intended for the latest YAR to be incorporated, not an earlier version which had become outdated. They further argued that “modifications” was wide enough to include “new”, relied on different comments in the text books and also relied by analogy on clauses which incorporated the Hague Rules “as amended”, which have been held to be sufficient to incorporate the Hague-Visby Rules. They argued that, in any event, there was no evidence of a “market practice”, the materials were irrelevant and the text book commentaries ambiguous.
The Judgment
The Judge noted that there was no dispute as to the relevant principles of construction of a contract, but only as to what material forms part of the background knowledge which was “reasonably available” to parties when construing the contract. In other words, it is not restricted to what the parties actually knew.
The Judge considered that “modifications” was wider than “amendments”, and that “any modifications” was wider still. The Judge limited himself to the “uncontroversial factual matrix”, namely the different version of the YAR which have been issued, and concluded that the words were wide enough to include “new” versions of the YAR. As the Judge concluded “There is no difficulty, in my view, as a matter of the ordinary use of language, in describing YAR 2004 or YAR 2016 as modifications of YAR 1994. Each was produced by the same body, was directed to the same end, and contained many of the same provisions, but introduced some changes.” The Judge also noted that this was consistent with the interpretation of the “Hague Rules as amended” and also with the intention to ensure that General Average should remain up to date with commercial shipping developments. The Judge discounted the other material relied upon by the Claimant as being knowledge that was too specialised, expressions of opinion only or ambiguous.
Comment
Whilst providing clarification as to the version of the YAR which is to apply to the adjustment of General Average in the context of the Congenbill 1994 form, this decision will also apply to clauses in other contracts of carriage in similar terms. However, as always, the particular clause should be construed based on the specific wording agreed between the parties.
Having decided that the YAR 2016 rather than the YAR 1994 will apply, the judgment is significant for two reasons, one general in nature, the second more particular.
The general consequence is that any General Average adjustments in the course of publication or recently published will have to be prepared, or are open to challenge, on the basis of the differences introduced by the YAR 2016 rather than the YAR 1994.
The more particular consequence is that the YAR 2016 introduced a time bar provision in Rule XXIII that runs one year from the date of publication of the adjustment (providing this is no later than 6 years from termination of the common maritime adventure). Again, this will need to be borne in mind in relation to General Average adjustments currently being prepared or recently published to ensure that a claim for a contribution against other parties to the adventure does not, or has not already become, time-barred.
Finally, consideration should be given when contracts of carriage are drafted to ensure that the intended version of the YAR will apply to any adjustment of General Average. Parties may have a preference, but they should be aware that a clause using the wording from or similar to the Congenbill 1994 form will apply the latest version of the YAR – here the YAR 2016.
