Vessel operating expenses incurred while under detention by pirates are allowable in general average

General average, as a concept of antiquity, emerged before the advent of marine insurance as an independent mechanism for the redistribution of losses suffered and expenses incurred for safety from peril of the common maritime adventure.

1 while a vessel was embarking on a voyage. Being a concept of international import efforts were made by the international community to achieve a measure of uniformity

2. in the principles and practice of general average. These efforts resulted in the adoption of the York-Antwerp Rules (YAR)

3. as a tool for achieving greater uniformity, clarity and simplification on the concept

4. However, the YAR only have force when they are incorporated into carriage contracts.

Stakeholders in the industry are in agreement that ransom payments fall under generated average and are to be redistributed amongst the maritime adventurers whose interests were
saved as a result of such payments. However, there has been no consensus amongst stakeholders on whether expenses incurred by a shipowner during the period a vessel is been detained by pirates fall under general average and should be redistributed amongst the maritime adventurers involved in the adventure.

The Supreme Court of England and Wales (the SC) in a recent decision in Mitsui & Co Ltd v Beteilingungsgesellschaft LPG Tankerflotte MBH & Co KG & Anor5 has held that such expenses, incurred during the period of negotiations for the release of a vessel detained by pirates, are to be redistributed in general average.

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