Butcher J has handed down a judgment resolving a longstanding controversy in the law of general average, ushering in York-Antwerp Rules 2016 – provisions that have so far lain mostly unused despite enjoying the approval of both the shipowner and cargo communities.

In issue was the question of which version of the York-Antwerp Rules is applicable pursuant to clause (3) of Congenbill 1994 – probably the most widely used bill of lading in dry cargo trades.  The clause provides:

“General Average shall be adjusted, stated and settled according to York-Antwerp Rules 1994, or any subsequent modification thereof”

Similar provisions are found in the Gencon 1994 charterparty and other standard forms.

Practitioners will be familiar with statements in general average adjustments recording the view that the York-Antwerp Rules 2016 are not incorporated by such formulae, on the basis that those rules are not considered to be a modification of York-Antwerp Rules 1994, but instead a new set of rules.  Similar views were expressed in connection with York-Antwerp Rules 2004 – rules that were rejected by the shipowning community as unduly favourable to cargo.

Until now, there has never been any judicial consideration of whether such a view is correct.

Butcher J has held that, upon its true interpretation, clause (3) of the Congenbill 1994 form incorporates York-Antwerp Rules 2016, since they can properly be described as a modification of York-Antwerp Rules 1994.

It is understood that the unsuccessful ship interests intend to apply for permission to appeal.

This decision holds out the opportunity of ushering in York-Antwerp Rules 2016 – provisions which, although better suited to modern trading and especially large containership casualties than the 1994 Rules, have so far lain largely unused.

Attention should, however, be directed to the stringent timebar provisions in Rule XXIII, York-Antwerp Rules 2016, which are not found in York-Antwerp Rules 1994, and which might catch some parties unawares.

The successful cargo insurers were represented by Richard Sarll of 7KBW, instructed by Henry Adams of Birketts LLP.

Please click here for the judgment.