York Antwerp Rules 2016

By way of reminder, what underlies this is that the 2004 York Antwerp Rules have not been very widely adopted and the CMI is optimistic that a new set of YAR can be adopted in 2016 acceptable to all stakeholders. The cargo interests, represented by IUMI, and the shipowning interests, have both significantly moderated their positions in order to try to bring that about.

The CMI’s International Working Group is continuing the drafting of a set of Rules that it is hoped will be acceptable to all stakeholders by the time the joint meeting of the MLA and CMI takes place in New York next May. The IWG met in early June, as described in my prior post.

Many of the proposed changes are evolutionary or are being made for clarification.

Changes of greater significance include a reversion to the treatment of crew wages as it existed in the 1994 Rules and prior versions – these will once again be allowable while the vessel is detained at a port of refuge under general average.

Secondly, under the 2004 Rules, salvage contributions had been left to lie where they fell unless one of the parties to the adventure paid for salvage on behalf of the other parties; under proposed revisions to Rule VI, salvage settlements will be readdressed in general average where this would make a material difference, for example where the salved values used for the salvage settlement were manifestly incorrect or there is a subsequent accident during the voyage that results in significant differences between salved values and the contributory values for general average purposes.

Another proposed revision will take place in the manner in which interest is calculated on general average sacrifices and allowances. Currently the CMI Assembly establishes the rate of interest annually “based upon a reasonable estimate of what is the rate of interest charged by a first class commercial bank to a shipowner of good credit rating”. This has resulted in what shipowners have found to be an unrealistically low rate of interest and the proposal now is that interest will be allowed based on the LIBOR rate for the currency of the adjustment, with an uplift of 4%.

Further proposed changes include matters such as the treatment of cash deposits, currency of adjustment and various tools to try to speed up the adjustment process. For the first time the CMI will promulgate, alongside the Rules, a set of guidelines addressing such issues as the application of the revised Rule VI on salvage, model general average security forms, meditation of disputes and the role of the general average surveyor.

The next meeting of the IWG is to take place in London on December 7th and 8th at the offices of the International Chamber of Shipping. The outstanding issues involve the treatment of temporary repairs, the application of the Bigham cap in non-separation agreements and continuing to draft the proposed changes to Rule VI. There is general feeling within the IWG that sufficient consensus will be reached for a new, 2016 version of the York Antwerp Rules to be adopted in New York.

Ben Browne of Thomas Cooper, an IUMI representative on the IWG, has posted a detailed update on the Istanbul discussions at http://www.thomascooperlaw.com/an-update-on-the-reform-of-the-york-antwerp-rules/

The CMI’s webpage on the revision is being kept current at http://comitemaritime.org/Review-of-the-Rules-on-General-Average/0,27140,114032,00.html

We perceive little interest in the revision from US stakeholders but I would certainly welcome any comments or questions.

Further to prior posts, the minutes of the December ISC/IWG meeting have been circulated and the first draft of the proposed 2016 Rules is now available.

Richard Cornah, a UK-based average adjuster and a rapporteur of the ISC and John O’Connor, a Canadian lawyer and past President of the CMLA, have prepared the draft on the basis of the what has been discussed so far. The draft however also includes ‘tidying up’ changes, some of which were based on the tidying up changes included in the YAR 2004. The text is set out in columns alongside YAR 1994 and YAR 2004 for easy comparison.

With regard to Rule XIV it has been decided at this stage to include the YAR 2004 wording with square brackets around the controversial wording described in the working papers.

Feel free to provide your comments.