The institute of general average is one of the oldest in maritime law. Its origins date back to Rhodian law from which the Lex Rhodia de Iactu was taken, later incorporated into Justinian law. Over the centuries, the institute has substantially maintained its guiding principle aimed at the fair distribution, within the scope of a maritime expedition, of the damage that, through a voluntary act intended for common safety, affects only one of the interested parties (ship or cargo) (2). While this rebalancing aim remains, the institute has undergone modifications and fluctuations, but has retained this genetic and defining characteristic. Under Louis XIV, Colbert's Ordonnance de la Marine of 1681 gave the institute organic and complete regulation. From the second half of the 19th century, the York-Antwerp Rules were drawn up, which are still continuously updated, concluding the evolutionary cycle of general average and achieving regulatory uniformity on an international scale.
Currently, they consist of seven rules distinguished by as many letters of the alphabet and twenty-two progressively numbered rules. The lettered rules set out definitions (such as that of general average in rule A) or general concepts, while the numbered rules govern specific cases of acts of general average and the practical criteria for their settlement and distribution (contributions, extinguishing of fire, voluntary stranding, salvage remuneration, damage to machinery, lashing expenses, expenses in the port of refuge, damage to cargo during discharge, temporary repairs, loss of freight, damage to the ship, etc.) (6).
The York-Antwerp Rules were conceived as a contractual code for the uniform regulation of general average, on an international level, therefore applicable only in the event of express reference, usually made in charterparty agreements or insurance contracts (7). Although the Rules are self-sufficient, constituting contractual regulations, they do not exhaust the factual circumstances into which an act of general average is inserted. In Italy, recourse is had to the flag state's law (Article 11 of the Navigation Code) to supplement them, whereas in Anglo-Saxon legal systems – where this criterion is almost unknown – reference is made to the law in force in the port of destination if the voyage is completed there, subject, if the voyage is completed in an intermediate port, to the application of local law (8). In the event of a disparity between legal provisions and those provided by the Rules, in a more favourable scenario but one not achievable by the shipowner, charterer, or consignee because the bills of lading do not refer to them, said parties shall be entitled to compensation for the prejudice suffered based on the general principles concerning contractual breach (9).
The fundamental “rule of interpretation” that precedes the list of the 7 alphabetical rules states that in the regulations of a.c. they prevail over laws or practices incompatible with them; for everything not expressly provided for, they are to be supplemented by the law governing, in general, the act and the a.c. regulations (11).
The second part of the interpretive rule expresses the principle that all specific cases provided for by the numerical rules constitute a matter of course and should be admitted for contribution accordingly, whereas the alphabetical rules only come into play for cases not expressly provided for by the numerical rules.
Article 469 of the Italian Navigational Code, under the heading “General Average”, states: “Expenses and damages directly caused by measures reasonably taken in accordance with Article 302 by the captain or by another in his stead, for the preservation of the expedition, are general average and shall be divided among all parties interested in the expedition, provided that the damage voluntarily caused is not the same damage that would necessarily have occurred in the natural course of events.” The definition follows Rule A (13) from which it does not borrow (but the omission is inconsequential) the adjective “extraordinary” which is intended to emphasise the exceptional nature of the measure adopted to avert an impending danger to the expedition. A typical example is damage sustained by the engine when trying to free the ship by its own means, which is disciplinarily covered by Rule VII.
The same applies to a ship which, to escape danger, enters a narrow passage, usually prohibited to it, or ventures without a pilot. If damage results, it will be classified as general average. However, the voluntarily caused damage must be different from what would have occurred in the absence of the general average act. This point is particularly important in the case of voluntary stranding. American jurisprudence admits the division of damages from stranding – even unavoidable ones – provided that the captain chose the grounding point. This is considered sufficient to deem the stranding voluntary and therefore classifiable as general average (15). The revision of Rule V in 1974 eliminated any difference in treatment of voluntary stranding, so that resulting losses and damages will be admitted for contribution even if the ship would have run aground anyway. The definition of general average given by Article 66 of the MIA (Marine Insurance Act 1906) (16) clearly distinguishes damage as general average from expenses as general average. Damage as general average occurs when the general average measure directly affects an asset of the voyage (ship, goods, freight) (17) which is sacrificed wholly or in part; expense as general average, on the other hand, involves an expense or the sacrifice of an asset not belonging to the voyage. This distinction is of considerable importance from an insurance perspective. Alongside expenses and damages classifiable as above, substitution expenses (Article 471 of the Navigation Code), well-defined by Rule F (18), must be admitted to general average. According to Article 469 of the Navigation Code and Rule C (19), the damages and expenses must be the direct consequence of the general average measure, so the causal link must be verified in accordance with the principles of Article 1223 of the Civil Code, which our jurisprudence interprets in terms of adequate causation.
In Anglo-Saxon common law systems, to exclude the chain of causation, there must be a novus actus interveniens possessing autonomous and determining causal efficacy (26) in a context not dissimilar to that provided, with the same consequences, by Article 41 of the Criminal Code concerning supervening causes (27).
The author of a general average act can be the master or another in his stead, even if not part of the crew; the failure to formally declare general average does not remove the provision's character (28), even within the scope of the York-Antwerp Rules. In Great Britain, “sacrifice made by a stranger to the adventure” is permissible in general average, with or without the master's consent, once the indispensability of the measure adopted for the safety of the venture is established (29). The situation changes radically if the intervention of third parties occurs after the ship has been abandoned; even an omission can amount to an act of general average if it is preordained to avert a loss to the venture, provided that there is a plurality of interests in the venture (36).
While contribution may be lacking (38), the plurality of the contributing goods is essential for the subsistence of a.c. (general average); for this reason, in England, under Article 65 of the MIA, the insured has the right to recover the a.g. (general average) contribution from the insurer even if the parties interested in the voyage, although multiple, are all represented by a single subject. In the United States, case law tends to recognise a.c. even with a vessel in ballast or in the presence of a yacht; the practical scope of this approach is to place the contribution on the insurer of the vessel, a result that can be achieved through a specific clause to be included in the “hull” policy (such as Rule 8 of the ITCH – Institute Time Clauses Hull). A situation of danger that jeopardises the entire voyage is required, and the subsequent immobilisation of the vessel and cargo justifies the act of a.c. even if, at the time of the loss, the sea is calm, given that, notoriously, the weather, however reassuring at the moment, can turn for the worse rapidly; for this reason, neither the York and Antwerp Rules nor Article 302 of the Italian Navigation Code require the danger to be imminent, so that the relevant assessment by the master must be evaluated *ex ante*, with the mere fear of a worsening situation not being sufficient. It should be recalled that Rule VI admits both voluntary and conventional salvage expenses to contribution (42). In parallel, Article 497 of the Italian Navigation Code establishes that the expense for salvage indemnities and compensation shall be shared among the parties interested in the rescued voyage in accordance with the provisions on a.c..
Various theories have been put forward in the search for the legal basis of the contribution in a. c.; the theory which identified it in the management of affairs, requiring the spontaneous taking of impromptu initiatives (43), has been refuted by the observation that, contrary to the provision of Article 2028 of the Civil Code (44), the Captain is required by law (Article 302 of the Code of Navigation) to take the necessary measures to ensure the safety of the voyage. Equally irrelevant is the reference to commission (45) or to the action for unjust enrichment, which is of a subsidiary nature and cannot be brought in the presence of a direct action for recovery, in the absence of provisions in the insurance policies and/or contracts, as provided for in Articles 469 et seq. of the Maritime Code. The legal basis for the contribution under the act of joint and several liability derives from the law, given that, with regard to contributory obligations, the act of joint and several liability constitutes “an act suitable … to give rise to them in accordance with the legal system” (Article 1173 of the Civil Code). Where clauses are present (which are virtually invariably found in bills of lading, marine insurance contracts and charter-parties) referring to the York-Antwerp Rules, the matter is governed by contractual provisions supplemented by statutory provisions, given that the obligation to contribute, not arising from the Rules, arises exclusively by operation of law (Article 475 of the Maritime Code). As these are rights that may be contractually agreed upon (only the Master’s obligation under Article 302 of the Maritime Code is a matter of public policy), the statutory provisions may be derogated from by agreement and the parties are free to refer to a law other than that of the flag state (49) and to provide, as is frequently the case, that the settlement of the average shall take place abroad, usually in London or New York. Such a clause does not constitute a derogation from jurisdiction, as the regulations (at least those set out in the Lloyd’s Average Bond) are not binding and merely constitute a draft scheme for the settlement of the average contribution (50). The average adjuster is not equivalent to an arbitrator, and Article 619 of the Italian Code of Navigation has fallen into disuse, being consistently overridden by contractual clauses, starting with the average bond. The liquidator’s adjustment is not in itself binding, not even under English law; therefore, in the event of disputes, the court or the arbitrator will have jurisdiction to settle them in the (rare) event that the contracts for the use of the vessel contain an arbitration clause (51). According to certain authors, contributory relationships would fall within the framework of a contract for the benefit of a third party (52), even though, in practice, by virtue of the clauses referring to the York and Antwerp Rules cited in the bills of lading, shippers and consignees, by negotiating them, subject themselves to the relevant rules, outside the scope of Article 1411 of the Civil Code.
In England, the dualist theory of implied terms and implied contracts is also invoked to justify the liability of shippers and consignees to each other (53). The Court of Cassation has ruled that “the action for contribution in a. c. must be distinguished from that for the enforcement of the obligations laid down by the general average regulations, so that the limitation period provided for in Article 481 of the Civil Code does not apply to the latter”, further establishing (55) that the said article subjects not only the right to contribution but also the action aimed at enforcing it to the annual limitation period. This is also evident from paragraph 405 of the Explanatory Memorandum to the Code of Navigation, which states “the dual consequence that the annual limitation period applies to the claim for contribution and is suspended for the entire duration of the average settlement proceedings, whilst the action to recover the debt ascertained in the contribution settlement is subject to the ordinary limitation period” (ten years, not one year). The driving force behind the average settlement procedure is the average adjuster. In common law jurisdictions, the action for contribution in average is subject to the general six-year limitation period for the extinction of rights arising under contract and tort, which, by virtue of the reference to the York and Antwerp Rules, runs from the time the sacrifice and expenses are incurred. It has also been clarified that (61) the average bond, entailing an undertaking to make any payments following the filing of the general average settlement, has independent contractual significance, such that the limitation period runs from the finalisation of the general average settlement. In Italy, rather than following the procedure set out in Article 610 et seq. of the Italian Code of Shipping, recourse is usually made to the signing of a promissory note for average, which provides for the appointment of an average adjuster; furthermore, the receivers issue guarantees to the carrier, in lieu of cash deposits, which are almost always underwritten by their respective insurers. This procedure, which is extremely simplified, is favoured by insurers. Article 561(2) of the Italian Code of Navigation grants the carrier a lien on the cargo as security for the sums due as a contribution in general average. Article 552(4) grants the same right of recourse over the ship and the freight as security for the contribution payable by the ship.
These privileges are extinguished after one year and are enforced through the precautionary attachment (Article 2769 of the Italian Civil Code) of the assets subject to the privilege, which in common law systems is known as a maritime lien, albeit with significant limitations. The same privileges are recognised by the Brussels Convention of 1926, also ratified by Italy, concerning maritime privileges and mortgages. The party liable for payment of the contributions charged to the cargo is the owner of the goods at the time the sacrifice and the expenditure constituting the act of general average are incurred.
As a general rule, under a sale and purchase contract, the obligation to contribute is assumed by the buyer – the endorsee of the bills of lading (62). In English law, those with an interest in the cargo do not benefit from any lien on the ship to protect their potential rights, whereas such a remedy is granted to the shipowner by the Merchant Shipping Act, which authorises the deposit of goods as security for the payment of the general average contribution due from the cargo. This procedure is similar to that provided for by Article 437 of the Italian Navigation Code for the protection of claims for freight and demurrage, but not for general average contributions.
Damage arising from general average, unless otherwise agreed, is, under Italian law, recoverable from the insurer even when no contribution is made. A typical case of contractual exclusion of contribution occurs with the introduction of the (now obsolete) “free of general average” clause. It is frequent for time charterparties and bareboat charterparties to include the clause “hire not to contribute to g.a.” (as in the Baltime form and others). Obviously, the hire must be at risk to form part of the contributing mass. If, as often happens, it is earned regardless of events or is pre-paid, the hire does not contribute, as it only constitutes an element that increases the value of the cargo.
The right to contribution may be challenged if the losses and/or expenses, despite being acts of general average, are attributable to the fault of one of the parties involved in the shipment, as is the case with an unseaworthy vessel at departure. Under English law (but not exclusively), only actionable fault penalises the author of wilful danger; given the carrier's obligation to exercise due diligence to ensure the seaworthiness of the vessel at departure, it follows that in the event of an established breach of this obligation (as well as in cases of “deviation”, i.e. unjustified deviation from the normal route, or of reasonable delay which are causally significant in determining the dangerous situation threatening the shipment), the shipowner will not be entitled to contribution from the cargo. These principles are also applicable in Italy, as Italy has ratified the 1924 Convention on the Bill of Lading, which informs the provisions of the Navigation Code concerning maritime transport (Article 422 of the Navigation Code) and general average.
In the United States, case law, inclined towards a literal interpretation of Section 3 of the Harter Act (which anticipates a similar provision of the US COGSA of 1936, similar to the corresponding English COGSA), is particularly severe on the subject of nautical fault: the shipowner is not entitled to claim general average contribution if the cause of the general average event is attributable to the fault of his employees; the New Jason Clause explicitly recognises (74) the shipowner's right to contribution from cargo interests, provided that the event giving rise to the general average is not attributable to the shipowner “by statute, contract or otherwise”.
Rule D stipulates that contribution rights in admiralty are not prejudiced by the fact that the event giving rise to the claim arose from negligence, as each stakeholder retains their respective rights of action and defence (75). The practical implication of Rule D is to permit the appointment of a liquidator for the preparation of the admiralty claim, leaving the resolution of legal preconditions relating to the existence or otherwise of contribution obligations by the interested parties to subsequent litigation (78), thereby facilitating the resolution of the insurance aspects of the admiralty claim in the meantime. In line with the prevailing principles in any legal matter concerning evidence, Rule E establishes that the claimant must provide proof that the damage or expense is indeed admissible in admiralty. The formation of the creditor mass (Art. 470 of the Navigation Code) and debtor mass (Art. 475) is specifically regulated by the Navigation Code; stating the principle that “each of the injured parties participates in the formation of the creditor mass and contributes to the distribution for the amount of damages actually affecting their property”, Art. 470 requires, as a condition for admissibility in admiralty, that the damages are a direct consequence of the measure taken by the captain.
Damage to objects, equipment or armaments not included in the ship’s inventory does not count towards the calculation of the insured sum; these exclusions stem from the need to prevent fraud (79). Examples of replacement costs permitted under Rule (F) are (80) the additional costs of repairs carried out during overtime shifts, the additional dry-docking costs for a fully laden vessel, or the additional cost of shipping a spare part by air rather than by sea. Rule X stipulates that when a ship calls at a port or place of refuge and returns to its port of loading (81) as a result of “accident, sacrifice or other extraordinary expenses” (82) for the purposes of general safety, the expenses incurred in entering or leaving the port of refuge shall be allowed as general average; the same applies where the vessel is unable to carry out repairs at the port of refuge and must proceed elsewhere to have them carried out. Expenses for the preservation and handling of the cargo are not admissible for contribution if the voyage is interrupted (84). Paragraph C of Rule A) allows, as general average, the expenses for storage, insurance, reloading and stowage, as well as those for fuel and provisions. However, in the case of damage constituting “excluded perils”, where the vessel has sustained irreparable damage, thereby releasing the shipowner-carrier from carrier’s liability due to the supervening impossibility of performance and the consequent cessation of the obligation to continue the voyage, the costs of preserving and handling the cargo shall be admissible for contribution up to the point at which the ship is found to be beyond repair or the voyage is abandoned, or until the unloading is completed if the ship is found to be beyond repair or the voyage is abandoned before that date (85). In addition to the above, Rule XI(a) allows, in a. c., wages and maintenance expenses for the crew (including whilst ashore and not limited to the provisions allowance), as well as consumables, provisions and fuel incurred as a result of the prolongation of the voyage (86) to a port of refuge or for return to the port of loading. Rule XIV allows for the contribution of provisional repairs carried out at the port of refuge without any reduction from the old to the new value (as otherwise required by Article 471 of the Navigation Code), regardless of the extent to which such provisional repairs have been completed, provided that they avoid the need to carry out definitive repairs. The cost of fitting a propeller to replace one that has been lost is a typical example of a repair eligible for contribution (87). Article 472 of the Maritime Code allows the loss of freight to be included in the estate of creditors at its gross amount, less the freight earned from goods loaded in its place and any expenses that the loss has made it possible to save. The freight deductible in the estate of the shipowner is that due under the terms of a voyage charter party or as consideration for the carriage of specific goods which are at the shipowner’s risk and therefore neither paid nor payable in all circumstances; it should be noted that, in the absence of express provisions, freight is payable at destination upon delivery; however, a contrary intention of the parties, to the shipowner’s advantage, may be inferred from the charter party (89). Article 473 sets out the criteria for the inclusion of damage to the ship and the cargo in the estate of creditors, stipulating that such damage must be assessed in relation to the values ascertained at the end of the voyage or, in the case of a round-trip, at the end of the contributing leg of the voyage, at the last port of discharge (90), after deducting (a) the expenses saved as a result of the damage and loss, (b) the damage sustained prior to the voluntary measure, and finally (c) the residual value that subsists or would have subsisted irrespective of the damage following the voluntary measure or for reasons unrelated to it. Damage sustained by goods held in the ship’s stores is also eligible for contribution (91). The principle that the assessment of damage and expenses, as well as the values subject to contribution, must be based on the place and time of the end of the consignment is enshrined in Rule G (92). Rule XVI stipulates that damage to the cargo is to be admitted under general average on the basis of the values calculated at the time of unloading and certified by the invoice submitted to the consignee; in the absence of such a document, the value at the time of loading, plus insurance costs and freight, shall apply. If the damaged cargo is sold, unless otherwise agreed, the loss in value shall be calculated as the difference between the proceeds of the sale and the valuation made in accordance with the criteria set out above. With regard to damage to the vessel, Rule XVIII distinguishes between repaired and unrepaired damage. In the case of repaired damage, the actual and reasonable costs of repair and/or replacement are admissible for contribution, subject to the deductions set out in Rule XIII (the most notable consequence of which is the deduction from the new value to the old value only for vessels over 15 years of age, with the costs of cleaning and painting the hull excluded from contribution unless such work had been carried out in the year prior to the incident. In the case of an unrepaired vessel, a reasonable depreciation arising from the damage and loss is allowed under general average, not exceeding the estimated cost of repairs. However, where the vessel has been actually lost (actual total loss) (93) the difference between the estimated value of the vessel in sound condition (less the cost of repairing damage not constituting a general average) and the value of the vessel in its damaged state, relative to its realisable value if it can be sold, shall be admissible as a general average loss (94). The guiding principle is that the shipowner is to be compensated for his actual loss but must endeavour to minimise it. There are frequent cases in which repairs to damage that does not compromise the seaworthiness of the vessel may, with the consent of the classification society, be deferred at the shipowner’s convenience.
In that case, should the cost of deferred repairs have increased due to inflation, such an increase is usually not taken into account. Conversely, in the hypothesis where the ship is dry-docked for repairs, the cost of dry-docking is only admitted pro-rata, where damage is partly attributable to particular average and partly to general average and normal wear and tear.
The numerical rules separately govern the damages from cargo contribution (rule 1) and those from contribution and sacrifice for common safety (rule II), those from onboard fire extinguishing (rule III), those from cutting up ships, parts of ships already removed or lost (rule IV), those from voluntary stranding (rule V), and finally the damages from refloating machinery and boilers (rule VI) as well as the expenses of lighters (rule VII) and objects and provisions burnt as fuel.
The levy is notoriously the oldest and most emblematic act of trade. Rule 1, by expressing itself negatively, excludes the levy from contribution unless that which was sacrificed was carried out in accordance with the recognised custom of the trade.
The issue, relatively straightforward for the cargo in the hold, is more complex in relation to the cargo on deck.
Although this constituted a typical act of commercial shipping, according to an ancient tradition it was not included in the estate of the estate because, with the exception of coastal trade and unless it had been contractually agreed or was customarily practised due to a well-established market practice, stowage on deck is not normally lawful (95); consequently, until the early nineteenth century, English liquidation practice excluded the proceeds of any cargo stowed on deck from the benefit of the contribution; the loss was therefore borne by the consenting shipper, whilst in the absence of such consent the shipowner was liable; hence the custom of taking out specific insurance policies for cargo thrown overboard. As English case law had recognised the loss of timber loaded on deck and thrown overboard to save the shipment (in accordance with the prevailing commercial practice in the timber trade from Canada to Great Britain), a settlement practice became established across the Channel, accepted by shipowners and insurers, known as “general contribution” and apportioned amongst them as if it were a general average (96). Traces of the theory of “quasi general average” can be found in Article 480 of the Italian Code of Navigation. Passengers“ accompanying vehicles are subject to tonnage tax and therefore to contribution (97), including trailers and semi-trailers loaded onto conventional ships and ferries; the same applies to containers, for which stowage in superimposed layers on specialised container ships is inherent to the particular nature of containerised maritime transport. The stowage of containers on deck on conventional ships is a daily occurrence, ”in accordance with the recognised custom of the trade“ (98), to paraphrase Rule 1. The clause stipulating that stowage on deck is at the owner’s risk is valid and does not preclude the owner’s right to a contribution (99). Where the loss of the cargo was caused by an inherent defect in the goods stowed on deck, the shipowner shall be entitled to claim contribution unless he has incurred any liability in connection with the shipment of the said cargo (100). Under Article 475 of the Italian Code of Shipping, “each party with an interest in the shipment shall contribute to the formation of the pool of liabilities and shall share in the bearing of damages and expenses in proportion to the value of the goods at risk on their behalf, with the exception of the crew’s personal effects and unregistered luggage. As regards freight charges, ”the share of the aggregate liability is determined on the basis of their actual amount, less any expenses which their loss has or would have enabled to be saved’ (Article 477 of the Italian Navigation Code). ‘Contributory freight’ refers to the freight payable under the terms of the bills of lading or the voyage charter party, where the charterer is also the consignee of the cargo. By contrast, freight due as consideration for a time charter, in the absence of a voyage charter party or of freight payable under bills of lading, does not constitute a contributory value separate from the ship (101); obviously, this must be freight at the shipowner’s risk and therefore neither prepaid nor earned in all circumstances; in such cases, the freight forms an integral part of the cargo (102). In England, unlike in the United States, France and Italy, if a ship is sailing in ballast towards the port of loading and an event classified as a general average occurs, the freight due under the terms of a charter-party (not a time charter) constitutes a taxable value distinct from the vessel (103). In the case of a vessel chartered for several consecutive voyages (104), the freight due for voyages following that in which the general average was declared does not contribute. Rule II, in the event of salvage, also allows for the inclusion of damage sustained by the vessel and cargo, including that caused by water entering through hatches or other openings made for the purpose of carrying out the salvage operation, for the common safety.
Rule II allows contributions for fire extinction damage, excluding that caused by fire and heat, as well as (Rule IV) damage resulting from the cutting of salvaged or already removed parts of the ship. Rule V includes in the contributing mass damage directly caused by the intentional grounding of the ship for common safety, even if the ship would have run aground anyway (105). According to Rule VII, damage sustained by engines and boilers in an attempt to refloat a grounded ship in peril is admissible for contribution, provided there was a genuine intention to refloat it for common safety; however, when the ship is afloat, no loss or damage caused by efforts of engines or boilers is admissible for contribution (106). Rule B, albeit superfluously, establishes that all parties interested in the adventure contribute to the adjustment. Rule C only allows damage and expenses that are a direct consequence of the act of adjustment to be apportioned, excluding damage due to delay and/or indirect damage. Rule E requires the claimant, in accordance with general principles, to demonstrate that the expense or damage is deductible for general average. Rule F governs the admissibility of substituted expenses to general average, and Rule G stipulates that contributing values are to be ascertained at the time and place where the adventure terminates. Rule D states that the suspected negligent origin of the act of adjustment does not prevent the formation of the adjustment, without prejudice to the rights of the opposing parties to contest it and to assert their rights in any competent court.
In the articles of association, the rescue, meaning the assistance provided to a ship in danger of being lost, deserves particular mention. The danger must be real and, without necessarily indicating an imminent or fatal catastrophe, such as to reasonably foresee a significant worsening of the situation.
The Navigation Code governs assistance and salvage (107) under Articles 489 et seq. of the Navigation Code, aligning itself, albeit with some important diversifications (108), with the regulations of the Brussels Convention of 1910, ratified by Italy and almost all maritime nations.
An essential element of the concept of rescue is the danger of the expedition being lost, such that it can be presumed that, without the intervention of the rescue services, a more serious accident might occur (109). Rescue is mandatory only for persons in danger (110) and failure to comply with this obligation, which rests with the master, is punishable as a criminal offence (Article 1158 of the Navigation Code). Rescue is classified as either contractual or voluntary (so-called ‘salvage proper’) and, as such, is remunerable provided it has not been carried out against the reasonable and express refusal of the master of the vessel rescued. The same rules apply to rescue operations ordered by the Port Authority (Article 170 of the Navigation Code). Within the limits of the value of the property assisted or salvaged, the salvor, upon completion of the service, is entitled (Article 491 of the Italian Code of Navigation) to reimbursement of expenses, compensation for damages and, where a result—even a partially successful one—has been achieved, to remuneration. The remuneration is determined on the basis of the success achieved, the risks incurred by the rescue vessel, the efforts made and the time spent, the general expenses of the undertaking if the vessel is fitted out and manned for the purpose of providing rescue (111) as well as the danger to which the property assisted or salvaged was exposed and the value of that property. A distinction is made between actual salvage and ‘engaged services’, which, by their very nature, cannot achieve the result of salvage (112). An activity carried out in the fulfilment of a duty which, although resulting in a salvage, does not entitle the provider to remuneration where the work performed falls, like the extinguishing of a fire by the fire brigade, within the institutional remit of the intervening body (113). However, where the service rendered, going beyond that provided for in the contract or within the entrusted functions, takes the form of a rescue operation and is successful, the reimbursements, compensation and remuneration provided for in the event of a rescue are due. With regard to towing, Article 106 of the Navigation Code provides that a tug which, in order to assist or save the towed vessel, performs work exceeding that normally involved in towing, is entitled to the indemnities and remuneration provided for in Article 491 of the Navigation Code. The rescuer is entitled to the lien provided for in Articles 552 and 554 of the Navigation Code on the vessel and its cargo as security for the salvage allowances and remuneration.
Italian case law holds that, in relation to salvors, the cargo interests and the shipowner are jointly and severally liable for the payment of salvage remuneration and compensation. A similar approach can be found in the United States¹¹⁵ and other European countries such as Germany, but not England¹¹⁶. The Italian case law orientation has met with valid criticism¹¹⁸. It should be recalled that¹¹⁹ in the case of contractual salvage, the master also acts in the name and on behalf of the cargo interests in a context defined in English law¹²⁰ as “agency of necessity”.
Within the scope of “provisions for the safety of the ship”, Article 302 of the Navigation Code obliges the captain to “seek to ensure its safety by all available means... requesting the assistance of other vessels”. The applicability of the contractual regulation of salvage directly to those interested in the cargo therefore derives from the law (Article 1387 of the Civil Code), but this does not seem sufficient (as held by certain Italian case law) to infer the joint and several liability of all parties involved in the shipment (ship and cargo) for the payment of salvage costs and remuneration. It should be remembered that the LOF – Lloyd's Open Form salvage agreement expressly provides in Article 17 that the ship and cargo are separately and proportionally liable to the salvors, without any joint and several obligation between them (121).
Article 497 of the Navigation Code simply states that the remuneration owed to the rescuer under Article 489 shall be shared among those with an interest in the voyage in accordance with the provisions on general average, even when the rescue was provided without request or despite refusal by the captain of the vessel in distress. The prevailing doctrine (122) does not passively accept the thesis that equates assistance and salvage with general average. Indeed, in the case of spontaneous or official rescue, and even more so in rescue operations carried out despite the captain's refusal, the voluntary act that underpins the institution of general average is absent; nor does the suggestion (123) to consider salvage as equivalent to general average appear entirely satisfactory, as, given that the rescuers' debt is already divided, the individual's loss to be admitted for contribution would still be missing (124).
Instead, they constitute genuine General Average sacrifices of the expedition's goods for the purpose of saving them, such as damage intentionally caused to extinguish a fire, engine efforts and hull damage to refloat the ship, or jettison to lighten it; indeed, beyond any theoretical disquisition, the apportionment formula is different. In salvage, remuneration is fixed and divided based on the value of the goods saved at the time and place where the salvage is completed. In General Average, however, the contributing goods participate in the debt pool based on their values at the end of the voyage, with deductions for any damage sustained in the further course of the journey, after the implementation of the General Average act. Hence the opportunity (which astute adjusters do not miss) to insure the sums guaranteed to the salvor and the expenses incurred for the salvage and in view of the continuation of the voyage; otherwise, if, after salvage is completed, the saved goods were lost or damaged, the owners and their insurers who provided guarantees to the salvors would be seriously prejudiced.
Prevailing doctrine and jurisprudence classify the insurance of contributions *in rem* and salvage awards under liability insurance. Consequently, it falls within the scope of Article 1917 of the Civil Code, excluding the applicability of Articles 1914 of the Civil Code and 534 of the Navigation Code. Aside from structural differences, the insurance provisions for contributions *in rem* and technically defined salvage expenses are analogous within the framework of the Navigation Code. According to Article 525 of the Navigation Code, the insurer is liable for sums owed by the insured for contributions *in rem* and must also compensate (Article 536) for damages and expenses arising from an act *in rem*. In cases where such damages and expenses are admitted for contribution, the insurer retains the right to be subrogated to the insured's claims against other expedition participants. However, the codified system is consistently derogated from in practice. In fact, current marine insurance policy forms make the insurer responsible for paying the insured sums due to third parties under the now-repealed regulations for contributions *in rem*, leaving to the insured the burden of recovering contributions owed by other expedition stakeholders, thereby placing the risk of their potential insolvency on the insured.
In England, under Article 65 of the MIA, expenses and remunerations due in the case of voluntary or official salvage (the so-called “salvage proper”) are borne by the insurers as “salvage charges” within the scope of the insured sum. As a voluntary salvor can never claim more than the value saved, the insured sum is therefore sufficient.
The case of contractual salvage is different, where the salvor often does not accept the “no cure no pay” principle. In that case, salvage indemnities and compensation will be reclaimable from the insurers as “particular charges” even beyond the insured sum, within the scope of the “suing and labour clause” defined by art. 67 of the MIA “supplementary to the contract of insurance” and therefore providing for a second limit.
With the introduction of Rule VI into the York-Antwerp Rules, salvage is now also regulated in England within the scope of the adjustment of general average, and the aforementioned distinctions have lost their practical importance. To summarise and exhaust the insurance profile of general average, it should be stated that general average damage, be it damage or expense, is borne by the insurer when the measure giving rise to it is designed to avoid damage covered by the insurance guarantee.
Damage to the ship (ship's average) is treated the same as particular average, but without the application of a franchise, except, in the event of a contribution (which is not, however, a requirement for compensation), for the subrogation of the solvent insurer against the other contributing parties.
Damage incurred generates an obligation towards a third party external to the shipment and must be indemnified according to the principles of liability insurance. In calculating the indemnities due by insurers for general average contributions, the insurable value (art. 537 of the Navigation Code) is understood as the contributory value of the item in respect of which the insurance was taken out; this must also be referred to in the case of an agreed value policy (130) because contributory values are understood as those existing (or presumed if no sacrifices were made) at the end of the voyage or shipment. Consequently, in the event of a discrepancy between the insurance valuation and the valuation made within the scope of the general average settlement, the proportional rule pursuant to art. 1907 of the Civil Code shall apply.
Note: This text is taken from the entry COMMON AVERAGE published by A. in the DIGESTO – UTET – IV edition. The numbers correspond to the notes inserted in the original text.
