General Average and Congenbill 1994 form. An old chestnut of interpretation resolved.

In The Star Antares, Star Axe I LLC v Royal and Sun Alliance Luxembourg SA – Belgian Branch & Ors [2023] EWHC 2784 (Comm) (10 November 2023) Butcher J was faced with resolving an old chestnut of interpretation as to which version of the York-Antwerp Rules (‘YAR’) is applicable pursuant to clause (3) of the standard Congenbill 1994 form, which provides:

‘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 Claimant argued for the York-Antwerp Rules 1994 (‘the YAR 1994’), the Defendants for the York-Antwerp Rules 2016 (‘the YAR 2016’).

Butcher J started with the undisputed factual matrix submitted by the Defendants at [14].

 “(1) That shipowners and charterers are in the habit of using contract wordings for many years, even after newer wordings have been published. There could have been no assurance, when drafting a wording such as Congenbill 1994, that the market would only use it until such time as an updated wording became available.

(2) The YAR constitute a code for regulating the adjustment of general average. The first version of the Rules appeared in 1877, their aim being to harmonize the treatment of general average by the principal seafaring nations.

(3) The YAR have been periodically revised, with further versions being published in 1890, 1924, 1950, 1974, 1994, 2004 and 2016. At least since 1950, the revisions have been overseen by CMI. Following a consultation process, the new version will be approved at a CMI meeting and published in the CMI yearbook.

(4) In addition to these further versions, an amended version of the 1974 Rules was issued in 1990, on order to take account of the Salvage Convention 1989.

(5) Apart from that specific instance, the periodic updating of the YAR is, in general terms, to be explained by a desire for the adjustment of general average to march in step with developments in shipborne commerce and to suit the changing expectations of ship and cargo interests.”

The Claimant relied on opinions in a variety of learned academic texts and commentary to the effect that the words ‘[YAR 1994], or any subsequent modification thereof’ did not embrace either the York-Antwerp Rules 2004 (‘YAR 2004’) or YAR 2016, which were new sets of Rules and not ‘modifications’ of YAR 1994.

Butcher J found that, against the undisputed factual matrix, the words in question were reasonably to be understood as capable of applying to a new version of the Rules. A reasonable person possessed of that background knowledge, and without regard to the academic materials relied on by the Claimant, would understand the parties to have meant only amendments to the 1994 version of the Rules which were identified as such, rather than a new version of the Rules which included some changed provisions. The word ‘modification’ ordinarily signifies a change which does not alter the essential nature or character of the thing modified. When used in the context of a written instrument or set of Rules it ordinarily has, if anything, a rather wider connotation than ‘amendment’, extending to changes in approach, and being less focused than is the word ‘amendment’ on textual change. Additionally, the clause here referred to ‘any subsequent modification’ and the use of ‘any’ emphasised that all ‘modifications’ to the YAR 1994 were to be incorporated. This would apply equally to YAR 2004 as to YAR 2016. This conclusion was consistent with the way in which courts have construed clauses incorporating the Brussels International Convention of 1924 ‘and any subsequent amendment thereto’ in The ‘Vechscroon’ [1982] 1 Lloyd’s Rep 301, or national legislation enacting the Hague Rules ‘as amended’ in The ‘Marinor’ [1996] 1 Lloyd’s Rep 301. In each the conclusion was that the Hague-Visby Rules applied.

As regards the academic opinions on the wording in question, even assuming that this material could be regarded as being known to the parties at the time of contracting, it did not point to the conclusion that the relevant words would have been reasonably understood to have the meaning for which the Claimant contended. The reasonable person considering what the parties meant, would have regarded these expressions of opinion as just that.

Accordingly, Butcher J found that the clause referred to YAR 2016.

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Professor Simon Baughen

Professor Simon Baughen was appointed as Professor of Shipping Law in September 2013 (previously Reader at the University of Bristol Law School). Simon Baughen studied law at Oxford and practised in maritime law for several years before joining academia. His research interests lie mainly in the field of shipping law, but also include the law of trusts and the environmental law implications of the activities of multinational corporations in the developing world. Simon's book on Shipping Law, has run to seven editions (soon to be eight) and is already well-known to academics and students alike as by far the most learned and approachable work on the subject. Furthermore, he is now the author of the very well-established practitioner's work Summerskill on Laytime. He has an extensive list of publications to his name, including International Trade and the Protection of the Environment, and Human Rights and Corporate Wrongs - Closing the Governance Gap. He has also written and taught extensively on commercial law, trusts and environmental law. Simon is a member of the Institute of International Shipping and Trade Law, a University Research Centre within the School of Law, and he currently teaches at Swansea on the LLM in:Carriage of Goods by Sea, Land and Air; Charterparties Law and Practice; International Corporate Governance.

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