Understanding General Average in Offshore Charter-Parties: Insights from IUA and AAA Seminar

Participants at a recent seminar in London organized by the International Underwriting Association of London (IUA) and the Association of Average Adjusters (AAA) were warned about the importance of understanding General Average (GA) in offshore charter-party contracts. Michiel Starmans and Alf Inge Johannessen, both experts in the field, explained that GA is a cost-sharing agreement where all parties involved in a maritime adventure contribute to indemnify the party who incurred costs or suffered a sacrifice to save other property from peril. They emphasized that offshore vessels should not be treated differently from traditional merchant vessels in terms of GA application.

The speakers discussed common charter-parties used in the offshore sector, such as Heavycon 2007, Heavyliftvoy 2009, Supplytime 2017, and Windtime 2013. Starmans highlighted the presence of knock-for-knock clauses in most contracts, which determine the responsibility for losses in case of incidents. He also noted that omitting a General Average clause, as seen in Windtime 2013, could lead to contentious GA claims, impacting insurance covers like Hull & Machinery, Cargo, and Construction All Risks.

Starmans and Johannessen stressed the importance of fully understanding GA principles in the offshore sector. They advised that including a GA clause in charter-parties provides certainty on how GA situations should be handled. If parties choose to contract out of GA, they should be aware of the implications and consider securing special insurance cover. The seminar, chaired by Ann Waite, aimed to educate industry professionals on the implications of GA in offshore operations.

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