At their recent gathering in New York the CMI approved the 2016 York Antwerp Rules. Unlike the 2004 Rules which never gained widespread use as they were perceived to be too cargo friendly, the 2016 Rules have the backing of BIMCO. It has been agreed that the new rules will be written into all new and revised BIMCO charter parties and bills of lading as standard. This means that, unless the parties choose to amend the new standard forms, any general average situation arising will in the future be adjusted in accordance with the 2016 York Antwerp Rules.
When it comes to negotiating new charters and contracts of carriage, we expect that Owners may pause to consider whether they should amend the standard clause to revert back to the better known 1994 York Antwerp Rules.
Key differences between 1994 and 2016 Rules:
1. No commission on GA disbursements is allowable under the 2016 Rules. This is not so favourable for Owners as under the 1994 Rules (Rule XX) they could claim a 2% commission on certain GA disbursements which would increase the amount recoverable in GA.
2. Interest on the adjustment is now lower than before but interest is fixed on the basis of the base rate of the currency of adjustment so it will be linked to any rises in that rate. Under the 1994 Rules the interest was fixed at 7%.
3. Adjuster now has the means to speed up the production of the adjustment by excluding certain low value cargoes and making estimations in the absence of information from cargo interests. This is what slowed down the process under the 1994 Rules. This is beneficial for Owners as they are more likely to get their money back quicker.
Our view is that the 2016 Rules will probably come into more widespread use as they are in principal an improvement on the 1994 Rules particularly when it comes to making the GA adjustment process more streamlined and efficient.
For more information refer to the relevant page on the BIMCO website here (https://www.bimco.org/).
