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Transportation Law
Average
Average
 Art 806 (1): All extraordinary or accidental expenses which
may be incurred during the voyage in order to preserve the
vessel, the cargo or both
 Art 806 (2): Any damages or deteriorations which the vessel
may suffer from the time it puts to the sea from the port of
departure until it casts an anchor in the port of destination,
and those suffered by the merchandise from the time they
are loaded in the port of shipment until they are unloaded in
the port of their consignment
 Technical maritime term
 Extraordinary expense or accidental expense or
 Just a damage or injury
 General meaning: EXPENSE or INJURY
 Why call it average?
o To distinguish it from a simple expense or damage
 Why?
 To determine who will bear such
damage
 Expenses to preserve the vessel or cargo during the voyage
Average vs. Ordinary Expense
Average
All extraordinary or accidental
expenses which may be incurred
during the voyage in order to
preserve the vessel, the cargo or
both
Depends on what kind

Ordinary
Petty or ordinary expenses
shouldered by the ship owner i.e.
Pilot fee “pilotage”, anchorage,
lighterage (transferring cargo
between vessels of different
sizes),
certification
fees,
inspection fee
Loss borne by ship owner



Simple/Particular – Loss
borne by person who
owns the property that
cause the damage or is
damaged



General/Gross – Loss
borne by all those having
an interest in the vessel
and the cargo therein at
the
time
of
the
occurrence
of
the
average (contribute)

Kinds of average
Simple/Particular
 Expense or damage cause to the vessel or cargo which did
not inure to the common benefit of all interested
 Loss borne by person who owns the property that cause the
damage or is damaged
 Examples
o Inherent defect in the cargo
o Damage in the vessel
o Wages, victuals or provisions in case of legitimate
embargo or detainment of the vessel – if fixed
voyage (if monthly basis, GENERAL AVERAGE)
o There is a shipment from the us that is loaded to an
agricultural machinery shipped in a German vessel
to be delivered to Russia, while the vessel is
navigating a war broke out between Russia and
Germany. Who will pay for the provisions or the
salary of the crew while detained in the Philippines?
 Particular Average – shouldered by ship
owner

General/Gross
 Deliberately caused in order to save the vessel, its cargo or
both from real and known risk
 There must be a contribution by those who benefited from it
 Deliberately made for the common good
 Contribute in proportion to their interest to the owner of the
thing who suffered damage
Requisites of General Average
1. Common Risk/Danger
o Clear, imminent, certain
o Ex. A captain was sailing his vessel then he received
a text message from his girlfriend that she dreamt of
a big storm that will hit the vessel. The captain
started to throw away the cargo. Is the act valid to be
a general average?
 No, based on speculation
 Not certain or imminent
2. Deliberate Sacrifice
o Purpose: to save the cargo, vessel or interest
o Ex. Vessel had logs for cargo, because of the
movement it was inevitable that the logs would fall.
The logs fell and because of that the boat or the
vessel has stabilized. Now it has saved the rest of
the cargo. The owner of the logs, Mr. Gonzales, said,
you have to pay me because if it were not for my
logs then all of the cargo would have been lost.
General average?
 No, not deliberate act of sacrifice
 Jettison must be deliberate
3. Sacrifice must be successful
o Ex. Supposing the cargo was jettisoned and it saved
the rest of the cargos and the vessel. Amount of the
cargo jettisoned was 50M. Then the vessel
continued the voyage but the some of the cargo
were still lost yet some cargoes were still saved. Are

those cargoes that were saved liable to pay the
cargoes that were earlier jettisoned to the owner of
the cargoes worth 50M?
 Yes. Liable for the cost of the cargo after it
was salvaged less the salvage expenses
 Salvage value – Expenses for salvaging
4. Follow the legal formalities
o Captain must determine all those who have an
interest
o Deliberate
o Resolution
o Resolution must be put in the logbook
 Captain has the last say in the voting
regardless of the majority rule BUT the same
must be recorded in the logbook
 If the Captain is incompetent, he shall be
liable
o Logbook must be reported to the proper
authority within 24 hours from upon arrival at the
first port
Jettison
o Determined by the Captain
o Order of Jettison
o On deck
 The heaviest but least valuable
o Lower deck
 The heaviest but with least value
Exception to Art. 806 (1) “DURING THE VOYAGE”
 Cargoes were transferred to the barges during a storm to
lighten the vessel to be able to enter the mount of the river
o General average because it saved the cargo and
vessel



Vessels already anchored in the pier. Deliberate sinking of
the other vessels the prevent a vessel on fire from spreading
the same to the other vessels
o General average because it saved the other ships
from catching fire

Who are liable to contribute in the General Average
 Ship owner
 Cargo owners (in proportion to their interest)
 Lenders in bottomry and respondentia
 Insurance company
Collision
Collision
 Sudden contact or impact between to moving vessels
o If the other is not moving or stationary – Allision
o For purposes of the law, both allision and collision
are covered
Rules
 One vessel at fault
o Vessel at fault must shoulder the damages for cargo
and vessel
 Both vessels at fault
o Each one will bear his own loss
o For the cargo – SOLIDARY liability
 Solidary – any solidary debtor can pay the
debt subject to reimbursement from the
other debtors
o Ex. Both vessels at fault
 Cannot be determined who is at fault
o Same rule as when both vessels at fault
o Doctrine of inscrutable fault
 Force majeure



o No liability
o Each one will bear his own loss
Third Person at fault
o Third person shall be liable

Principle of Proximate Cause does NOT apply
 Both are liable
Principle of Last Clear Chance does NOT apply
 Both are liable
Zones
 First Zone
o All the time until the risk begins
 Second Zone
o From the time the risk begins until the time that
collision is certain
 Third Zone
o From the time the collision is certain until impact
Purpose
 To determine who is liable
Fault in Extremis
 Vessel A is a privileged vessel being in its proper course.
Vessel B is not in its proper course. Vessel B while in the
third zone swerved in another direction and returned to its
proper course colliding with A. B returned to the proper
course while a was removed from its course. Who is liable?
o B under the doctrine of extremis
Jettison
 Cargoes must be covered by a bill of lading
 It must be covered by an inventory

Limited liability rule
 Also applies in collision
 Ex. A collided with B with A at fault. B was partially damaged.
A, which is at fault sank totally. Under limited liability rule, A
is not liable because of total loss. Hence, the liability is
extinguished. But under collision law it is liable.
Protest
 Within 24 hours
 In case of
o Shipwreck



o Hurricane
o Arrival in distress
o Collision
Exceptions for protest
o Person involved is not onboard
o Person in incapable of expressing his wishes
because of injuries sustained
o One vessel is not a maritime vessel

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