Rule XII

Damage to Cargo in Discharging, etc.

Damage done to or loss of cargo necessarily caused in the act of discharging, storing, reloading and stowing shall be made good as G.A. when and only when the cost of those measures respectively is admitted as G.A.

Rule XIII

Deductions from Cost of Repairs

In adjusting claims for G.A., repairs to be allowed in G.A. shall be subject to the following deductions in respect of "new for old," viz.: -

In the case of iron or steel ships, from date of original register to the date of accident: -

Up to 1 year old (A.)

All repairs to be allowed in full, except painting or coating of bottom, from which one-third is to be deducted.

Between 1 and 3 years (B.)

One-third to be deducted off repairs to and renewal of woodwork of hull, masts and spars, furniture, upholstery, crockery, metal and glassware, also sails, rigging, ropes, sheets and hawsers (other than wire and chain), awnings, covers and painting.

One-sixth to be deducted off wire rigging, wire ropes and wire hawsers, chain cables and chains, donkey engines, steam winches and connexions, steam cranes and connexions; other repairs in full.

Between 3 and 6 years (C.)

Deductions as above under clause B, except that one-sixth be deducted off ironwork of masts and spars, and machinery (inclusive of boilers and their mountings).

Between 6 and 10 years (D.)

Deductions as above under clause C, except that one-third be deducted off ironwork of masts and spars, repairs to and renewal of all machinery (inclusive of boilers and their mountings), and all hawsers, ropes, sheets and rigging.

Between 10 & 15 years (E.)

One-third to be deducted off all repairs and renewals, except ironwork of hull and cementing and chain cables, from which one-sixth to be deducted. Anchors to be allowed in full.

Over 15 years (F.)

One-third to be deducted off all repairs and renewals. Anchors to be allowed in full. One-sixth to be deducted off chain cables.

Generally (G.)

The deductions (except as to provisions and stores, machinery and boilers) to be regulated by the age of the ship, and not the age of the particular part of her to which they apply. No painting bottom to be allowed if the bottom has not been painted within six months previous to the date of accident. No deduction to be made in respect of old material which is repaired without being replaced by new, and provisions and stores which have not been in use.

In the case of wooden or composite ships: -

When a ship is under one year old from date of original register, at the time of accident, no deduction "new for old" shall be made. After that period a deduction of one-third shall be made, with the following exceptions: -

Anchors shall be allowed in full. Chain cables shall be subject to a deduction of one-sixth only.

No deduction shall be made in respect of provisions and stores which had not been in use.

Metal sheathing shall be dealt with, by allowing in full the cost of a weight equal to the gross weight of metal sheathing stripped off, minus the proceeds of the old metal. Nails, felt and labour metalling are subject to a deduction of one-third.

In the case of ships generally: -

In the case of all ships, the expense of straightening bent ironwork, including labour of taking out and replacing it, shall be allowed in full.

Graving dock dues, including expenses of removals, cartages, use of shears, stages and graving dock materials, shall be allowed in full.

Rule XIV

Temporary Repairs

No deductions "new for old" shall be made from the cost of temporary repairs of damage allowable as G.A.

Rule XV

Loss of Freight

Loss of freight arising from damage to or loss of cargo shall be made good as G.A., either when caused by a G.A. act or when the damage to or loss of cargo is so made good.

Rule XVI

Amount to be made good for Cargo Lost or Damaged by Sacrifice

The amount to be made good as G.A. for damage or loss of goods sacrificed shall be the loss which the owner of the goods has sustained thereby, based on the market values at the date of the arrival of the vessel or at the termination of the adventure.

Rule XVII

Contributory Values

The contribution to a G.A. shall be made upon the actual values of the property at the termination of the adventure, to which shall be added the amount made good as G.A. for property sacrificed; deduction being made from the shipowner's freight and passage-money at risk, of such port charges and crew's wages as would not have been incurred had the ship and cargo been totally lost at the date of the G.A. act or sacrifice, and have not been allowed as G.A.; deduction being also made from the value of the property of all charges incurred in respect thereof subsequently to the G.A. act, except such charges as are allowed in G.A.

Passengers' luggage and personal effects, not shipped under bill of lading, shall not contribute to G.A.

Rule XVIII

Adjustment

Except as provided in the foregoing rules, the adjustment shall be drawn up in accordance with the law and practice that would have governed the adjustment had the contract of affreightment not contained a clause to pay G.A. according to these rules.

The above rules differ in some important respects from English common law, and from former English practice. They follow ideas upon the subject of G.A. which have prevailed in practice in foreign countries (though often in apparent opposition to the language of the codes), in preference to the more strict principle of the common law applied by English courts. That principle requires that, in order to have the character of G.A. a sacrifice or expenditure must be made for the common safety of the several interests in the adventure and under the pressure of a common risk. It is not enough that the sacrifice or expenditure is prudent, or even necessary to enable the common adventure to be completed. G.A., on the English view, only arises where the safety of the several interests is at stake. "The idea of a common commercial adventure, as distinguished from the common safety from the sea," is not recognized. It is not sufficient "that an expenditure should have been made to benefit both cargo owner and shipowner."[1]