The Suez Canal Authority’s decision to arrest the Ever Given, following the six-day closure of the waterway, as leverage for its $916m insurance claim against the vessel owner, is likely to further delay the General Average process.
Jose Guerrero, president of independent claims consultancy Virtual Claims, told The Loadstar one of the key elements of GA was that “the goods and the ship must successfully reach the destination, otherwise, there is no general average”.
However, with the ship arrested, the prospect of cargo being released has diminished, as there is little practical option of unloading it at anchor in the Bitter Lake area and transhipping the boxes to another vessel. Ever Given will need to get to port for any sort of unloading to begin.
The Q&A below with Mr Guerrero explains what is likely to happen next.
What happens to the GA process, given that the ship has been arrested?
After the shipowner declares general average, the assigned average adjuster, RHL, will start assembling the bills of lading from Evergreen to start communicating with the consignees that they have to execute the average bond with commercial invoice.
The consignee will then have to contact their cargo insurer so that the latter can execute the GA guarantee. If there is no insurance, the consignee has to post a cash deposit.
t’s a big question, to which my answer is controversial. My views are expressed in my book published by Witherby more than 15 years ago. Other people, including a former chairman of the Association of Average Adjusters of the United States, have similar views, ie, general average has to change. My thoughts on this matter, including its historical perspective based on my numerous marine insurance-related books/literature, going back more than 150 years is my next project. Because of this, I need to spend more time on the question to be able to strongly support my opinion.
However, my immediate thoughts here in this Ever Given incident will hopefully help those who do not have much marine insurance experience.