A cargo interest receives, one day, a document headed general average adjustment: a few dozen pages, a final table, a sum to pay. It often arrives months after the casualty, sometimes two years, and it is presented as a technical statement to be settled without argument. That reading is wrong. The adjustment is an account drawn up by a professional appointed, in most cases, by the shipowner itself. It carries none of the authority of a judgment, it is not final until accepted or approved by a court, and both French law and the York-Antwerp Rules leave several handholds to whoever wants to discuss it.
1. The adjustment is an account, not a decision of a court
The French word dispache covers both the operation and the document. To adjust is to apportion between ship, freight and cargo the weight of the sacrifices and expenditure decided by the master to save the adventure. Article L. 5133-7 of the French Transport Code says it plainly: general average is borne by the ship, the freight and the cargo. The average adjuster puts figures to that apportionment.
What he produces is neither an award nor a court expert’s report. It is a proposed account. It binds those who accept it, and it binds nobody else. The confusion comes from the staging that surrounds it: the cargo was held, security was signed under pressure, the underwriter provided a letter, and by the time the account arrives everyone feels the matter was settled long ago. It was not.
2. Two routes to an adjustment, and they are not equal
The first route is contractual. The bill of lading or the charterparty incorporates the York-Antwerp Rules, in their 1994, 2004 or 2016 version depending on the document, and the owner appoints the adjuster of its choice. That is the usual pattern in container trades. French law permits it: Article L. 5133-1 provides that average is adjusted in accordance with the chapter of the code only in the absence of contrary stipulations of the interested parties. The French statutory provisions are therefore default rules.
The same article sets a limit that is little known and useful. Any statement by which the carrier reserves, in a bill of lading, provisions other than those of the chapter is deemed unwritten. In other words, contractual freedom covers a clear and common choice, not a unilateral clause slipped into a document of adhesion. It is worth reading the general average clause of the bill of lading again before accepting that the regime is the one the adjuster announces.
The second route is judicial, and it is largely ignored outside France. Article R. 5133-3 of the French Transport Code provides that, absent agreement between the parties on the adjustment, one or more court appointed average adjusters are named, at the request of the most diligent party, by the president of the commercial court or, failing that, of the judicial court of the last port of discharge. Where that port lies outside France, the appointment falls to the president of the court of the vessel’s port of registry.
That route changes everyone’s position. The court appointed adjuster is not the shipowner’s service provider, he holds his mandate from the court, and the initiative belongs to the most diligent party, which includes the cargo interest and its underwriter. Disagreement on the adjustment is therefore not a dead end to be escaped by paying: it is the condition that opens a procedure the cargo side can start itself.
3. What must exist before the adjustment: the log book and the attestation
Article R. 5133-1 requires the master, as soon as he is able, to enter in the log book the date, time and place of the event, the reasons that determined his decision and the measures he ordered. At the first port the vessel reaches, he must attest those facts within twenty-four hours of arrival.
Those two formalities are the raw material of any serious adjustment. They date the decision, they give its reasons, they identify the measures taken. An adjustment resting on a narrative reconstructed after the event, with no contemporaneous log entry, or where the attestation came well after the twenty-four hours, has an evidential problem before it has a computational one. The first request to make is therefore not a challenge to figures, it is a request for disclosure: log extract, note of protest, sea report, correspondence with the salvors.
4. The burden lies on the claimant, not on the party receiving the demand
Article R. 5133-2 runs to a single sentence: the burden of proving that a loss or expense is to be classified as general average lies on the party claiming it. The rule looks obvious, yet it is routinely reversed in practice, where the cargo interest finds itself required to show why it should not pay.
The York-Antwerp Rules point the same way with their Rule Paramount, under which no allowance is due for a sacrifice or expenditure unless reasonably made or incurred. Reasonableness is not presumed: it is demonstrated, item by item. A tow invoiced at a price unrelated to the market, a stay at a port of refuge prolonged beyond necessity, handling costs inflated by poor organisation are all open to argument on that footing.
5. What the adjustment actually calculates: two masses, two dates, two methods
Every adjustment rests on a creditor mass, what is allowed in general average, and a debtor mass, what contributes. The two are valued neither in the same place nor by the same method, and that is where most of the discrepancies sit.
On the allowance side, Article L. 5133-4 confines entry into general average to loss of and damage to the property engaged in the adventure, and to expenditure incurred for that property, provided they are the direct consequence of the act decided by the master. The word direct does the sorting. Commercial loss, loss of a market, a delay penalty borne by the receiver are not physical damage and do not enter the mass.
The amount allowed is then determined according to the property concerned. For the vessel, Article L. 5133-9 takes the cost of repairs at the port where the adventure ends, the actual cost where repairs were carried out, the estimated cost where they were not. For the cargo, Article L. 5133-10 takes the cost of the loss, damage and expenditure calculated on the market value of that cargo in sound condition, at the port of discharge. An adjustment valuing the cargo at its ex works invoice price, or at a quotation taken at the port of loading, departs from the text.
On the contribution side, Article L. 5133-8 is precise on three points. The vessel contributes in proportion to its value at the port where the adventure ends, increased where appropriate by the loss, damage and expenditure it suffered. Gross freight and passage money contribute for two thirds of their value, even where not yet earned by the owner. Goods saved or sacrificed contribute in proportion to their real or presumed market value at the port of discharge. The reduction of freight to two thirds is regularly omitted, or applied to net freight rather than gross: the check is worth making, because it mechanically shifts everyone’s share.
One final ceiling, often decisive, appears in Article L. 5133-15: the value of his contribution is, for each interest, the limit of his obligation. The same article settles two practical situations, competition between claims where the values are insufficient, which leads to proportional payment, and the insolvency of a contributor, whose share is apportioned between the others in proportion to their interests.
6. Six points on which an adjustment is usefully challenged
The classification itself. Article L. 5133-3 reserves general average to the extraordinary loss, damage and expenditure incurred for the common and pressing safety of the interests engaged in the adventure. Three conditions are cumulative: the extraordinary character, the common safety, the urgency. A deferred maintenance expense, a repair the owner owed before sailing, an operation undertaken for the vessel alone do not pass that triple test.
The declared value of the cargo. Article L. 5133-11 sets up an asymmetry that shippers discover late: goods declared at less than their real value contribute in proportion to the real value, but their loss or damage is classified in general average only in proportion to the declared value. Under-declaring costs twice. Conversely, an adjustment adopting an unjustified real value has to explain itself.
Absence of a document of title, and deck carriage. Article L. 5133-12 excludes from allowance the goods for which no bill of lading or master’s receipt was issued, where they are lost, while making them contribute where they are saved. The same regime applies to deck cargo, save in short sea trade where it is treated as under deck cargo. Article L. 5133-13 goes further where deck cargo irregularly stowed within the meaning of Article L. 5422-7 is jettisoned: the value of the goods thrown overboard is not allowed.
The substituted expense. Article L. 5133-6 allows as general average any additional expense voluntarily incurred to avoid an expense or loss that would have been so classified, but only up to the amount of the expense saved or the loss avoided. The ceiling is the rule, not a concession. A substituted expense carried into the account at its full figure, with no demonstration of the saving achieved, is challengeable in the very principle of its calculation.
Total loss. Article L. 5133-16 is categorical: there is no adjustment at all where the interests engaged in the adventure have been totally lost. Where the casualty carried everything away, the adjustment has no subject, and contribution demands still issued in those circumstances are refused.
The fault behind the event. Article L. 5133-5 provides that fault committed by one of the parties engaged in the adventure does not prevent the general average adjustment, but preserves recourse against the party to whom it is attributable. Rule D of the York-Antwerp Rules says the same. In practice, you pay or secure first, then pursue. That split explains why challenging the adjustment and suing the carrier are two separate files, following neither the same time limits nor the same evidential logic. The second is covered in our analysis of who contributes and who to pursue.
7. Court approval, and what it changes for the party refusing to sign
Article R. 5133-4 settles what follows: where it is not accepted amicably by all the interested parties, the adjustment is submitted to the court for approval, on the application of the most diligent party. And where approval is refused, the court appoints new adjusters.
Two consequences are worth keeping in mind. First, a reasoned refusal to sign is not an obstruction, it triggers a review. Second, the court does not merely set aside an adjustment it disapproves of: it has the work redone by other adjusters. The prospect of a second adjustment, drawn up by a professional the owner did not choose, weighs on the discussions long before any hearing.
8. Time limits: five years under French law, one year under the York-Antwerp Rules
Article L. 5133-17 is the French rule: any action deriving from general average is barred after five years from the date on which the adventure ended. The starting point is neither the date of the casualty nor the date the adjustment was issued, but the end of the adventure, which has to be dated with care where the voyage was interrupted, deviated or continued on another vessel.
Where the adjustment is subject to the York-Antwerp Rules in their 2004 or 2016 version, Rule XXIII adds a markedly shorter contractual period: one year from the issue of the general average adjustment, and in any event six years from the termination of the common maritime adventure. A file can therefore be time barred under the contractual clause while the five year French period is still running. That is the first check to make on receiving an adjustment, before reading a single figure. Our analysis of time limits and recourse sets out the three periods in detail.
9. Upstream of all this: the security demanded to release the cargo
The balance of power is settled before the adjustment, at the moment the cargo is held. Article L. 5133-18 allows the master to refuse delivery and to require that the goods be placed in the hands of a third party until the corresponding contribution is paid, unless sufficient security is provided by the party entitled to them. Article L. 5133-19 adds that the shipowner has a preferential right for payment of the contributions owed to it.
Two words govern the negotiation: sufficient security. Sufficient means proportionate to the foreseeable contribution, not to the amount the owner would like to secure. An average bond signed without reservation, coupled with an underwriter’s guarantee calibrated on a generous estimate, amounts to accepting part of the future account in advance. The reservations that matter are made at that precise moment, and they determine the room for challenge later. That stage is developed in our analysis of the average bond and the average guarantee.
The full guide, with the step-by-step challenge procedure
The firm has prepared a practical guide detailing the complete procedure for challenging an adjustment, the seven steps of a general average settlement, the salvage reward / special compensation / SCOPIC allocation table, how to read an average bond correctly, and the time limits to observe under the applicable rules. It is available free of charge in exchange for a professional email address:
Download the “General Average” guide
For assistance with maritime litigation or a maritime transaction, see our maritime law page and, on this specific topic, our page on general average.
On the same guide, from the side of fault and recourse: General average and liability: the six points that decide who contributes and who to pursue.
Frequently asked questions
Who pays the average adjuster?
The adjuster’s fees and expenses form part of the creditor mass and are therefore shared between all the contributors, including the one who disputes the account. That is one more reason to check this item like any other, and to compare the figure claimed with the real complexity of the file. On a casualty involving a handful of cargo interests, a fee schedule built for several thousand claimants is not self-evident.
How long does it take to obtain an adjustment?
On a container ship casualty involving several thousand cargo interests, eighteen to thirty-six months is common. That time is not neutral: it consumes the contractual one year period in Rule XXIII of the York-Antwerp Rules, which runs from the issue of the adjustment, and also the five year period in Article L. 5133-17 of the French Transport Code, which runs from the end of the adventure and not from the arrival of the account.
Is the average adjuster independent of the shipowner?
In the contractual route, the adjuster is appointed by the owner, which does not make the adjustment worthless but does explain why it deserves a close reading. French law offers another route that is often overlooked: under Article R. 5133-3, absent agreement on the adjustment, the most diligent party may have one or more average adjusters appointed by the president of the commercial court or of the judicial court of the last port of discharge. That party can be the cargo interest or its insurer.
Which documents should I ask for first?
The papers contemporaneous with the casualty, before any argument about figures. Article R. 5133-1 requires the master to enter in the log book the date, time and place of the event, the reasons for his decision and the measures ordered, and to attest those facts within twenty-four hours of arrival at the first port. Ask for the log extract, the note of protest, the sea report and the correspondence with the salvors. Their absence is easier to establish when raised early.
Can an adjustment drawn up abroad be challenged?
Yes. An adjustment issued in London, Hamburg or Singapore under the York-Antwerp Rules remains a proposed account, not a decision. How it is challenged depends on the jurisdiction and governing law clauses of the bill of lading, which should be read before any correspondence is sent, because a badly worded exchange can amount to acceptance. Where French law applies, Article R. 5133-4 submits an adjustment that has not been accepted by all the interested parties to the approval of the court.