After the Disaster is Over— MV Ever Given and Law of General Average by Michael J. Rauworth, Esq. magine it is spring, 80 CE. You are a It’ll be a ship with open cargo holds, between you and Hannicus and reminds garum merchant in Carthage, not far and you arrange to accompany your am- you both of the urgency to lighten the ves- from the site of today’s city of Tunis. phorae on the sea voyage to the port serving sel—quickly. Whose cargo goes by the (Garum, as our readers will doubtless Rome, as you expect to do the haggling for boards, he reminds you, is irrelevant because know, was the queen of condiments of the the selling of your garum yourself, once everything stands to be lost if the ship isn’t Iday—a sauce fermented from crushed fish, you’ve landed it. immediately relieved of some of the weight highly prized by the wealthy households of But the increase in demand has an- on board. Then he tells the two of you some- the time, and vigorously traded throughout other effect. It also motivates your chief thing that calms you both down, where- the Mediterranean.) Pompeii was a major rival—not a friendly one—to join in the upon you both turn to helping the crew cast producer of garum for Rome and its empire, garum trade in Carthage, one Hannicus. your amphorae over the side. but the eruption of Mount Vesuvius the Nevertheless, it appears that the market in What on earth could the master have previous August had destroyed the city and Rome will take all of your amphorae, as told the two of you—with such an effect? buried everything in it. This event pro- well as the additional sixty that Hannicus It is what you—in 80 CE—have in com- duces, among other things, a garum short- is planning on shipping aboard the same mon with MV Ever Given, the massive age and drives up its price, especially in ship. He, too, plans on accompanying his container ship that caught the world’s at- Rome. Tragedy, for some, is an opportu- cargo. His amphorae arrive at the docks tention for a week in March when it got nity, and the shortage in Rome makes it first and are mostly stowed onboard by the lodged sideways across the Suez Canal, economically worthwhile for you to load a time the crew begins loading yours. blocking all ship traffic in either direction. ship with seventy amphorae full of your The pressure of profitable trade also We are talking about the doctrine of “gen- best product and send it northwards across prompts the owner of the ship to book more eral average”—a phenomenon of property the Mediterranean to Italy because the price cargo for loading than is customary. The law found only in maritime law. (In this it’ll fetch in Rome will repay you far beyond vessel, laden with the 130 amphorae, a small context, the word “average” may have dif- the cost of shipping it there. crew, and the two supercargoes, sets out ferent linguistic roots than does the term from Carthage and sets a course for Rome, as used in arithmetic.). The master assures across the Tyrrhenian Sea. Two days out, you that Hannicus will share equally in the the ship encounters a storm. Deeply laden, loss by jettison, even though it is your am- the vessel begins to ship water over the gun- phorae that are being tossed overboard. wales as the wave height increases. The In 80 CE, assuming you and your ship weight of the water coming onboard—there thereafter land successfully at Rome, the being no reliable pumps—bears her down amount that you lost in the jettisoning of even more. The master sees the way the your amphorae at sea would have been cal- situation is heading and rousts his crewmen, culated, and compared to the total value of who go forward into the cargo area and your surviving cargo. In effect, a tax of sorts begin to hurl amphorae over the side to would have been imposed on Hannicus— lighten the load, thereby increasing the and the proceeds paid to you—so that his freeboard—to save the ship, the remaining loss was in the same proportion to yours. cargo, and, of course, all the souls on board. The phenomenon of general average Hannicus goes forward as well and starts (affectionately abbreviated as “G.A.” by vigorously casting amphorae overboard— shipping executives and maritime attorneys) your amphorae—sparing his own. He en- evolved to prevent the situation as described courages the crew to focus on your ampho- from being governed by the principle that rae, too. “no good deed goes unpunished.” Obvi- You become aware of this travesty, go ously, you and Hannicus were literally in forward, and fisticuffs ensue. While the the same boat, and somebody’s goods had two of you are fighting about whose am- to be sacrificed so that all persons and most phorae to jettison, the vessel ships ever more of the cargo—not to mention the ship it- water and is not getting lightened. You and self—would have a chance of surviving. Hannicus are equally fervent that the car- You all were united in what the law consid- go going over the side should be the other ers a “common venture,” and the jettisoning guy’s. Suddenly, the master pushes his way of some portion of the cargo was a sacrifice

This image of an urseus (an earthenware jug with one handle) is depicted in a mosaic

claus abelier cc by s.a. via 3.0 wikipedia commons discovered in Pompeii in 1958, in what had been the atrium of a garum supplier. 12 SEA HISTORY 175, SUMMER 2021 that benefitted all concerned, even though a total loss of cargo. Given the choice, those it actually came “out of the hide” of just insurers would be happy to spend a penny one member of the common venture in our to save a dollar, and their policies are little fable. Thus, the principle of general claused accordingly. average has existed since those ancient times It will also involve a determination of to provide for a fair outcome. The actual which expenditures claimed by the owner practice in today’s world is much more actually qualify as sacrifices for purposes complicated, of course, but the concept is of G.A. These decisions are usually arrived the same. at by members of a select priesthood of On 1 April 2021, not too many days maritime lawyers and marine insurance after being freed from her position blocking practitioners known as “average adjusters,” the entire Suez Canal, the owners of the applying a set of principles known as the Ever Given declared a G.A. This launched York-Antwerp Rules. These Rules were a process by which the interests of all the settled upon in international agreements owners of the cargo on board, plus the in 1890 and have been amended several interests of the owner of the ship itself, are times—as recently as 2016— and are set made subject to a one-off, self-contained forth in the bills of lading and charter par- nasa jsc iss image library scheme of taxation, limited to those who ties that govern the legal relations between MV Ever Given stuck in the Suez Canal, had financial interests in the common ven- ships and cargo owners. They tend not to viewed from the International Space Station. ture. (While cargo and vessel interests are get much coverage on CNN. The adjust- the biggest ones, there may be some other bond or a letter of guarantee from an ment of the G.A. as to the Ever Given is assorted interests involved, depending on insurer—as a condition of getting their likely to take years. how the business of the ship was put to- cargo released to its recipient, once it is in At the end of the day, this ancient gether. For example, if someone other than a position to be unloaded. This security remedy—as evolved—still functions as the the shipowner actually owned the bunker ensures that the shipowner will have funds best means the law has to see to it that those fuel aboard, this would have to be account- from which to collect the G.A. “tax,” once who are literally “in the same boat” share, ed for separately, and taxed accordingly. it is finally calculated; the remainder will in a fair manner, the perils of the sea that But because we don’t know enough about be refunded to its source(s). they confront in common. the business arrangements on board, we Arriving at that calculation will involve But what about the interests of the will stick to the simple case of cargo and lots of time, plus a massive spreadsheet of hundreds of vessels whose transit was ship alone.) Despite its complexity, the ob- individual values of the vessel and all of the blocked, some by as much as six or seven jective would have been the same as com- thousands of cargo interests on board the days? Aren’t there vast liabilities that lay at pared to your jettisoned amphorae in an- 400-meter ship at the time. The vessel has the feet of the Ever Given interests, in favor cient times—to apportion the loss incurred a capacity of approximately 20,000 TEUs of those delayed ships and their cargoes? in saving the vessel, so that the pain would (Twenty-foot Equivalent Units) and was These questions call for another tale… be borne equally, in proportion to the reported to have had some 13,000 TEUs value of the property that each owner had on board, either in the form of actual 20- Imagine you’re the night watchman at risk. foot boxes, or 40-footers (counted as two aboard a bulk carrier alongside the dock, In the case of the Ever Given, of course, TEUs), and perhaps some odd 53-footers. pointed upriver. It is winter and you are in although some initial thought was given Within each box might have been freight a northern latitude in a river choked with to off-loading some of the cargo, at the end belonging to quite a few cargo owners, ice. You have been assigned to mind the of the day, no cargo was off-loaded, much assembled by intermediaries known as interests of the ship until the grain elevators less was any cast overboard. Instead, the freight forwarders, or as NVOCCs—Non- downriver can accept the cargo. You are sacrifice alleged would be a sacrifice on the Vessel-Operating Common Carriers. (We the only person onboard. part of the shipowners (or perhaps the char- won’t even begin to pick apart the com- Suddenly you notice something is terers) as distinct from cargo owners. Once plexities of the bills of lading involved.) wrong. Ice floes carried downstream by the again, at the time of this writing in mid- Suffice it to say that this calculation will current are getting wedged between the April, because not enough is known about be very complicated and time consuming. hull and the dock, forcing the bow out into the details, we will assume that the princi- For the most part, the “tax” imposed on the river. The mooring lines are stretched pal claim of the shipowners is for out-of- the cargo will be covered by the insurance bar-tight—twisting and smoking and mak- pocket expenditures made in the efforts to that will have been placed on most of the ing frightening noises. The gangway sud- free the ship from her stranded position. cargo. This only makes sense because it is denly crashes down onto the ice floes. Your The immediate effect of the declaration literally the pocketbooks of the insurance heart’s in your throat. of general average is to require the owners companies that are spared by a successful Then, POW!! POW!! and POW!! of cargo to post security—either a cash G.A. sacrifice—they don’t have to pay for again—the mooring lines at the bow part SEA HISTORY 175, SUMMER 2021 13 under the extreme strain. Your adrenaline levels spike as you realize how lucky you were not to be too close to them when they exploded. But now the bow swings freely out into the river, perpendicular to the cur- rent, tearing the ship free of the dock, as the stern lines also part. You rush forward to drop an anchor, but you only manage to get both of them jammed, and they are now useless. “Oh, %$!@#,” you murmur, as you contemplate your future employment pros- pects. “Oh, %$!@#” is right, because now your ship is swept by the current into an- other vessel. Horrible sounds ensue, sparks fly, and shock waves shudder through the steel hull. People onboard the stricken ves- sel are shouting and running. Now the second ship also breaks free of its mooring, and it, too, is being swept down the river toward the town downstream. The two ships collection of the buffalo history museum continue to careen down the river…toward The freightersMichael K. Tewksbury and MacGilvray Shiras in the ice-choked Buffalo a bridge. River, 21 January 1959, after they had taken out the Michigan Avenue lift bridge. That’s when theship hits the span. same position as all those ships whose tran- words, whose cargo operations were pre- It collides with and demolishes a major sit through the Suez Canal was blocked by vented by the ice dam—were not. This is bridge, essentially knocking it into the the Ever Given. What gives? sometimes known as the “economic loss river. The helpless ships are pinned by the First of all, this little fable is a short- rule.” This same principle was applied, for current across the upstream side of the hand account of a real event that took place example, to deny recovery to a vessel that bridge. The ice that formerly was being in Buffalo, New York, in 1959. The ship was prevented from reaching its discharge swept downstream and out of the river is that started the incident was a laker named berth in Boston by a vessel that caused an instead now trapped on the upstream side MacGilvray Shiras, built in 1904 and owned oil spill in the harbor. of this pile-up, and begins to stack up. by a family firm named Kinsman Transit. To many, the doctrine seems arbitrary This ice dam impedes the flow of the Its vice president at the time, George Stein- and unfair, and indeed has been hotly de- river. The river rises, overflows its banks, brenner (before his time with the New York bated by legal scholars. But the Kinsman and pours into the surrounding streets, Yankees), was mentioned in the legal deci- decision includes a hypothetical that il- flooding many businesses, causing general sions in a ruling that allowed Kinsman lustrates the problem that the doctrine seeks civic chaos. Transit, remarkably, to limit its liability for to solve: Fast-forward several years. The negli- the damages that were assessed. (Maritime gent parties are held responsible (that is, limitation of liability is a controversial doc- Although to reason by example is legally liable) for the damage caused to the trine that will require a whole separate often merely to restate the problem, innocent ships (and other structures) that article to explain and discuss.) the following illustration may be were hit, to the owners of the businesses Even though its story is perhaps the an aid in explaining our result. To flooded out, and more. juiciest, the legal ruling—Petitions of Kins- anyone familiar with NY traffic “Yeah, yeah,” say you, “but what’s this man Transit, 388 F.2d 821(2d. Cir. 1968)— there can be no doubt that a fore- tale got to do with the Ever Given?” is actually one of many that apply the legal seeable result of an accident in the It’s this: Back in our icy river scene principle in question. That basic principle Brooklyn Battery Tunnel during there are two other ships, both physically is this: with a few exceptions, the law of rush hour is that thousands of undamaged but whose passage to their dis- admiralty will not award damages for people will be delayed. A driver who charge berth is now blocked by this pile-up. purely economic loss caused by negligent negligently caused such an accident Their owners also make a claim against the conduct, in the absence of a contract. Thus, would certainly be held accountable same negligent parties for the economic the ships and businesses that suffered ac- to those physically injured in the harm that they experience from the ice dam. tual physical harm were allowed to collect crash. But we doubt that damages But the court rules that they cannot re- against the responsible parties. Those who would be recoverable against the cover. Why should that be? They are in the suffered only economic harm—in other negligent driver in favor of truckers 14 SEA HISTORY 175, SUMMER 2021 or contract carriers who suffered liable at least to the owners or charterers authorities have since arrested the Ever provable losses because of the delay of the delayed ships. Given. Wait…what?!?! You can actually or to the wage earner who was The problem, of course, doesn’t stop arrest a ship? That, too, will have to be a forced to “clock in” an hour late. there. What about the claims for delay that story for another day. And yet it was surely foreseeable could be lodged by the owners of all the that among the many who would individual cargoes on board the ships that Michael J. Rauworth is a maritime attorney be delayed would be truckers and were delayed in getting through the canal? based in Boston and maintains a Coast wage earners. What about the downtime of the contain- Guard license as Master, Sail, Steam, and er terminals (or bulk terminals), which had Motor Vessels of any gross tons, based on more The courts essentially reason that to set aside crane time to discharge the ships than 200,000 nautical miles as a deck of- allow the claim of one person who suffered delayed by Ever Given and whose schedules ficer and master of commercial and military delay (but not physical damage) would be were disrupted? Then there are the busi- vessels. In nearly 30 years of service with the a step down a slippery slope: once you allow nesses whose supply chains were thrown USCG and Coast Guard Reserve, he rose to one, how do you come up with a reasoned into disarray by the delay of those cargoes, the rank of captain and served in command principle that allows you to know where to and who had to pay for alternative supplies? of one US Navy unit and five Coast Guard stop? After all, the people who could claim What about the truckers who were idled units. His clients include pilot organizations, some kind of economic loss from the con- by the dearth of cargo arrivals? ship owners, port authorities, marine insur- gestion of the tunnel could be virtually It is too early to tell how the courts in ers, shipyards, marinas, and other maritime endless. How could you afford auto insur- Egypt will handle this case and these prob- businesses and individuals, and he taught ance if there weren’t such a limit? lems. For the moment, the biggest problem marine insurance at Massachusetts Maritime Back to the Ever Given. Obviously, seems to be the near-term actions that Academy for many years. Mike is well known US law will not apply to a blockage in the the government has taken, apparently to in the traditional sailing ship community as Suez Canal. It appears that the particular twist the arm of the owners and insurers the board chair of Tall Ships America, a post rules that govern transits through the ca- of the Ever Given to pay seemingly exor- from which he recently stepped down after nal will probably make the Ever Given bitant claims, without a day in court. The almost 20 years of service.

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