Advice to the Master in Case of Average

In the following pages we will address a few key issues. The content is abbreviated and is by no means complete, and primarily intended for the initial phase of a situation. As stated above, company procedures always take precedence, but we trust that the content may serve as a useful supplement to company procedures in an emergency situation. 

 Notifications

When a casualty has occurred or is imminent, the owners are to be notified immediately. To notify the vessel's H&M insurers please contact Norwegian Hull Club or one of our Key- or Local Correspondents directly. Depending on the urgency of the matter, you may also notify us on our emergency phone number. If e-mail is used for notification purposes, it should be followed by a phone call in order to ensure immediate attention. 

A timely notification will enable NHC to be of assistance. Our network of specialists and correspondents around the world will be ready to support the master. The consequences of not reporting an incident may be dire. According to insurance conditions, you are obliged to notify your underwriter without undue delay. 

Immediate notification of the Master, especially in collision cases, is vital. Time is of the essence in order to safeguard your position. When considering notifying the insurer about a casualty, the master should also keep in mind whether the vessel carries a Loss of Hire insurance and notify accordingly.

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A notification should include the following information:

  • name of the vessel
  • MO no.
  • position, port, time and date of casualty
  • type and extent of damages
  • when and where a survey can be arranged 
  • details regarding the vessel’s local agent

 Documentation 

To ensure proper handling of an insurance claim the logbooks on board are important sources of information. When a casualty has occurred or threatens to occur, proper notes should be made in the logbooks according to company procedure. The logs are official documents and can be legally important. Never scribble over or erase a wrongful entry in the logbook, just draw a single line through it. 

We also encourage the master to ensure that relevant officers, as soon as possible, write a more specific Statement of Facts in order to describe a casualty.

  1. The Surveyor's Role

    Surveyors are usually appointed by NHC based on the notification from the Master through Owners/Shipmanagers. Surveyors can also be appointed directly by the Master from the List of Correspondents, if the urgency of the situation requires it. 

    The surveyor has multiple roles. He will assess the extent of the damages and report his findings. He will also follow up on the progress of the repairs. In addition to being NHC’s representative on site, the surveyor is also an asset for the Master. The surveyor can normally assist the Master with knowledge of local repair facilities, port conditions and authorities. It is recommended to note the name of the attending surveyor in the logbook, cf. section on "Collision" below. 

    An attending surveyor will request a number of documents for his report.
    The most commonly requested documents are:  

    • relevant log book pages for engine and deck 
    • crew list 
    • ship’s particulars
    • class documents concerning the average
    • maintenance reports 
    • service reports

    As stated in the section on collisions, it is important to verify the identity of the surveyor and who he is representing prior to granting him access to the vessel. The vessel should normally be informed about his name prior to attendance. 

     Key points to survey:

    • If possible, do not repair damages prior to survey being conducted.
    • Do not discard damaged parts until surveyed.
    • Photos are always useful, especially if damages have to be repaired prior to survey.

    Joint survey

    When damages relate to third party matters, surveys should preferably be arranged so that representatives from all parties can be present. Make sure you receive instructions from Owners on how a joint survey should be conducted. Opponent surveyors should only be granted access to the physical damages. The circumstances of the damages should not be discussed.

  2. Salvage

    When a casualty has occurred, the Leading Underwriter’s experience, contacts in salvage companies in all waters and network of agents are at the Master’s disposal. Co-operation with the Owners and Leading Underwriter should be established as early as possible. 

    This co-operation and assistance that can be rendered from shore must be based on information from the vessel. Send a complete report to the Owners as soon as possible, detailing all information that may be of importance in assessing the situation. This includes the vessel’s exact position, description of the occurrence, information about the weather conditions and the cargo, etc. 

    It is essential to include in the report the steps have been taken so far and what, in the Master’s judgement, should be done to salve the vessel. Of particular interest in this regard is the Master’s opinion about the efficiency of the available local assistance. This information is necessary to ensure speedy and effective assistance to the vessel. 

    A salvage contract should not be signed until the Owners’ Leading Underwriter has been notified about the situation. Should the vessel be in imminent danger and salvage operations imperative without opportunity or time to contact the Owners, then sign a contract on the best possible terms with a salvor who is able to render adequate assistance. If a NO CURE - NO PAY contract is required, we recommend Lloyd’s Standard Form of Salvage Agreement, ref next page.

    When the salvage has been completed a report must be prepared detailing the following:

    1. all circumstances in connection with the casualty, including vessel position, times of the separate stages of the salvage operation, weather conditions, etc.
    2. information about the salvors, their equipment, efficiency, efforts, damage sustained by them and any risks they have run, etc.

    The report to be sent to the Owners together with verbatim extracts from the vessel’s logbooks. The report will become an important document at the subsequent negotiations for determining the size of the salvage award.

  3. General Average

    General Average law is codified in the York-Antwerp Rules, and has ancient traits. The YAR rules define GA as follows: "There is a general average act when, and only when, any extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritime adventure."

    The property involved in a common maritime adventure is typically vessel, cargo and bunkers.

    Examples of General Average situations and General Average losses include:

    • Situations where the vessel needs assistance from tugs or other vessels. 
    • Salvage situations, e.g. costs for tugs to refloat vessel after grounding, lightering and reloading costs to re-float the vessel.
    • Machinery damages that influence the navigational safety where extraordinary costs are incurred for common safety. 
    • Damages to hull and machinery in connection with refloating, jettison/discharging/ lightering of cargo to lighten the vessel.
    • Costs related to sacrificing cargo in order to save the vessel. The typical example is when cargo is jettisoned in order to save the vessel from sinking, or as part of a firefighting effort.
    • Damages to vessel or cargo due to firefighting. 
    • Calling at port of refuge and detention at port of refuge. 
    • Costs of using the ship's equipment and crew wages during GA. This may also include running the main engine and other equipment for example in order to refloat the vessel.  

    On several occasions we have experienced vessels being in a general average situation without the Master being aware of it. A laden vessel is in a GA situation, or instance, if it approaches a harbour with escort tugs as per standard port procedure, and then experiences a temporary technical problem with the steering gear and requests the tug to make fast. 

    This may cause a problem for the shipowner if the Master discharges the cargo without obtaining security from the cargo owner(s). The problem arises when the tug owner claims for salvage. In such cases, the shipowner risks lacking a General Average Contribution from the cargo. 

    The above is meant to assist the Master in identifying General Average Situations. When the Master finds himself in a possible GA situation he should notify his Managers (and/or Hull & Machinery underwriter) for advice on how to proceed regarding the cargo. H&M usually covers General Average for the ship’s proportion.

    Cargo must NOT be delivered to the receiver until the GA issues are sorted out and agreed upon. If a General Average is to be declared, the Owner’s next step will be to formally appoint a General Average Adjuster. It is his task to prepare the General Average Statement.

    Average Bonds (cf. item 5d in this text) from the consignees must also be signed by the Cargo Underwriters. Average Bonds in which reservations are made must not be accepted. 

    If the cargo is uninsured, cargo owners should also provide a bank guarantee or pay a deposit as security for the cargo’s contribution before the cargo is delivered. Often the Average Agent will be able to assist and the Average Adjuster may give directives as to what form of security should be demanded in the given case. 

    If the cargo has been damaged, the Average Adjuster or Owners / Leading Underwriter will appoint a General Average Surveyor.

  4. Average bond

  5. Collision

    Technical evidence from for example VDR, VTS, GPS, RADAR, ECDIS and machinery/engine control systems has become increasingly important. This evidence can be lost if it is not properly saved. The vessel should have pre-planned procedures for saving such data. If not, the manufacturer should be contacted immediately. However, it is still important that the crew witnessing a collision write down their observations as soon as possible. This should be done prior to discussing with other crew members. 

    The Master should make sure the following is properly noted:

    1. The exact time of the collision. In this connection it must be checked whether the clocks on the bridge and in the engine room are synchronised. Any differences must be noted.
    2. The vessel’s position, course, speed and propeller revolutions at the moment of the collision. Make note of what the course and speed recorders show at the moment of the collision.
    3. Exact points of time and description of the various rudder and engine manoeuvres immediately before and after the collision.
    4. An assessment of the visibility and weather conditions with a note of when and where signals were seen or heard.
    5. Observed manoeuvres of the other vessel before the collision. Calculations of CPA and TCPA. 
    6. Estimate the angle of the blow, as well as the course and speed of the colliding vessel at the time of contact.
    7. Any communication with the other vessel, either on VHF, sound, shape or light signals, etc.
    8. Vessels in the vicinity that may have witnessed the collision should be noted. 

    The Owners must be informed of the occurrence as soon as possible after the collision. At the same time, give information about the weather conditions, damage to both vessels and the other vessel’s name and nationality. Limit the report to facts without referring to the question of liability, as all correspondence with the Owners must be produced in Court if demanded by Opponents (discovery documents). 

    Only when the vessel’s officers and crew members have had the opportunity to report to the Master what they have seen in connection with the collision should the actual sequence of events be described in the vessel’s logbooks. The description should be written by the person in charge on the bridge at the moment of the collision and approved by the Master. 

    In the majority of collision cases it may be necessary to appoint a solicitor to look after the vessel’s interests. The solicitor’s first task is to support the Master. When the vessel has reached a port, he will go on board to take statements from the witnesses. No one on board must express any opinion about the collision to outside parties or reply to questions from persons other than the solicitor instructed by the Owners or the Leading Underwriter. 

    If possible and if the circumstances so indicate, the Master should obtain an admission of liability from the colliding vessel, or at least have the Master of the other vessel sign the Collision Letter Form below or your company’s form for ”As Receipt Only”.

    In case of a collision or striking in which a third party has sustained damages, the representative of the Leading Underwriter should be requested for survey and assistance. Liabilities to a third party due to causes other than collision and striking concerns the vessel’s P&I Underwriters.

    After a collision it is of utmost importance to have strict control of the persons who board the vessel, and to deny unauthorised persons access to it. As previously stated it is common after a collision to arrange joint surveys with a surveyor who represents the other vessel. The surveyor should be allowed access only to the damaged area, and must be escorted at all times. During joint surveys the surveyor representing the other vessel shall not enter any other part of the vessel than what is strictly necessary to access the damaged area. 

    Information control is important. This has become increasingly difficult now that most crew members have their own mobile phone and access to e-mail. Managers should have pre-planned measures for their vessel to control information after a collision.

  6. Collision Letter Form

    Download Collision Letter Form