Laws of the People's Republic of China

SPECIFIC INSTRUCTIONS ON ENTRUSTMENT
FOR AVERAGE ADJUSTMENT

 

 

 

SUBJECT: MARITIME LAW

ISSUING-DEPT: CHINA COUNCIL FOR THE PROMOTION OF INTERNATIONL TRADE

ISSUE-DATE: 02/26/1980

IMPLEMENT-DATE: 02/26/1980

LENGTH: 877 words

TEXT:

The Department of Average Adjustment under the Department of Legal Affairs of CCPIT is a specialized agency to serve international trade, marine transport and insurance. It deals with the computation and apportionment of losses and expenses arising from accidents to ships in marine transport and draws up average adjustments to enable interested parties to make settlement.

The principal basis for average adjustment by the Department of Average Adjustment is the provisions in hull policies for particular average and the rules of adjustment agreed upon in the contract of affreightment for general average.

The Provisional Rules for General Average Adjustment of the China Council for the Promotion of International Trade, or in short, Peking Adjustment Rules promulgated on January 1, 1975 not only adopts a number of customary practices in international general average adjusting work, but also embraces specific provisions in the light of the new trend in the development of international trade and navigation. Compared with the 1974 York-Antwerp Rules generally adopted throughout the world, the wording of the Peking Adjustment Rules is clear and concise and easy to comprehend, facilitating adoption by interested parties in marine transport.

Whenever an accident occurs to a laden ship, the Chinese or foreign shipowners or hull underwriters may get in touch with the Division of Average Adjustment, either direct or through ship agents or charterers, if it is necessary to entrust them with the adjustment for particular average and/or general average. Cargo owners may also entrust the Department of Average Adjustment with the adjustment for general average if the shipowners have not done so.

After the entrustment is made, the shipowners should provide the Department of Average Adjustment with relevant materials as soon as possible.

For particular average cases, the covering hull policy, documentary evidence pertaining to accidents and all accounts for expenses incurred together with all supporting vouchers, etc. are required.

For general average cases, the following materials are required:

A. Documentary evidence pertaining to accidents and losses including

(1) Deck and engine log extracts or original log books.

(2) Master's sea protest duly attested or notarized.

(3) Master's and chief engineer's reports on facts.

(4) Survey reports on ship's damage and repairs.

(5) Survey report on cargo damage.

(6) Salvage contract and report on salvage operations in case of salvage services having been rendered.

(7) Bell book and statements for bunkers and stores consumed during refloating operations in case of grounding.

(8) Lists of jettisoned cargo under each bill of lading in case of jettison.

(9) Non-separation agreement signed between ship and cargo interests in case of transhipment of cargo to destination by other ship or ships.

(10) Statements of quantity of cargo discharged, reconditioned, stored and reloaded and survey report on cargo damage, if any, during the course of these operations in case of forced discharge.

B. Accounts for disbursements including:

(1) All accounts for disbursements with supporting vouchers.

(2) Portage bill and statement of crew's victualling (with indication of scale thereof) during prolongation of voyage and extra period of detention at port of refuge.

(3) Statements for bunkers and stores consumed during the aforesaid period (with unit price).

(4) Off-hire sheet for ships under time-charter.

C. Other materials including:

(1) Cargo stowage plan, manifest and freight list.

(2) Charterparty and bills of lading.

(3) Ship's particulars.

(4) Hull policy.

(5) Copies of letters, cables and telexes relating to the accident.

D. General Average Security:

Security for general average contribution collected by the shipowners from the cargo owners after declaration of general average and prior to delivery of cargo shall include average bonds, average guarantees and valuation forms with invoices attached. For cargo insured with the People's Insurance Company of China, no average bonds are required. Deposit receipt should be provided in case a cash deposit has been collected.

Where there are both general average and particular average on cargo, the cargo owners should provide the following materials:

(1) Bills of lading.

(2) Invoices.

(3) Statement of short-landed cargo.

(4) Survey report on cargo damage.

(5) Cargo insurance policy.

(6) Statement of claims or adjustment of claims.

(7) Subrogation Forms.

(8) All accounts for disbursements with supporting vouchers.

Circumstances vary with each case, and affect the materials required for preparation of average adjustment. In the event of a special case, the Department of Average Adjustment will collect from the parties concerned materials in addition to those listed above.

The Department of Average Adjustment draws up the statement of average adjustment on the strength of all materials collected. The statement of average adjustment has no binding force in law, the interested parties may, if they take exception to it, make settlement either through negotiation or by resorting to legal proceedings (arbitration or litigation).