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General Average in Santos, Brazil: cargo release, guarantees and claims
General average declared at Santos? What it means for cargo interests, why security is requested and how insurers and cargo owners should respond.
- Publicado
- Autor
- Meireles Advocacia
- Leitura
- 2 minutos
- Tópicos
- 7
Neste artigo (7 tópicos)
A general average declaration can stop an otherwise routine cargo release. Cargo interests may be asked to provide security before their goods are delivered, even when their own cargo was not physically damaged.
For an importer whose cargo is arriving in Santos, the practical priority is to understand the applicable bill of lading terms, contact the cargo insurer and identify the appointed average adjuster.
What is General Average?
General Average is a maritime mechanism under which extraordinary sacrifices or expenses intentionally incurred for the common safety may be shared among the interests that were saved. Many international contracts incorporate the York-Antwerp Rules or similar contractual provisions.
Why is security requested?
The carrier or ship interests need assurance that the contribution assessed after the adjustment can be collected. Cargo may therefore remain under control until appropriate security is provided, subject to the applicable contract and circumstances.
What should an insured cargo owner do?
Notify the cargo insurer immediately, provide the bill of lading and commercial documents, and follow the insurer’s instructions for the required guarantee. The insurer may provide a general average guarantee or other security when coverage applies.
What if the cargo is uninsured?
The cargo owner may have to arrange the required security directly. This makes early legal and financial assessment important, especially when the shipment has high value or is generating demurrage and storage costs.
Keep track of secondary losses
Storage, demurrage, detention, missed production schedules and contractual penalties should be documented separately. Whether these losses are recoverable depends on the relevant contracts and insurance policies; they should not automatically be treated as part of the general average contribution.
Frequently asked questions
Does General Average mean my cargo was damaged? No. A general average declaration concerns a common maritime peril and extraordinary measures taken for the common safety; cargo can be physically intact.
Who calculates the contribution? An average adjuster generally prepares the adjustment according to the applicable contractual and maritime rules.
Can I refuse to provide security? A cargo owner should obtain legal and insurance advice before refusing. The practical consequence may be continued retention of the cargo, depending on the applicable terms and circumstances.
Conclusion
When a vessel declares General Average, speed matters. Cargo owners in Santos should involve their insurer, the average adjuster and local counsel promptly, while preserving evidence of every cost caused by the detention and release process.