The appellant contracted to deliver a shipment of crude oil to the respondent in Louisiana. The crude oil was transported by the Diala. The pilot directed the vessel to anchor due to the failure of its radar system. During the anchoring, the vessel ran aground. After a week of salvage effort, the Diala was refloated.

The appellant brought suit against the respondent asserting a claim under the general average clause of the carriage contract to recover a portion of the costs of the salvage effort. The shipping contract between the appellant and the respondent provided that 'General average shall be payable according to the York Antwerp Rules 1974' and contained a New Jason Clause that required a general average contribution even if the carrier was negligent, unless the carrier was responsible for the damage under COGSA/the Hague Rules. The respondent denied the claim and argued that the proximate cause of the grounding was the appellant's failure to maintain the radar in proper working order.

The District Court found that the appellant failed to prove that a general average act occurred on the ground that the Diala was not in peril and, even if it was, the appellant's failure to exercise due diligence in maintaining the radar was the proximate cause of the incident. (See Deutsche Shell Tanker-Gesellschaft mbH v Placid Refining Co (CMI719).) The appellant appealed and argued that the District Court erred in raising the issue of peril because the issue was never in dispute. The lists of contested issues of law and fact in the pre-trial order contained no mention of a general average act. The respondent argued that a general average act was a necessary element of the appellant's cause of action, and that the burden was on the appellant to prove that it occurred.

Held: Appeal dismissed.

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. Since the Court upheld the District Court's finding that the appellant failed to exercise due diligence to maintain its radar, it did not need to decide whether the vessel was in peril nor whether the issue was raised properly.