The plaintiff contracted to deliver a shipment of crude oil to the defendant 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 plaintiff brought suit against the defendant 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 plaintiff and the defendant 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 defendant denied the claim asserting that the proximate cause of the grounding was the appellant's failure to maintain the radar in proper working order.

Held: The plaintiff's claim was dismissed.

A general average claim requires a three-step analysis. The vessel owner has the initial burden to establish a general average act and that there was a separate cargo owner at the time of the act. If the vessel owner meets this burden, the cargo owner may avoid liability by establishing that the vessel was unseaworthy at the start of the voyage and the unseaworthiness was the proximate cause of the general average act. Finally, if the cargo owner establishes unseaworthiness, the vessel owner may still succeed if it proves that it exercised due diligence to make the vessel seaworthy at the start of the voyage.

The Court did not find that the plaintiff established a general average act. Although the Court agreed that a catastrophe would have occurred if the oil had spilled into the river, the plaintiff failed to establish that both the vessel and its cargo were in a position of sufficient 'peril' necessary for the Court to find that the salvage effort constituted 'extraordinary expenditures'. Therefore, there was no general average act. Further, even assuming that the salvage effort had constituted a general average act, the Court found that the unseaworthiness of the vessel at the start of its voyage from its defective radar unit was the proximate cause of the grounding.

[For the unsuccesful appeal to the Court of Appeals for the Fifth Circuit, see Deutsche Shell Tanker-Gesellschaft mbH v Placid Refining Co (CMI718).]