The M/V Clydewater was loaded with cargo under a bill of lading which incorporated a Jason Clause and the York-Antwerp Rules 1950. The vessel sustained substantial damage as a result of stranding and/or refloating. On arrival, the master of the ship declared general average. The cargo was discharged and delivered to the respondent after an agreement was executed by the respondent (the GA Agreement).

In accordance with the GA Agreement, the shipowner appointed an average adjuster. The adjuster computed the respondent's liability for general average (the Statement). The respondent failed to pay a contribution. The shipowner commenced these proceedings, alleging two causes of action: (1) Breach of contract, on the theory that the GA Agreement was conclusive and binding upon the parties and required payment of a contribution; (2) An action under the general principles of maritime law on the ground that whether or not the Statement per se established liability, the respondent as a cargo owner was liable in general average in the amount set forth in the Statement. The respondent denied that it was bound by the Statement, and also denied that it was bound to contribute in general average, both on the grounds that the loss was occasioned by negligence attributable to the ship, and that the ship was unseaworthy. The shipowner indicated that it would seek to establish that the stranding was owing to an error in navigation for which it was not responsible under s 4(2)(a) of the Carriage by Sea Act, 46 USCA § 1300 ff (COGSA).

The parties asked the Court to decide four questions.

Held: (1) Is the Statement conclusive as to the rights and obligations of the parties?

Current law and practice relating to the adjustment of general average is for the most part determined by reference to the York-Antwerp Rules 1950, which are generally incorporated in charterparties and bills of lading and are thereby made binding by contract between the parties.

A statement prepared pursuant to a general average agreement such as the Statement is not conclusive as to the issue of whether there is any liability to contribute in general average. A general average statement is prima facie proof of: (1) the losses, damages and expenses which as factual matters are the direct consequence of a general average act; (2) the value attaching to such losses, damages and expenses; and (3) the computations proportioning these losses, damages and expenses between the parties to the venture.

The distinction between whether there is liability to contribute in general average and the issue of what items of damage are the direct consequence of a general average act is not entirely easy to draw. The former relates to the broad question of whether there was any 'general average act' - defined in r A of the York-Antwerp Rules 1950. In the absence of agreement by the parties to be bound by an adjuster's decision, it is for the courts alone to determine such questions.

Determination of whether certain broad categories of damage, which by custom and rule are generally conceded to be properly includable or excludable as items of general average, require the resolution of issues which are primarily legal. As to to those issues the general average statement has no effect. For instance, under rr 4 and 7 of the York-Antwerp Rules 1950, damage to the machinery and boilers of a stranded and imperilled ship incurred in efforts to refloat it is a type of damage which is properly includable in general average, but loss or damage caused by cutting away the wreck or remains of spares or of other things which have previously been carried away by a sea peril is not general average damage.

(2) If the Statement is not conclusive, who has the burden of proof to establish the correctness of the computations in the Statement?

According to r E of the York-Antwerp Rules, 'the onus of proof is upon the party claiming in general average to show that the loss or expense claimed is properly allowable as general average'. Also, the burden to establish the correctness of the computations in the general average statement is here on the ship, ie the party seeking general average contribution.

(3) If the Statement is not conclusive, who has the burden to show that the stranding was due to an error in navigation?

Jason Clauses, such as the one involved in this case, provide for contribution even if the loss is due to negligence for which the owner is not responsible by statute, contract, or otherwise. Cases in which the benefits of the Jason Clause have been invoked have generally involved a claim by the carrier that it is not responsible under the COGSA, for an act of negligence which the opposing party may seek to attribute to it.

The effect of the combination of the Jason Clause and COGSA is that once a general average act within traditional bounds is established, cargo will be required to contribute in general average even if the general average loss is due to a cause, such as an error in navigation attributable as negligence to the carrier, if it is determined that the carrier would not be responsible to cargo under COGSA for loss resulting from such cause.

In the absence of a Jason Clause, the burden of proof lies upon a ship claiming contribution in general average to show that the loss occurred without its fault. Thus in cases in which the existence of a Jason Clause makes relevant the immunities provided by COGSA, a claim by cargo that it is not liable to contribute in general average on the ground that the damage which is the subject of the ship's claim was the result of a cause which would bar recovery by the ship in the absence of a Jason Clause presents the ship with two alternatives. On the one hand, the ship may, in effect, admit that the loss resulted from a cause which would bar recovery absent a Jason Clause but, at the same time, seek to establish the facts necessary to show the applicability of one of the immunities specified in s 4 of COGSA. In attempting to establish any of those immunities, the ship has the burden of proof. On the other hand, the ship may contend that the loss was occasioned by a cause for which it would not be barred from recovery in the absence of a Jason Clause. This amounts to a contention that the cause of the loss did not involve fault attributable to the vessel or its owners. Here again the burden of proof lies upon the ship.

(4) If the Statement is not conclusive, who has the burden to prove that the stranding was the result of unseaworthiness and occasioned by the owner's failure to exercise due diligence to make the vessel seaworthy?

Provision for immunity from responsibility for loss occasioned by unseaworthiness is provided in s 4(1) of COGSA. To avail itself of that immunity, the ship would assume the burden of proving that the loss occurred as a result of that specific cause. If the ship chose to do that, it would also assume the burden of proving due diligence on its part to make the ship seaworthy.

If the ship should meet the burden of establishing an error in navigation as an excepted cause, it would be incumbent upon cargo to prove that unseaworthiness of the vessel was an additional cause of the stranding. If that were done, the ship might then seek to establish that such unseaworthiness was also an excepted cause by shouldering the burden of proving, in accordance with section 4(1) of the COGSA, due diligence on its part. If however, the ship were unable to do this and the case were submitted to the trier of fact with one cause of the stranding having been proved to be excepted and the other not, the burden would then be upon the ship to show how much of the damage came from the excepted as distinguished from the unexcepted cause.