MISCELLANEOUSCentral

Section 23 of The Multimodal Transportation of Goods Act, 1993

Notwithstanding anything contained in any other provision of this Act, it shall be lawful for the parties to the multimodal transport contract to include in the multimodal transport document any provision relating to general average. Explanation. -- For the purposes of this section, "general average" means loss, damage or expense reasonably incurred in order to avert danger to property in common peril and in the common interest involved in the multimodal transportation.

Summary

Parties to a multimodal transport contract are legally permitted to include provisions about general average in their document.
General average rules apply notwithstanding any other provisions in this Act.
General average means loss, damage, or expense reasonably incurred to avert danger.
This loss or expense must be incurred to protect property in common peril.
The sacrifice or expense must be made in the common interest involved in the multimodal transportation.

Practical examples

1On November 10, 2024, during a massive storm, a cargo vessel began sinking. To lighten the ship and save it, the captain ordered twenty heavy containers of machinery to be thrown overboard. Under Section 23, the loss of those containers is shared proportionally among all cargo owners and the shipowner as a general average loss.

2On December 12, 2024, a fire broke out in a cargo hold. The crew flooded the area with water to extinguish the fire, which damaged Rajesh's shipment of paper rolls. Because this damage was a reasonable expense incurred to save the ship and all other cargo from total destruction, Rajesh's loss is shared among all parties under the general average clause of their contract, as permitted by Section 23.

FAQ

1. What does "general average" mean under Section 23 of the Act?

It means any loss, damage, or expense reasonably incurred to protect property from a shared danger in the common interest of the journey.

2. Must a general average expense be reasonable to qualify under this section?

Yes, the Explanation explicitly states that the loss, damage, or expense must be reasonably incurred.

Test yourself

Q1.Under Section 23 of The Multimodal Transportation of Goods Act, 1993, what does "general average" refer to?

Q2.Under Section 23 of The Multimodal Transportation of Goods Act, 1993, is it lawful to include a clause about general average in a multimodal transport document?

Q3.Under Section 23 of The Multimodal Transportation of Goods Act, 1993, which of the following is required for a loss to qualify as "general average"?

Q4.Under Section 23 of The Multimodal Transportation of Goods Act, 1993, how does a general average provision interact with other restrictive clauses in the same Act?

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