The fundamental issue is whether the shipowner or cargo owner should bear the extra costs arising out of a casualty to the vessel during the performance of the carriage contract. The Bijela went aground on 14 November 1985 shortly after leaving the port of loading, Providence in Rhode Island, on a voyage to Kandla, in India. She put into Jamestown, the nearest anchorage, but could not proceed on her voyage without repairs. Faced with such a casualty, shipowners have a number of choices, dependent upon the severity of the damage and the cost and time involved in remedying it. If the vessel is seriously disabled, the only solution may be to abandon the carriage contract and have permanent repairs effected. On any analysis, such permanent repairs would be particular average, i.e., an expense falling solely on the shipowner. If the vessel is in such danger that she might sink, imperilling the common safety of ship and cargo, it may be necessary to effect temporary repairs. These would be allowable in general average under the York-Antwerp Rules 1974, Rule XIV. Although seriously damaged, the Bijela was merely disabled so that there was, therefore, no threat to the common safety.

The shipowners were still left with a difficult choice as to what to do next, but had two alternatives. First, the Bijela could discharge part of her cargo into barges, return to Providence and there discharge the rest of her cargo. She would then be able to proceed under her own power to New York, where she could undergo permanent repairs in dry dock. The second alternative was to carry out temporary