The emergence of the People’s Republic of China (hereinafter referred to as “China”1) as an international trading nation of importance makes it opportune to examine the procedures which have recently been established in that country for the adjustment of general average and for dealing with disputes which may arise in the course of a maritime adventure. One may expect to find differences in outlook, if only for ideological reasons, but shipowners and underwriters will be more concerned whether these differences will give rise to practical problems and, if so, how they may be solved.

Prior to 1970 it would have been uncommon for Chinese chartering organisations to stipulate for the adjustment of general average or for arbitration in China, but about that time it became usual for such provisions to be included in charter-parties when the Chinese agencies chartered foreign tonnage. These stipulations are now, we might say, customary, and it is time to take note of them and examine their practical effect.

Initially the variation in the charter-party clause required by Chinese charterers was to substitute for the words “general average to be adjusted in accordance with the York-Antwerp Rules” the words “general average to be adjusted in Peking”, without reference to any code or method of adjustment. This gave rise to speculation that the Chinese would employ a code of adjustment which was unknown to the rest of the world and many shipowners feared that in the event of a claim in general average they might lose their allowances entirely.

The author has had occasion to examine a number of general average statements prepared in Peking between 1970 and 1975, and although there were a number of variations, the general practice appears to have been to accept claims made bona fide and to make allowances which would have been justified if the York-Antwerp Rules had been applicable. The method of assessment of contributory values was, however, inconsistent: some of the earlier adjustments showed the ship to contribute on the basis of her insured value, but this was soon abandoned in favour of the more acceptable criterion of market value. Now, according to the Department for Average Adjustment, the insured value is rarely applied and only as an expedient to simplification if the parties have specifically consented thereto.