General Average Vietnam: Declaration, Guarantee and Adjustment Guide

Updated: 14 October 2026 · IVLF Advisors

A ship grounds, a fire breaks out in a hold, or a tow is needed to reach a place of refuge. Within days, cargo owners who never touched the casualty receive a demand to contribute to the cost, and the carrier will not release their goods until they sign a guarantee. This is the practical face of general average Vietnam exposure: a centuries-old sharing mechanism that turns a shipowner’s emergency into a cash-and-paperwork problem for every party with an interest in the voyage. The party that reacts in the first 72 hours usually controls the cost, the evidence and the leverage. This article sets out the declaration, security, adjustment and insurance steps that cargo owners, insurers, charterers and financiers should have ready before the next casualty.

Table of Contents

• The principle: why strangers share a loss
• Which rules apply to a Vietnam-linked voyage
• Declaration and the first 72 hours
• Security: bonds, guarantees and release of cargo
• Adjustment, contributory values and the adjuster
• Salvage, expenses and what is allowed in
• Insurance, recovery and cargo action list
• Hypothetical scenario and risk table
• Contract and finance protections
• FAQ
• Conclusion and next step

The principle: why strangers share a loss

General average is a rule of maritime law and contract by which a sacrifice or extraordinary expenditure, intentionally and reasonably incurred for the common safety of the ship and cargo in a common adventure, is shared proportionally among the interests that were saved. Jettisoning cargo to refloat a vessel, flooding a hold to fight a fire, or paying a tug to avoid a stranding are classic examples.

What it is not

It is not the same as particular average, which is a loss that lies where it falls, for instance sea-water damage to one consignment. It is also not a claim for fault; the carrier’s own fault is addressed separately.

Why it matters commercially

The contribution is owed by the owner of each interest on the basis of values at the end of the adventure, not by the party who happened to suffer the loss. An importer holding undamaged goods may therefore owe a sum that is a meaningful fraction of the cargo value, payable before it can collect the cargo. The practical risk is not the final percentage; it is being asked for security within days, with incomplete information.

Which rules apply to a Vietnam-linked voyage

The governing law and the applicable rules are two different questions. Most bills of lading and charterparties incorporate a general average clause that selects a set of adjustment rules and often a place of adjustment. The relevant chapter of the Vietnam Maritime Code 2015 (Law No. 95/2015/QH13, effective 1 July 2017, with consolidated text 101/VBHN-VPQH of 26 August 2025) also deals with general average, and a Vietnamese court or arbitral tribunal may look to it. Which provisions apply, and how far the parties’ contract displaces them, should be confirmed against the current text .

Reading the clause first

For a dispute connected with general average Vietnam parties, the first document is the contract of carriage, not the statute. Check four things: the rules incorporated, the place of adjustment, the governing law and forum, and whether the clause contains a “New Jason” type provision under which cargo contributes even where the carrier is at fault. The last point reflects English-law and market practice and should not be assumed to apply under Vietnamese law.

York-Antwerp Rules 2016 in practice

The York-Antwerp Rules 2016 are a set of non-mandatory rules that parties incorporate by contract; they are not a convention. They comprise lettered rules of principle and numbered rules that say what is allowed in and how it is valued. Confirm which year of the rules your bill of lading names. Practice under the 2016 rules, including treatment of salvage, substituted expenses and interest, should be checked with an adjuster rather than assumed.

The lettered rules also contain two principles that frequently decide disputes. First, an act must be reasonable and intentional. Second, a loss must be the direct consequence of the general average act, which excludes remote losses such as delay unless a numbered rule says otherwise.

Declaration and the first 72 hours in a general average Vietnam case

In a general average Vietnam matter the carrier or shipowner normally issues a declaration of general average through its agents or by circular to cargo interests. It will name the casualty, appoint an average adjuster, state the security required and ask for cargo valuation documents.

What to do on receiving the declaration

• Calendar the deadlines stated in the circular and in the contract; time limits for claims and for suit are short and differ by instrument, so check them .
• Notify the cargo insurer immediately in writing, attaching the circular and bill of lading.
• Collect evidence: commercial invoice, packing list, bill of lading, survey reports and any pre-shipment inspection.
• Do not sign the owner’s form without checking what it waives or admits.

Preserve evidence of the casualty

Ask the carrier for the master’s protest, log extracts and the salvage or towage agreement; insurers and adjusters will ask for them. A cargo surveyor should be appointed early if damage is suspected.

Security: bonds, guarantees and release of cargo

The shipowner commonly holds a contractual lien over cargo for general average contributions and may refuse delivery until security is provided. That is the leverage behind every circular.

The general average guarantee

The usual security is a general average guarantee, normally issued by the cargo insurer on the receiver’s behalf, together with an average bond signed by the cargo owner and a valuation form. Where cargo is insured, the insurer’s guarantee typically replaces a cash deposit; where it is not, the receiver may have to pay one.

What to check before the guarantee goes out

• The wording must be limited to the insurer’s liability under the policy and to the adjustment made in accordance with the stated rules.
• It should not constitute a waiver of any defence against the carrier, including unseaworthiness or breach of the contract of carriage.
• It should state the amount cap or confirm the adjustment will be binding only when it is final and not appealed.
• Cash deposits should be released to the party who is entitled once the adjustment is issued.

A guarantee is a payment promise, not an administrative form. A guarantee given too quickly or too broadly can leave the insurer exposed on points the carrier should have borne.

Adjustment, contributory values and the adjuster

The average adjuster is an independent specialist, usually appointed by the shipowner under the contract, who decides which expenses and sacrifices are admissible, determines contributory values and draws up the statement of adjustment.

The adjuster’s task, in order

1. Identify the general average acts and the expenditure or sacrifice.
2. Decide which items are allowed under the applicable rules.
3. Establish the contributory values of ship, cargo and freight.
4. Calculate the percentage and each interest’s share.

Contributory values

For general average Vietnam receivers, cargo contributes on its value at destination, typically the invoice value plus freight and insurance, less damage and expenses incurred after the casualty. Cargo that was jettisoned is made good at its value, and the sacrificed owner is repaid by the others. Late or inconsistent figures push the adjuster to estimate.

Challenging the draft

Check each admitted item against the rules, the valuation basis, the interest calculation and any item credited against the cargo’s contribution, such as salvage security. Send comments in writing within the adjuster’s period.

Salvage, expenses and what is allowed in

Salvage reward, port of refuge expenses, temporary repairs, extra crew costs and substituted expenses often form the bulk of an adjustment. How these are treated depends on the rules incorporated, so treat any figure in an early circular as provisional.

Salvage and general average

The interplay between salvage and general average matters most to cargo. Where a salvage contract is signed on behalf of all interests, the salvage reward is commonly treated as general average expenditure. Where cargo interests have paid salvage directly or separately, the adjustment should reflect that. Under the 2016 rules, salvage remuneration payable by one party to another is generally dealt with in accordance with the lettered and numbered rules, and this should be confirmed with the adjuster rather than assumed. For the casualty-response side, our article on trade credit insurance for exporters explains contract choice and special compensation.

Typical items in a claim

• Cargo jettisoned or damaged by firefighting water.
• Tug and towage costs to a place of refuge.

Insurance, recovery and cargo action list

Every general average Vietnam receiver should know, before a casualty, who will issue its guarantee.

Cargo insurance on market terms such as the Institute Cargo Clauses 2009 normally covers general average contributions and salvage charges incurred to avoid an insured peril. That is English-law market practice; your policy wording and governing law control. Hull and protection and indemnity cover respond differently.

Cargo interests contribution: what the insurer pays

The insurer usually pays the cargo interests contribution up to the sum insured and subject to policy terms, including the treatment of under-insurance, which can reduce recovery proportionally. Cargo insured below its arrival value leaves a gap that the receiver bears.

Action list for cargo owners and insurers

Step	Action	Owner	Check
1	Acknowledge circular; reserve all rights in writing	Cargo owner	Deadline in the circular
2	Notify insurer; send bill of lading and invoice	Cargo owner	Policy notice clause
3	Review draft guarantee and bond wording	Insurer and counsel	No waiver of defences
4	Supply valuation documents to the adjuster	Cargo owner	Values at destination
5	Review draft adjustment and comment	Insurer and counsel	Rules, items, interest
6	Consider recourse against carrier	Insurer	Time bar for suit

Recourse against the carrier

If the casualty resulted from the carrier’s breach, such as unseaworthiness or negligent navigation outside protective exceptions, cargo may have a counterclaim or recourse that offsets the contribution. Whether the contract allows it depends on the clause and the governing law. Preserve the claim by written notice and a time-bar extension agreement.

Hypothetical scenario and risk table

Hypothetical scenario

Assumptions: a bulk carrier loaded in Southeast Asia suffers an engine-room fire en route to Vietnam. Tugs tow the vessel to a port of refuge. The owner declares general average, appoints an adjuster and requests security from receivers. A Vietnamese importer of steel coils has a cargo policy on market terms and a bill of lading that incorporates the York-Antwerp Rules 2016 and provides for adjustment abroad. No figures are assumed; the point is process only.

The importer’s first call is to its insurer. The insurer reviews the bill of lading, issues a guarantee limited to its liability under the policy, and asks the importer for a valuation. The importer’s counsel reserves the right to challenge the adjustment and to claim against the carrier if the fire is shown to result from poor engine-room maintenance. Cargo is released within days against the guarantee and bond.

Risk table for a general average Vietnam receiver

Issue	Legal position	Commercial impact	Risk	Mitigation
Cargo held until security is given	Contractual lien commonly exercised under the bill of lading clause	Delay, demurrage, buyer penalties	High	Pre-agree guarantee template with insurer
Guarantee wording too broad	Insurer may be bound beyond policy terms	Uninsured exposure	High	Counsel review; limit to policy liability
Uninsured cargo	Owner liable for contribution directly	Cash deposit, no insurer support	Fatal	Cargo cover with general average and salvage extension
Under-insurance	Proportional reduction of recovery	Funding gap	Medium	Insure at full arrival value plus margin
Missed claim or suit deadline	Time bars apply	Recourse lost	High	Calendar and extension agreement
Disputed items in adjustment	Rules incorporated govern allowance	Inflated contribution	Medium	Written comments within adjuster’s period

Contract and finance protections before the next voyage

The time to improve your position is before the voyage. A contract that says nothing about general average leaves the parties to the default rules and to the carrier’s form.

Clauses and conditions to negotiate

• Rules incorporated: name the York-Antwerp Rules 2016 expressly, and state the place of adjustment and the law and forum.
• Insurance covenant: require the buyer or seller to maintain cargo cover with general average and salvage charges extension, at a stated percentage of value.
• Condition precedent in financing: require evidence of cover and an assignment of insurance proceeds in favour of the financier.
• Information covenant: require the carrier to supply circulars, adjuster details and survey reports promptly.
• Security protocol: pre-agree the form of guarantee with your insurer so that it can issue within hours.

Financier’s perspective

A lender with security over cargo or receivables should treat a general average declaration as a material event. It may require notice, additional collateral or a drawstop until security is in place. In any general average Vietnam transaction, check the facility terms to see whether the event triggers a default or a mandatory prepayment.

Frequently Asked Questions

Do I have to pay general average if my cargo arrives undamaged?

Generally yes. Contribution is based on the value saved, not on damage. Undamaged cargo benefits from the common safety, so the owner normally contributes unless a contract term or defence displaces the obligation.

Can the carrier refuse to deliver until I sign a guarantee?

Usually, a contractual lien lets the carrier withhold delivery until security is given. The exact right depends on the bill of lading and governing law, so seek advice before delay costs accumulate.

Does cargo insurance cover general average?

Market-form cargo cover generally covers general average contribution and salvage charges for insured perils, subject to the sum insured and exclusions. Check your policy wording and notify the insurer at once.

Who chooses the average adjuster?

Usually the shipowner, under the contract of carriage. The adjuster should act impartially, and cargo interests may comment on the draft statement and challenge items within the time the adjuster allows.

Can I recover from the carrier if it caused the casualty?

Possibly. Fault by the carrier, such as unseaworthiness, may support recourse or defence, subject to the contract, applicable law and time bars. Preserve evidence and give written notice early.

Conclusion and next step

General average shifts a shipowner’s emergency into a time-limited commercial problem for everyone on the voyage. In short, general average Vietnam risk is managed by clear contract wording, insurance that matches the arrival value, a pre-agreed guarantee process and disciplined evidence handling. For authoritative information on market wording, see BIMCO, and for marine insurance practice see the International Union of Marine Insurance. Our guidance on arbitration clause choices: SIAC, ICC and HKIAC covers the policy side in more depth.

Next action: this week, pull your last three bills of lading and cargo policies, mark the general average clause, rules incorporated and place of adjustment, and agree a guarantee template with your insurer.

This article provides general information as of 14 October 2026 and is not legal advice for a specific matter. Laws, rules and regulator practice may change; verify current texts before acting.