Remember the importance of the new Jason clause
The “New Jason Clause” has been recommended for many years for inclusion in contracts for the private or common transportation of goods, particularly if the trade involves US law or freight being shipped to or from the United States. The practice of including the clause is so common that most bills of lading and charter parties include the clause in one form or another. Although rare, charter or freight interests may attempt to remove the clause during contract negotiations, whether due to intent or confusion as to the need for the clause. This alert reminds shipowners of the importance of including the clause in their contracts, especially if there is an American dimension to the trade.
Under English law and the law of several other countries, a shipowner is entitled to a General Average Contribution (GA) from cargo interest when the GA incident is caused by the fault of the owner or the owner. crew, provided that the owner is not responsible for such conduct under the rules governing the contract of carriage (eg The Hague or The Hague-Visby rules). The classic example is when the event giving rise to the GA is caused by negligent navigation or management of the vessel by the vessel’s crew. In such cases, the owner is likely to be able to claim a GA contribution from freight interest because a carrier has a complete defense against negligent shipping or management under Article IV Rule 2 (a) of The Hague or The Hague-Visby Rules (assuming those rules apply). The owner’s right to the GA contribution essentially increases and decreases if the owner has defaulted on his transport obligations or can otherwise escape the consequences of this fault through the terms of the contract or the law.
American law is different. The default position under US law is that an owner is not entitled to an GA contribution from the cargo when the GA event is caused by the fault or negligence of the owner or its agent. This is so even if the US COGSA applies to the trip and negligence or fault is a defense under the COGSA. The incorporation of a new Jason clause in the transport contract modifies this default rule.
A new standard Jason clause confirms that cargo interests are required to contribute to the GA when the event arises from any cause, whether due to negligence or not, or for consequences which the owner / carrier is not responsible by law, contract or otherwise. . So, provided that a new Jason Clause is incorporated, the position in US law is similar to the position in English law – the interests of the cargo cannot avoid contributing to GA if the event was caused by the fault. of the owner / vessel unless such fault makes the owner liable under the rules applicable to the contract of carriage, for example if the owners have not exercised due diligence to restore the vessel to seaworthy condition.
In view of the situation under US law, it is customary for a new Jason clause to be inserted in contracts of carriage in the event that US law applies to the owner’s rights of recovery against the interests of the company. cargo. The York-Antwerp rules, under which many adjustments to the GA are made, provide that the rights to the GA contribution will not be affected by the fault of one of the parties to the trip, “but this does not shall not prejudice any remedies or defenses which may be available against … that party in respect of such fault. ‘ The incorporation of the York-Antwerp rules may therefore not have the same effect as the new Jason clause in modifying the default position under US law. It is always advisable to include the new Jason clause when incorporating the York-Antwerp rules.
Subject to certain exclusions, P&I coverage meets the proportion of GA that the member is or would be entitled to claim from freight or other party “that is not recoverable solely due to a breach of contract. transport ”(see rule 3.14). As such, coverage of irrecoverable GA contributions due to a failure to incorporate a new Jason clause, rather than a breach of the contract of carriage, would be made discretionary.
The main takeaway from the above is that members should ensure that the standard and unmodified wording of the new Jason clause is still incorporated into their bills of lading and charter parties if US law could apply to the GA contribution claim against cargo interests or if the trade involves cargo being shipped to or from the United States. If in doubt or, for example, if a time charter includes worldwide trade limits, then it is recommended to insist on the incorporation of a New Jason clause.
This article is intended to provide general advice, not to provide legal advice in relation to a specific query. If members require further information on this topic, please contact your usual club contact first.
Source: The Standard Club