Star Axe I LLC v Royal and Sun Alliance Luxembourg SA - Belgian Branch & Ors

Words providing for incorporation of the York-Antwerp Rules 1994 “or any subsequent modification thereof” are capable of incorporating later versions of the Rules, including the York-Antwerp Rules 2004 and 2016. “Modification” is wider than “amendment” and may include changes in approach as well as textual amendments.

The court must construe the words against the background reasonably available to the contracting parties. Published materials may evidence trade understanding, but statements in textbooks, circulars and commentary ordinarily represent opinion and will not displace the natural meaning of the clause unless they establish a relevant shared background understanding.

The claimant carrier issued seven bills of lading on the Congenbill 1994 form for cargo carried on the vessel Star Antares. Clause (3) provided that general average was to be adjusted under the York-Antwerp Rules 1994, or any subsequent modification thereof.

After the vessel sustained damage and general average was declared, the cargo insurers issued average guarantees. The parties disputed whether their rights and obligations were governed by the York-Antwerp Rules 1994 or the York-Antwerp Rules 2016. The Part 8 claim required construction of the incorporating words in their contractual and commercial context.

1. Construction of “modification”. The word ordinarily signifies a change which does not alter the essential nature or character of the thing modified. In the context of a written instrument or set of rules, it may extend to changes in approach and is at least as wide as “amendment”. The word “any” reinforces the breadth of the clause.
2. Relevant background. The clause was to be construed against the uncontroversial background that the York-Antwerp Rules are periodically revised by the Comité Maritime International to reflect developments in shipborne commerce. Against that background, a reasonable person would understand the clause as capable of applying to a new version of the Rules, rather than only to amendments expressly identified as amendments to the 1994 version.
3. Published materials. Evidence of what contractual language meant in the relevant trade may be given by published materials and need not necessarily be expert evidence. However, the materials must be examined to determine whether they reveal a shared background usage or merely express an opinion. The commentary, circulars and textbooks relied on by the claimant did not establish a binding or shared market understanding. Several expressed opposing views or acknowledged that the issue was debatable.
4. Application. The York-Antwerp Rules 2004 and 2016 were produced by the same body, pursued the same objective, retained many provisions of the earlier Rules and introduced changes. They could therefore properly be described as modifications of the 1994 Rules. The authorities concerning incorporation of later versions of the Hague Rules supported that conclusion. It was agreed that the relevant general average adjustment was to be conducted under the York-Antwerp Rules 2016.