Commercial Code

If any measures are taken to handle a ship or its cargo and other such objects in order to avoid a common danger to the ship and its cargo and other such objects, damage and costs arising from these measures (hereinafter referred to as "measures to avoid a common danger" in this Chapter) constitute a general average.

If the danger referred to in the preceding paragraph is caused by negligence, the provisions of that paragraph do not preclude an interested person from exercising the right of reimbursement against the negligent party.

The amount of damage that constitutes a general average is calculated on the basis of the amounts specified in the following items according to the categories set forth in the respective items; provided, however, that the amount of any and all costs that are no longer required to be paid because cargo has been lost or damaged are deducted from the amounts set forth in items (ii) and (iv):

ship:the price of the ship at the place and time of arrival;

cargo:the price of the cargo at the place and time of discharge;

objects on the ship other than the cargo:the price of the objects at the time and place of arrival; and

freight charges:the amount of freight charges claimable at the place and time of discharge.

If a value that is lower than the real value of the cargo is entered in a bill of lading or any other document by which the price of the cargo can be evaluated (hereinafter referred to as a "price evaluation document" in this Chapter), the amount of damage caused to the cargo is determined on the basis of the value entered in the price evaluation document. The same applies if any false entry is made in a price evaluation document with regard to a particular that may affect the price of the cargo, and the value of the cargo to be evaluated on the basis of the false entry would be lower than the real value thereof.

Interested persons are not required to share the following damage or costs:

damage caused to the following objects; provided, however, that for objects as set forth in (c) below, this excludes a case as set forth in Article 577, paragraph (2), item (i), and for objects as set forth in (d) below, this excludes cases in which it is consistent with commercial custom for those goods to be loaded above deck:

cargo that has been loaded onto the ship without the permission of the shipowner;

cargo for which an intentional false declaration has been made at the time of loading;

cargo constituting valuables, of whose type and value the shipper or charterer has not notified the carrier upon entrusting the carrier with their transportation;

above-deck cargo;

equipment not entered in the equipment inventory; and

special compensation.

A general average is shared among the persons set forth in the following items (excluding the mariners and passengers) in the proportions specified in those items:

persons with an interest in the ship:the price of the ship at the place and time of arrival;

persons with an interest in the cargo: the amount arrived at when the amount set forth in (b) below is deducted from the amount set forth in (a) below:

the price of the cargo at the place and time of discharge; and

freight charges and other such costs that persons with an interest in the cargo would not have been required to pay if all of the cargo provided for in (a) had been lost at the time of the measures to avoid a common danger;

persons with an interest in objects on the ship other than the cargo (excluding weapons mounted on the ship):the value of the objects at the place and time of arrival; and

the carrier: the amount arrived at when the amount set forth in (b) below is deducted from the amount set forth in (a) below:

the amount constituting the part of the claim actually existing at the place and time of discharge for the freight charges provided for in item (ii)(b); and

the amount constituting the part of the mariners' salaries and other necessary costs of the voyage (excluding costs that constitute a general average) that the carrier would not have been required to pay if the ship and all of the cargo prescribed in item (ii)(a) had been lost at the time of the measures to avoid a common danger.

If any necessary costs or beneficial costs have been paid out for a ship or its cargo and other such objects after the implementation of the measures to avoid a common danger and before the arrival of the ship or discharge of the cargo and other such objects, the amounts specified in items (i) through (iii) of the preceding paragraph for the ship or the cargo and other such objects are calculated by deducting the amount of the costs that have been paid (excluding costs that constitute a general average).

If a person provided for in paragraph (1) incurs loss or damage to their property due to the measures to avoid a common danger, the amount set forth in the items of that paragraph for that person is calculated by adding the amount of the loss or damage incurred (limited, if the person pays any necessary costs or beneficial costs prescribed in the preceding paragraph for that property, to the amount paid in excess of the amount of those costs (limited to costs that constitute a general average)).

If a value that exceeds the real value of cargo is entered in a price evaluation document, a person with an interest in the cargo shares a general average in proportion to the value entered in the price evaluation document. The same applies if any false entry is made in a price evaluation document with regard to a matter that may affect the price of the cargo, and the value of the cargo to be evaluated on the basis of the false entry would be higher than its real value.

Persons that are required to share a general average pursuant to the provisions of the preceding Article are liable to do so only up to the value that actually exists at the time of the arrival of the ship (or the time of discharge of the cargo, in the case of the person set forth in paragraph (1), item (ii) or item (iv) of that Article).

A claim based on the sharing of a general average is extinguished by prescription if it is not exercised in the one year after its calculation is completed.