Abstract:
The General Average (GA) principle in international maritime law is a cornerstone of risksharing
in global shipping, compelling all parties to contribute proportionally to shared
sacrifices made to preserve voyage and cargo. However, the principle paradoxically
incentivizes some to contribute less by sacrificing less valuable portions of their cargo, leaving
others to bear a disproportionate burden. This research delves into this "General Average
Paradox," analyzing its practical implications for international marine insurance and its
compatibility with Pakistan's existing maritime regime. Through a thorough doctrinal research
also incorporating descriptive methods of research, the thesis will: Examine the historical and
theoretical underpinnings of the GA principle, highlighting its evolution and justifications.
Analyze case studies of GA sacrifices identifying instances where the paradox manifested and
assessing its impact on insurance claims and legal proceedings. Compare and contrast the GA
provisions in Pakistan's national maritime legislation with international conventions and
industry practices, evaluating its alignment with global standards and potential areas for
reform. Investigate the role of marine insurance in mitigating the GA paradox's effects,
exploring how insurance schemes and practices address disproportionate burden-sharing and
incentivize optimal sacrifice decisions. Evaluate the effectiveness of alternative risk-sharing
mechanisms, such as special average or limited liability regimes, in overcoming the
paradoxical disincentives inherent in the traditional GA system. The research findings will be
synthesized to draw insightful conclusions about the GA paradox's practical challenges in the
context of international marine insurance and Pakistan's maritime regime. Recommendations
for legislative and contractual modifications, tailored to address the identified issues, will be
proposed, aiming to promote fairer risk-sharing mechanisms and enhance predictability for
stakeholders in Pakistan's maritime sector. By unraveling the intricacies of the General
Average Paradox and offering practical solutions, this research aspires to contribute to a more
equitable and efficient marine insurance environment, fostering a vibrant and resilient maritime
industry in Pakistan and beyond.
