The Longchamp was boarded and hijacked by pirates on the Gulf of Aden while carrying cargo under a bill of lading subject to the York Antwerp Rules 1974. The pirates asked for USD6 million ransom to disembark and release the vessel. The owner negotiated over 51 days and reduced the ransom to USD1.85 million, which was paid, and the vessel was released. The cost of operating expenses incurred by the owners during the 51 days was USD160,000, which the owners claimed in general average contribution from the cargo interest together with the ransom paid. A dispute arose as to whether the USD160,000 operating expenses are allowable in general average. Lord Neuberger, who the majority agreed, held that it was allowable in general average under Rule F, which provides:

Any extra expense incurred in place of another expense which would have been allowable as general average shall be deemed to be general average and so allowed without regard to the saving, if any, to other interests, but only up to the amount of the general average expense avoided.

His lordship construed the Rule F objectively and in the natural context.  and rejected the argument of the cargo interests. His lordship rejected the cargo interests’ argument that the general average contributions in the circumstances are excluded by Rule C, holding that even if the expenditure fell within Rule C, it did not prejudice its allowability under Rule F. Rule C provides:

Only such losses, damages or expenses which are the direct consequence of the general average act shall be allowed as general average. Loss or damage sustained by the ship or cargo through delay, whether on the voyage or subsequently, such as demurrage, and any indirect loss whatsoever, such as loss of market, shall not be admitted as general average.