The Zim Montreal was a container ship owned by Zim Israel Navigation Co Ltd (Zim). The Zim Montreal carried cargo from various ports in the Far East to the United States. The Zim Montreal suffered a fire which damaged some of the cargo on board, including a portion of the cargo owned by Hatzlachh Supply Inc (Hatzlachh). As a result of the fire, a general average loss was declared. The bill of lading issued by Zim to Hatzlachh specified that general average should be adjusted, stated and settled according to the York-Antwerp Rules 1974. The adjustment showed that Hatzlachh was to receive a net payment of USD 742,623.09. Pursuant to the general average clause in the bill of lading, Zim was responsible for apportioning the loss among all of the cargo owners. However, many cargo owners refused to pay their contributions and brought counterclaims against Zim. Zim settled with all of the cargo owners who had brought counterclaims against it except Hatzlachh. According to the settlements, Zim agreed to pay the cargo owners the full amount they were to receive under the adjustment and only required them to pay between 50-75% of their contributions to the general average fund. As a result, Zim was only able to collect 70% of the general average fund. Zim argued that Hatzlachh was only entitled to 70% of its proportionate share under the adjustment. Hatzlachh filed a motion for summary judgment and argued that because Zim paid the other cargo owners 100% of their proportionate share, it was entitled to the full amount of its claim as well.

Held: Motion granted.

The York-Antwerp Rules 1974 were binding because they were incorporated into the bill of lading issued by Zim. Once a general average event has been declared, the shipowner is responsible for collecting and disbursing the general average fund among all of the cargo owners. A cargo owner who has not received its share of the fund has a right in personam against the shipowner. Zim compromised the fund in order to settle litigation brought against it personally. Therefore, Zim was responsible for the low level of recovery. In addition, general average is an equitable doctrine. It does not require every partner who suffers a loss to be fully compensated, but it does require that all partners to the adventure share the loss equally. Therefore, Hatzlachh was entitled to the same percentage of its claim as the other owners whose cargo was lost. Since Zim paid the other cargo owners 100% of their proportionate share under the adjustment, it must pay Hatzlachh 100% as well.