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    Aboitiz Shipping v. General Accident Fire and Life Assurance Corporation

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    YieMaghirang
    The Supreme Court of the Philippines heard a case regarding the sinking of a cargo ship owned by Aboitiz Shipping. The ship sank in 1980 while traveling from Hong Kong to the Philippines. General Accident Fire and Life Assurance Corporation, as the insurer of several cargo owners, paid claims to cargo owners and sought recovery from Aboitiz Shipping. The trial court found for General Accident, but Aboitiz Shipping argued it was only liable up to the limited liability set by maritime law. The Supreme Court had to determine if Aboitiz Shipping could limit its liability according to maritime law, preventing General Accident from recovering more than Aboitiz Shipping's assets related to the ship. The Supreme Court ultimately

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    Aboitiz Shipping v. General Accident Fire and Life Assurance Corporation

    Uploaded by

    YieMaghirang
    74 views2 pages
    The Supreme Court of the Philippines heard a case regarding the sinking of a cargo ship owned by Aboitiz Shipping. The ship sank in 1980 while traveling from Hong Kong to the Philippines. General Accident Fire and Life Assurance Corporation, as the insurer of several cargo owners, paid claims to cargo owners and sought recovery from Aboitiz Shipping. The trial court found for General Accident, but Aboitiz Shipping argued it was only liable up to the limited liability set by maritime law. The Supreme Court had to determine if Aboitiz Shipping could limit its liability according to maritime law, preventing General Accident from recovering more than Aboitiz Shipping's assets related to the ship. The Supreme Court ultimately

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    TRANSPO LIMITED LIABILITY INSURANCE

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    The Supreme Court of the Philippines heard a case regarding the sinking of a cargo ship owned by Aboitiz Shipping. The ship sank in 1980 while traveling from Hong Kong to the Philippines. General Accident Fire and Life Assurance Corporation, as the insurer of several cargo owners, paid claims to cargo owners and sought recovery from Aboitiz Shipping. The trial court found for General Accident, but Aboitiz Shipping argued it was only liable up to the limited liability set by maritime law. The Supreme Court had to determine if Aboitiz Shipping could limit its liability according to maritime law, preventing General Accident from recovering more than Aboitiz Shipping's assets related to the ship. The Supreme Court ultimately

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    74 views2 pages

    Aboitiz Shipping v. General Accident Fire and Life Assurance Corporation

    Uploaded by

    YieMaghirang
    The Supreme Court of the Philippines heard a case regarding the sinking of a cargo ship owned by Aboitiz Shipping. The ship sank in 1980 while traveling from Hong Kong to the Philippines. General Accident Fire and Life Assurance Corporation, as the insurer of several cargo owners, paid claims to cargo owners and sought recovery from Aboitiz Shipping. The trial court found for General Accident, but Aboitiz Shipping argued it was only liable up to the limited liability set by maritime law. The Supreme Court had to determine if Aboitiz Shipping could limit its liability according to maritime law, preventing General Accident from recovering more than Aboitiz Shipping's assets related to the ship. The Supreme Court ultimately

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Aboitiz Shipping v.

    General Accident Fire and Life Assurance Corporation,


    Ltd., 217 SCRA 359
    FACTS:
    Abboitiz Shipping is a corporation organized and operating under Philippine laws
    and engaged in the business of maritime trade as a carrier. As such, it owned and
    operated "M/V P. ABOITIZ," a common carrier which sank on a voyage from HK to
    the Philippines on October 31, 1980. General Accident Fire and Life Assurance
    Corporation, Ltd. (GAFLAC), on the other hand, is a foreign insurance company
    pursuing its remedies as a subrogee of several cargo consignees whose respective
    cargo sank with the said vessel and for which it has priorly paid.

    The incident of said vessel's sinking gave rise to the filing of suits for recovery of
    lost cargo either by the shippers, their successor-in-interest, or the cargo insurers
    like GAFLAC as subrogees. The sinking was initially investigated by the Board of
    Marine Inquiry which found that such sinking was due to force majeure and that
    subject vessel, at the time of the sinking was seaworthy. This administrative finding
    notwithstanding, the trial court found against the carrier on the basis that the loss
    subject matter therein did not occur as a result of force majeure. Thus, in said case,
    plaintiff GAFLAC was allowed to prove, and was later awarded, its claim. This
    decision in favor of GAFLAC was elevated all the way up to the Supreme Court

    It is in this factual milieu that the instant petition seeks a pronouncement as to the
    applicability of the doctrine of limited liability on the totality of the claims vis a vis
    the losses brought about by the sinking of the vessel M/V P. ABOITIZ, as based on
    the real and hypothecary nature of maritime law.

    ISSUE:
    Whether or not the Limited Liability Rule warrants immediate stay of execution of
    judgment to prevent impairment of other creditors' shares?

    HELD:
    The real and hypothecary nature of maritime law simply means that the liability of
    the carrier in connection with losses related to maritime contracts is confined to the
    vessel, which is hypothecated for such obligations or which stands as the guaranty
    for their settlement. It has its origin by reason of the conditions and risks attending
    maritime trade in its earliest years when such trade was replete with innumerable
    and unknown hazards since vessels had to go through largely uncharted waters to
    ply their trade. It was designed to offset such adverse conditions and to encourage
    people and entities to venture into maritime commerce despite the risks and the
    prohibitive cost of shipbuilding. Thus, the liability of the vessel owner and agent
    arising from the operation of such vessel were confined to the vessel itself, its
    equipment, freight, and insurance, if any, which limitation served to induce
    capitalists into effectively wagering their resources against the consideration of the
    large profits attainable in the trade.
    The rights of a vessel owner or agent under the Limited Liability Rule are akin to
    those of the rights of shareholders to limited liability under our corporation law. Both
    are privileges granted by statute, and while not absolute, must be swept aside only
    in the established existence of the most compelling of reasons. In the absence of
    such reasons, this Court chooses to exercise prudence and shall not sweep such
    rights aside on mere whim or surmise, for even in the existence of cause to do so,
    such incursion is definitely punitive in nature and must never be taken lightly.

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