Warsaw Convention, Maritime Law, Collision, Averages, Salvage Law, Charter Party,

Loans on Bottomry and Respondentia, Carriage of Goods by Sea Act, Public Service Act

I. WARSAW CONVENTION II. MARITIME LAW

Liabilities of a carrier: Limited Liability Rule:

a. for damage in case of death or wounding of a passenger, if the accident which The liability of a shipowner for damages in case of loss is limited to the value of
caused the damage so sustained took place on board the aircraft or in the his vessel.
course of any of the operations of embarking or disembarking;
b. for damage sustained in case of destruction, loss or damage to any registered Real and Hypothecary Nature of Maritime Law:
luggage or any goods, if its cause took place during the carriage by air; and The liability of the carrier in connection with losses related to maritime contracts
c. for damage occasioned by delay in the carriage by air of passengers, luggage or is confined to the vessel, which is hypothecated for such obligations or which
goods. stands as the guaranty for their settlement.

Limit of Liability: Exceptions to the Limited Liability Rule:

a. Under the WARSAW Convention liability for injuries to passengers, shall be a. Where the injury or death to a passenger is due either to the fault of the
limited to 250,000 francs, unless agreed otherwise; shipowner, or to the concurring negligence of the shipowner and the captain
b. for damages with respect to registered baggage or cargoes, it shall be limited to (NEGLIGENCE);
250 francs per kg; and b. Where the vessel is insured (INSURANCE);
c. As to objects that the passenger takes charge himself, it shall be limited to 5,000 c. In the workmen’s compensation claims (WORKER’S COMPENSATION);
francs. d. Total Destruction of the vessel;
e. Claim for death benefits under POEA-SEC;
Defenses against limit of liability: f. If the claim is not maritime; and
(1) Willful misconduct; g. When there is no abandonment.
(2) Gross negligence;
(3) Absence of baggage check; SC Ruling
(4) If there was a waiver on the part of the carrier; and One of the exceptions when limited liability does not apply is when the carrier fails
(5) If the carrier is estopped from invoking the provision on limit of liability. to overcome the presumption of negligence. Such presumption is only rebutted
when the carrier establishes that the vessel is seaworthy.
SC RULING
Unless the contents of a cargo are declared or the contents of a lost luggage are NO VESSEL, NO LIABILITY expresses in a nutshell the limited liability
proved by the satisfactory evidence other than the self-serving declaration of one rule. Total destruction or sinking of the vessel extinguishes the maritime lien
party, the contract should be enforced as it is the only reasonable basis to arrive at as there is no longer any res to which it can attach.
a just award. The passenger or shipper is bound by the terms of the passenger ticket
or the air waybill.

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 Warsaw Convention, Maritime Law, Collision, Averages, Salvage Law, Charter Party,
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Transshipment Persons involved in Maritime commerce:

SC Ruling a. Shipowners and ship agents;
The act of taking cargo out of one ship and loading it in another. It is immaterial b. Captains and masters of the vessel;
whether or not the same person, firm or entity owns the 2 vessels. c. Officers and crew of the vessel; and
xxx d. Supercargoes
A person is bound by the terms of the bill of lading upon accepting the same.
Acceptance under such circumstances makes the bill of lading a binding contract. SC Ruling
The Code of Commerce provides that the ship agent shall be liable for indemnities
Liability of a common carrier: in favor of third persons which arise from the conduct of the captain in the care of
SC Ruling the goods which the vessel carried. The Supreme Court has held that the doctrine
If the fact of improper packing is known to the carrier or its servants, or apparent having reference to the relation between principal and agents cannot be applied in
upon ordinary observant, but the carrier accepts the goods notwithstanding such the case of ship agents and ship owners.
condition, it is not relieved of liability for loss or injury resulting therefrom. xxx
The law does not make the liability of the ship agent dependent upon the solvency
Can claimants go after the proceeds of the insurance? or insolvency of the ship owner.
SC Ruling
There is a need to collate all claims preparatory to their satisfaction from the IV. AVERAGES
insurance proceeds on the vessel and its pending freightage at the time of its loss.
General Average vs. Particular Average
III. COLLISION GENERAL AVERAGE PARTICULAR AVERAGE
As a general rule, all the damages and As a general rule, all the expenses and
Doctrine of Instructable Fault expenses which are deliberately caused damages caused to the vessel or to her
In case of collision where it cannot be determined which between the two vessels in order to save the vessel, her cargo, cargo which have not redounded to the
was at fault, both vessels bear their respective damage, but both should be solidarily or both at the same time, from a real benefit and common profit of all the
liable for damage to the cargo of both vessels. and known risk. persons interested in the vessel and her
cargo.
Doctrine of Last Clear Chance and Contributory Negligence not
applicable Requisites of General Average:
SC Ruling a. Common danger;
The doctrine of last clear chance is inapplicable to collision of vessels at sea under b. that for the common safety part of the vessel or of the cargo or both is
the Code of Commerce, and the case will be considered as if the collision is sacrificed deliberately;
imputable to both vessels.

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 Warsaw Convention, Maritime Law, Collision, Averages, Salvage Law, Charter Party,
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c. that from the expenses or damages caused follows the successful saving of the V. SALVAGE
vessel and cargo; and
d. that the expenses or damages should have been incurred or inflicted after Salvage, defined:
taking proper legal steps and authority. services one person renders to the owner of a ship or goods, by his own labor,
preserving the goods or the ship which the owner or those entrusted with the care
SC Ruling of them have either abandoned in distress at sea, or are unable to protect or secure.
The jettisoning of said cargoes constitutes general average loss which entitles the
owners thereof to contribution from the owner of the vessel and also from the Requisites of valid Salvage claim:
owners of the cargoes saved. a. there must be a marine peril;
b. the service is voluntarily rendered and is not required as an existing duty or
Who bears general average? from a special contract; and
Borne by those who benefited from the sacrifice; the shipowner and the owner of c. there must be success in whole or in part or that the service contributed to
the cargoes that were saved. such success.
d. valid vessel which is shipwrecked beyond the control of the crew or shall have
Deviation been abandoned (not necessary)
Under the Insurance Code, deviation is proper when made in good faith, and upon
reasonable grounds of belief in its necessity to avoid a peril. Who is entitled to salvage claims?
SC Ruling
Hiring of Salvors The reward for salvage or for assistance shall be divided between the owner, the
SC Ruling captain, and the remainder of the crew of the latter vessel, so as to give the owner
The right to hire salvors shall not be granted if the requisites of valid salvage claim a half, the captain a fourth, and all the remainder of the crew the other fourth of
are not present. the reward, in proportion to their respective salaries, in the absence of an agreement
to the contrary.
JASON CLAUSE
A shipowner (provided he had exercised due diligence to make the ship seaworthy
and properly manned, equipped and supplied) could claim a general average
contribution from cargo, even where the damage was caused by faulty navigation
of the vessel, provided that the bill of lading excluded liability for such faults.

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 Warsaw Convention, Maritime Law, Collision, Averages, Salvage Law, Charter Party,
Loans on Bottomry and Respondentia, Carriage of Goods by Sea Act, Public Service Act

VI. CHARTER PARTY VII. LOANS ON BOTTOMRY AND RESPONDENTIA

Kinds of Charter: General Rule:

a. Bareboat or Demise – shipowner leases to the charterer the whole vessel, The captain cannot contract loans on respondentia secured by the cargo, and
transferring to the charterer the entire command, possession and consequent should he do so, the contract shall be void. Neither can he borrow money or
control over the vessel’s navigation, including the master and the crew, who Bottomry for his own transactions.
becomes the charterer’s “servants”.
b. Contract of Affreightment – charterer hires the vessel only, either for a Exceptions:
determinate period of time or for a single or consecutive voyage, with the SO a. On the portion of the vessel he owns, provided no money has been previously
providing for the provision of the ship, wages of the master and crew, and borrowed on the whole vessel, nor exists any other kind of lien or obligation
expenses for maintenance of the vessel. chargeable against her.
c. Time Charter – vessel is leased to a charterer for a fixed period of time. b. When he is permitted to do so, he must necessarily state what interest he has
d. Voyage Charter – vessel is leased for a single or particular voyage. in the vessel.

SC Ruling SC Ruling
The carrier is not liable because it is not a common carrier and the parties to a To constitute usury, it is essential that the principal sum be repayable absolutely.
contract, as such, may enter into a stipulation exempting the owner from liability Thus, usury statute has no application to loans on bottomry and the perils of marine
for the negligence of its agents. navigation have been always considered sufficient to take bottomry or respondentia
xxx loans outside the ambit of the usury law.
A common carrier undertaking to carry a special cargo or chartered to a special
person only, becomes a private carrier. As a private carrier, a stipulation exempting VIII. CARRIAGE OF GOODS BY SEA ACT
the ship owner from liability for the negligence of its agents is not against public
policy and is deemed valid. Notice of Claim
✓ must be made within three days from delivery if damage is not apparent.
Meaning of “Owner Pro Hac Vice” ✓ the same period is not mandatory.
In bareboat charter, the charterer is treated as owner pro hac vice of the vessel and ✓ however, a prescriptive period of one year from delivery for the filing of
hence, the charterer will generally be liable as if it were the owner of the vessel. the case is a condition precedent or mandatory.
Moreover, the bareboat charterer assumes the liabilities of the ship owner in ✓ the one year prescriptive period does not apply to cases of misdelivery or
relation to third persons. Accordingly, it is the charterer and not the ship owner conversion.
who is liable to the seamen manning the vessel.

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 Warsaw Convention, Maritime Law, Collision, Averages, Salvage Law, Charter Party,
Loans on Bottomry and Respondentia, Carriage of Goods by Sea Act, Public Service Act

Prescriptive period for filing claims in court: Conflict with local ordinances
SC Ruling SC Ruling
The carrier and the ship shall be discharged from all liability in respect of loss or The City of Manila has the power to regulate the use of its streets. The Charter of
damage unless suit is brought within one year after delivery of the goods or the the City of Manila is a special law and therefore prevails over the Public Service
date when the goods should have been delivered: Provided, that, if a notice of loss Act which is a law of general application.
or damage, either apparent or concealed, is not given as provided for in this section, xxx
that fact shall not affect or prejudice the right of the shipper to bring suit within The power vested in the Public Service Commission under Section 16(m) is
one year after the delivery of the goods or the date when the goods should have subordinate to the authority of the City of Manila under Section 18(hh) of its
been delivered. revised charter, to superintend, regulate or control the streets of the City of Manila.
xxx xxx
The 1-year prescriptive period under the COGSA refers to the cause of action The powers conferred by law upon the Public Service Commission were not
against the carrier and not against the arrastre operator. designed to deny or supersede the regulatory power of local governments over
motor traffic in the streets subject to their control.
Change in the consignee of the goods:
SC Ruling Conditions for granting CPC:
After the goods have been delivered to the carrier, and the shipper should change a. The applicant must be a citizen of Philippines or a corporation or a
the consignee of the goods, without changing their destination, the carrier shall copartnership, association, or joint stock company constituted and organized
comply with the new order provided the shipper returns to the carrier the bill of under the laws of the Philippines, 60 percentum at least of the stock or paid-
lading, and a new one is issued showing the novation of the contract. up capital of which belong entirely to citizens of the Philippines.
b. The applicant must be financially capable of understating the proposed service
IX. PUBLIC SERVICE ACT and meeting the responsibilities incident to its operations.
c. The applicant must prove that the operation of the public service proposed
Certificate of Public Convenience, its nature: and the authorization to do business will promote the public interest in a
✓ it may or may not be considered property depending on the perspective or proper and suitable manner.
viewpoint.
✓ a certificate is a mere privilege that is always subject to regulation of the Instances when CPC is not required:
State. a. Warehouses
✓ in so far as the state is concerned, it constitutes neither a franchise nor a b. Vehicles drawn by animals and bancas moved by oar or sail, and tugboats and
contract, confers no property right, and is a mere license or privilege. lighters.
c. Airships within the Philippines except as regards the fixing of the maximum
SC Ruling rates on freight and passengers.
A Certificate of Public Convenience is inseparable from the vessel covered. d. Radio companies except with respect to the fixing of rates

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e. Public services owned or operated by any instrumentality of the National So long as the first licensee keeps and performs the terms and conditions of its
Government or by any government-owned or controlled corporation, except license and complies with the reasonable rules and regulations of the Commission
with respect to the fixing of rates. and meets the reasonable demands of the public.
xxx
SC Ruling In case of conflict between the “prior or old operator rule” and the “prior applicant
A franchise in this case is not necessary to operate and maintain an electric plant. rule”, the former must prevail.
Such a franchise is necessary only in order to operate and maintain an electric line
or power plant and line for business purposes, that is, to render service to the Power of the Commission to revoke or suspend certificate:
general public for compensation. SC Ruling
The Commission can suspend or revoke a certificate of public convenience when
Other rules and policies: the operator fails to provide a service that is safe, proper or adequate, and refuses
a. Prior Operator Rule – the regulating agency like the then Public Service to render any service which can reasonably be demanded and furnished.
Commission protects the first licensee’s investment and will not be subjected xxx
to ruinous competition. The PSC will not issue a CPC to a second operator if The Commission shall have the power to suspend or revoke any certificate issued
there is a first operator who is rendering sufficient, adequate and satisfactory under the provisions of this Act whenever the holder thereof has violated or
service. willfully contumaciously refused to comply with any order, rule or regulation of the
b. Third Operator Rule – just a variation of the prior operator rule. Instead of Commission or any provision of this Act.
one prior operator, there are two prior operators who are rendering sufficient
service. Where tow operators are more than serving the public, there is no Grounds:
reason to permit a third operator to engage in competition with them. a. Where the holder is a mere dummy;
c. Protection of Investment Rule – it is the duty of the government to protect b. Where the operator ceased operations and placed his vehicles on storage; or
the investment of the operators of a public utility from unfair, unjustified and c. Where the operator totally abandoned the service.
ruinous competition.
d. Prior Applicant Rule – provides priority in the filing of the application for a Certificate of Public Convenience vs. Certificate of Public Convenience
certificate of public convenience. and Necessity
CPC CPCN
SC Ruling - Does not requires such prior - requires prior issuance of
Accordingly, priority should be given to the carrier who was first granted a issuance. municipal franchise.
certificate of public convenience provided that it is rendering sufficient, adequate - However, the law on issuance of
and satisfactory service and who in all things and respects is complying with the CPCN is now obsolete. Hence,
rules and regulations of the Commission. cities and municipalities no longer
xxx issue CPCNs as contemplated
under the public service act.

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 Warsaw Convention, Maritime Law, Collision, Averages, Salvage Law, Charter Party,
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Regulation of Rates Art. 587. The agent shall also be civilly liable for the indemnities in favor of third
SC Ruling persons which arise from the conduct of the captain in the care of the goods which
The power of the Board of Communications, as successor to the defunct Public the vessel carried; but he may exempt himself therefrom by abandoning the vessel
Service Commission, to amend, modify or revoke or establish rates in lieu of those with all her equipments and the freight he may have earned during the voyage.
set forth in the final decision is affirmed in Section 16 (c) of the Public Service Act, Art. 612. A captain whose vessel has gone through a hurricane or who believes that
as amended, which rates shall immediately be operative, provided a new case is
the cargo has suffered damages or averages, shall make a protest thereon before
filed therefore under separate docket in the Public Service Commission.
the competent authority at the first port he touches within the twenty-four hours
Elements for a person the be considered a public service: following his arrival, and shall ratify it within the same period when he arrives at
a. The person must own, operate, manage or control in the Philippines public the place of his destination, immediately preceding with the proof of the facts, it
services which may include distribution of goods or rendering of services to not being permitted to open the hatches until this has been done.
the public. The captain shall proceed in the same manner if, the vessel having been wrecked,
b. The ownership, operation, management or control must be for hire or he is saved alone or with part of his crew, in which case he shall appear before the
compensation. nearest authority, and make a sworn statement of the facts.
c. The ownership, operation, management or control must be done for general The authority or the consul abroad shall verify the said facts, receiving a sworn
business purposes. statement of the members of the crew and passengers who may have been saved,
and taking the other steps which may assist in arriving at the facts, drafting a
X. PROVISIONS (Code of Commerce) certificate of the result of the proceedings in the log book and in that of the sailing
mate, and shall deliver the original records of the proceedings to the captain,
Art. 366. Within the twenty-four hours following the receipt of the merchandise,
stamped and folioed, with a memorandum of the folios, which he must rubricate,
the claim against the carrier for damage or average be found therein upon opening
for their presentation to the judge or court of the port of destination.
the packages, may be made, provided that the indications of the damage or average
The statement of the captain shall be believed if it is in accordance with those of
which gives rise to the claim cannot be ascertained from the outside part of such
the crew and passengers; if they disagree, the latter shall be accepted, unless there
packages, in which case the claim shall be admitted only at the time of receipt.
is proof to the contrary.
After the periods mentioned have elapsed, or the transportation charges have been
Art. 657. If during the voyage the vessel should be rendered unseaworthy the
paid, no claim shall be admitted against the carrier with regard to the condition in
captain shall be obliged to charter another one at his expense, in good condition,
which the goods transported were delivered.
to take the cargo to its destination, for which purpose he shall be obliged to look
Art. 586. The owner of a vessel and the agent shall be civilly liable for the acts of
for a vessel not only at the port of arrival but in the other ports within a distance
the captain and for the obligations contracted by the latter to repair, equip, and
of 150 kilometers.
provision the vessel, provided the creditor proves that the amount claimed was
If the captain should not furnish a vessel to take the cargo to its destination, either
invested therein.
through indolence or malice, the freighters, after a demand of the captain to charter
By agent is understood the person intrusted with the provisioning of a vessel, or
a vessel within an unextendible period, may charter one and apply to the judicial
who represents her in the port in which she happens to be.

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 Warsaw Convention, Maritime Law, Collision, Averages, Salvage Law, Charter Party,
Loans on Bottomry and Respondentia, Carriage of Goods by Sea Act, Public Service Act

authority requesting that the charter party which may have been made be 3. The cables and masts which are cut or rendered useless, the anchors and the
immediately approved. chains which are abandoned in order to save the cargo, the vessel, or both.
The same authority shall judicially compel the captain to confirm the charter made 4. The expenses of removing or transferring a portion of the cargo in order to
by the shippers for his account and under his responsibility. lighten the vessel and place her in condition to enter a port or roadstead, and the
If the captain, notwithstanding his efforts, should not find a vessel to charter, he damage resulting therefrom to the goods removed or transferred.
shall deposit the cargo at the disposal of the freighters, to whom he shall 5. The damage suffered by the goods of the cargo through the opening made in the
communicate the facts on the first opportunity presenting itself, the charter being vessel in order to drain her and prevent her sinking.
regulated in such cases by the distance covered by the vessel, there being no right 6. The expenses caused through floating a vessel intentionally stranded for the
to any indemnification whatsoever. purpose of saving her.
Art. 689. At the request of the person from whom the vessel is chartered the charter 7. The damage caused to the vessel which it is necessary to break open, scuttle, or
party may be rescinded: smash in order to save the cargo.
1. If the charterer at the termination of the extra lay days does not place the cargo 8. The expenses of curing and maintaining the members of the crew who may have
alongside the vessel. been wounded or crippled in defending or saving the vessel.
In such case the charterer must pay half the freight stipulated besides the demurrage 9. The wages of any member of the crew detained as hostage by enemies, privateers,
for the lay days and extra lay days elapsed. or pirates, and the necessary expenses which he may incur in his imprisonment,
2. If the person from whom the vessel was chartered should sell her before the until he is returned to the vessel or to his domicile, should he prefer it.
charterer has begun to load her and the purchaser should load her for his own 10. The wages and victuals of the crew of a vessel chartered by the month during
account. the time it should be embargoed or detained by force majeure or by order of the
In such case the vendor shall indemnify the charterer for the losses he may suffer. Government, or in order to repair the damage caused for the common good.
If the new owner of the vessel should not load her for his own account the charter 11. The loss suffered in the value of the goods sold at arrivals under stress in order
party shall be respected, and the vendor shall indemnify the purchaser if the former to repair the vessel because of gross average.
did not inform him of the charter pending at the time of making the sale. 12. The expenses of the liquidation of the average.
Art. 811. General or gross averages shall be, as a general rule, all the damages and Art. 815. The captain shall supervise the jettison, and shall order the goods cast
expenses which are deliberately caused in order to save the vessel, her cargo, or overboard in the following order:
both at the same time, from a real and known risk, and particularly the following: 1. Those which are on deck, beginning with those which embarrass the handling
1. The goods or cash invested in the redemption of the vessel or cargo captured by of the vessel or damage her, preferring, if possible, the heaviest ones and those of
enemies, privateers, or pirates, and the provisions, wages, and expenses of the least utility and value.
vessel detained during the time the arrangement or redemption is taking place. 2. Those in the hold, always beginning with those of the greatest weight and
2. The goods jettisoned to lighten the vessel, whether they belong to the vessel, to smallest value, to the amount and number absolutely indispensable.
the cargo, or to the crew, and the damage suffered through said act by the goods
kept.

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Art. 816. In order that the goods jettisoned may be included in the gross average it in the proceedings he must institute in accordance with the provisions contained
and the owners thereof be entitled to indemnity, it shall be necessary in so far as in Article 612.
the cargo is concerned that their existence on board be proven by means of the bill Should it not be possible to transfer to the other vessels the entire cargo of the one
of lading; and with regard to those belonging to the vessel, by means of the wrecked, the goods of the highest value and smallest volume shall be saved first,
inventory made up before the departure, in accordance with the first paragraph of the designation thereof being made by the captain, in concurrence with the officers
Article 612. of his vessel.
Art. 827. If both vessels may be blamed for the collision, each one shall be liable Art. 851. At the instance of the captain, the adjustment, liquidation, and distribution
for his own damages, and both shall be jointly responsible for the losses and of gross averages shall be held privately, with the consent of all the parties in
damages suffered by their cargoes. interest.
Art. 828. The provisions of the foregoing article are applicable to the case in which For this purpose, within forty-eight hours following the arrival of the vessel at the
it can not be decided which of the two vessels was the cause of the collision. port, the captain shall call all the persons interested, in order that they may decide
Art. 830. If a vessel should collide with another by reason of an accident or as to whether the adjustment or liquidation of the gross average is to be made by
through force majeure, each vessel and her cargo shall be liable for their own damage. experts and liquidators appointed by themselves, in which case this shall be done
Art. 835. The action for the recovery of losses and damages arising from collisions should the persons interested agree.
cannot be admitted if a protest or declaration is not presented within twenty-four Should an agreement not be possible, the captain shall apply to the judge or court
hours to the competent authority of the point where the collision took place, or of competent jurisdiction, who shall be the one of the port where these proceedings
that of the first port of arrival of the vessel, if in Spain, * and to the consul of are to be held in accordance with the provisions of this Code, or to the consul of
Spain * if it should have occurred in a foreign country. Spain, * should there be one, and otherwise to the local authority when they are to
Art. 836. In so far as the damages caused to persons or to the cargo are concerned, be held in a foreign port.
the absence of a protest can not prejudice the persons interested who were not on
board or were not in a condition to make known their wishes.
Art. 837. The civil liability contracted by the shipowners in the cases prescribed in
this section, shall be understood as limited to the value of the vessel with all her
appurtenances and all the freight earned during the voyage.
Art. 843. If several vessels navigate under convoy, and any of them should be
wrecked, the cargo saved shall be distributed among the rest in the proportion to
the amount each one can receive.
If any captain should refuse, without sufficient cause, to receive what may
correspond to him, the captain of the wrecked vessel shall enter a protest against
him before two sea officials of the losses and damages resulting therefrom, ratifying
the complaint within twenty-four hours after arrival at the first port, and including

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