22985110 transportation law

8/9/2019 22985110 Transportation Law

1/26

Feb. 27, 2002 Vern Nava/Kasmot

Article 1732 of the Civil Code

Common Carriers are persons, corporations, firms or associations engaged in the business ofcarrying or transporting passengers or goods or both, by land, water or air, for compensation,

offering their services to the public.

Contracts of carriage are governed primarily by the Civil Code, then in a suppletory manner,by the provisions of the Code of Commerce on Maritime Commerce, the COGSA (Carriage of Goods

by Sea Act, and the Salvage !aw.

"or someone to be considered a common carrier, it is not re#uired that it should be hisprincipal business. $ven if that is what is %nown as his &sideline', he is still a common carrier.

De Guzman vs. CA (168 SCRA 612)

• he law defining a common carrier ma%es no distinction whether the carriage of goods or

persons is the principal or merely ancillary activity of the carrier.

• he fact that there is no fi)ed or regular schedule in transporting goods for others does notdistract from the fact that he is a common carrier.

A school bus service is a Common Carrier and although it does not cater to the general

public, but to a limited clientele, and the school bus was hired for a special trip to the province, courtsaid that it is still a common carrier although it usually caters only to a limited segment of society

and that the trip to the province was not a regular trip but an unscheduled and special trip.

he fact that the Common Carrier does not have a certificate of public convenience does notdistract from the fact that it is a common carrier (although operating illegally. Otherwise, it would

be better off than a company that is operating legally.

First Philippine Inustrial Pipeline vs. CA (!"" SCRA 661)

• A company which transports petroleum products from a refinery to a terminal by means of a

pipeline is a common carrier because it is transporting goods.

Article 1733. Common carriers, from the nature of their business and for reasons of publicpolicy, are bound to observe extraordinary diligence in the vigilance over the goods and

the safety of the passengers transported by them, according to all the circumstances ofeach case.

Article 1734. Common Carriers are responsible for the loss, destruction or deterioration

of the goods, unless the same is due to any of the folloing causes only!

"or the common carrier to be e)empt from liability, these must be the only cause of the loss.here must be no concurring negligence on the part of the common carrier.

he law re#uires that before, during and after the loss, the common carrier must have

e)ercised e)traordinary diligence to try to prevent or minimi*e the loss.

"1# $lood, storm, earth%ua&e, lightning or other natural disaster or calamity'

+f there was delay, common carrier cannot invo%e fortuitous event to be e)empt.

here the captain departed although there was already a warning from -AGASA that there

was a strong typhoon brewing, the vessel san%, cargoes were lost. hey cannot invo%e that as an

e)cuse because there was concurring negligence. hey should not have left port.

Jimenez Transcripts (Transportation and Public Service Law)Page 1 of 25


2/26

here the coils of wire the vessel was transporting became wet because of the rain and

became rusty. he court said that it is not due to a fortuitous event because the rain would nothave reached the coils if the hatches were properly closed. So there was concurring negligence.

$ire

• As a rule, fire is not a fortuitous event because it is always traceable to human negligence.

• $)ception would be if it was cause by lightning.

"2# Act of public enemy during ar, hether international or civil'

nder international law, merchant vessels can be sei*ed as prices of war during war.

"3# Act or omission of the shipper or oner of the goods'

"or e)ample, if he planted a bomb with the goods he was shipping.

"4# (he character of the goods or defects in the pac&ing or in the containers'

"ruits cannot be prevented from becoming ripe during the course of the voyage, natural

process.

S#uthern $ines vs. CA (% SCRA 1&')

• +f the fact of improper pac%ing is %nown to the carrier, or apparent upon ordinary observation,but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or

in/ury.

")# *rder or act of competent public authority.

Ganz#n vs. CA (161 SCRA 6%6)

• he order must be a valid order, not an illegal order. One cannot invo%e that as a valid e)cuse.

Collision

+f there is a collision, its e)clusively the fault of another vessel, of course the other vessel willbe e)cused from liability. 0ut if there is concurring negligence, that will not e)empt the carrier from

liability.

"or e)ample, a vessel collided with a tan%er when they should have had a loo%out at night,

and then the person in charge of the vessel was uns%illed, and when it became apparent that acollision might occur, the vessel steered to the left, when under the rules of navigation, it should

steer to the right, so they collided.

Or when a vessel saw that a collision might occur but it too% evasive action too late or started

ta%ing evasive action when collision was already imminent.

he fault of the owner will only minimi*e the liability of the shipping company but will note)empt it from liability.

Armed +obbery

+n the de Gu*man case, a stipulation providing that a common carrier will not be liable for

acts committed by robbers who act without irresistible force would not be valid.



3/26

A carrier cannot be e)empt from liability if it fails to show that the robbers acted withirresistible force.

Article 173). n all cases other than those mentioned in -1734, if the goods are lost,

destroyed or deteriorated, common carriers are presumed to have been at fault or to haveacted negligently, unless they prove that they observed extraordinary diligence as

re%uired in article 1733.

Mechanical failure is not a fortuitous event.• Crac% in the steering %nuc%le

• ires e)ploded

• 1efect in the bra%es

Article 173/. (he extraordinary responsibility of the common carrier lasts from the time

the goods are unconditionally placed in the possession of, and received by the carrier for

transportation until the same are delivered, actually or constructively, by the carrier tothe consignee, or to the person ho has a right to receive them, ithout pre0udice to the

provisions of article 173.

2otice of the arrival and the consignee fails to claim the goods after the laps of a reasonable

period, there will be constructive delivery.

+f the consignee still fails to ta%e delivery, from that point on, the contract between the

carrier and the consignee will no longer be a contract of carriage but a contract of deposit.herefore, the carrier is no longer re#uired to e)ercise e)traordinary diligence, but only the due

diligence of a good father of a family.

Article 1737. ven if the goods are temporarily unloaded or stored hile in transit, theduty of the common carrier to exercise extraordinary diligence subsists.

"or e)ample, they are transferring the goods to another vessel and the vessel develops

mechanical trouble, it could not continue. So meanwhile, the loo% for another vessel. heyunloaded the goods. hile in the warehouse, under the law, liability to e)ercise e)traordinary

diligence remains.

Article 174. f the common carrier negligently incurs in delay in transporting the goods,a natural disaster shall not free such carrier from responsibility.

Although bills of lading provided that they did not guarantee to deliver the goods at any

particular date, court said, that has to be given a reasonable interpretation. hat should not beinterpreted that you can deliver the goods even beyond what is a reasonable period. A delay of 3

months and 4 days + not reasonable. Common carrier cannot invo%e fortuitous event to escapeliability.

Article 1744. A stipulation limiting the liability of the common carrier ould be valid if!

"1# in riting'"2# supported by valuable consideration'

"3# reasonable, 0ust and not contrary to public policy.

Article 174). (he folloing or similar stipulations shall be considered unreasonable,un0ust and contrary to public policy "void# !

"1# (hat the goods are transported at the ris& of the shipper or oner of the goods'"2# (hat the common carrier ill not be liable for any loss, destruction or

deterioration of the goods'

Jimenez Transcripts (Transportation and Public Service Law)Page of 25


4/26

"3# (hat the common carrier need not observe any diligence in the custody of thegoods "at all#'

"4# (hat the common carrier need not observe any diligence less than that of a goodfather of a family'

")# (hat the common carrier shall not be responsible for the acts or omissions of hisemployees'

"/# (hat the common carriers liability for acts committed by thieves or robbers hodo not act ith grave and irresistible force, threat or violence is dispensed ith or

diminished'"7# (hat the common carrier is not responsible for the loss, destruction or

deterioration of the goods on account of the defective condition of the car,

vehicle, hip, airplane or other e%uipment used in the contract of carriage.

A provision saying that the carrier is not liable for loss is void. A provision limiting the

liability to a fi)ed amount is also void. 0ut, a provision limiting the liability to a certain fi)ed amountunless the shipper declared a higher value and pays the corresponding freight for that higher value

would b reasonable.

-rovisions limiting the liability of the carrier cannot be invo%ed if the carrier incurs in delay.nless, the delay is due to the fault of the government or of 5 rd persons, beyond the control of the

carrier.

Article 17)3. (he la of the country to hich the goods are to be transported shouldgovern the liability of the common carrier for their loss, destruction or deterioration.

!aw of the destination governs under conflicts of law.

Article 17)4. n the case of baggage of passengers, if they are in the personal custody of

the passenger, then liability of the common carrier ill be that of a baileedepositary.

"or e)ample, hand carried baggage of a passenger. he common carrier is re#uired only toobserve the due diligence of a good father of a family. 0, for chec%6in luggage, the carrier will

have to e)ercise e)traordinary diligence.

Article 17)). Common carriers are re%uired to observe extraordinary diligence for thesafety of their passengers.

Article 17)/. n the case of death or in0ury to passengers, it is presumed that the carrier

is at fault, unless they prove thy exercised extraordinary diligence.

he liability of the common carrier will begin from the time the passenger places his footupon the carrier.

he act of boarding represents a perfected contract of carriage.

he contract will not be terminated upon arrival at the destination until the passenger has

had reasonable opportunity to leave the premises.

he carrier is not an insurer of the safety of the passengers. +f the death or in/ury was due

to a cause beyond the control of the carrier, it will not be liable to the passenger. 7owever, it mustdo everything in its power to try to prevent any passengers from getting hurt. +t must ta%e

precautionary measures.

+f there is a collision with another bus company, and they were both at fault, both will still be

liable. hey cannot invo%e the !ast Clear chance rule. he rule is only for determining who will bear

Jimenez Transcripts (Transportation and Public Service Law)Page ! of 25


5/26

the loss as between the two. Since the carriers are both at fault, it will not apply. 0ut, with respectto passengers, each will be liable for their own.

+f the bus was speeding, a passenger was in/ured, the bus company will be liable. 0ut if the

passenger is guilty of contributory negligence, then that will minimi*e, but will not e)empt theliability of the carrier.

Article 17). f the passenger is carried gratuitously, the liability of the common carrier

may be limited by stipulation to only due diligence of a good father of a family. 56(, itcannot exempt it from gross negligence.

Pleasantville Devel#pment C#rp. vs. CA (2&!* SCRA 1")

• A stipulation e)empting a party from negligence is void because it is against public policy.

Feb, 28, 2002 Rexy Garcia

A5(8 *$ C*99*: CA+++8

Article 17); of the 2ew Civil Code reads8

Common carriers are liable for the death of or in0uries to passengers through the

negligence or illful acts of the former


6/26

-A! was at fault. After that case was decided, this -adilla case was litigated. -adilla was anotherpassenger there. 7e was a chance passenger but was accomodated because the regular passengers

did not show up. -adilla was hurrying to return to Manila for his wedding. 7e perished in that planecrash (female classmates instantly reacted, &awww?'. So his widowed mom sued for damages. +

handled the case for -A! in the Court of Appeals, and argued that since SC already ruled in 1avilacase that -A! was at fault, then the only issue is the e)tent of -A!@s liability. So + tried to reduce

the liability of -A!. + cited some cases that in computing the income, you should use the lifee)pectancy of the mother. 0ecause even if the son had not died, the mother would not have

received the income of the son until the death of the son, because the mother could have died aheadof the son, because in the normal course of events, the mother would die ahead of her son.

herefore, she could not have received the income of her son after her death. So you only computeher life e)pectancy. he CA ruled in favor of the mother. On appeal, the SC re/ected that

argument. he SC said that the life e)pectancy of the son should be used as the basis even if the lifee)pectancy of the mother is shorter.

9oral damages

he Court has said that moral damages can be recovered in case of death. he court

recently ruled that you don@t have to prove mental anguish. +n previous cases, the court said thatmoral damages can@t be recovered in cases of death because nobody testified. 0ut in a recent

decision, the Court said that mental anguish need not be proven, because it is presumed.

Also, under the Civil Code, as a rule, you can recover moral damages for the breach of

contract only if there is death or bad faith. he Court has applied that to gross negligence

amounting to bad faith. here@s this one case where the bus was speeding, and the passengerswere already as%ing the driver to slow down, but he /ust ignored them. he Court said that it was

gross negligence amounting to bad faith.

Attorney


7/26


8/26

+n S, under the rules of Civil Aeronautics 0oard, airline companies are allowed to overboo%

by :J. "rom e)perience, not everyone shows up, so if there are vacancies, that@s lost revenue.So overboo%ing is allowed. he problem is if everyone shows up. +n such a case, the airline

company should as% for volunteers who are willing to give up their seats, and they@ll be given somesort of compensation for that. +f no volunteers, those who chec%ed in last will be displaced.

alamea ,ase

alamea was not accommodated because flight was overboo%ed. he Court said that sincetic%et was bought in the -hilippines, -hilippine laws should govern, and so the airline company

cannot invo%e that ruling of the S CA0.

PA$ ,ase-A! made a stop over in 7onolulu and unloaded luggage of some passengers so it could ta%e

in cargoes to earn more freight. Court said that there@s bad faith. -A! deliberately left behindluggage of passengers to earn more freight. !iable for damages.

5#rthest ,ase2orthwest left some baggage because of weight and balance restriction. Court said that 2

cannot be held liable for damages. ell, you %now, those "ilipinos carry a lot of 0ali%bayan bo)es.

And + thin% that if you are going to S, the flight going there is shorter than the flight returning. $

pano, ang mga -ilipino, madaming dala, so the plane is slower (his time, everybody, not /ust the

girls, reacted. awang tawa si -edro?

=A+8A= C*:>:(*: "=C#

here@s a limitation on liability of lost luggage. 7owever, the court has said that8

nder the C, if a passenger was not given a baggage claim tab, the Airline Company cannotinvo%e that limited liability.

3 C says that limited liability cannot be invo%ed when the word used is the "rench word, &dol',e#uivalent to the Spanish word, &dolo'. 0ut in the $nglish translation of the C, it was

translated as &willful misconduct'. he Court has said time and again that when the luggage islost because of rec%lessness of the airline company, it can@t invo%e its limited liability under the

C.

he provisions under the C do not bar the passenger to sue instead under the Civil Code.!i%e there@s a provision there for lost luggage, you have to file a claim from the airline company

within K days, otherwise, your claim will be barred. he Court has said that even if the passenger

does not do that, the C does not bar him to claim under the Civil Code. Or the 36year prescriptiveperiod under the C.

hat will not apply if the passenger was humiliated and treated discourteously. +n the nited

Airlines case, the passenger made a demand, but he was given the run around. he Court said that

since the delay in filing was due to the evasiveness of the airline company, the prescriptive periodunder the C shall not apply.

PA$ ,ase

-A! unloaded luggage of passengers to ta%e in cargoes to earn more freight.7eld8 here was misconduct. So you can@t invo%e limited liability.

+ritish Aira3s-assenger proved that the value of his lost suitcase was greater than the value provided in

the C. 2o ob/ection was made.7eld8 hat is waiver of the limited liability under the C.

Jimenez Transcripts (Transportation and Public Service Law)Page $ of 25


9/26

Jimenez Transcripts (Transportation and Public Service Law)Page % of 25


10/26

+e%uisites for the Application of =C

1) +t must be an international flight. +f the tic%et was bought in 0ang%o% for a flight in the S,from !A to Chicago, that is domestic flight.

2) wo countries must both be signatories. Singapore is not a signatory.

A flight that is covered by the C is a single operation. $)ample, if you@re going to $uropeand ta%ing different flights8

Manila to Dome L Alitalia

Dome to -aris L Air "rance-aris to !ondon L 0ritish Airways

Alitalia will issue the tic%et. So it will cover the legs to be flown by the other airlines.

7$ ,ase-assenger was going to $urope. ic%et was issued by H!M. H!M will fly from Manila to

Amsterdam, then to another place by another airline. 0ut he was not accommodated. So he suedH!M.

7eld8 H!M liable. A flight covered by the C is a single operation.

hey interpreted to mean that the airline company which issued the tic%et is liable foreverything that happens down the line, although the other portions may be flown by other airlines.

hat is wrong? 8ingle operation means that the moment a leg is covered by the C, the C willapply all throughout. he SC interpreted otherwise. Moreover, the tic%et clearly stated that the

issuing airline is an agent of the other airlines for the legs to be flown by the other airlines.

hen we already said in H!M that the issuing company is liable for all the other legs to beflown by other airlines because it is a single operationEwhen a passenger bought a tic%et here to go

to S, and too% for a certain portion of S, say Manila to 2 L 2orthwest, and 2 to !AL AmericanAirlines, the Court has said that American Airlines can be sued here because the tic%et was issued

here because that is a single operation under the C.

Sant#s v. 59 :rient Airlines

Santos was a student in California. 7e was planning to go home for a Christmas vacation, sohe bought a tic%et in San "rancisco, 2 Orient. 7e had his tic%et confirmed. On the day ofdeparture, while chec%ing in, he was told, &e can@t guarantee that you@ll be accommodated from

2arita to Manila. ou might be stranded in apan.' Santos bac%ed out. 7e was eventually accommodated but he sued for damages. 2 Orient

said that under Article ; of the C, you could sue an airline company only in any of the following

places8 -lace where it is incorporated

3 -lace where it has its principal office5 -lace where tic%et was bought

K 1estination

2 Orient claimed that 2 was incorporated in MinnesotaN it has its principal office thereN

the tic%et was bought in San "ranciscoN and the tic%et was a round trip tic%et, so the point ofdeparture is also the point of destination. herefore, it is claimed that the point of destination is alsoS". +n other words, 2 claims that Manila is not one of the places where you can sue.

7eld8 2o, C was adopted in the "rench language. Am ur has repeatedly said that it is the"rench /urisprudence that should be consulted in interpreting the C. +n "rench /urisdiction,

principal office is any place where a corporation has a branch office. 2 has a branch office inManila, so it can be sued here.

Moreover, in round trip tic%ets, the place of departure is the place of destination only whenthe roundtrip tic%et has a e4inite ate #4 return. +f the date of return is left open, the place of

Jimenez Transcripts (Transportation and Public Service Law)Page 1& of 25


11/26

departure is not e#uivalent to the place of destination. hat you have is an option to ta%e the flightto the place where you came from. +n this case, therefore, the place of destination is Manila.

Spen,er vs. 59 :rient Airlines

hen you are suing on a tort, the C provisions on venue are not applicable.

Mar. 4, 2002 Pero !riston

9A+(9 A= ? A@9+A(

+ill #4 $ain; "v. !rts. 70#$7%8, &oe o' &ommerce(-urposes8

. Contract3. Deceipt for the goods F the shipping company recogni*es it as receipt for the goods.

5. Symbol of the goods covered by it F that is why the goods can be sold and ownership can betransferred by merely delivering the bill of lading

One of the more important classes of bill of lading is the clean bill of lading F that means it is an

ac%nowledgement by the vessel that there are no defects in the cargoes when they too% delivery,therefore if upon delivery to the consignee there are damages, then the common carrier will be

liable.

he carrier may refuse to transport pac%ages which appear unfit for transportation. And if the carrier

believes that the declaration made by the shipper regarding the contents of the pac%age is false,

then the carrier can e)amine the pac%age in the presence of witnesses of the shipper or consignee.And if it turns out that the suspicions of the common carrier are false, and that the declaration is

correct then the e)penses for re6pac%ing the goods will be borne by the carrier.

he shipper may change the consignee but he must surrender the bill of lading. he carrier will beliable for any damages, loss of the goods or diminution in their value.

he Court has said that the delivery of cargoes to consignee is valid even if the original bill of lading

was not surrendered where the bill of lading was not received by the consignee or anyway the goods

were delivered to the actual consignee.

Consolidated 9ines Case. &onso)iate Mines im*orte minin+ e-i*ment an o*ene a

)etter o' creit. e bi)) o' )ain+ as sent to te ban1 ic o*ene te )ettero' creit beca-se te ban1 as not been *ai. e carrier e)ivere te

e-i*ment to &onso)iate Mines even i' te bi)) o' )ain+ as not s-rrenereby te )atter beca-se te bi)) as in te *ossession o' te ban1. &onso)iate

Mines i not *ay te ban1. No, te ban1 -estionin+ te carrier, y iyo- e)iver te e-i*ment to &onso)iate Mines ito-t re-irin+ te

s-rrener o' te bi)) o' )ain+ an te bi)) is in o-r *ossession3 e &o-rt saitat te ban1 co-) not s-e te carrier i' te consi+nee, &onso)iate Mines,

i not *ay it beca-se te consi+nee ias &onso)iate Mines. 5o tey e)iverete e-i*ment to te correct *erson. 6' te ban1 as not *ai, tats beteen

te ban1 an te consi+nee.

a,a


12/26

+f the consignee delays in ta%ing delivery of the goods he will be liable for the voyage.

7en; =ua () Pr#u,ts Case. Heng 7ua refused to ta%e delivery of the goodspaper products

because they said that they did not comply with the specifications with the contract. Meanwhilethe vessel was stuc% there accumulating demurrage. he court said8 if the products delivered by

the seller have not complied with the specification of the contract, the vessel is not liable forthat. ou run after the seller. So you cannot refuse and delay in ta%ing delivery of the goods on

that ground. So you@ll be liable for the demurrage.

7owever if the delay was due to a fortuitous event, the consignee will not be liable for demurrage.$.g. 8 (a +n one case, where the consignee was not able to ta%e delivery right away because there

was error in the manifest and then the e#uipment of the arrastre operator bro%e down, so that@s nothis faultN (b Or because there was a stri%e in the pier.

a;ellan() Case. he letter of credit, which the buyer of the imported goods opened, contained

a provision prohibiting transshipment of the goods. he shipping transshipped the goods onanother vessel. And, there was a provision in the bill of lading issued that there be a

transshipment. he seller accepted the bill of lading without protesting. Although the in the letter

of credit there was a stipulation there will be no transshipment, the bill of lading said there willbe a transshipment. he buyer refused to accept the goods, our agreement was that there shall

be no transshipment. he seller now was running after the vessel. he court said8 2o, becausethat agreement that there shall be no transshipment is /ust between the two of you. he carrier

is not bound by that and in the bill of lading which the seller issued there is a stipulation that thegoods would be transshipped, and you accepted it, you did not ob/ect. So in the contract

between you and the =carrier> there was a provision for transshipment, you cannot sue thecarrier if the buyer refuse to ta%e delivery of the goods.

he consignee may refuse to ta%e delivery of the goods and may abandon the goods in certain

cases, vi*.8. +f there was partial non6delivery and you cannot ma%e use of the parts delivered. !i%e they are

components of an e#uipment and without the missing parts you cannot use the e#uipment.3. +f the goods were rendered useless for the purpose for which they were intended. $.g. you

imported a thoroughbred and the legs of the horse were bro%en during the shipment.5. +f there is delay thru the fault of the carrier

2ow, if upon delivery of the goods, it is obvious from the e)ternal appearance of the pac%ages that

there were damages, the consignee must immediately file a claim. +f that is not apparent from thee)ternal condition of the pac%ages, then he has 3K hours from delivery within which to file a claim. +f

the claim is not filed within this period as mentioned in the law, then that will be barred becausecompliance with that is a condition precedent for a filing a case in court.

Management contracts with the arrastre operators contain this common provisions that8 (a theconsignee must file the claims within 9 days otherwise all claims will be barredN (b in case the

claim is denied, he has year to sue, otherwise the action will be barredN (c the arrastre will onlybe liable for a certain amount, + thin% li%e -3,:::, unless a higher value is declared. he court has

said8 where this is provided in the management contract between the government and the arrastre

operator is a contract with a stipulation for the benefit of a third person, the consignee. And

therefore, they are bound by the stipulation if they ma%e use of the services of the arrastre operatorpursuant to that management contract. 0ut if they did not avail of the services, li%e the goods werenever delivered, they never too% delivery, so thatE(inaudibleEthat limitation of liability will not

apply.

+n one case, li%e what San Miguel did, they wanted to play safe, to ma%e sure that any claimswill not be barredEthat although they haven@t received the goods, they already filed a provisional

claim. he Court said8 that is not valid, you haven@t seen the goods, you haven@t received themand you filed a claim. +n other words, your claim is speculative, that is not valid.



13/26

+f the goods are to be transshipped, the last carrier to deliver the goods shall be liable for eitherdamage or loss, even if that occurred while the goods were in the custody of a previous vessel.

Suppose the goods were imported from apan. hey were brought by apanese vessel from

o%yo to Manila. hen they were transshipped to Cebu by domestic shipping company,Sweetlines. And the goods arrived in Cebu in a damaged condition, the consignee can run after

Sweetlines even if the goods might have been damaged while in custody of that apanese vessel.he recourse of Sweetlines is to run after that apanese vessel for reimbursement.

he carrier has a lien on the goods if the freight is not paid. +f the freight is not yet paid, it must bepaid within 3K hours after their delivery. +f there is delay in the payment, the carrier may as% thatthe goods be sold. nder the Civil Code, Article PPP, it is provided that the lien of the carrier is up to

5: days.

imited iabilityOne of the basic principles in maritime commerce is the limited liability. he hypothecary nature of

maritime commercethis has been a principle of maritime commerce dating bac% to ancient timesbecause of the ha*ards connected with maritime commerce. 0ecause ha*ardous nature of maritime

commerce the liability of shipowners is limited to the vessel. +f the vessel sin%s or he abandons it,his liability is e)tinguished. 7is liability is limited to the vessel and its value. And that limited liability

applies even to the shipping agent. hat is why in a number of cases, the Court has said that were

the vessel san% the liability of the owner is e)tinguished.

he shipowner and the ship agent are liable under the law in certain instances

. for acts of the captain under Article 9;Q, Code of Commerce3. under the same provision, they are liable for contracts entered into by the captain for repair of

the vessel or to obtain provisions or supplies for the vessel5. under Article 9;4, Code of Commerce, they are liable for damages due third persons because to

the conduct of the captainK. they are liable for tort committed by the captain

9. they are also liable in case of collision

$)ceptions to the rule on limited liability8

1. when the shipowner is at fault. As was laid down in the Pa;


14/26


15/26

they loaded the molasses, there was a shortage in the molasses. +t was the fault of thewarehouseman. Anyway, so the shipowner filed a claim for deadfreightwere there was shortage in

the molasses so that freight he could have earned was an opportunity lost. ou have to ma%e goodthat amount because you agreed to load so many tons of molasses. hat is deadfreight.

he charterer will not be liable for the voyage if the delay in loading is due to fortuitous evente.g.,

the arrastre wor%ers went on stri%ethat is beyond the control of the charterer, he won@t be liablefor the demurrage.

he Court has said that in a bareboat charter of a private carrier, a stipulation there that the

shipowner will not be liable in case of loss and damage, the Court said since this is a private carrier,not a common carrier, that stipulation is valid. So the shipowner will not be liable for the loss of the

goods due to the negligence of the captain.

he Court said that a stipulation in a voyage charter that the charterer will be liable for the loadingand unloading of the goods, while the owner will be liable for the care of the cargo during the

voyage, that is valid.

D#n uan case. D#n uan collided with a tan%er which Calte) chartered to transport oil. PP

wanted to run after Calte) because it had deeper poc%ets than the owner of the tan%er. he

tan%er was at fault, it was navigating at nighttime without any lights. he Court said8 2o,

because this was a voyage charter. And in a voyage charter, the tan%er remained a commoncarrier. hus, Calte), the charterer, will not be liable. +t will be the owner of the tan%er who will

remain liable.

+n one case, the shipowner (inaudible option8 either you claim the goods and pay the freight oryou abandon the goods. 7e said8 + am abandoning the goods. ou gave him the option to

abandon the goods so you cannot claim anymore for freight.

he goods may be deposited (inaudible (a if there are reasons to believe that freight will not bepaid or (b the consignee cannot be found or (c the consignee refuses to receive the goods. On the

other hand, the goods may be sold to pay for the freight, e)penses and PP due the captain, to payfor freight under Article QQ48 (a if the consignee cannot be found, (b if the consignee refuses to

receive the goods or (c the goods will deteriorate li%e fruits that will become ripe.

A stipulation in the bill of lading limiting the liability of the carrier unless the shipper declares ahigher value, that is valid and that is binding upon the consignee. (inaudible he consigneebecomes a party to the bill of lading, the contract for the benefit of a third party. =hat is why(I>

the Court has said that a stipulation in a bill of lading saying that an action must be filed within acertain period, that is valid.

!vera+es v. Arti,les 8"6>81"/ C#e #4 C#mmer,e*hat is important here is the distinction between general and particular average. +n general average

there are K re#uisites8. here must be common danger to the ship and the cargoes

3. -art of the vessel or the cargoes aboard is deliberately sacrificed for the common safety5. here was success

K. he procedure under the Code for ma%ing a general average must be followed, li%e the captainshould call a meeting with the members of the crew and if the owner of the goods happens to be

on board he must be called to attend the meeting. And then if the captain decides to ma%e ageneral average, that must be entered in the log boo%.

2ow the enumeration in the law of general and particular average are merely given by way of

e)ample and they are not e)haustive.

a;sa3sa3 v. A;an ()8 where the vessel got stranded and the shipowner wanted to collect from

the owners of the cargo e)penses for refloating the vessel. he Court said8 there is no general



16/26

average. here was no common danger because there was no danger that the vessel would sin%.he weather was fair, and the vessel simply got stranded on the shoals.

+n this case where fire bro%e out in the vessel. +t has been burning for several days before they

discovered it. And now the vessel wants to declare a general average, and claim from the othercargo owners. he court said8 no, that is not general average. hat is damage due to the

negligence of the crew.

&o))isions v. Arti,les 826>8!'/ C#e #4 C#mmer,e*

he law lays down the rules for determining liability in case of collisions. !i%e this provision lay downthe rules that govern collisions. herefore the provisions of the Civil Code on #uasi6delict are notapplicable. his is a case of maritime tort governed by the provisions of the Code of Commerce and

not by the Civil Code. he rules are laid down here.

Section ;(I =should be Article> says if a vessel collides with another through the fault the captain or

crew, then the owner of the vessel at fault will answer for all damages. +f both vessels are at fault,

each one bears its own loss and they will be /ointly and severally liable to the owners of the cargoesof both vessels. his is a special rule of maritime tort, you don@t apply the Civil Code, even the last

clear chance rule. And one vessel cannot avoid liability by claiming that it has e)ercised diligence inthe selection and supervision of its crew. 2either do you apply the principle of comparative fault and

say you were at greater fault, you should have a bigger share in damages. All those rules will be

irrelevant because these are special rules governing maritime commerce.

octrine o' 6nscr-tab)e Fa-)t. +f you cannot determine which vessel is at fault, each one bears its

own loss and the shipowners of the two vessels will be /ointly and severally liable for the owners ofthe cargoes of both vessels. his is the doctrine of inscrutable fault. &+nscrutable,' you cannot

determine. here two vessel collides and you cannot determine who is at fault, then each vesselbears its own loss and the vessels will be /ointly and severally liable for the owners of the cargoes of

both vessels.

9mer+ency R-)e. ere there are 5 PP. he first PP when the vessels are near each other. hesecond is where collision is imminent. he third PP is when collision is a certainty and actual impact

ta%es place. 2ow, you apply the emergency rule if in a situation li%e this, in the third PP, the onewho is privileged, that is, the vessel who has the right of way committed an error. +f a person

e)ercising due diligence of reasonable man ma%es an error of /udgment during an emergency and=inaudible> has the right of way, he must be laible =or not liableI 2.0. not sure about this, recording

rather inaudible>.

0ut in that case of D#n uan. he Court said8 both vessels were at fault because while one vessel

is at fault, the other one did not ta%e evasive action on time, well it too% evasive action when

collision was already =imminent>. +t should have ta%en evasive action earlier. So they were both

at fault.

D#na Paz case. hile the boat was sin%ing, the captain was playing mah/ong. 7e did not ta%e

steps to try to delay the sin%ing of the vessel. 7e did not supervise the abandonment of thevessel.

+f 3 vessels collide because of a fortuitous event, nobody is at fault, each one bears its own loss and

the cargo owners will also bear their own loss.

+f a third vessel who is at fault, causing 3 vessels to collide. Such third vessel will answer foreverythingall losses and damages to the vessels and losses to the cargo owners.

!astly, if because of a fortuitous event, e.g. a typhoon, a vessel which is properly and safely moored

collides with another, that is again a fortuitous event, each vessel will bear its own loss, the cargoowners will bear their losses.

Jimenez Transcripts (Transportation and Public Service Law)Page 1" of 25


17/26

Protest here are K instances when a protest should be made8

1. hen there is a general average

2. hen there is a shiprec&

3. hen there is a collision4. hen there is arrival under stress

Of course, if the captain cannot ma%e the protest because of a fortuitous event, that ise)cusable. !i%e he was in/ured and was in the hospital, so he is not in a condition to ma%e theprotest.

Mar. #, 2002 :an-ary

5armiento

ell, this idea of having a law that would regulate these public utilities is really vitiated by therailroad companies in the nited States in that they have to preserve their oligopoly so that no

newcomer could come in unless you could get a certificate of public convenience, and of course theywould oppose any new application.

2ow before, the -ublic Service Commission (-SC regulated all the public utilities but after

Martial !aw, it was dissolved and its functions were parted out with different regulatory agencies co*that commission had become notoriously corrupt because it was regulating properties worth billions

of pesos. So now you have different agencies regulating public utilities li%e the !and ransportation"ranchising and Degulatory 0oard (!"D0, although under the !ocal Government Code, the

regulation of the issuance of certificates of public convenience (C-C for tricycles has now beentransferred to the cities and municipalities. So the tricycle operators do not have to go to !"D0,

they /ust go to the cities and municipalities, that@s where they apply. And for water transportation,you have the Maritime +ndustry Authority (M+A, telecommunications you have the 2ational

elecommunications Commission (2C, for the commercial aircrafts the Civil Aeronautics 0oard(CA0, then the $nergy Degulatory 0oard ($D0, the 2ational ater Desources Council (2DC.

+egulatory agencies do not have 0udicial poer

2ow the regulatory agencies do not have /udicial power so that they cannot entertain

complaints, let@s say, of customers for damages. hat will have to be decided by the regular courts.ou have this case where somebody sent a telegram. hen there was delay. 2ow the regular courts

have /urisdiction over that. !i%e in the 2C case, the court said this is a collegial body and thereforean order denying a motion which was signed by the Commissioner only without the involvement of

any associate commissioner was not valid, because it was a collegial body, so you need a ma/ority.

8ome enterprises not covered by the la

2ow the public service law mentions certain enterprises that are not covered by the law sothey can operate even without a certificate of public convenience. arehouses. Rehicles drawn by

animals li%e yang mga %aritelas, tartanillas, %alesas, bancas moved by sails, tugboats and lighters,

mga pedicabs, tricycab (ano toI. ell radio companies have to get their certificates from the 2C.

hen ice plants before were covered by the law, but when the commission had been

abolished, and its functions were parted out, ice plants were not included, ice plants are notconsidered public utilities anymore. 2ow in this case of the SG Summit, what happens is that these

shipyards were defined as public utilities. And then a decree repealed that. 0ut then a law broughtit bac%. So shipyards, at the moment, are considered public utilities.

Jimenez Transcripts (Transportation and Public Service Law)Page 1# of 25


18/26

2ow the law mentions that public utilities operated by the government or government6ownedinstrumentalities are e)empt from the law but they will be sub/ect to regulation by the appropriate

agency and the fi)ing of the fares that they will charge the public.

+e%uirement of obtaining a C+($CA( *$ B65C C*:>::C

So, to operate a public utility, one must have a certificate of public convenience.

And the court has said that as a rule, there is no need to get a legislative franchise becausethe legislature has delegated to the regulatory agencies to issue the authority to operate a public

utility. hat@s why the court said Grand Air could operate a commercial operation service withoutneed of getting a legislative franchise. 7owever, in the case of telecommunication companies,

Congress passed a special law providing that you need a legislative franchise to operate a telephonecompany.

Boers and functions of the +egulatory Agencies

%. 6ss-ance o' certi'icates o' *-b)ic convenience

2ow the law says that these regulatory agencies have the power to issue certificates of

public convenience authori*ing the operation of public utilities. 2ow, usually they have the

power to issue provisional authority. +n CA0, they will usually grant first a provisional authoritybefore they grant a regular certificate of public convenience.

Demember that the court has said that ownership of e#uipment used to operate a publicutility does not ma%e one a public utility li%e that railway system along $1SA that is owned by a

foreign company but the owner is not the one transporting the passengers. +t@s the governmentwho is rendering services to the public because it is leasing the e#uipment and ownership of that

does not ma%e that corporation a public utility. +n the same way that our airline companies aremerely leasing the airplanes they@re using from foreign companies.

+n the case of -etron, the court said that it is not a public utility co* it was argued that the

-etroleum Act of TKT provides that refining of oil is a public utility. he court said that refers to

domestically e)tracted oil and the oil that -etron is refining is imported oil and -etron is notrefining oil for someone to whom it will charge a fee. +t is refining oil for itself. So it is not apublic utility.

So even if you get a legislative franchise, you still have to get a certificate of public

convenience from the regulatory agency in order to operate. 2ow there is this old old lawpassed by the -hilippine Commission authori*ing local governments to issue franchises in certain

cases, but you still have to get a certificate of public convenience.

2ow to get a certificate of public convenience, there are three re%uisites8

1. he applicant must be a $ilipino citien or if it@s a corporation or partnership, it must beorgani*ed in the -hilippines and must be at least Q:J "ilipino6ownedN

2. hen the applicant must prove that its proposed service will promote the public interestNand3. +t must be financially capable of meeting the responsibilities of the operation.

So Q:J ownership, you submit your Articles of +ncorporation to %now if you@re Q:J

"ilipino6owned. "inancial capability, well you show your financial statements.

2ow you have this -antranco. hey@re offering this service F you board the bus in -asay

and you get off in Samar. he court said8 ou only have a certificate of public convenience to

Jimenez Transcripts (Transportation and Public Service Law)Page 1$ of 25


19/26

operate land transportation service. 0ut from Sorsogon to Samar, you have to cross the sea.+t@s not merely ferry service. +t involves crossing the sea. +t involves inter6island shipping. So

you need a certificate of public convenience in transporting passengers between Sorsogon andSamar.

2ow usually, the franchise given by the legislature provides that you cannot sell or

dispose of that without the approval of the legislature. hat@s why the court said, wheresomebody, a radio company was given a certificate, a franchise and agreed with somebody else

that they will operate, the Crusader 0roadcasting System (not so sure about the name, thatthey will operate the radio company /ointly, that is void. So the legislative franchise is peculiar

to the grantee. +t cannot as% somebody to en/oy those rights without the consent of Congress.

2ow you have that prior operator rule. +t says that before you allow a new applicant tocome in, the prior operator should be allowed to e)pand his service provided that his service is

satisfactory. hat you should not allow a new applicant to come in if it will result in ruinouscompetition. 0ut the mere fact that the income of an e)isting operator will be reduced does not

mean that that is ruinous competition. +uinous competition means that because of thecompetition, his income will be so reduced that it will not give him an ade#uate return on his

investment. 0ut up to now + never saw anyone succeed in proving ruinous competition.

here are exce*tions to tis *rior o*erator r-)e@

1. +f the old operator operated less units that what he was authori*ed to operate. !i%e a ta)icaboperator who@s authori*ed to operate 3: units but is only operating :. 7e cannot even

operate what he was authori*ed to operate. 7e cannot ob/ect to any new operators =haay..

puro &operate' >3. +f the old operator is opposing the application because there is no need, and if he does not

recogni*e that there is a need to e)pand his service then the prior operator rule does notapply

5. +f the old operator did not apply to meet the increased demand until the new applicant camein. +n other words, you must always be alert, be ready to respond to the need of the public

for e)panded service. ou only wo%e up when a new applicant came in. ou cannot invo%ethe prior operator rule.

K. +f the service is unsatisfactory.

9. +f the old operator failed to increase his service although he was given the authority to do so.Q. +f he abandoned his service.4. +f it is a different route. Suppose here is an operator@s certificate of public convenience

covering Caloocan to -arana#ue along $1SA. 7ere is somebody applying from -asig toUuiapo. So his route will be from -asig, then along Shaw 0oulevard, along $1SA, then from

$1SA he will turn right to 0uendia, then to Uuiapo. Although his route will cover $1SA, thoseother operators along $1SA cannot complain because that is a different route although it will

overlap with a portion of the route they are servicing.

hen in the old Ded !ine case, the court said that this agreement between twooperators that they will divide the territory so that they will not compete is void. hat is in

restraint of trade.

And remember, even if you@re client is limited, you can still be considered a publicutility. !i%e school bus services. hey are public utilities although they cater only to

students in the schools.

2. Fixin+ o' rates

hen to fix the rates which the utilities will charge, again, they are given the power toapprove provisional authority to be valid for 5: days. 2ow the court has said that a regulation

Jimenez Transcripts (Transportation and Public Service Law)Page 1% of 25


20/26

issued by the Sec. of ransportation saying that when an application is filed the burden will beoppositor to prove that there is no need for the proposed service, that is void. Co* under the

law, the burden is on the applicant. And that regulation shifts the burden to the oppositor,therefore void.

!i%ewise, the regulation issued by the Sec. of ransportation saying that operators of

provincial buses are allowed to ad/ust the fare they@re charging up to 9:J more or 9:J lessthan what is authori*ed by the !"D0, that is void. nder the law, the power to fi) the rate is

with the 0oard. he effect of that regulation is to delegate the power to the bus companies. Sothat is not valid.

2ow the court has said, a customer who is suing Meralco, claiming that he is

overcharged, should be filed with the regular courts, not with the $nergy Degulatory 0oardbecause the issue does not involve fi)ing of the rates to be charged the public. he #uestion is

not about the rate to be charged. he #uestion is whether he was overcharged. !i%ewise whena customer is as%ing for the basis of the computation for this power ad/ustment, that is within

the /urisdiction of the regular courts co* again it does not involve fi)ing of the power rates. +f it@sa #uestion of how to fi) the rates, then it@s the $nergy Degulatory 0oard which has /urisdiction.

0ut this is /ust as%ing how you arrived at that computation. So it@s the regular courts that havea power to do that.

5A+ 9A((+

2ow the court has said that even if aE this is the Cenia "D# case and this was as%ed in

the 0ar $)ams, even if a customer is contesting the bill of the public utility, they can disconnectthe service if he does not pay, otherwise the customer can compel the public utility to continue

rendering services by mere #uestioning the actual receipt of the bill.

And there@s this old, old regulation issued by the defunct -ublic Service Commission, hasbeen repealed, and it said that if a public utility will disconnect the service, it must give its

customer K;6hour advance notice so he can pay. +f he disconnects without prior notice, he isliable for damages.

And the court said, even if the meter was not tampered with but it is not correctlyregistering the electric consumption, the customer is still liable to pay the correct amount.Demember, that is in the Civil Code. +f there is an error in accounting, you simply correct it.

+ remember when my uncle was still alive, Daffy Decto went to him. 7e said that the

!ope*es of the Meralco would want my uncle to be an e)pert witness. My uncle said, &ell + willonly testify as a witness sub/ect to certain conditions. "irst, + will chec% your meter to find out if

it@s accurate or not. An then you cannot tell me what + will tell in court. +t has to be the resultsof my findings. hen secondly, + will not be paid. + don@t want to be cross6e)amined and be

as%ed &And how much were you paid to testify in courtI' Decto said, &O%ay.' So he e)aminedthe meter. And it was running very slow, it is not registering correctly your consumption. So

Daffy Decto did not present my uncle as a witness. Meralco instead presented him as a witnessand said that yes, the meter was running too slow. And in court, he was as%ed what e)planation

does he give for this. ell there are many factors. +t could be the factor defect in themanufacture of the meter, or because of wear and tear, the meter is no longer registering the

consumption, and of course, there is always the possibility of human intervention. My uncle

said, he did not tell in court what was the possible cause, but he said, &he way + e)amined thatmeter, most probably it was due to human intervention.'

2ow but in that Dadio (I ape and Chemical Corporation case, the court said that while itis true that the meter did not register the consumption correctly, but Meralco did not discover it

after a long, long time and now suddenly they slapped the customer with their whopping bill.

Jimenez Transcripts (Transportation and Public Service Law)Page 2& of 25


21/26

he court said, because of that since you were also negligent, you did not discover the fact thatthe meter was not registering consumption correctly, then the liability of the customer should be

reduced. + thin% they reduced it to 9:J.

2ow the court has fi)ed 3J of the (PPP sum or return on investment of the publicutility. here did they get that 3JI "rom old American decisions. Ang la%i nung 3J return.

And that is based on the cost, haI +f you were to reconstruct the facilities being used by thecustomer, li%e a public utility servicing the public, of course you consider the present value, what

is the value today. hat@s why you will notice that the -ublic Service Commission adopted aformula in TQK and the Supreme Court upheld it. hat@s why usually these public utilities

periodically have their assets re6appraised. So they will tell the regulatory agency that well thisis what our assets are worth today, we are entitled to 3J return. e are entitled to ad/ust our

rates.

;. Fixin+


22/26

the provincial buses said that their certificate of public convenience says that Manila is theirdestination, the effect of the ordinance is to amend the certificate of public convenience. he

court said 2O co* under its charter Manila has control over its streets and therefore it has thepower to prohibit provincial buses from using the streets in Manila in order to reduce the

volume of traffic.

9atters that can be acted upon ithout need of prior hearing

2ow under Sec. 4, there are certain matters which can be acted upon without need of priorhearing.

%. 6nvesti+ation o' any matter itin its


23/26

=. to enter into conso)iations, mer+ers

6. to )ease. hat@s why this boundary6system is illegal. +n effect the operator is leasing the

/eepney to the driver without the approval of the !"D0.

7. to se)), a)ienate, mort+a+e or enc-mber its *ro*erty, certi'icate o' *-b)ic

convenience, etc., you need prior approval

2ow even without approval, the contract is valid between the parties. 0ut onlybetween them. And not with respect to the regulatory agency and the public. hat@s why if a

public utility sold certain buses but the approval has not been approved yet, creditors of thepublic utility can levy on the buses because the sale is valid only between the parties and not

with respect to the public and the regulatory agency.

5A+ 9A((+

ell in that Cohon (I case which was as%ed in the 0ar $)ams and ustice 7errera was

the e)aminer, where the certificate of public convenience mentions the vessel to be operated

by the operator or shipping company and the vessel san%, so a total loss, the court said thevessel has become unseaworthy, it can no longer be operated. he court said the certificate

of public convenience cannot be sold because it attached and adhered to that vessel becausethe certificate will specify the unit you will operate and that vessel is no longer seaworthy. So

there is no sub/ect matter of a valid sale.

EabitF8ystem

And because of this a


24/26

%. e one$year *rescri*tive *erio to 'i)e a case a+ainst te si**in+ com*any

2. e )imitation o' )iabi)ity $ ?=00 *er *ac1a+e.

2ow this COGSA applies up to the final port of destination even if there is transshipment by adomestic carrier. So if you have goods imported from apan, transported by a apanese vessel from

o%yo to Manila, and they were transshipped say by Sweet !ines from Manila to Cebu and

somewhere between Manila and Cebu, the goods were lost or damaged, COGSA will still apply co* it

applies up to the final port of destination.

Jimenez Transcripts (Transportation and Public Service Law)Page 2! of 25


25/26

Re@ Ane$year Prescri*tive Perio

2ow as a rule you have to file a case within one year from the date the last item wasdelivered to the consignee. 2ow if the goods were not delivered, then you count the one6year

period from the last day that delivery could have been made. So if the vessel stayed here for threedays and then it left, then you count from the last day that it stayed here. 2ow the court has said

that if the goods were lost and the insurance company paid the consignee and now the insurancecompany is suing, if the action had prescribed insofar as the consignee is concerned, that should

also be prescribed insofar as the insurance company is concerned co* it is merely subrogated to therights of the consignee. So any defense that a person may raise against the consignee, li%e

prescription, then that may also be raised against the insurance company. Co* the consignee cancircumvent the one6year prescriptive period by simply as%ing the insurance company to pay on the

ground that, anyway, the one6year period will not apply to him. 2o.

And the court has said that the one6year prescriptive period will not be suspended orinterrupted by ma%ing a written demand. hat provision in the Civil Code that the prescriptive

period will be interrupted by a written demand does not apply to the prescriptive period under theCOGSA co* it is the policy of the law that claims involving maritime commerce should be decided as

soon as possible.

7owever, there are also cases which are not covered by the one6year prescriptive period.

his applies to delivery of lost or damaged goods or non6delivery. his does not apply tomisdelivery. here the goods are delivered to the wrong person, that involves conversion of goods,

then what will apply will be the prescriptive period in the Civil Code, not the COGSA. en years if

you@re suing on the basis of a written contract, and four years if you@re suing on the basis of a #uasi6delict.

And you have this caseE the old Code of Civil -rocedure contains provisions on prescription.

hose provisions have not been repealed by the Civil Code co* the Civil Code says that theprovisions on prescription of the Code of Civil -rocedure are repealed insofar as they are inconsistent

with the Civil Code. So provisions in the Code of Civil -rocedure which are not inconsistent with theCivil Code are still applicable. 2ow there is a provision in the Code of Civil -rocedure that if a case

was filed and it was dismissed, you have one year from the dismissal to refile the case. 2ow in the

old law, all admiralty cases irrespective of the amount were cogni*able by the Court of "irst+nstance. So if the amount is only -:: you have to file that with C"+. 2o what happened is thatthe case is filed with the City Court and because it was an admiralty case, filed under COGSA, it was

dismissed. hen the case was refiled with the C"+, the court said that the action is not barred byprescription because in accordance with that provision in the Code of Civil -rocedure where the case

was dismissed, that one6year period was revived or renewed.

And the court has also said that the parties may agree to e)tend the one6year prescriptiveperiod. A consignee filed a claim and the one6year period is about to e)pire. 2ow the shipping

company tells the consignee, don@t file a case yet co* we are still investigating, loo%ing into yourclaim. So give us time. And they agreed to e)tend. he court said that the parties can agree to

e)tend the one6year prescriptive period.

And the court also said that where the customs bro%er too% the delivery of the goods of theconsignee and then the goods were lost in the course of the bro%er, the one6year prescriptive period

will no longer apply co* the one liable is the customs bro%er, not the shipping company.

!i%ewise, the court said that where the goods were delivered to the consignee but there was

delay, and because of that the goods were sold at a very low price. So the shipping company was

sued for the damages suffered because of the delay in the delivery. he court said that the COGSAwill not apply co* this is not a case where the goods were lost or damaged. his is a case of delay in



26/26

the delivery of the goods. So this is not covered by COGSA and what will apply is the prescriptiveperiod in the Civil Code. So if based on a written contract, you have : years to sue.

Re@ Bimitation in te Biabi)ity $ ?=00 *er *ac1a+e

2ow the court has said that in computing the V9:: per pac%age, you refer to the cartons

inside the container van, it does not refer to the container van. he value of the container van willbe worth millions, so you use the cartons inside that. hat will be considered.

G# 2""2. It as ;reat

22985110 transportation law

Documents