Admiralty courts, also known as maritime courts, are courts

exercising jurisdiction over all maritime contracts, torts, injuries, and offenses.

Admiralty Court
REVIEWED BY WILL KENTON

Updated Jun 7, 2018

DEFINITION of Admiralty Court
An admiralty court is any court with jurisdiction over maritime law, which hears
shipping, ocean and sea legal cases, whether or not the court is officially titled
admiralty court or granted official jurisdiction over admiralty cases. While
historically admiralty courts were separate courts, in modern times official
jurisdiction for admiralty law generally falls under part of the regular court
system, usually a federal or superior level court.
BREAKING DOWN Admiralty Court
Admiralty courts are those that exercise jurisdiction over all maritime
contracts, torts, injuries or offenses relating to maritime law and events on the
high seas. Generally, admiralty courts will hear civil actions. The courts can
thus hear a range of cases covering shipping, boating, insurance matters
related to either ships or their cargo, collisions at sea, civil matters involving
seamen, passengers and cargo, salvage claims, claims for damages by ships,
disputed ownership of ships and marine pollution. Admiralty courts can also
issue a maritime lien against a ship, allowing the court or its appointees to
arrest and seize the ship to settle claims against it. Whether it can be seized
in other countries is governed by the admiralty courts of those countries and
any treaties that may be in effect.
History of Admiralty Courts
Historically, admiralty courts dated back centuries. In England, for example,
admiralty courts date back to the mid-1300s. At the time, they were under the
jurisdiction of the admirals, hence their name. In the United States, which has
a much shorter history of maritime law than Europe, the founders envisaged
from the start that federal courts would have jurisdiction over admiralty law,
since maritime matters often involved questions of national importance, and
this was enshrined in the Constitution.
More recently and more generally, jurisdiction for matters falling under
admiralty courts has been given over to regular court systems within most
countries, usually a federal or superior court. In the United States jurisdiction
is under federal district courts, in Canada under the Federal Court, and in the
U.K. under the High Court. When such courts hear matters relating to
admiralty law, however, they are still usually referred to as admiralty courts. In
the U.S., when federal courts act as admiralty courts, they do not use juries
and have unique rules of court.
United States admiralty law
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Admiralty law in the United States is a matter of federal law.

Contents
1Jurisdiction
2Applicable law
3Limitation of shipowner's liability
4Cargo claims
5Personal injuries to seamen
6Agony of collision
7See also
8References
Jurisdiction[edit]
In the United States, the federal district courts have jurisdiction over all
admiralty and maritime actions; see 28 U.S.C. § 1333.
In recent years, a non-historically-based conspiracy argument used by tax
protesters is that an American court displaying an American flag with a gold
fringe is in fact an "admiralty court" and thus has no jurisdiction. Courts have
repeatedly dismissed this as frivolous.[1] In United States v. Greenstreet, the
court summarized their finding to this argument with, "Unfortunately for
Defendant Greenstreet, decor is not a determinant for jurisdiction."[2]

Applicable law[edit]
A state court hearing an admiralty or maritime case is required to apply the
admiralty and maritime law, even if it conflicts with the law of the state, under
a doctrine known as the "reverse-Erie doctrine." The Erie doctrine, derived
from Erie Railroad Co. v. Tompkins, directs that federal courts hearing state
actions must apply state law. The "reverse-Erie doctrine" directs that state
courts hearing admiralty cases must apply federal admiralty law. This
distinction is critical in some cases.
For instance, U.S. maritime law recognizes the concept of joint and several
liability among tortfeasors, while many states do not. Under joint and several
liability, where two or more people create a single injury or loss, all are equally
liable, even if they only contributed a small amount. A state court hearing an
admiralty case would be required to apply the doctrine of joint and several
liability even if state law does not contemplate the concept.
Limitation of shipowner's liability[edit]
One of the unique aspects of maritime law is the ability of a shipowner to limit
its liability to the value of a ship after a major accident. An example of the use
of the Limitation Act is the sinking of the RMS Titanic in 1912. Even though
the Titanic had never been to the United States, upon her sinking the owners
rushed into the federal courts in New York to file a limitation of liability
proceeding. The Limitation Act provides that if an accident happens due to a
circumstance which is beyond the "privity and knowledge" of the ship's
owners, the owners can limit their liability to the value of the ship after it sinks.
After the Titanic sank, the only portions of the ship remaining were the
14 lifeboats, which had a collective value of about $3,000. This was added to
the "pending freight"—which means the ship's earnings from the trip from both
passenger fares and freight charges[3]—to reach a total liability of about
$91,000. The cost of a first-class, parlor suite ticket was over $4,350. The
owners of the Titanic were successful in showing that the sinking occurred
without their privity and knowledge, and therefore, the families of the
deceased passengers, as well as the surviving passengers who lost their
personal belongings, were entitled only to split the $91,000.
Another example was when Transocean filed in the U.S. District Court for the
Southern District of Texas in 2010 to limit its liability to just its interest in
the Deepwater Horizon which it valued at $26,764,083. This was in the wake
of billions of dollars liabilities resulting from the Deepwater Horizon oil
spill that followed the sinking.[4]
The theory behind the Act was that a shipowner who properly equipped and
crewed a ship shouldn't be liable for something that happens when the ship is
out of his control. Modern ships are seldom out of the control of their
shoreside owners, but the Act remains a viable protection to them.
The Limitation Act doesn't just apply to large ships. It can be used to insulate
a motorboat owner from liability when he loans his boat to another who then
has an accident. Even jet ski owners have been able to successfully utilize the
Limitation Act to insulate themselves from liability. An unusual application
involved the case Grubart v. Great Lakes Dredge and Dock Company, where
a vessel performing piling operations in the Chicago River punctured a tunnel
and caused the 1992 Chicago flood of many underground areas of the city's
downtown; the courts ruled that the vessel was in navigable waters covered
by the admiralty law limitation clause.[1]
Cargo claims[edit]
Claims for damage to cargo shipped by ocean carrier in international
commerce into and out of the United States are governed by the Carriage of
Goods by Sea Act (COGSA), which is the U.S. enactment of the Hague
Rules. One of its key features is that a carrier is liable for cargo damaged from
"hook to hook," meaning from loading to discharge, unless it is exonerated
under one of 17 exceptions to liability, such as an "act of God," the inherent
nature of the goods, errors in navigation, and management of the ship. A
shipowner is generally entitled to limit its liability to $500 per package, unless
the value of the contents is disclosed and marked on the container. There is
significant litigation as to what constitutes a "package" for purposes of
determining liability under COGSA. This practice has resulted in substantial
and continuing litigation in the United States. Federal Courts in the United
States, however, are reluctant to treat an ocean shipping container as a single
COGSA package. The statute of limitations on cargo claims is one year.
Personal injuries to seamen[edit]
Seamen injured aboard ship have three possible sources of compensation:
the principle of maintenance and cure, the doctrine of unseaworthiness, and
the Jones Act. The principle of maintenance and cure requires a shipowner to
both pay for an injured seaman's medical treatment until maximum medical
recovery (MMR) is obtained and provide basic living expenses until
completion of the voyage, even if the seaman is no longer aboard ship. The
seaman is entitled to maintenance and cure as of right, unless he was injured
due to his own willful gross negligence. It is similar in some ways to workers'
compensation. The doctrine of unseaworthiness makes a shipowner liable if a
seaman is injured because the ship, or any appliance of the ship, is
"unseaworthy," meaning defective in some way. The Jones Act allows a sailor,
or one in privity to him, to sue the shipowner in tort for personal injury or
wrongful death, with trial by jury. The Jones Act incorporates the Federal
Employers Liability Act (FELA), which governs injuries to railway workers, and
is similar to the Coal Miners Act. A shipowner is liable to a seaman in the
same way a railroad operator is to its employees who are injured due to the
negligence of the employer. The statute of limitation is three years.
Not every worker injured on board a vessel is a "seaman" entitled to the
protections offered by the Jones Act, doctrine of unseaworthiness, and
principle of maintenance and cure. To be considered a seaman, a worker
must generally spend 30% or more of his working hours onboard either a
specific vessel or a fleet of vessels under common ownership or control. With
few exceptions, all non-seamen workers injured over navigable waters are
covered instead by the Longshore and Harbor Workers' Compensation Act, 33
U.S.C. §§ 901–950, a separate form of workers' compensation.
Agony of collision[edit]
The "agony of collision" is a defense to a statutory claim of negligence in ship
collisions

The admiralty jurisdiction of the High Court may be invoked in

accordance with the provisions of High Court (Admiralty Jurisdiction)
Act (Cap. 123 2001 Rev Ed). Admiralty proceedings may take the form
of an action against a ship (action in rem) or against a person
(action in personam). In some cases, admiralty proceedings may be
commenced both against a ship and against a specific person or
persons.
 HIGH COURT (ADMIRALTY JURISDICTION) ACT
(CHAPTER 123)
(Original Enactment: Ordinance 32 of 1961)

REVISED EDITION 2001

(31st July 2001)

An Act relating to admiralty jurisdiction, legal proceedings in connection with

ships and aircraft and the arrest of ships and other property and for purposes
connected therewith.

[15th January 1962]

Short title
1. This Act may be cited as the High Court (Admiralty Jurisdiction) Act.

Interpretation
2. In this Act, unless the context otherwise requires —
“goods” includes baggage;
“master” has the same meaning as in the Merchant Shipping Act (Cap.
179) and accordingly includes every person (except a pilot) having
command or charge of a ship;
“ship” includes any description of vessel used in navigation;
“towage and pilotage”, in relation to an aircraft, mean towage and
pilotage while the aircraft is waterborne.

Admiralty jurisdiction of High Court

3.—(1) The admiralty jurisdiction of the High Court shall be as follows,
that is to say, jurisdiction to hear and determine any of the following questions
or claims:
(a) any claim to the possession or ownership of a ship or to the
ownership of any share therein;
(b) any question arising between the co-owners of a ship as to
possession, employment or earnings of that ship;
(c) any claim in respect of a mortgage of or charge on a ship or any
share therein;
(d) any claim for damage done by a ship;
(e) any claim for damage received by a ship;
(f) any claim for loss of life or personal injury sustained in consequence
of any defect in a ship or in her apparel or equipment, or of the
wrongful act, neglect or default of the owners, charterers or persons
in possession or control of a ship or of the master or crew thereof or
of any other person for whose wrongful acts, neglects or defaults the
owners, charterers or persons in possession or control of a ship are
responsible, being an act, neglect or default in the navigation or
management of the ship, in the loading, carriage or discharge of
goods on, in or from the ship or in the embarkation, carriage or
disembarkation of persons on, in or from the ship;
(g) any claim for loss of or damage to goods carried in a ship;
(h) any claim arising out of any agreement relating to the carriage of
goods in a ship or to the use or hire of a ship;
(i) subject to section 168 of the Merchant Shipping Act (Cap. 179)
(which requires salvage disputes to be determined summarily by a
District Court in certain cases), any claim in the nature of salvage
(including any claim arising under section 11 of the Air Navigation
Act (Cap. 6) relating to salvage to aircraft and their apparel and
cargo);
(j) any claim in the nature of towage in respect of a ship or an aircraft;
(k) any claim in the nature of pilotage in respect of a ship or an aircraft;
(l) any claim in respect of goods or materials supplied to a ship for her
operation or maintenance;
(m) any claim in respect of the construction, repair or equipment of a
ship or dock charges or dues;
(n) any claim by a master or member of the crew of a ship for wages
and any claim by or in respect of a master or member of the crew of
a ship for any money or property which, under any of the provisions
of the Merchant Shipping Act (Cap. 179) is recoverable as wages or
in the Court and in the manner in which wages may be recovered;
(o) any claim by a master, shipper, charterer or agent in respect of
disbursements made on account of a ship;
(p) any claim arising out of an act which is or is claimed to be a general
average act;
(q) any claim arising out of bottomry;
(r) any claim for the forfeiture or condemnation of a ship or of goods
 which are being or have been carried, or have been attempted to be
carried, in a ship, or for the restoration of a ship or any such goods
after seizure, or for droits of admiralty,
together with any other jurisdiction connected with ships or aircraft which may
be vested in the Court apart from this section.
(2) The jurisdiction of the High Court under subsection (1)(b) includes
power to settle any account outstanding and unsettled between the parties in
relation to the ship, and to direct that the ship, or any share thereof, shall be
sold, and to make such other order as the Court thinks fit.
(3) The reference in subsection (1)(i) to claims in the nature of salvage
includes a reference to such claims for services rendered in saving life from a
ship or an aircraft or in preserving cargo, apparel or wreck as, under
sections 166 and 167 of the Merchant Shipping Act or any regulations made
under section 11 of the Air Navigation Act (Cap. 6), are authorised to be made
in connection with a ship or an aircraft.
(4) Subsections (1) to (3) shall apply —
(a) in relation to all ships or aircraft, whether of Singapore or not and
whether registered or not and wherever the residence or domicile of
their owners may be;
(b) in relation to all claims, wheresoever arising (including, in the case
of cargo or wreck salvage, claims in respect of cargo or wreck found
on land); and
(c) so far as they relate to mortgages and charges, to all mortgages or
charges, whether registered or not and whether legal or equitable,
including mortgages and charges created under foreign law.
(5) Nothing in subsection (4) shall be construed as extending the cases in
which money or property is recoverable under any of the provisions of the
Merchant Shipping Act (Cap. 179).
[34/73]

Mode of exercise of admiralty jurisdiction

4.—(1) Subject to section 5, the admiralty jurisdiction of the High Court
may in all cases be invoked by an action in personam.
(2) The admiralty jurisdiction of the High Court may in the cases mentioned
in section 3(1)(a), (b), (c) and (r) be invoked by an action in rem against the
ship or property in question.
(3) In any case in which there is a maritime lien or other charge on any ship,
aircraft or other property for the amount claimed, the admiralty jurisdiction of
the High Court may be invoked by an action in rem against that ship, aircraft or
property.
 (4) In the case of any such claim as is mentioned in section 3(1)(d) to (q),
where —
(a) the claim arises in connection with a ship; and
(b) the person who would be liable on the claim in an action in
personam (referred to in this subsection as the relevant person) was,
when the cause of action arose, the owner or charterer of, or in
possession or in control of, the ship,
an action in rem may (whether or not the claim gives rise to a maritime lien on
that ship) be brought in the High Court against —
(i) that ship, if at the time when the action is brought the relevant
person is either the beneficial owner of that ship as respects all the
shares in it or the charterer of that ship under a charter by demise; or
(ii) any other ship of which, at the time when the action is brought, the
relevant person is the beneficial owner as respects all the shares in
it.
[2/2004 wef 01/04/2004]

(5) In the case of a claim in the nature of towage or pilotage in respect of an

aircraft, the admiralty jurisdiction of the High Court may be invoked by an
action in rem against that aircraft if at the time when the action is brought it is
beneficially owned by the person who would be liable on the claim in an action
in personam.
(6) Notwithstanding anything in subsections (1) to (5), the admiralty
jurisdiction of the High Court shall not be invoked by an action in rem in the
case of any such claim as is mentioned in section 3(1)(n) unless the claim
relates wholly or partly to wages (including any sum allotted out of wages or
adjudged by a superintendent to be due by way of wages.)
(7) Where, in the exercise of its admiralty jurisdiction, the High Court
orders any ship, aircraft or other property to be sold, the High Court shall have
jurisdiction to hear and determine any question arising as to the title to the
proceeds of sale.
(8) In determining for the purposes of subsections (4) and (5) whether a
person would be liable on a claim in an action in personam, it shall be assumed
that he has his habitual residence or a place of business within Singapore.

Jurisdiction in personam of High Court in collision and other similar cases

5.—(1) The High Court shall not entertain an action in personam to enforce
a claim to which this section applies unless —
(a) the defendant has his habitual residence or a place of business
within Singapore;
(b) the cause of action arose within inland waters of Singapore or
 within the limits of the port of Singapore; or
(c) an action arising out of the same incident or series of incidents is
proceeding in the High Court or has been heard and determined in
the Court.
(2) The High Court shall not entertain an action in personam to enforce a
claim to which this section applies until any proceedings previously brought by
the plaintiff in any court outside Singapore against the same defendant in
respect of the same incident or series of incidents have been discontinued or
otherwise come to an end.
(3) Subsections (1) and (2) shall apply to counter-claims (not being counter-
claims in proceedings arising out of the same incident or series of incidents) as
they apply to actions in personam, but as if the references to the plaintiff and
the defendant were respectively references to the plaintiff on the counter-claim
and the defendant to the counter-claim.
(4) Subsections (1) to (3) shall not apply to any action or counter-claim if
the defendant thereto submits or has agreed to submit to the jurisdiction of the
High Court.
(5) Subject to subsection (2), the High Court shall have jurisdiction to
entertain an action in personam to enforce a claim to which this section applies
whenever any of the conditions specified in subsection (1)(a) to (c) are
satisfied.
(6) The Rules of Court relating to the service of process outside the
jurisdiction shall make such provision as may appear to the rule-making
authority to be appropriate having regard to subsection (5).
(7) The claims to which this section applies are claims for damage, loss of
life or personal injury arising out of a collision between ships or out of the
carrying out of or omission to carry out a manoeuvre in the case of one or more
of 2 or more ships or out of non-compliance, on the part of one or more of 2 or
more ships, with the collision regulations.
(8) In this section —
“collision regulations” means the regulations made under section 100(2)
(h) of the Merchant Shipping Act (Cap. 179) and any regulations
made under subsection (1) of section 41 of the Maritime and Port
Authority of Singapore Act (Cap. 170A) for or in respect of any of
the matters mentioned in paragraph (d) of that subsection;
“inland waters of Singapore” includes any part of the sea adjacent to the
coast of Singapore certified by the Minister to be waters falling by
international law to be within the territorial sovereignty of Singapore
apart from the operation of that law in relation to territorial waters;
“port of Singapore” means any place or places and any navigable river or
 channel leading into such place or places declared to be the port
under section 3 of the Maritime and Port Authority of Singapore Act
(Cap. 170A) and “the limits of the port” means the limits thereof as
defined in the declaration.
[7/96; 7/97]

Wages
6. Nothing in this Act shall be construed as limiting the jurisdiction of the
High Court to refuse to entertain an action for wages by the master or a
member of the crew of a ship, not being a Singapore ship.

High Court not to have jurisdiction in cases falling within Rhine

Convention
7.—(1) The High Court shall not have jurisdiction to determine any claim
or question certified by the Minister to be a claim or question which, under the
Rhine Navigation Convention of 7th October 1868 as revised by any
subsequent Convention, falls to be determined in accordance with the
provisions thereof.
(2) Any proceedings to enforce a claim mentioned in subsection (1) which
are commenced in the High Court shall be set aside.

Saving
8.—(1) Nothing in this Act shall affect section 172 of the Merchant
Shipping Act (Cap. 179) (which relates to the power of a receiver of wreck to
detain a ship in respect of a salvage claim).
(2) Nothing in this Act shall authorise proceedings in rem in respect of any
claim against the Government, or the arrest, detention or sale of —
(a) any ship of which the beneficial interest is vested in the
Government, or which is for the time being demised or subdemised
to or in the exclusive possession of the Government;
(b) any aircraft belonging to the Government; or
(c) any cargo or other property belonging to the Government.
LAWS RELATED TO VESSELS AND SHIPPING IN THE PHILIPPINES
Category: Transportation Laws
CODE OF COMMERCE

ARTICLE 573. Merchant vessels constitute property which may be

acquired and transferred by any of the means recognized by law. The
acquisition of a vessel must appear in a written instrument, which
shall not produce any effect with respect to third persons if not
inscribed in the registry of vessels.

The ownership of a vessel shall likewise be acquired by possession in

good faith, continued for three years, with a just title duly recorded.
In the absence of any of these requisites, continuous possession for
ten years shall be necessary in order to acquire ownership.

A captain may not acquire by prescription the vessel of which he is in

command.

------------------------------

[With respect to Article 573, read P.D. No. 474, Sections 3 & 12(h)

Presidential Decree No. 474

PROVIDING FOR THE REORGANIZATION OF MARITIME FUNCTIONS

IN THE PHILIPPINES, CREATING THE MARITIME INDUSTRY
AUTHORITY, AND FOR OTHER PURPOSES

Section 3. Definition of Terms. The terms, as used, in this Decree, shall

have the following meaning, unless the context of the particular
usage of the term indicates otherwise;
a. "Maritime Industry", briefly referred to as "industry" in the broadest
concept of the term. All enterprises engaged in the business of
designing, constructing, manufacturing, acquiring, operating,
supplying, repairing and/or maintaining vessels, or component parts
thereof; of managing and/or operating shipping lines, stevedoring
arrastre and customs brokerage services, shipyards, drydocks, marine
railways, marine repair shops, shipping and freight forwarding
agencies and similar enterprises.

b. "Vessels" or "Watercraft" Any barge, lighter, bulk carrier, passenger

ship freighter, tanker, container ship, fishing boats or other artificial
contrivance utilizing any source of motive power, designed, used or
capable of being used as a means of water transportation operating
either as common contract carrier, including fishing vessels covered
under Presidential Decree No. 43, except (1) those owned and/or
operated by the Armed Forces of the Philippines and by foreign
governments for military purposes, and (ii) bancas, sailboats and
other waterborne contrivance of less than three gross tons capacity
and not motorized.

c. "Philippine national" A citizen of the Philippines; or a partnership or

association wholly owned by and composed of citizens of the
Philippines; or a corporation organized under the laws of the
Philippines of which at least sixty per cent of the capital stock
outstanding and entitled to vote is owned and held by Philippine
citizens; or a trustee of funds for pensions or other employee
retirement or separation benefits, where the trustee is a Philippine
national and at least sixty per cent of the funds will accrues to the
benefit of the Philippine nationals: Provided, That where a
corporation and its non-Filipino stockholders own stock in an
enterprise, at least sixty percent of the members of the governing
board of both corporations must be Philippine nationals.

d. "Philippine flag vessel" A vessel or watercraft registered under

Philippine laws.

e. "Foreign flag vessel" A vessel or watercraft registered under the

laws of a country other than the Philippines.
f. "Philippines shipping companies" Philippine nationals registered
and licensed under the laws of the Philippines to engage in the
business of overseas and/or domestic water transportation.

Section 12(h). Approve the sale, lease or transfer of management of

vessels owned by Philippine Nationals to foreign owned or controlled
enterprises.

-------------------------------------

ARTICLE 574. Builders of vessels may employ the materials and

follow, with respect to their construction and rigging, the systems
most suitable to their interests. Ship owners and seamen shall be
subject to what the laws and regulations of the public administration
on navigation, customs, health, safety of vessels, and other similar
matters.

ARTICLE 575. Co-owners of vessels shall have the right of repurchase

and redemption in sales made to strangers, but they may exercise the
same only within the nine days following the inscription of the sale in
the registry, and by depositing the price at the same time.

-------------------------------------

[With respect to Article 575, read Article 1620 of Civil Code]

Article 1620. A co-owner of a thing may exercise the right of

redemption in case the shares of all the other co-owners or of any of
them, are sold to a third person. If the price of the alienation is
grossly excessive, the redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right of
redemption, they may only do so in proportion to the share they may
respectively have in the thing owned in common. (1522a)

------------------------------------

ARTICLE 576. In the sale of a vessel it shall always be understood as

included the rigging, masts, stores and engine of a streamer
appurtenant thereto, which at the time belongs to the vendor. The
arms, munitions of war, provisions and fuel shall not be considered as
included in the sale.

The vendor shall be under the obligation to deliver to the purchaser a

certified copy of the record sheet of the vessel in the registry up to
the date of the sale.

ARTICLE 577. If the alienation of the vessel should be made while it is

on a voyage, the freightage which it earns from the time it receives its
last cargo shall pertain entirely to the purchaser, and the payment of
the crew and other persons who make up its complement for the
same voyage shall be for his account.

If the sale is made after the vessel has arrived at the port of its
destination, the freightage shall pertain to the vendor, and the
payment of the crew and other individuals who make up its
complement shall be for his account, unless the contrary is stipulated
in either case.

ARTICLE 578. If the vessel being on a voyage or in a foreign port, its

owner or owners should voluntarily alienate it, either to Filipinos or to
foreigners domiciled in the capital or in a port of another country, the
bill of sale shall be executed before the consul of the Republic of the
Philippines at the port where it terminates its voyage and said
instrument shall produce no effect with respect to third persons if it is
not inscribed in the registry of the consulate. The consul shall
immediately forward a true copy of the instrument of purchase and
sale of the vessel to the registry of vessels of the port where said
vessel is inscribed and registered.

In every case the alienation of the vessel must be made to appear

with a statement of whether the vendor receives its price in whole or
in part, or whether he preserves in whole or in part any claim on said
vessel. In case the sale is made to a Filipino, this fact shall be stated in
the certificate of navigation.
When a vessel, being on a voyage, shall be rendered useless for
navigation, the captain shall apply to the competent judge on court
of the port of arrival, should it be in the Philippines; and should it be
in a foreign country, to the consul of the Republic of the Philippines,
should there be one, or, where there is none, to the judge or court or
to the local authority; and the consul, or the judge or court, shall
order an examination of the vessel to be made.

If the consignee or the insurer should reside at said port, or should

have representatives there, they must be cited in order that they may
take part in the proceedings on behalf of whoever may be concerned.

ARTICLE 579. After the damage to the vessel and the impossibility of
her being repaired, in order to continue the voyage had been shown,
its sale at public auction shall be ordered, subject to the following
rules:

1.The hull of the vessel, its rigging, engines, stores, and other articles
shall be appraised, after making an inventory, said proceedings to be
brought to the notice of the persons who may wish to take part in
the auction.

2.The order or decree ordering the auction to be held shall be posted

in the usual places, an announcement thereof to be inserted in the
Official Gazette and in two of the newspapers of the largest
circulation of the port where the auction is to be held, should there
be any. The period which may be fixed for the auction shall not be
less than twenty days.

3. These announcements shall be repeated every ten days, and their

publication shall be made to appear in the records.

4. The auction shall be held on the day fixed, with the formalities
prescribed in the common law for judicial sales.

5. If the sale should take place while the vessel is in a foreign country,
the special provisions governing such cases shall be observed.
ARTICLE 585. For all purposes of law not modified or restricted by the
provisions of this Code, vessels shall continue to be considered as
personal property.

ARTICLE 589.If two or more persons should be part owners of a

merchant vessel, a partnership shall be presumed as established by
the coowners. This partnership shall be governed by the resolutions
of the majority of the members.

If the part owners should not be more than two, the disagreement of
views, if any, shall be decided by the vote of the member having the
largest interest. If the interests are equal, it should be decided by
lot.The person having the smallest share in the ownership shall have
one vote; and proportionately the other part owners as many votes as
they have parts equal to the smallest one.

A vessel may not be detained, attached or levied upon in execution in

its entirety, for the private debts of a part owner, but the proceedings
shall be limited to the interest which the debtor may have in the
vessel, without interfering with the navigation.

ARTICLE 591.All the part owners shall be liable, in proportion to their

respective ownership, for the expenses for repairing the vessel, and
for other expenses which are incurred by virtue of a resolution of the
majority. They shall likewise be liable in the same proportion for the
expenses for the maintenance, equipment, and provisioning of the
vessel, necessary for navigation.

ARTICLE 592. The resolution of the majority with regard to the repair,
equipment, and provisioning of the vessel in the port of departure
shall bind the minority, unless the minority membersrenounce their
interests, which must be acquired by the other co-owners, after a
judicial appraisement of the value of the portion or portions
assigned. The resolutions of the majority relating to the dissolution of
the partnership and sale of the vessel shall also be binding on the
minority.

The sale of the vessel must be made at public auction, subject to the
provisions of the law of civil procedure, unless the co-owners
unanimously agree otherwise, saying always the right of repurchase
and redemption provided for in Article 575.

ARTICLE 593. The owners of a vessel shall have preference in her

charter over other persons, under the same conditions and price. If
two or more of them should claim this right, the one having the
greater interest shall be preferred; and should they have equal
interests, the matter shall be decided by lot.

ARTICLE 606. If the captain should be a co-owner of the vessel, he

may not be discharged unless the ship agent returns to him the
amount of his interest therein, which, in the absence of agreement
between the parties, shall be appraised by experts appointed in the
manner established in the law of civil procedure.

ARTICLE 607. If the captain who is a co-owner should have obtained

the command of the vesselby virtue of a special agreement contained
in the articles of association, he may not be deprived of his office
except for the causes mentioned in Article 605.

ARTICLE 608. In case of the voluntary sale of the vessel, all contracts
between the ship agent and the captain shall terminate, reserving to
the latter his right to the indemnity which may pertain to him,
according to the agreements made with the ship agent. They vessel
sold shall remain subject to the security of the payment of said
indemnity if, after the action against the vendor has been instituted,
the latter is found to be insolvent.

------------------------------

Presidential Decree No. 761

AMENDING SECTION EIGHT HUNDRED SIXTY OF THE TARIFF AND
CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED, BY ALLOWING
THE REGISTRATION OF VESSELS THE OWNERSHIP OF WHICH IS
VESTED IN CORPORATIONS OR ASSOCIATIONS, AT LEAST SIXTY
PERCENT OF THE CAPITAL STOCK OR CAPITAL OF WHICH BELONG
TO CITIZENS OF THE PHILIPPINES, AND FOR OTHER PURPOSES
Section 1. Section 806 of the Tariff and Customs Code of the
Philippines, as amended, is hereby amended to read as follows:

Sec. 806. Certificate of Philippine Registry. Upon registration of a

vessel of domestic ownership, and of more than fifteen tons gross, a
certificate of Philippine registry shall be issued for it. If the vessel is of
domestic ownership, and of fifteen tons gross or less, the taking of
the certificate of Philippine registry shall be optional with the owner.
"Domestic ownership, as used in this section means ownership vested
in citizens of the Philippines or corporations or associations
organized under the laws of the Philippines at least sixty per centum
of the capital stock or capital of which is wholly owned by citizens of
the Philippines, and, in the case of corporations or associations which
will engage in coastwise trade the president or managing directors
thereof shall be such citizens: Provided, That the members of the
crew of the vessel, except specialized fishing vessels, shall all be
citizens of the Philippines, Provided, That the certificate of Philippine
registry issued to a vessel prior to the approval of this Code shall not
be affected; Provided, further, That any vessel of more than fifteen
gross tons which on February eight, nineteen hundred and eighteen,
had a certificate of Philippine registry under existing law, shall
likewise be, deemed a vessel of domestic ownership if there has been
no change in its ownership or if the capital of the association or
capital stock of the corporation owning such vessel has not been
transferred to persons
who are not citizens of the Philippines and if any such vessels should
have been totally lost through shipwreck, collision or any other
marine disaster while being lawfully operated, it may be replaced with
another vessel of the same or lesser tonnage by the same person,
association or corporation owning and operating same by virtue of
this section, under such terms and conditions as may be prescribed
by the Maritime Industry Authority consistent with public policy and
with the view of its utility for government service in case of war or
any public emergency: Provided, further, That the controlling interest
of the association or corporation shall not be considered as held by
the citizen of the Philippines; (a) if less than sixty percent of the
capital or capital stock is held by such citizens or such capital or
capital stock is subject to any trust or fiduciary obligation in favor of
any person not a citizen of the Philippines; (b) if less than sixty
percent of the capital or capital stock in said association or
corporation entitled to vote is in the hands of citizens of the
Philippines; (c) if by means of (a) any contract or agreement, more
than forty percent of the capital or capital stock can be voted directly
or indirectly in favor of any person not a citizen of the Philippines: or
(d) if by other means, the control of more than forty percent of the
capital or capital stock of the association or corporation is conferred
upon or allowed to be exercised by any person not a citizen of the
Philippines."

Section 2. The above definition of "domestic ownership"

notwithstanding, an enterprise duly registered with the Board of
Investments, under R.A. 5186 or 6135, whether or not entirely owned
by foreign nationals, may register its own vessels under the provision
of the section immediately preceding if such vessels are to be used
exclusively to transport its own raw materials and finished products in
Philippine waters as an incident to its manufacturing, processing or
business activity registered with the Board of Investments and
certified to by said Board as an essential element in the operation of
the registered project.

Section 3. Any provision of the law, decree, executive order, or rules

and regulations to the contrary notwithstanding, the Maritime
Industry Authority is hereby vested with the exclusive authority over
the registration and documentation of Philippine vessels, as well as
the issuance of all certificates, licenses or other documents necessary
or incident to such registration and documentation.

Section 4. The Maritime Industry Authority shall be subject to

approval by the Office of the President, issue such rules and
regulations implementing the provisions of this decree.

Section 5. All laws, decrees, executive orders, or rules and regulations,

or parts thereof, inconsistent with this Decree are hereby repealed or
modified accordingly.
Section 6. This Decree shall take effect immediately.

------------------------------

CA 65 - COGSA

TITLE I - Section 1. When used in this Act

(a) The term "carrier" includes the owner or the charterer who enters
into a contract of carriage with a shipper.
(d) The term "ship" means any vessel used for the carriage of goods
by sea.

---------------------------------

CIVIL CODE

Article 1132. The ownership of movables prescribes through

uninterrupted possession for four years in good faith.

The ownership of personal property also prescribes through

uninterrupted possession for eight years, without need of any other
condition.With regard to the right of the owner to recover personal
property lost or of which he has been illegally deprived, as well as
with respect to movables acquired in a public sale, fair, or market, or
from a merchant's store the provisions of Articles 559 and 1505 of
this Code shall be observed. (1955a)

Article 1484. In a contract of sale of personal property the price of

which is payable in installments, the vendor may exercise any of the
following remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay;
(2) Cancel the sale, should the vendee's failure to pay cover two or
moreinstallments;
(3) Foreclose the chattel mortgage on the thing sold, if one has been
constituted, should the vendee's failure to pay cover two or more
installments. In this case, he shall have no further action against the
purchaser to recover any unpaid balance of the price. Any agreement
to the contrary shall be void. (1454-A-a)
Article 1485. The preceding article shall be applied to contracts
purporting to be leases of personal property with option to buy,
when the lessor has deprived the lessee of the possession or
enjoyment of the thing. (1454-Aa)

Article 1486. In the case referred to in two preceding articles, a

stipulation that the installments or rents paid shall not be returned to
the vendee or lessee shall be valid insofar as the same may not be
unconscionable under the circumstances. (n)

-------------------------------

Republic Act No. 7471

AN ACT TO PROMOTE THE DEVELOPMENT OF PHILIPPINE OVERSEAS

SHIPPING

SECTION 1. Title. — This Act shall be known and cited as the

"PhilippineOverseas Shipping Development Act."

SECTION 2. Declaration of Policy. — It is hereby declared the policy of

the Government of the Philippines to:

(a) Develop and maintain a Philippine Metropolitan Marine

composed of well-equipped, safe and modern vessels most suited
for, Philippine requirements and conditions, manned by qualified
Filipino officers and crew, and owned and operated under the
Philippine flag by citizens of the Philippines or by associations or
corporations organized under the laws of the Philippines, at least
sixty percent (60%) of the capital of which is owned by citizens of the
Philippines;

(b) Assist in the development, recovery and expansion of Philippine

overseas shipping capable of meeting the requirements of the
expanding international trade of the Philippines;

(c) Provide assistance to Philippine Shipping enterprises and

encourage the long range vessel acquisition development
modernization and expansion through private investments without
direct government financial assistance; and

(d) Create a Healthy climate to attract private enterprises.

SECTION 3. Definition. — As used this Act:

(a) "Philippine overseas shipping" means the transport of goods

and/or passengers by a ship owned and operated under the
Philippine flag by a Philippine shipping enterprise, except when the
ship is operated solely between ports in the Philippines;

(b) "Philippine shipping enterprise" means a citizen of the Philippines

or an association or corporation organized under the laws of the
Philippines, at least sixty percent (60%) of the capital of which is
owned by citizens of the Philippines and engaged exclusively in
Philippine overseas shipping;

(c) "MARINA" means the Maritime Industry Authority;

(d) "Monetary authority" means the Central Bank of the Philippines

and any other agency in charge of foreign exchange controls; and

(e) "Regulation" means the rules and regulations promulgated

pursuant to

Section 10 hereof.

SECTION 4. Foreign Exchange Requirements. — Foreign exchange

requirements of Philippine Shipping enterprises for the purchase of
oceangoing vessels for registration under the Philippine flag, for
repair or improvement of vessels, for importation of engines, spare
parts, accessories, supplies, containers and for other expenses
required for the operation of vessels in foreign ports or in the high
seas, when recommended by the MARINA, shall be made available to
the Philippine shipping enterprise subject to the regulations.
SECTION 5. Acquisition of Oceangoing Vessels. — Philippine shipping
enterprises may likewise acquire oceangoing vessels for Philippine
overseas shipping upon approval by the MARINA, subject to the
guidelines prescribed in the regulations: provided, that:

(a) The funds utilized in the acquisition of the vessel are financed
from sources other than the Philippine banking system;
(b) No guaranty of the monetary authority or of any Philippine
government or private financial institution is granted or extended for
the purpose;
(c) The vessel serves as sole collateral for the financing of the vessel
and no other asset of the Philippine shipping enterprise is pledge,
mortgaged, or used as security in case of default;
(d) All foreign exchange requirements for the servicing of the loan,
the operation, maintenance and repair of the vessel, the purchase of
supplies and related equipment shall be financed solely from
earnings derived from the operation of the vessel and no foreign
exchange shall be made available by the monetary authority and the
Philippine banking system for these purposes;
(e) Mortgage documents and/or other financial agreements shall be
filed with the monetary authority and such other government
agencies in charge of such mortgage formalities; and
(f) Any excess foreign exchange earning shall be inwardly remitted
and surrendered to the Philippine banking system.

SECTION 6. Exemption from Import Duties and Taxes. — The

importation by a Philippine shipping enterprise of oceangoing vessels
for registration under the Philippine flag shall be exempt from the
payment of import duties and taxes. The spare parts for the repair
and/or overhaul of vessels shall likewise be exempt from the payment
of import duties and taxes provided, that such items are destined or
consigned either to:

(a) A Philippine dry-docking or repair facility, accredited by the

MARINA and registered as a customs-bonded warehouse, which will
undertake the necessary repairs and works on the vessel; and

(b) The vessel in which the items are to be installed: provided That, if
such items are found in locations other than the two (2)
aforementioned ones or in places not authorized by customs, the
person or entity in possession of such items shall be subject to full
duties and taxes, including surcharges and penalties.

Local manufactures or dealers who sell machinery, equipment,

materials and spare parts to a Philippine shipping enterprise shall be
entitled to tax credits for the full amount of import duties and taxes
actually paid thereon, or on parts or components thereof, subject to
the approval of the Secretary of Finance, upon the recommendation
of the MARINA.

SECTION 7. Exemption from Income Tax. — A Philippine shipping

enterprise shall be exempt from payment of income tax on income
derived from Philippine overseas shipping for a period of ten (10)
years from the date of approval of this Act: provided, that:

(a) The entire net income, after deducting not more than ten percent
(10%) thereof for distribution of profits or declaration of dividends,
which would otherwise be taxable under the provisions of Title II of
the National Internal Revenue Code, is reinvested for the
construction, purchase, or acquisition of vessels and related
equipment and/or in the improvement of modernization of its vessels
and related equipment in accordance with the regulations; and

(b) The cumulative amount so reinvested shall not be withdrawn for a

period of ten (10) years after the expiration of the period of income
tax exemption or until the vessel or related equipment so acquired
have been fully paid, whichever date comes earlier. Any amount not
so invested or withdrawn prior to the expiration of the period
stipulated herein shall subject to the corresponding income tax,
including penalties, surcharges and interests.

SECTION 8. Registration and Deletion of Vessels. — All vessels owned

by Philippine shipping enterprises and availing of the incentives
under this Act shall be registered under the Philippine flag. Said
vessels can only be deleted from the Philippine registry after the
MARINA has determined that:
(a) No other Philippine shipping enterprise is interested in acquiring
the vessel; or
(b) The vessel has to be scrapped.

SECTION 9. Requisition of Vessels. — The President of the Philippines

may, in times of war and other national emergency, requisition
absolutely or temporarily, for any naval or military purpose, any and
all vessels of the Philippine registry. The Government shall pay the
owner or operator of the vessel, based on normal conditions at the
time of requisition;

(a) The fair market value, if the vessel is taken absolutely, or

(b) The fair charter value, if the vessel is taken temporarily. In case of
disagreement, such fair value shall be determined by an arbitration
committee composed of:
(c) One (1) member to be appointed by the MARINA;
(d) One (1) member to be appointed by the owner or operator of the
vessel; and
(e) One (1) member to be appointed by the two (2) members so
appointed.

The decision of the arbitration committee shall be final and binding

on both parties.

SECTION 10. Rules and Regulations. — The MARINA, in consultation

with the monetary authority and the Department of Finance, shall
jointly formulate and promulgate the rules and regulations necessary
for the implementation of this Act taking into consideration the
policies and programs of the Government for the development of the
Philippine overseas shipping.

SECTION 11. Annual Report. — The MARINA, in coordination with the

monetary authority and the Department of Finance, shall submit an
annual report to the President of the Philippines and the Congress of
the Philippines on the implementation of this Act, which report shall
include:
(a) The amount of foreign exchange earned, acquired and spent by
Philippine shipping enterprises;
(b) The amount of income tax and import duties and taxes for which
exemption have been granted;
(c) The additional oceangoing vessels constructed, purchased or
acquired, the improvement made thereon and the additional related
equipment procured; and
(d) Such other information as the MARINA may deem necessary or
the President of the Philippines may require.

SECTION 12. Penal Provisions. — Violation of the provisions of this

Act or the rules and regulations promulgated to implement the same
shall be punished by a fine of not more than Ten thousand pesos
(P10,000) or imprisonment for not more than five (5) years, or both
such fine and imprisonment, at the discretion of the court.

If the violation is committed by an association or corporation, the

penalties prescribed hereunder shall be imposed on the president the
chief executive officer and the other officials and employees
responsible for the violation.

If the violation is committed by a government official or employee, he

shall, in addition to the penalties prescribed hereunder, be dismissed
from the government service with all administrative penalties
accessory thereto.

SECTION 13. Repealing Clause. — All laws, executive orders,

regulations, or parts thereof, inconsistent with the provisions of this
Act are hereby repealed, amended or modified accordingly
PUBLIC ACT NO. 521

CARRIAGE OF GOODS BY SEA ACT

chan robles virtual law library
chan robles virtual law library
Section 1. That the provisions of Public Act No. 521 of the 7th
Congress of the United States, approved on April 16, 1936, be
accepted, as it is hereby accepted to be made applicable to all
contracts for the carriage of goods by sea to and from Philippine
ports in foreign trade: Provided, that nothing in this Act shall be
construed as repealing any existing provision of the Code of
Commerce which is now in force, or as limiting its
application. chanrobles virtual law library
Sec. 2. This Act shall take effect upon its approval. (Approved
October 22, 1936).chanrobles virtual law library
TITLE I

Sec. 1. When used in this Act — chanrobles virtual law library

(a) The term "carrier" includes the owner or the charterer who enters
into a contract of carriage with a shipper.
(b) The term "contract of carriage" applies only to contracts of
carriage by covered by a bill of lading or any similar document of
title, insofar as such document relates to the carriage of goods by
sea, including any bill of lading or any similar document as aforesaid
issued under or pursuant to a character party from the moment at
which such bill of lading or similar document of title regulates the
relations between a carrier and a holder of the same. chanrobles
virtual law library
(c) The term "goods" includes goods, wares, merchandise, and
articles of every kind whatsoever, except live animals and cargo which
by the contract of carriage is stated as being carried on deck and is
so carried. chanrobles virtual law library
(d) The term "ship" means any vessel used for the carriage of goods
by sea. chanrobles virtual law library
(e) The term "carriage of goods" covers the period from the time
when the goods are loaded to the time when they are discharged
from the ship.
RISKS

Sec. 2. Subject to the provisions of Section 6, under every contract

of carriage of goods by sea, the carrier in relation to the loading,
handling, stowage, carriage, custody, care, and discharge of such
goods shall be subject to the responsibilities and liabilities and
entitled to the rights and immunities hereinafter set forth. chanrobles
virtual law library

RESPONSIBILITIES AND LIABILITIES

Sec. 3. (1) The carrier shall be bound before and at the beginning of
the voyage to exercise due diligence to —
(a) Make the ship seaworthy;
(b) Properly man,equip, and supply the ship;
(c) Make the holds, refrigerating and cooling chambers, and all other
parts of the ship in which goods are carried, fit and safe for their
reception, carriage, and preservation.
(2) The carrier shall properly and carefully load, handle, stow, carry,
keep, care for,and discharge the goods carried.
(3) After receiving the goods into his carrier, or the master or agent
of the carrier, shall, on demand of the shipper, issue to the shipper a
bill of lading showing among other things — chanrobles virtual law
library
(a) The loading marks necessary for identification of the goods as the
same are furnished in writing by the shipper before the loading of
such goods starts, provided such marksare stamped or otherwise
shown clearly upon the goods if uncovered,in such a manner as
should ordinarily remain legible until the end of the
voyage. chanrobles virtual law library
(b) Either the number of packages or pieces, or the quantity or
weight, as the casemay be, as furnished in writing by the shipper.
(c) The apparent order and conditions of the goods: Provided, that
no carrier, master, or agent of the carrier, shall be bound to state or
show in the bill of lading any marks, number, quantity, or weight
which he has reasonable ground for suspecting not accurately to
represent the good actually received or which he has had no
reasonable means of checking. chanrobles virtual law library
(4) Such a bill of lading shall be prima facie evidence of the receipt
by the carrier of the goods as therein described in accordance with
paragraphs (3) (a), (b), and (c), of this section: (The rest of the
provision is not applicable to the Philippines).
(5) The shipper shall be deemed to have guaranteed to the carrier
the accuracy at the time of shipment of the marks, number, quantity,
and weight, as furnished by him; and the shipper shall indemnify the
carrier against all loss, damages, and expenses arising or resulting
from inaccuracies in such particulars. The right of the carrier to such
indemnity shall in no way limit his responsibility and liability under
the contract of carriage to any person other than the
shipper. chanrobles virtual law library
(6) Unless notice or loss or damage and the general nature of such
loss or damage by given in writing to the carrier or his agent at the
port of discharge or at the time of the removal of the goods into the
custody of the person entitled to delivery thereof under the contract
of carriage, such removal shall be prima facie evidence of the delivery
by the carrier of the goods as described in the bill of lading. If the
loss or damage is not apparent, the notice must be given within three
days of the delivery. chanrobles virtual law library
Said notice of loss or damage may be endorsed upon the receipt for
the goods given by the person taking delivery thereof.
The notice in writing need not be given if the state of the goods has
at the time of their receipt been the subject of joint survey or
inspection.
In any event the carrier and the ship shall be discharged from all
liability in respect of loss or damage unless suit is brought within one
year after delivery of the goods or the date when the goods should
have been delivered: Provided, that, if a notice of loss or damage,
either apparent or concealed, is not given as provided for in this
section, that fact shall not affect or prejudice the right of the shipper
to bring suit within one year after the delivery of the goods or the
date when the goods should have been delivered.
In the case of any actual or apprehended loss or damage, the carrier
and the receiver shall give all reasonable facilities to each other for
inspecting and tallying the goods.chanrobles virtual law library
(7) After the goods are loaded the bill of lading to be issued by the
carrier, master, or agent of the carrier to the shipper shall if the
shipper so demands, be a "shipped" bill of lading: Provided, that if
the shipper shall have previously taken up any document of title to
such goods, he shall surrender the same as against the issue of the
"shipped" bill of lading, but at the option of the carrier such
document of title may be noted at the port of shipment by the
carrier, master, or agent with the name or names of the ship or ships
upon which the goods have been shipped and the date or dates of
shipment, and when so noted the same shall for the purpose of this
section be deemed to constitute a "shipped" bill of lading.
(8) Any clause, covenant, or agreement in a contract of carriage
relieving the carrier of the ship from liability for loss or damage to or
in connection with the goods, arising from negligence, fault, or failure
in the duties and obligations provide in this section or lessening such
liability otherwise than as provided in this Act, shall be null and void
and of no effect. A benefit of insurance in favor of the carrier, or
similar clause, shall be deemed to be a clause relieving the carrier
from liability.
RIGHTS AND IMMUNITIES

Sec. 4. (1) Neither the carrier nor the ship shall be liable for loss or
damage arising or resulting from unseaworthiness unless caused by
want of due diligence on the part of the carrier to make the ship
seaworthy and to secure that the ship is properly manned, equipped,
and supplied, and to make the holds, refrigerating and cooling
chambers, and all other parts of the ship in which goods are carried
fit and safe for their reception, carriage, and preservation, in
accordance with the provisions of paragraph (1) of Section (3).
Whenever loss or damage has resulted from unseaworthiness, the
burden of proving the exercise of due diligence shall be on the carrier
or other person claiming exemption under this section. chanrobles
virtual law library
(2) Neither the carrier nor the ship shall be responsible for loss or
damage arising or resulting from —
(a) Act, neglect, or default of the master, mariner, pilot, or the
servants of the carrier in the navigation or in the management of the
ship;
(b) Fire, unless caused by the actual fault or privity of the
carrier; chanrobles virtual law library
(c) Perils, dangers, and accidents of the sea or other navigable
water; chanrobles virtual law library
(d) Act of God; chanrobles virtual law library
(e) Act of war; chanrobles virtual law library
(f) Act of public enemies;
(g) Arrest or restraint of princes, rulers, or people, or seizure under
legal process;
(h) Quarantine restrictions; chanrobles virtual law library
(i) Act or omission of the shipper or owner of the goods, his agent or
representative;chanrobles virtual law library
(j) Strikes or lockouts or stoppage or restraint of labor from whatever
cause, whether partial or general: Provided, that nothing herein
contained shall be construed to relieve a carrier from responsibility
for the carrier's own acts; chanrobles virtual law library
(k) Riotsand civil commotions; chanrobles virtual law library
(l) Saving or attempting to save life or property at sea; chanrobles
virtual law library
(m) Wastage in bulk or weight or any other loss or damage arising
from inherent defect, quality, or vice of the goods;
(n) Insufficiency or packing;
(o) Insufficiency or inadequacy of marks; chanrobles virtual law
library
(p) Latent defects not discoverable by due diligence; and chanrobles
virtual law library
(q) Any other cause arising without the actual fault and privity of the
carrier and without the fault or neglect of the agents or servants of
the carrier, but the burden of proof shall be on the person claiming
the benefit of this exception to show that neither the actual fault or
privity of the carrier nor the fault or neglect of the agents or servants
of the carrier contributed to the loss or damage.
(3) The shipper shall not be responsible for loss or damage sustained
by the carrier or the ship arising or resulting from any cause without
the act, or neglect of the shipper, his agents, or his
servants. chanrobles virtual law library
(4) Any deviation in saving or attempting to save life or property at
sea, or any reasonable deviation shall not be deemed to be an
infringement or breach or this Act or of the contract of carriage, and
carrier shall not be liable for any loss or damage resulting therefrom:
Provided, however, that if the deviation is for the purpose of loading
or unloading cargo or passengers it shall, prima facie, be regarded as
unreasonable. chanrobles virtual law library
(5) Neither the carrier nor the ship shall in any event be or become
liable for any loss or damage to or in connection with the
transportation of goods in an amount exceeding $500 per package of
lawful money of the United States, or in case of goods not shipped in
packages, per customary freight unit, or the equivalent of that sum in
other currency, unless the nature and value of such goods have been
declared by the shipper before shipment and inserted in the bill of
lading. This declaration, if embodied in the bill of lading, shall be
prima facie evidence, but shall not be conclusive on the
carrier. chanrobles virtual law library
By agreement between the carrier, master or agent of the carrier, and
the shipper another maximum amount than that mentioned in this
paragraph may be fixed: Provided, that such maximum shall not be
less than the figure above named. In no event shall the carrier be
liable for more than the amount of damage actually
sustained.chanrobles virtual law library
Neither the carrier nor the ship shall be responsible in any event for
loss damage to or in connection with the transportation of the goods
if the nature or value thereof has been knowingly and fraudulently
misstated by the shipper in the bill of lading. chanrobles virtual law
library
(6) Goods of an inflammable, explosive, or dangerous nature to the
shipment whereof, the carrier, master or agent of the carrier, has not
consented with knowledge of their nature and character, may at any
time before discharge be landed at any place or destroyed or
rendered innocuous by the carrier without compensation, and the
shipper of such goods shall be liable for all damages and expenses
directly or indirectly arising out of or resulting from such shipment. If
any such goods shipped with such knowledge and consent shall
become a danger to the ship or cargo, they may in like manner be
landed at any place, or destroyed or rendered innocuous by the
carrier without liability on the part of the carrier except to general
average if any. chanrobles virtual law library
SURRENDER OF RIGHTS AND IMMUNITIES AND INCREASE OF
RESPONSIBILITIES AND LIABILITIES

Sec. 5. A carrier shall be at liberty to surrender in whole or in part all

or any of his rights and immunities or to increase any of his
responsibilities and liabilities under this Act, provided such surrender
or increase shall be embodied in the bill of lading issued to the
shipper.
The provisions of this Act shall not be applicable to charter parties;
but if bills of lading are issued in the case of a ship under a charter
party, they shall comply with the terms of this Act. Nothing in this Act
shall be held to prevent the insertion in a bill of lading of any lawful
provisions regarding general average. chanrobles virtual law library
SPECIAL CONDITIONS

Sec. 6. Notwithstanding the provisions of the preceding section, a

carrier, master or agent of the carrier, and a shipper shall, in regard to
any particular goods be at liberty to enter into any agreement in any
terms as to the responsibility and liability of the carrier for such
goods, and as to the rights and immunities of the carrier in respect to
such goods, or his obligation to seaworthiness, (so far as the
stipulation regarding seaworthiness is contrary to public policy), or
the care or diligence of his servants or agents in regard to the
loading, handling, stowage, carriage, custody, care and discharge of
the goods carried by sea; provided, that in this case no bill of lading
has been or shall be issued and that the terms agreed shall be a non-
negotiable document and shall be marked as such. chanrobles virtual
law library
Any agreement so entered into shall have full legal effect: Provided,
that this section shall not apply to ordinary commercial shipments
made in the ordinary course of trade but only to other shipments
where the character or condition of the property to be carried or the
circumstances, terms and conditions under which the carriage is to be
performed are such as reasonably to justify a special agreement.
Sec. 7. Nothing contained in this Act shall prevent a carrier or a
shipper from entering into any agreement, stipulation, condition,
reservation, or exemption as to the responsibility and liability of the
carrier or the ship for the loss or damage to or in connection with the
custody and care and handling of goods prior to the loading on and
subsequent to the discharge from the ship on which the goods are
carried by sea.chanrobles virtual law library
Sec. 8. The provisions of this Act shall not affect the rights and
obligations of the carrier under the provisions of the Shipping Act,
1916, or under the provisions of Sections 4281 to 4292, inclusive, of
the Revised Statutes of the United States, or of any amendments
thereto, or under the provisions of any other enactment for the time
being in force relating to the limitation of the liability of the owners
of seagoing vessels.chanrobles virtual law library
TITLE II

Sec. 9. Nothing contained in this Act shall be construed as

permitting a common carrier by water to discriminate between
competing shippers similarly placed in time and circumstances, either
(a) with respect to their right to demand and receive bills of lading
subject to the provisions of this Act; or (b) when issuing such bills of
lading either in the surrender of any of the carrier's rights and
immunities or in the increase of any of the carrier's responsibilities
and liabilities pursuant to Section 5, Title I, of this Act; (c) in any other
way prohibited by the Shipping Act, 1916, as amended. chanrobles
virtual law library
Sec. 10. (Not applicable to the Philippines.) chanrobles virtual law
library
Sec. 11. When under the custom of any trade the weight of any bulk
cargo inserted in the bill of lading is a weight ascertained or accepted
by a third party other than the carrier or the shipper and the fact that
the weight as ascertained or accepted is stated in the bill of lading,
then notwithstanding anything in this Act, the bill of lading shall not
be deemed to be prima facie evidence against the carrier of the
receipt of goods of the weight so inserted in the bills of lading, and
the accuracy thereof at the time of shipment shall not be deemed to
have been guaranteed by the shipper. chanrobles virtual law library
Sec. 12. (Not applicable to the Philippines.) chanrobles virtual law
library
Sec. 13. This Act shall apply to all contracts for carriage of goods by
seas to or from ports of the United States in foreign trade. As used in
this Act the term "United States" includes its districts, territories, and
possessions: Provided, however, that the Philippine Legislature may
by law exclude its application to transportation to or from ports of
the Philippine Islands. The term "foreign trade" means the
transportation of goods between the ports of the United States and
ports of foreign countries. Nothing in this Act shall be held to apply
to contracts for carriage of goods by sea between any port of the
United States or its possessions and any other port of the United
States or its possessions: Provided, however, that any bill of lading or
similar document of the title which is evidence of a contract for the
carriage of goods by sea between such ports, containing an express
statement that it shall be subject to the provisions of this Act; shall be
subjected hereto as fully as if subject hereto by the express provisions
of this Act: Provided, further, that every bill of lading or similar
document of title which is evidence of a contract for the carriage of
goods by sea from ports of the United States in foreign trade, shall
contain a statement that it shall have effect subject to the provisions
of this Act. chanrobles virtual law library
Sec. 14. Upon the certification of the Secretary of Commerce that
the foreign commerce of the United States in its competition with
that of foreign nations is prejudiced by the provisions, or any of
them, of the Title I of this Act, or by the laws of any foreign country or
countries relating to the carriage of goods by sea, the President of
the United States may, from time to time by proclamation, suspend
any or all provisions of Title I of this Act for such periods of time or
indefinitely as may be designated in the proclamation. The President
may at any time rescind such suspension of Title I hereof, and any
provisions thereof which may have been suspended shall thereby be
reinstated and again apply to contracts thereafter made for carriage
of goods by sea. Any proclamation of suspension or rescission of any
such suspension shall take effect on the date named therein, which
date shall be not less than ten days from the issue of the
proclamation.
Any contract for the carriage of goods by sea, subject to the
provisions of this Act, effective during any period when Title I hereof,
or any part thereof, is suspended, shall be subject to all provisions of
law now or hereafter applicable to that part of Title I which may have
thus been suspended. chanrobles virtual law library
Sec. 15. This Act shall take effect ninety days after the date of its
approval; but nothing in this Act shall apply during a period not to
exceed one year following its approval to any contract for the
carriage of goods by sea, made before the date on which this Act is
approved nor to any bill of lading or similar document of title issued,
whether before or after such date of approval in pursuance of any
such contract as aforesaid. chanrobles virtual law library
Sec. 16. This Act may be cited as the "Carriage of Goods by Sea Act."
The following are important features of the Carriage of Goods by Sea Act:

1.) It acts as a supplement to the Civil Code and applies to all contracts of
carriage of goods coming to or from Philippine ports in foreign trade.

2.) When there is damage to the goods, notice must be given by the
recipient to the carrier or his agent upon receipt of the goods. But if the
damage is apparent/externally visible, notice must be given within 3 days
from receipt of the goods.

3.) Failure of the recipient to notify the carrier will not prevent the filing of
a suit for the loss/damage of the goods.

4.) The maximum liability is US$500.00 per package/customary freight

unit unless the shipper or owner of the goods declares a higher value. It
may be lowered by agreement put down in the bill of lading.

The purpose of limiting the common carrier's liability is to protect it from

fraud, such as by allowing it to take insurance to protect itself. If, for
example, the shipper or consignee/recipient understated the value of the
goods, it not only violates a valid contractual stipulation; it has also
committed fraud against the common carrier by trying to make it liable for
an amount greater that what was stipulated in the bill of lading (Cokaliong
Shipping Lines vs. UCPB General Insurance Co., GR 146018, June 25,
2003.)

Prescriptive Period

The prescriptive period is 1 year from date of delivery or the date when
they shouldhave been delivered. Take note of the following:

1.) Delivery is to the arrastre operator not the recipient

2.) It won't apply if the goods were delivered to the wrong person
3.) An extra-judicial claim/demand from the recipient won't interrupt the
prescriptive period

It will apply only to goods damaged/lost in transit, which is why

prescription begins when the goods are handed over to the arrastre
operator. If the arrastre service was responsible for damaging the goods,
another law will apply.

The SC has been known to bend the rules on the prescriptive period,
especially if certain unfortunate things would take place. If, for instance, a
case was dismissed for lack of jurisdiction and the prescriptive period
expired, it ruled that the recipient could file a new case within 1 year from
the dismissal of the previous case (Stevens & Co vs. Nordeutscher Lloyd,
6 SCRA 180.) If, however, the case was filed against the wrong party, the
prescriptive period won't be interrupted.

The prescriptive period is interrupted by the following instances:

1.) An action has been filed in court

2.) There is an express agreement that extra-judicial claims/demands for

damages will suspend the running of the prescriptive period.

If the goods were delivered to the wrong person, the recipient of the
goods has 10 years to file an action (for breach of contract) or 4 years
(for a quasi-delict.)