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CHAPTER 6
Carriage of Goods by Sea Act (Commonwealth Act 65; COGSA)
Prefatory:
1. COGSA refers to the rights and responsibilities between shippers
and the shipowners (i.e., carrier) as regards INTERNATIONAL
carriage of GOODS BY SEA where Philippines is the
destination (Note: Philippines must be the destination because
of Article 1753 NCC providing that the law that governs regarding
carriage of goods is the law of destination)
HENCE: COGSA does not apply to:
(a)
International carriage of PASSENGERS

by

sea

by

common carriers - even if Philippines is the destination as

COGSA only applies to carriage by sea of goods. What applies to
international carriage of passengers by sea is the Civil Code as
primary law, and Code of Commerce and other special laws as
suppletory
Note: Warsaw Convention only applies to international carriage
of passengers and goods by AIR (not by SEA)
(b)
DOMESTIC carriage of goods by sea by common carriers
even if the goods are transported by the sea within Philippines
territory, since COGSA only applies to international carriage of
goods by sea
AT ANY RATE: In international carriage of goods by common
carrier, Civil Code is still the primary law, and only in case of its
deficiency that COGSA applies suppletory pursuant to Article 1766
NCC, or that when both NCC and COGSA have provisions on a given
fact however the provision of COGSA is more specific than COGSA
that makes the latte law applied (Note: By the way, Warsaw
Convention on international carriage of passengers and goods by
AIR prevails over Civil Code considering that Philippines is a
signatory thereto such that the primacy of Article 1766 does
not apply [this is implied in the case of Lhuillier vs. British
Airways, GR No. 171092, March 15, 2010 where our Supreme
Court gives primacy to the provision of Warsaw Convention over
and above our Civil Code regarding the period of prescription of
action and the suspension of the running of the prescriptive
period])
2. Synopsis of what law governs regarding international carriage
of GOODS by SEA

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(a)

For international common carrier for goods with

Philippine port as destination

First: Civil Code. Reason: Article 1766: In all matters not
regulated by this Civil Code (governing common carriers), the
rights and obligations of common carriers shall be governed by
the Code of Commerce and by special laws (such as COGSA as
suppletory)
Second: COGSA (in the absence of provision of NCC, or that
both NCC and COGSA provide the law on a given fact however
COGSA is more specific)
Third: Code of Commerce (Reason why COGSA prevails over
Code of Commerce: COGSA is a special law and while Code
of Commerce is a general law)
(b)
For international private carrier(i.e., not common
carrier) for goods with Philippine port as destination
First: COGSA (Reason: Article 1766 regarding primacy of Civil
Code refers to common carriers and not private carriers)
Note: Section 1 (d) COGSA: The term "ship" means any
vessel (whether common carrier or private carrier) used
for the international carriage of goods by sea - HOWEVER:
NCC

is

the

primary

law

over

COGSA

as

regards

international carriage of goods by common carrier by sea

Second: Code of Commerce (Reason why COGSA prevails
over Code of Commerce: COGSA is a special law and while
Code of Commerce is a general law)
Third: Civil Code (But only as to its provisions other than
Articles 1732 to 1754, as these provisions pertains to
common carrier)
(c)
For common/private carrier with foreign port as
destination
Philippine laws does not apply (Reason: Article 1753: Law of
destination)

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TITLE 1
Section 1. When used in this Act
(a)

The term "carrier" includes the (1) shipowner who entered

into contract with shipper for the international transport of

goods, or (2) the charterer(who entered into contract with
shipownerregarding the use of the carrier and entered into
contract with shipper for the internationaltransport of goods)
(b) The term "contract of carriage" applies only to contracts of
carriage covered by a document called B/L or any similar
document of title (purporting to be a B/L) regarding (international)
carriage of goods by sea,whether such document issued by
shipowner or by the charterer as the case may be - which
document

regulates

the

juridical

relations

between

carrier(shipowner or charterer) and a holder of such document

(i.e., the shipper or consignee)
(c) The term "goods" refer to articles of every kind whatsoever,
except live animals (hence, meat products included as goods) and
cargo which by the contract of carriage is stated as being carried
on deck and is so actually carried on deck
(d) The term "ship" means any vessel (common carrier or private
carrier) used for the (international) carriage of goods by sea
(e) The term "carriage of goods" covers the period from the time
when the goods are loaded(on ship/vessel) up to the time when
goods are unloaded from the ship
RISKS (its coverage)
Section 2. Subject to Section 6, the carrier regarding loading,
handling, stowage (i.e., loading of goods into the ship/vessel), 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

RESPONSIBILITIES AND LIABILITIES
Section 3.
(1)

Before and at the beginning of the voyage, the carrier

(shipowner/charterer) shall observe due diligenceon the following

(a)
(b)

Make the ship seaworthy;

Properly man, equip, and supply the ship;

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(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 (usage), carriage and preservation
Note: Section 3 (1) COGSA which provides that the carrier shall
only observe due diligence, this is true only if the carrier is a
private carrier AND NOT: When the carrier is a common carrier
(Reason:

Under

destination

Article

1753

provides

as bolstered by Section

for
13

the

law

of

COGSA, and if

Philippines is the law of destination, then apply Article 1766 which

provides for the primacy of Civil Code regarding common carrier,
then by Code of Commerce and special laws such as COGSA are
only suppletory HENCE: Under Article 1733 provides that
common carrier are to observe extraordinary diligence in the
transport of goods [Philam Insurance Co. vs. Heing-A Shipping
Corp., GR 187701, July 23, 2014])
(2) The carrier shall properly and carefully load, handle, stow,
carry, keep, care for, and discharge the goods carried
(3) After the carrier received the goods, on demand of the shipper,
the captain or agent of the carrier shallissue B/L - stating therein
among other things:
(a) The leading marks necessary to identify the goodswhich marks
furnished (given) in writing by the shipper before start loading
the goods on the ship, provided such marks are stamped or
otherwise shown clearly upon the goods if uncovered, or on the
cases or coverings in which such goods are contained, in such a
manner the mark ordinarily remains legible until the end of the
voyage
(b) Either the number of packages or pieces, or the quantity or

weight, as the case may be, as furnished in writing by the

shipper
(c) The apparent (noticeable) order and condition of the goods:

Provided, That no carrier, master, or agent of the carrier, shall be

obliged to write in the bill of lading any marks, number, quantity,
or weight which he has reasonable ground for suspecting not
accurately to represent the goods actually received, or which he
(4)

has had no reasonable means of checking

Such a B/L shall be prima facie evidence of the receipt by the

carrier of the goods as described in B/L - in accordance with

paragraphs (3) (a), (b), and (c) of this section (The rest of the

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provision of this Section 3 [4] not applicable in the Philippines being
applicable only to U.S.)
(5) The shipper shall be deemed to have guaranteed to the
carrier the accuracy at the time of shipment regarding the
marks, number, quantity, and weight (written in the B/L) as
furnished by (given by) by the shipper - 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 or to any
person other than the shipper (e.g., consignee; insurer of shipper in
case of subrogation)
(6) (IMPORTANT): Unless notice of (apparent) loss or damage
and the general nature of such loss or damage on the goods be
given

in

writing

(e.g.,

by

holder

of

B/L

whether

the

shipper/consignee) to the carrier or his agent at the port of

discharge (of the goods) before 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 (e.g., by holder of B/L
whether the shipper/consignee), such removal shall be prima
facie evidence of the delivery by the carrier of the goods as
described in the B/L. If the loss or damage is not apparent,
the (written) notice must be given (e.g., by holder of B/L whether
the shipper/consignee) within three days of the delivery (to the
person entitled to delivery under the contract of carriage
Said notice of loss or damage of the goods maybe endorsed (given)
upon the receipt for the goods given by the person taking delivery
thereof.
The written notice (of the loss or damage of goods) need not be
given if the state/condition of the goods has at the time of their
receipt (by holder of B/L whether the shipper/consignee) been the
subject of (i.e., subjected to) joint survey or inspection (by the
holder of B/L and the representative of the vessel).
(IMPORTANT): In any event the carrier (shipowner or charterer)
and the ship shall be discharged from ALL liability for loss or
damage - UNLESS: Suit (action for damages) is brought within
one year after delivery of the goods or the date when the
goods should have been delivered (to the person entitled for
delivery under the contract of carriage [i.e., the holder of B/L which

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could be shipper/consignee]): PROVIDED (IMPORTANT), That if a
written notice of loss or damage, either apparent or
concealed (not apparent), is not given as provided for in this
section, that fact shall not affect or prejudice the right of the
SHIPPER (or consignee) to bring suit (action for damages) within
one year after the delivery of the goods or the date when the
goods should have been delivered (to the person entitled to
delivery under contract of carriage whether the shipper/consignee).
(Note: Remember however that when loss/damage of goods is
apparent, and the holder of B/L (shipper/consignee) received the
goods without giving written notice of loss/damage then,
there is prima facie evidence of the delivery by the carrier of
the goods as described in the B/L)
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.
(7) After the goods are loaded, the B/L to be issued by the carrier,
master, or agent of the carrier to the shipper shall, if the shipper
so demands, be a "shipped B/L": PROVIDED, That if the shipper
shall have previously taken up any document of title (e.g.,
ordinaryB/L [i.e., not shipped B/L ]) to such goods, shipper shall
surrender the same for the issuance of "shipped B/L"
HOWEVER (instead of surrendering ordinary B/L to be substituted
with shipped B/L): At the option of the carrier such document
of title(i.e., previously issued ordinary B/L) may be noted
(written) at the port of shipment by the carrier/captain/agent with
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 (i.e., written on the previously issued ordinary B/L), the
same shall deemed to constitute a "shipped B/L".
Note:Shipped B/L: A kind of bill of lading where it is certified
therein that goodsbeen received in apparent good condition
from the shipper, and been taken aboard on a named ship on
stated date. This shipped B/L is required by banks that
funds/pays the shipment fare
(8) Any clause/covenant/agreement

in

contract

of

carriage

relieving (exempting) the carrier from liability for loss or

damage of goods, arising from negligence, fault, or failure in
the duties and obligations provided in this sectionor

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lessening such liabilitycontrary to this Act - shall be null
and void (subject to agreement under Section 6). (HOWEVER) A
benefit of insurance in favor of the carrier (stipulated in the
contract of carriage) or similar clause, shall be deemed to be a
clause/agreement relieving the carrier from liability (hence,
the shipper/consignee shall file action for damages not against the
carrier but instead against the insurer)
RIGHTS AND IMMUNITIES
Section 4.
(1)

The (common) carrier nor the ship (private carrier) shall not be

liable

for

loss

or

damage

arising

or

resulting

from

unseaworthiness UNLESS: (a) caused by lack of due diligence

to make the ship seaworthy, and (b) to secure that the ship is
properly manned, equipped, and supplied, and (b) to make to
the holds, refrigerating and cool chambers, and all other
parts of the ship in which goods are carried fit and safe for their
reception (usage), carriage, and preservation,- in accordance with
Section 3 Paragraph 1. Whenever loss or damage of goods has
resulted from unseaworthiness, the burden of proving the
exercise of due diligence shall be on the carrier or other
persons claiming exemption (e.g., insurer of carrier) under the
section
Note: As regards this due diligence, this is true only if the
carrier is a private carrier such that if the carrier is a common
carrier, then what is to be observed is extraordinary diligence
pursuant to Article 1733 (common carrier to observe extraordinary
diligence) in relation with Article 1753 (law of destination; as
bolstered by Section 13 COGSA) and Article 1766 (primacy of
Civil Code on common carrier)
(2) The (common) carrier nor the ship (private carrier) shall not be
liable for loss or damage - arising or resulting from:
(a) Act, neglect, or default of the captain, 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;
(c) Perils, dangers, and accidents of the sea or other navigable

waters (e.g., river);

(d) Act of God;
(e) Act of war,

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(f) Act of public enemies (e.g., pirates);
(g) Arrest or restraint of princes, rulers, or people (even not under

legal process), or seizure under legal process;

(h) Quarantine restrictions;
(i) Act or omission of the shipper or owner of the goods, his agent
or representative;
(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;
(k) Riots and civil commotions;
(l) Saving or attempting to save life or property at sea;
(m)
Wastage in bulk or weight or any other loss or damage

arising from inherent (i.e., natural; intrinsic) defect, quality, or

vice of the goods;
(n) Insufficiency of packing;
(o) Insufficiency or inadequacy of marks;
(p) Latent (hidden; concealed) defectsnot

discoverable by due

diligence; and
(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.
Note: For common carrier, Civil Code applies
(3) The shipper shall not be liablefor loss or damage sustained by
the carrier or the ship arising from any cause without the act,
fault, or neglect of the shipper, his agents, or servants
(4) Any deviation (change of established/regular or agreed route)
for the purpose of saving or attempting to save life or
property at sea OR any reasonable deviation does not
constitute breach of this Act/contract of carriagesuch that
carrier shall not be liable for any loss or damage resulting
therefrom: PROVIDED, however, That if the deviation is for the
purpose of loading cargo or unloading cargo or passengers,
then it shall aprima facie unreasonable deviation
(5)
(IMPORTANT [threshold of liability of carrier]): The (common)
carrier nor the ship (private carrier) shall not be liable for any
loss or damage to goods in an amount exceeding US$500 per
package (i.e., regardless of the actual amount of goods), or in case
of goods not shipped in packages, per customary freight

Page | 9
unit (e.g., per tonnage, etc.), or the equivalent of that sum in other
currency UNLESS: The nature and value of such goods have
been declared by the shipper in the B/L before shipment,
which declaration shall be prima facie evidence but not
conclusive on the carrier
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 (i.e., not less than $500 US
dollars). In no event shall the carrier be liable for more than the
amount of damage actually sustained (by loss/damage of goods).
The carrier nor the ship shall not be liable for loss or damage of
goods if the nature or value thereof has been knowingly and
fraudulently misstated by the shipper in the B/L
(6) In case of goods of an inflammable, explosive, or dangerous
nature, captain or agent of the carrier who has not consented
with knowledge of their nature and character, may at any time
before discharge (i.e., unloaded to its Philippine destination) be
landed at any place or destroyed or rendered innocuous (not
dangerous) by the carrier without liability, instead, the shipper
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(of
the captain/agent) 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 averageif any (is written in the
B/L; general average refers to avoidance of goods from the ship for
the benefit of all).
WAIVEROF

RIGHTS

AND

IMMUNITIES

AND

INCREASE

OF

RESPONSIBILITIES AND LIABILITIES

Section 5. A carrier shall has the option (even without the consent of
shipper) to waivein whole or in part all or any of his rights and
immunities, or has option to increase any of his responsibilities
and liabilities under this Act - PROVIDED such waiver or increase
shall be embodied/written in the B/Lissued to the shipper(Note:
The carrier cannot decreaseresponsibilities and liabilities as this

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is void under Section 3 [8] but subject to agreement Section
6)
The provisions of this Act shall not be applicable to charter parties
(i.e., charter contract between owner of shipowner and the charterer)
HOWEVER: If B/L are issued in the case of a ship under charter party
(i.e., B/L issued by shipowner to the charterer [e.g., charter party is
only time/voyage charter]), the shipowner and charterershall
comply with the provisions of this Act. Nothing in this Act prohibits
the insertion in the B/L of any lawful provision regarding general
average
SPECIAL CONDITIONS
Section 6. Notwithstanding the provisions of the preceding
sections (including Section 3 [8]), a carrier, captain or agent of the
carrier, and a shipper shall, regarding transport of particular
goods,be at liberty to enter into any agreement in any terms(1)
as to the[increase/decrease/waiver] responsibility and liability of the
carrier for such goods, and (2) as to the [increase/decrease/waiver]
rights and immunities of the carrier in respect of such goods, or (3)
carriers obligation as to seaworthiness so long as it is not
contrary to public policy, or (4) [increase/decrease/waiver] 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 B/L(i.e., bill of lading is
a negotiable instrument) been, or shall be issued and that (but in the
meantime) the terms agreed shall be embodied in a receipt which
receipt shall be marked as non-negotiable
Any agreement so entered into

shall

have

full

legal

effect: PROVIDED, That this section (i.e., Section 6) shall not apply to
ordinary commercial shipments made in the ordinary course of
tradeBUT ONLY to other shipments(particular goods) 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
Section 7. The carrier or a shipperare free to enter into any
agreement, condition, reservation, or exemption as to the
responsibility and liability of the carrier or the ship for the loss or
damage in connection with the custody and care and handling of
goodsBEFOREloadingand AFTER to the discharge from the ship

P a g e | 11

Section 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 section 4281 to 4289, 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.
TITLE 2
Section 9. Nothing contained in this Act shall be construed as
permitting a common carrier by water to discriminate between
competing shippers similarly place in time and circumstances,
either(a) with respect to the 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 6, Title I, of this Act or (c) in any other
way prohibited by the Shipping Act, 1916, as amended.
Section 10. Section 25 of the Interstate Commerce Act is hereby
amended by adding the following proviso at the end of paragraph 4
thereof: "Provided, however, That insofar as any bill of lading
authorized hereunder relates to the carriage of goods by sea, such bill
of lading shall be subject to the provisions of the Carriage of Goods by
Sea Act."
Section 11. Where under the customs 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 is so ascertained or accepted is stated in the
B/L, then, notwithstanding anything in this Act, the B/L shall not be
deemed to be prima facie evidence against the carrier of the
receipt of goods of the weight so inserted in the B/L, and the
accuracy (of the weight of bulk cargo) thereof at the time of shipment
shall not be deemed to have been guaranteed by the shipper
(viz., the weight of bulk cargo determined by 3 rd party is disputable by
carrier and shipper).
Section 12. Nothing in this Act shall be construed as superseding any
part of the Act entitled "An act relating to navigation of vessels, bills of

P a g e | 12
lading, and to certain obligations, duties, and rights in connection with
the carriage of property," approved February 13,1893, or of any other
law which would be applicable in the absence of this Act, insofar as
they relate to the duties, responsibilities, and liabilities of the ship or
carrier prior to the time when the goods are loaded on or after the time
they are discharged from the ship.
Section 13. This Act shall apply to all contracts for carriage of
goods by sea 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 transportationto or
from ports of the Philippine Islands (i.e., this is where Article 1753 is
made to applyregarding law of destination). The term "foreign trade"
means the transportation of goods between the ports of the United
States (Philippines) 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 possession: Provided, however, That any
bill of lading or similar document of 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 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.
Section 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 the provisions, or any of them, of 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

P a g e | 13
contracts thereafter made for the carriage of goods by sea. Any
proclamation of suspension or rescission of any such suspension shall
take effect on a 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.
Section 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.
Section 16. This Act may be cited as the "Carriage of Goods by Sea
Act."
COMMENTS:
1. Written extrajudicial demand does NOT TOLL the running of
one-year prescriptive period under COGSA (within which to file
Suit/Action; DOLE Philippines, Inc. vs. Maritime Company of the
Philippines, GR No. L-61352, February 27, 1987; p. 209)
COGSA Section 3 Par 6: In any event the carrier (shipowner or
charterer) and the ship shall be discharged from ALL liability for
loss or damage- UNLESS: Suit (action for damages) is brought
within one year after delivery of the goods or the date
when the goods should have been delivered (to the person
entitled for delivery under the contract of carriage [holder of B/L
which could be shipper/consignee]): PROVIDED, That if a written
notice of loss or damage, either apparent or concealed (not
apparent), is not given as provided for in this section,that fact
shall not affect or prejudice the right of the SHIPPER (or
consignee) to bring suit (action for damages) within one year
after the delivery of the goods or the date when the goods
should have been delivered (to the person entitled to delivery
under contract of carriage [shipper/consignee])

P a g e | 14
Facts: Goods were transported from other country with Philippines
as destination. The goods were received by the consignee on
December 18, 1971. The consignee asseverates that when he
made extrajudicial demand on May 4, 1972 reckoned from the
time he received the goods on December 18, 1971, it was still
within the 1-year prescriptive period under COGSA and hence, the
1-year prescriptive period is tolled/suspended and has to start
anew also on May 4, 1972 pursuant to Article 1155 NCC so
that when action for damages was filed with RTC (judicial
demand) on June 11, 1973, it is still within the 1-year prescriptive
period (i.e., May 4, 1972 to June 11, 1973). (Note: Article 1155
NCC: The prescription of actions is interrupted/tolled when
they are filed before the court (judicial demand), or when there
is a written extrajudicial demand by the obligee, or when there
is any written acknowledgment of obligation by the obligor which interruption/tolling makes the prescription of action runs
anew of fresh start from the date of such extrajudicial/judicial
demand)
Issue: Whether or not the one-year prescriptive period under
Section 3 Par 6 2nd Paragraph COGSA within which to file
suit/action for loss/damages against the carrier/ship is subject
to tolling under Article 1155 particularly written extrajudicial
demand?
Held: NO. Article 1155 NCC is a general provision which has to
yield to a special/specific provision under Section 3 Par 6 2 nd
Paragraph COGSA otherwise, to apply Article 1155 NCC would
have the effect of extending the one-year prescriptive period
specially fixed under COGSA. The reason for the strict
observance of the one-year prescriptive period is to decide
actions for loss/damages of goods affecting transportation of
goods by sea in as short a time as possible (Note: Judicial
demand tolls the running of the one-year prescriptive period under
COGSA)
(a)
EXCEPTION: The one-year prescriptive period under
Section 3 Par 6 COGSA can be suspended or extended by the
express agreement of parties (Universal Shipping Lines, Inc.
vs. Intermediate Appellate Court, GR No. 74125, July 31, 1990; p.
212)

P a g e | 15
2. The one-year prescriptive period under Section 3 Par 6 2nd
Paragraph of COGSA given to shipper within which to file
suit/action

against

shipper/consignee

carrier/ship
but

also

not

only

against

applies
insurer

to
of

shipper/consignee who becomes subrogee of the rights of the

insured

shipper/consignee

after

the

insurer

paid

the

shipper/consignee (Filipino Merchants Insurance Company, Inc. vs.

Court of First Instance of Manila, GR No. L-54140, October 14, 1986;
p. 215)
Reason: Otherwise, if the one-year prescriptive period under
COGSA does not apply against insurers, then what COGSA intends
to prohibit after the lapse of the one-year prescriptive period can
be indirectly avoided by way of the shipper/consignee simply
filing a claim against the insurer even after the lapse of the
said one-year prescriptive period, and subsequently for the
insurer to file action against the carrier in which case, 1-year
limitation under COGSA will be practically useless.
Opinion: Hence, the insurer must be on the lookout that the
insured shipper/consignee must claim the insurance proceeds well
within the 1-year prescriptive period of COGSA so that after the
insurer paid and now as subrogee, it can also file action against the
carrier within the 1-year prescriptive period under COGSA
Note: This one-year prescriptive period applies to shipper, insurer
but also to consignee or any legal holder of the bill of
lading (Belgian Overseas Chartering and Shipping vs. Philippine
First Insurance Co., Inc., GR No. 143133, June 5, 2002; p. 226)
(a)

The one-year prescriptive period under COGSA applies

in favor of carrier/ship as against the shipper but does

not also apply in favor of the insurer as against the
insured-shipper/consignee (Mayer Steel Pipe Corporation vs.
Court of Appeals, GR No. 124050, June 19, 1997; p. 218)
Facts: Shipper transported his goods with carrier. The goods
were insured by shipper with insurer. When goods reached
Hongkong, the goods were damaged. The shipper-insured
claimed the insurance against the insurer after the lapse of the
1-year prescriptive period under COGSA. Now, the insurer
refused to pay on ground that the shipper claimed the insurance
after the 1-year prescriptive period under COGSA. The reason

P a g e | 16
given by the insurer is that it would be unfair for the insurer to
pay the insured shipper after the 1-year prescriptive period
already lapsed, and render the insurer incapable of claiming
against the carrier since pursuant to the case of Filipino
Merchants Insurance Company, Inc. vs. Court of First Instance of
Manila (supra), the 1-year prescriptive period under COGSA not
only applies against the shipper but also against the insurer.
Issue No. 1: Is the insurer correct?
Held: NO. While it is true that the 1-year prescriptive period
under COGSA applies not only against the shipper/consignee
but

also

against

the

insurer,

nevertheless,

the

1-year

prescriptive period under COGSA does not apply in favor of the

insurer. Reason: The basis of the action of the shipper against
the insurer is not under COGSA but rather under the
provisions of the Philippine Insurance Code in relation to
NCC which prescriptive period of action under Insurance Code is
longer than the 1-year prescriptive period under COGSA
Issue No. 2: What is then the prescriptive period for the
insured-shipper to file action against the insurer based on the
insurance?
Held: 10 years. The insurance policy being a written contract,
Article 1144 NCC then applies which provides that written
contract prescribed in 10 years from the cause of action accrues
3. The one-year prescriptive period under COGSA applies to
loss/damage

of

goods

(i.e.,

physical

disappearance

or

physical deterioration of the goods) and does not apply to

misdelivery of goods (Ang vs, CompaniaMaritima, GR No. L30805, December 26, 1984; p. 222)
Facts: Yau Yue Bank in Hongkong agreed to sell goods to Teves in
Manila.

Yau

Yue

Bank

transacted

with

Tokyo

Boeki

Ltd.

(manufacturer) regarding the goods needed by Teves. Tokyo Boeki

loaded the goods with the carrier with Manila as destination, and
the carrier issued B/L where written thereon is Tokyo Boeki as
shipper. And then Tokyo Boeki indorsed the B/L to Yau Yue Bank,
hence, such B/L was surrendered by Tokyo Boeki to Yau Yue Bank.
Then Yau Yue Bank assigned the B/L to the Complainant in Manila
thereby Yau Yue Bank surrendered possession over B/L to the
Complainant. When the good reached Manila, the carrier delivered
the

goods

to

Teves

which

delivery

should

be

to

the

Complainant being the present holder of the B/L (viz., there is

P a g e | 17
misdelivery of by carrier goods to Teves), this pursuant to the
terms in the B/L itself that the carrier shall deliver the goods to the
holder of the B/L (which in this case, the Complainant). The
Complainant filed action against the carrier one year after the
misdelivery of the goods to Teves. The carrier in its Answer
countered that the action filed by the Complainant already
prescribed as the 1-year prescriptive period under COGSA
already lapsed
Issue No. 1: Is the carrier correct that the 1-year prescriptive
period already lapsed?
Held: NO. The carrier could have been correct that the 1-year
prescriptive period under COGSA already expired only when the
Complainant filed action for DAMAGES/LOSS of the goods
pursuant to Sec 3 Par 6 COGSA. But then, the basis of the
action of the Complainant is not about damage/loss of goods,
but rather MISDELIVERY of goods hence, the 1-year
prescriptive period under COGSA does not apply because the
goods are not damaged/loss but rather the goods were
merely

"misdelivered."

Damage/loss

referred

to

under

Section 3 (6) COGSA refers to PHYSICAL deterioration of the

goods (damage) or PHYSICAL disappearance of the goods (i.e.,
loss) and not to mere misdelivery
Issue No. 2: What prescriptive period therefore applies in the
case at bar?
Held: Prescriptive period under Article 1144 NCC, which is 10
years from cause of action accrued for written contract
which in the case at bar, the B/L. The cause of action of the
complainant accrued from the time of misdelivery.
4. Section 3(6) of COGSA only refers to physical loss/damage and
not to damage/loss in the legal/general sense (e.g., depreciation
of the sale/market value of goods is loss/damages, but it is not
physical loss/damage; Mitsui O.S.K. Lines Ltd vs. Court of
Appeals, GR No. 119571, March 11, 1998; p. 223)
Facts: Goods were transported by shipper with the carrier from
Philippines to France. However, when the goods reached France,
there was a considerable transport delay so that at the time the
goods reached France, it was already market off-season for that
goods in France (so that the sale/marketvalue of the goods
deteriorated[less profit]). Hence, the consignee in France only
paid half of the value of the goods (i.e., not due to

P a g e | 18
loss/damaged on the physical condition of the goods, but
because of the sale/market value). Because the carrier refused
to pay the shipper the other half of the value of the goods, the
shipper filed action against the carrier. The carrier countered that
the 1-year prescriptive period under COGSA to file action for
loss/damage of goods already lapsed from the time the goods
were received by the consignee in France.
Issue No. 1: In the case at bar, is "loss or damage"of the goods
based on their sale/market value is within the contemplation
of Section 3(6) COGSA?
Held: NO. Because what is contemplated under Section 3(6) COGSA
only refers to PHYSICAL loss/damage and not loss/damage
based on their sale/market value
Issue No. 2: What is then the applicable prescriptive period?
Held: 10 years. The contract of carriage between the carrier and
shipper is a written contract by way of B/L, and under Article
1144 NCC: Written contract prescribes in 10 years from the time the
cause of action accrues
Personal observation: Under Article 1753:The law of the
country to which the goods are to be transported shall govern
the liability of the common carrier for their loss, destruction or
deterioration (i.e., law of destination [France]). If that is the case,
then why the Court attempted to apply Philippine law as to the
liability of the carrier? Reason: The basis of the cause of action of
the shipper is not based on NCC governing liability of common
carriers from Article 1732 to 1766 as there is no damage/loss of
goods caused by the negligence in transportation by the
common carrier but merely misdelivery, neither under COGSA as
loss/damage of goods referred to under COGSA refers to physical
loss/damage and not to misdelivery - HENCE: What applies is
still the NCC but particularly OBLICON
5. Shippers Load and Count (explained; International Container
Terminal Services, Inc. vs. Prudential Guarantee and Assurance Co.,
Inc., GR 134514, December 8, 1999; p. 225)
Facts: Carrier loaded goods contained in a container for Shipper
from California bound to Manila under shippers load and
count. The Carrier issued B/L written thereon Consignee as
consignee. The Consignee insured the goods with Insurer. When
the goods reached Manila, the Carrier discharged the goods to
the Arrastre Operator for safekeeping. The Broker withdrew the

P a g e | 19
goods from the Arrastre Operator and delivered to goods to the
Consignee. When the goods reached the Consignee, the latter
found that there are physical losses of goods. The Insurer paid
the

Consignee,

then

the

Insurer

as

subrogee

demanded

payment from the Arrastre Operator, but the Arrastre Operator

refused to pay the Insurer.
Issue: Is the arrastre operator liable for the losses?
Held: NO. The goods were loaded by the Shipper under Shippers
load and count, i.e., the Shipper is solely responsible for the
loading of the container (containing the goods) into the vessel
of the Carrier, so that the Carrier is not in privy or required to
inspect/verify as to the contents or quantity of the goods as
are contained inside the container. When the goods reached
Manila, the Carrier discharged the goods to the Arrastre, the duty
of the Arrastre is only to take good care of the goods as
received from the Carrier, and to turn over the good to the
person entitled to receive (in this case, the Broker withdrew the
goods from the Arrastre and then delivered the goods to the
Consignee). The goods being transported under shippers load
and count, "just like the carrier, the Arrastre is not also
required

to

verify

the

contents

of

the

container

as

received by it from the carrier and compare them with the B/L
viz., the Arrastre is only required to deliver the goods to the
Consignee (through Broker) as received from the Carrier.
In the case at bar, the loading being as shippers load and
count, for as long as the Arrastre able to prove that it delivered
the goods to the Consignee (through Broker) "as received" from
the Carrier which in this case such burden of proof was proven by
the Arrastre thereby making the Arrastre not liable for the loss of
the goods
(a)
Nature of service of Arrastre Operator (International
Container Terminal Services, Inc. vs. Prudential Guarantee and
Assurance Co., Inc., GR 134514, December 8, 1999; p. 225)
The legal relationship between arrastre operator and
consignee (person who has right to receive the goods from the
carrier/ship as provided in the B/L) is akin the relationship
between

warehouseman

and

depositor.

In

case

of

loss/damage of goods, the burden is on the arrastre

P a g e | 20
operator

to

prove that it

complied

with its

duty

in

accordance with law.

Note: Arrastre operator is deemed as common carrier
(Philippine First Insurance Co. vs. WallemPhils. Shipping Inc. GR
No. 165647, March 26, 2009) hence, pursuant to Article 1733
NCC, it is bound to observe extraordinary diligence in the
vigilance over the goods while in its possession until it delivery to
the shipper/consignee.
6. Package Limitation of carriers liability for loss/damage of
goods (Section 4 [5] COGSA)
Section 4[5] COGSA [threshold/limit of liability of carrier]: The
(common) carrier nor the ship (private carrier) shall not be liable
for any loss or damage to goods in an amount exceeding
US$500 per package (i.e., regardless of the actual amount of
goods), or in case of goods not shipped in packages, per
customary freight unit (e.g., per tonnage, etc.), or the equivalent
of that sum in other currency UNLESS: The nature and value of
such goods have been declared by the shipper in the B/L
before

shipment,

which declaration shall be prima

evidence but not conclusive on the carrier

(a)
Belgian Overseas Chartering and

facie

Shipping

vs.

Philippine First Insurance Co., Inc., GR No. 143133, June

5, 2002; p. 226
Facts: 242 coils (goods) were received by Carrier from Germany
to be transported to Manila port. In the B/L, it is stipulated that
the liability of the Carrier is limited to US$500 per package.
Annotated in the B/L is about the statements in the Letter of
Credit (L/C) stating the value of the goods per metric ton
which value is way higher than US$500 per package as
written in the B/L. When the goods reached Manila port, four
coils were physically damaged. The Carrier invoked COGSA
Section 4 (5) which provides: Carrier shall not be liable
beyond US$500 per package unless the shipper declares
the value of the goods writtenon the B/L. However, the
shipper

invoked

Article

1749

NCC

which

provides,

stipulation is binding when the common carrier's liability is

limited to the VALUE of the goods as WRITTEN on the B/L unless the shipper or owner declares a greater value
written in the B/L

P a g e | 21
Issue: In contract of carriage of goods, which law that primarily
governs the rights and obligations of common carriers?
Held: Civil Code. Article 1766 NCC provides, In all matters
not regulated by this Code (NCC), the rights and obligations of
common carriers shall be governed by the Code of Commerce
and by special laws (e.g., COGSA). Hence, Code of Commerce
and by special laws (e.g., COGSA) are only suppletory in the
absence of provision of the NCC
Issue: In the case at bar, what governs the contract of
carriage of the parties is it Article 1749 NCC or special law
particularly COGSA Section 4 (5)?
Held: COGSA Section 4 (5).Reason: Article 1749 NCC does
not apply because there is no provision therein about
limiting the liability of common carrier PER PACKAGE
instead, what Article 1749 provides is the limitation of liability of
common carrier as to VALUE of the goods written on the B/L
(i.e., NOT limitation of liability PER PACKAGE). Now, under
COGSA Section 4 (5), it is SPECIFICALLY PROVIDED therein
that the common carrier can limit its liability as written in the B/L
only up to US$500 per package. Hence, applying Article 1766
NCC, In all matters not regulated by this Code (NCC), the
rights and obligations of common carriers shall be governed by
the Code of Commerce and by special laws which in this case
the limitation of liability PER PACKAGE is SPECIFICALLY
provided under COGSA Section 4 (5) rather than the
GENERAL provision of Article 1749 NCC.
Issue: COGSA Section 4 (5) which provides: Carrier shall not
be liable beyond US$500 per package UNLESS the shipper
DECLARES THE VALUE of the goods written on the B/L.
Shipper alleged, granting that COGSA Section 4 (5) applies, the
liability of the common carrier is not limited to US$500 per
package because in the B/L, therein ANNOTATED about the
statements in the Letter of Credit (L/C) stating that the VALUE
of the goods PER METRIC TON which value of the goods is way
higher

than

US$500

PER

PACKAGE,

annotation of L/C on the B/L,

which

by

such

in effect technically a

DECLARATION OF THE VALUE of the goods per metric in the

B/L hence, limited liability to US500 per package under COGSA

P a g e | 22
Section 4 (5) does not apply. The question, is the Shipper
correct?
Held: NO. Such annotation of the L/C on the B/L stating the
value of the goods per metric ton is NOT A DECLARATION
OF THE VALUE of goods in the B/L required under COGSA
Section 4 (5). The annotation of L/C on the B/L was made
merely for the convenience between the shipper and the
bank processing the L/C (the bank being the consignee and
the shipper being merely the notify party such that the shipper
cannot withdraw the goods he imported without paying first the
bank that granted the L/C, and only after the shipper pays the
bank that the latter to surrender possession of the B/L to the
shipper). In other words, the L/C indicating the value of the
goods per metric ton even if annotated on the B/L is
separate and distinct from the B/L and has nothing to do
between the contract of carriage between the common
carrier and the shipper
Issue: The B/L provides that the liability of the common carrier is
limited only up to US$500 per package. Suppose, the 242 coils
were contained in 2 containers, should such 2 containers be
deemed as 2 packages so that the liability of the common
carrier would only be US$1,000?
Held: NO. Per package is not to be construed by package or
by container or by crate or similar denomination instead,
it is to be construed per unit or per good. Hence, there being
4 coils damaged, the common carrier is liable toUS$2000 (i.e.,
US$500 x 4 units)
(b)
Eastern Shipping Lines Inc. vs. BPI/MS Insurance
Corp., GR 182864, January 12, 2015 (incorporation/insertion
for the Invoice with the B/L)
Facts: COGSA Section 4 (5) which provides: Carrier shall not
be liable beyond US$500 per package UNLESS the shipper
DECLARES THE VALUE of the goods written on the B/L.
Issue: Is the incorporation/insertion of the invoice itself (written
thereon the value of the goods) with the B/L complies with the
declaration of value under COGSA Section 5 (5) - such that the
limitation of liability of carrier for US$500 per package does not
apply?
Held: YES. COGSA Section 4 (5) does not require that the value
of the goods must be written on the very B/L itself. Compliance

P a g e | 23
on COGSA Section 4 (5) can be attained by incorporating the
invoice, by way of reference to the B/L provided such
invoice contains the value of the goods. The value of the goods
being written on the invoice, and incorporated with the B/L, in
effect, the shipper informed the carrier about the value of the
goods, and being informed, the carrier can charge the freightage
in accordance with the value of the goods.
Note: In the same case, the SC ruled that mere insertion in the
B/L about the invoice number does not satisfy the requirement
of COGSA Section 4 (5) about the declaration of the value of the
goods in the B/L, hence, the US$500 per package limited liability
applies in favor of the carrier. Reason: Mere insertion of the
invoice number does not declare the value of the goods
Note: Incorporation/insertion of L/C with the B/L

is

not

declaration of value of goods in the B/L

7. Package Limitation of carriers liability for loss/damage of
goods under Section 4 [5] COGSA (Philam Insurance Compny,
Inc. vs. Heung-A Shipping Corp., GR 187701, July 23, 2014)
Facts: Shipper shipped 19 pallets of 200 rolls of goods (contained
in container) with Carrier from South Korea bound to Manila with
Consignee as consignee, with Insurer as insurer. A B/L was issued,
but the Shipper did not declare therein the value of the goods.
During the voyage, the goods sustained damaged due to seawater.
It also found out that there is damage to the container supplied by
the Shipper to the Carrier. The Consignee received the goods on
January 5, 2001 with damage of 17 pallets. Consignee claimed
damages against Carrier, but the latter refused, hence, Consignee
claimed the insurance proceeds from the Insurer. Now, the Insurer
as subrogee, filed against the Carrier within one year from the time
the Consignee received the goods on January 5, 2001.
Issue No. 1: Whether or not the goods were damaged during the
possession of the Carrier?
Held: YES. Because it is proven that the goods were damaged
during voyage
Issue No. 2: What degree of diligence required of Carrier as
common carrier is it due diligence under section 3 (1) COGSA, or
extraordinary diligence under Article 1733 NCC?
Held: Extraordinary diligence. Article 1766 NCC provides that in all
matters not regulated by the NCC, then Code of Commerce and
special laws (such as COGSA) shall apply by suppletory, and also

P a g e | 24
considering that Philippines if the destination, then Article 1753
provides, the liability of common carrier shall be governed by the
law of destination, which in this case, Philippines. Now, the diligence
required

of

common

carrier

in

transportation

of

goods

is

extraordinary diligence (Article 1733 NCC).

Issue No. 3: Is the Carrier could still be liable for damages even if
the container containing the good supplied by Shipper himself is
defective that could also attribute to the seawater getting into the
container and damaged the goods?
Held: YES. Article 1742 NCC: Even if the damage/ lossof the goods
should be caused by the character of the goods, or the faulty
nature of the packing or of the containers, the common carrier
must exercise due diligence to prevent or at least lessen the
damage/loss. In the case at bar, the Carrier was not also able to
prove that it exercised due diligence for prevent/lessen damage on
the goods
Issue No. 4: Did the Insurer filed the action in court within the oneyear prescriptive period under Section 3 (6) COGSA?
Held: YES (see the Facts)
Issue No.5: Suppose the Consignee did not comply with the written
notice in accordance with Section 3 (6) COGSA, can the Insurer still
file action against carrier?
Held: YES. Provided, the Insurer should file action with court within
one year from the time the Consignee received the goods on
January 5, 2001. Reason: Section 3 (6) COGSA: If a written notice
of

loss

or

damage,either

apparent

or

concealed

(not

apparent), is not given as provided for in this section,that fact

shall not affect or prejudice the right of the SHIPPER (or
consignee) to bring suit (action for damages) within one year
after the delivery of the goods or the date when the goods
should have been delivered (to the person entitled to delivery
under contract of carriage [shipper/consignee]).
Hypothetical Issue: Article 366 Code of Commerce provides
claim for damages against the carrier must be made FROM
RECEIPT of the goods if the damage is apparent from outside OTHERWISE: If the damage cannot be ascertained from
outside the package, then claim must be made within 24hour from the time of the opening of the package. While
Section 3 (6) COGSA provides that an action shall be brought

P a g e | 25
within 1 year from delivery of the goods. Now, the
question is, which shall govern?
Answer: Section 3 (6) COGSA. Reason: In the Statutory
Construction, when two laws are conflicting and cannot be
harmonized, then special law shall prevail over the
general law. COGSA is a special law and Code of Commerce is
a general law (Note: In this same case of Philam Insurance
Compny, Inc. vs. Heung-A Shipping Corp., GR 187701, July 23,
2014, the issue was squarely raised, i.e., which shall govern, is it
Article 366 Code of Commerce or Section 3 (6) COGSA. Here, the
Supreme Court did not squarely addressed the issue but at any
rate, it applied COGSA)
Issue No.6: If the Insurer filed the action within one year from the
time the Consignee received the goods on January 5, 2001 then,
the question is, what is the basis of amount of liability of the
Carrier?
Held: Limited Package Liability for US$500 per package pursuant
Section 4 (5) COGSA. Reason: The Shipper did not declare the
value of the goods in the B/L
Issue No. 7: If the Limited Package Liability for US$500 per
package pursuant Section 4 (5) COGSA applies then, how much is
the Carrier liable?
Held: There being 17 pallets loss/damaged, then 17 pallets
multiplied with US$500, it would be US$8,500