COGSA

1. Applies suppletorily to the Civil Code if the goods are to be shipped form a foreign port to the Philippines
2. COGSA is applicable in international maritime commerce.
3. It can be applied in domestic sea transportation if agreed upon by the parties (paramount clause).

ARTICLE 1753, NCC

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.

WHEN COGSA NOT APPLICABLE

1. When liability is based on a contract of insurance
2. In cases of misdelivery of goods

CONTRACTS
COGSA applies to contracts of carriage of goods evidenced by Bills of Lading.

Section 1(b) of COGSA provides that the term “contract of carriage” applies only to contracts of carriage by sea 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 charter 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.

Reason: In international trade, other countries are also involved. A bill of lading is the contract between the shipper and the carrier. Being so, regardless of country, it shall be
governing law between the two. Consequently, in case of suit, the law to be applied won’t be an issue because it is the contract (bill of lading) that will govern.

FOREIGN TRADE
Transportation of goods between the ports of the Philippines and ports of foreign countries; “to and from” Philippine ports.

PARTIES
1. Carrier - includes the charterer who enters into a contract of carriage with the shipper; charters a vessel and conducts his own business for his own account.
2. Shipper
3. Consignee becomes a party to the contract by reason of either:
a) When he accepted the bill of lading and is trying to enforce the agreement;
b) Relationship of agency between the consignee and the shipper/consignor;
c) Unequivocal acceptance of the of the bill of lading delivered to the consignee with full knowledge of its contents; or
d) Availment of the stipulation pour autrui

PHILIPPINES FIRST vs. WALLEM

HELD: Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods
transported by them. Subject to certain exceptions enumerated under Article 1734 of the NCC, common carriers are responsible for the loss, destruction, or deterioration of the
goods. The extraordinary responsibility of the common carriers last from the time the goods are unconditionally placed in the possession of, and received by the carrier for
transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them. For Marine vessels,
Article 619 of the Code of Commerce provides that the ship captain is liable for the cargo from the time it is turned over to him at the dock or afloat alongside the vessel at the
port of loading, until he delivers it on the shore or on the discharging wharf at the port of unloading, unless agree otherwise.

Lastly, Section 2 of the COGSA provides that 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 set forth in the Act. Section 3(2) thereof then states
that among the carriers’ responsibilities are to properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried. On the other hand, the functions
of an arrastre operator involve the handling of cargo deposited on the wharf or between the establishment of the consignee or shipper and the ship’s tackle. Being the custodian
of the goods discharged from a vessel, an arrastre operator’s duty is to take good care of the goods and to turn them over to the party entitled to their possession. Handling
cargo is mainly the arrastre operator’s principal work so its drivers/operators or employees should observe the standards and measures necessary to prevent losses and
damage to shipments under its custody. It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier. In the
instant case, the damage or losses were incurred during the discharge of the shipment while under the supervision of the carrier. Consequently, the carrier is liable for the
damage or losses caused to the shipment. As for the 3rd issue, Wallem’s failure to respond to its demand letter does not constitute an implied admission of liability. Accoridng to
Justice Oliver Wendell Holmes: “A failure to answer such adverse assertions in the absence of further circumstances making an answer requisite or natural has no effect as an
admission.”

DELIVERY TO ARRASTRE

SECTION 3(6), COGSA

Unless notice or loss or damage and the general nature of such loss or damage 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.

ASIAN TERMINALS vs. PHILAM INSURANCE

As to prescription

The prescriptive period for filing an action for the loss or damage of the goods under the COGSA is found in paragraph (6), Section 3, thus: (6) Unless notice of loss or damage
and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge 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, 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.

Said notice of loss or damage maybe 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.

S/S “Calayan Iris” arrived at the port of Manila on April 20, 1995, and the subject cargoes were discharged to the custody of ATI the next day. The goods were then withdrawn
from the CFS Warehouse on May 11, 1995 and the last of the packages delivered to Universal Motors on May 17, 1995. Prior to this, the latter filed a Request for Bad Order
Survey on May 12, 1995 following a joint inspection where it was discovered that six pieces of Chassis Frame Assembly from two bundles were deformed and one Front Axle
Sub without Lower from a steel case was dented. Yet, it was not until August 4, 1995 that Universal Motors filed a formal claim for damages against petitioner Westwind. Even
so, we have held in Insurance Company of North America v. Asian Terminals, Inc. that a request for, and the result of a bad order examination, done within the reglementary
period for furnishing noticeof loss or damage to the carrier or its agent, serves the purpose of a claim. A claim is required to be filed within the reglementary period to afford the
carrier or depositary reasonable opportunity and facilities to check the validity of the claims while facts are still fresh in the minds of the persons who took part in the transaction
and documents are still available.

Here, Universal Motors filed a request for bad order survey on May 12, 1995, even before all the packages could be unloaded to its warehouse. Moreover, paragraph (6),
Section 3 of the COGSA clearly states that failure to comply with the notice requirement shall not affect or prejudice the right of the shipper to bring suit within one year after
delivery of the goods. Petitioner Philam, as subrogee of Universal Motors, filed the Complaint for damages on January 18, 1996, just eight months after all the packages were
delivered to its possession on May 17, 1995. Evidently, petitioner Philam’s action against petitioners Westwind and ATI was seasonably filed.
DELIVERY TO ARRASTRE:
NOTICE OF CLAIM
1. If loss or damage is apparent – notice must be given immediately
2. If loss or damage is not apparent – notice must be given within 3 days from delivery.

Non-compliance with the notice requirement shall not prejudice the right of the shipper to bring suit within 1 year from delivery of the goods or the date when the goods should
have been delivered

STEEL DRUM/PALLET

PHILAM INSURANCE vs. HEUNG-A

Common carriers, as a general rule, are presumed to have been at fault or negligent if the goods they transported deteriorated or got lost or destroyed. That is, unless they
prove that they exercised extraordinary diligence in transporting the goods. In order to avoid responsibility for any loss or damage, therefore, they have the burden of proving
that they observed such diligence. As the carrier of the subject shipment, HEUNG-A was bound to exercise extraordinary diligence in conveying the same and its slot charter
agreement with DONGNAMA did not divest it of such characterization nor relieve it of any accountability for the shipment. However, the liability of HEUNG-A is limited to $500
per package or pallet because in case of the shipper’s failure to declare the value of the goods in the bill of lading, Section 4, paragraph 5 of the COGSA provides that 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.

PRESCRIPTION
Where to reckon?

SECTION 3 (6), COGSA

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.

Prescriptive period

Suit for loss or damage to the cargo must be brought within 1 year from:
1. Delivery of the goods, or
2. The date when the goods should be delivered.

The one-year prescriptive period does not apply to cases of misdelivery or conversion.

MITSUI V. COURT OF APPEALS

As defined in the Civil Code and as applied to Section 3(6), paragraph 4 of the Carriage of Goods by Sea Act, "loss" contemplates merely a situation where no delivery at all
was made by the shipper of the goods because the same has perished, gone out of commerce, or disappeared in such a way that their existence is unknown or they cannot be
recovered. Conformably with this concept of what constitutes "loss" or "damage," the Court held in another case that the deterioration of goods due to delay in their
transportation constitutes "loss" or "damage" within the meaning of Section 3(6), so that as suit was not brought within one year the action was barred.

In Ang v. American Steamship Agencies, Inc. the question was whether an action for the value of goods which had been delivered to a party other than the consignee is for
"loss or damage" within the meaning of Åò3(6) of the COGSA. It was held that there was no loss because the goods had simply been misdelivered. "Loss" refers to the
deterioration or disappearance of goods.

In the case at bar, there is neither deterioration nor disappearance nor destruction of goods caused by the carrier's breach of contract. Whatever reduction there may have been
in the value of the goods is not due to their deterioration or disappearance because they had been damaged in transit. Indeed, what is in issue in this petition is not the
liability of petitioner for its handling of goods as provided by Section 3(6) of the COGSA, but its liability under its contract of carriage with private respondent as covered by laws
of more general application. Precisely, the question before the trial court is not the particular sense of "damages" as it refers to the physical loss or damage of a shipper's goods
as specifically covered by Section 3(6) of COGSA but petitioner's potential liability for the damages it has caused in the general sense and, as such, the matter is governed by
the Civil Code, the Code of Commerce and COGSA, for the breach of its contract of carriage with private respondent. The Court concluded by holding that as the suit is not for
"loss or damage" to goods contemplated in Åò3(6), the question

AGREEMENT FOR SHORTER PERIOD

PIONEER INSURANCE vs. APL CO. PTE. LTD.

SC: In the Bill of Lading, it was categorically stated that the carrier shallin any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought in
the proper forum within nine (9) months after delivery of the goods or the date when they should have been delivered. The same, however, is qualified in that when the said
nine-month period is contrary to any law compulsory applicable, the period prescribed by the said law shall apply. The present case involves lost or damaged cargo. It has long
been settled that in case of loss or damage of cargoes, the one-year prescriptive period under the COGSA applies. It is at this juncture where the parties are at odds, with
Pioneer Insurance claiming that the one-year prescriptive period under the COGSA governs; whereas APL insists that the nine-month prescriptive period under the Bill of Lading
applies. A reading of the Bill of Lading between the parties reveals that the nine-month prescriptive period is not applicable in all actions or claims. As an exception, the nine-
month period is inapplicable when there is a different period provided by a law for a particular claim or action. Thus, it is readily apparent that the exception under the Bill of
Lading became operative because there was a compulsory law applicable which provides for a different prescriptive period. Hence, strictly applying the terms of the Bill of
Lading, the one-year prescriptive period under the COGSA should govern because the present case involves loss of goods or cargo.

EFFECT OF TRANSSHIPMENT
THE AMERICAN INSURANCE COMPANY vs. COMPANIA MARITIMA

SC: According to paragraph 4 of the amended complaint the cargo was loaded on board the "M/S TOREADOR" in New York, "freight prepaid to Cebu City . . . pursuant to the
bill of lading No. 13." In other words, the action is based on the contract of carriage up to the final port of destination, which was Cebu City, for which the corresponding freight
had been prepaid. The transshipment of the cargo from Manila to Cebu was not a separate transaction from that originally entered into by Macondray, as general agent for the
"M/S TOREADOR". It was part of Macondray's obligation under the contract of carriage and the fact that the transshipment was made via an inter-island vessel did not operate
to remove the transaction from the operation of the Carriage of Goods by Sea Act. The one-year period starts on the day of delivery to Cebu.

LETTER OF CREDIT

UNSWORTH TRANSPORT INTERNATIONAL vs. CA

SC rejected CA’s contention that COGSA limitation of $500 per package should not apply considering that a higher value was declared pursuant to the letter of credit and the
pro forma invoice. Insertion of the words "L/C No. LC No. 1-187-008394/ NY 69867 covering shipment of raw materials for pharmaceutical Mfg. x xx" cannot be the basis of
petitioner's liability and invoice number does not in itself sufficiently and convincingly show that petitioner had knowledge of the value of the cargo.

In the present case, the shipper did not declare a higher valuation of the goods to be shipped (meaning, letters of credit and letters of invoice are not enough to establish the
value of the goods; it should be stated in the bill of lading). Petitioners liability should be limited to $500 per steel drum. In this case, as there was only one drum lost, private
respondent is entitled to receive only $500 as damages for the loss.

INVOCATION OF ARRASTRE
INSURANCE CO. OF NA vs. ASIAN TERMINALS

COGSA does not apply to arrastre operators. Section 3 (6) of COGSA applies only to carriers. “Carrier” under Section 1 of COGSA includes the owner or the charterer who
enters into a contract of carriage with a shipper. Consequently, not being a common carrier, an arrastre operator cannot invoke the prescriptive period of one year.
SUSPENSION OF PRESCRIPTIVE
Article 20(4) – Agreement of the parties

The person against whom a claim is made may at any time during the running of the limitation period extend that period by a declaration in writing to the claimant. This period
may be further extended by another declaration or declarations.

2. Exchange of correspondence

UNIVERSAL SHIPPING vs. IAC

This provision under Section 3 (6) of COGSA admits of an exception, that is, if the one-year period is suspended by express agreement of the parties for in such a case, their
agreement becomes the law for them. In this case, the period was suspended because of the exchange of communication by the parties. It was considered by the court that
they have mutual agreed to extend the time to file the suit.

TN: The circumstances in this are peculiar and cannot be applied in all cases.

3. Implied admission

CUA vs. WALLEM

In the allegations of his complaint, petitioner alleged that they have agreed to extend the prescriptive period. When the defendant answered, it was not specifically denied. So
the court said that it was a presumed admission. Therefore, there was no prescription.

4. Amended complaint
WALLEN PHILS vs. SR FARMS
The one year prescriptive period is reckoned not from the filing of the original complaint, but from the filing of the amended complaint.

5. Fault attributable to insurer

NEW WORLD vs. SEABOARD
In this case, the one year already prescribed. But the SC allowed the filing of the action because there was fault on the part of the insurance company, the subrogee:
(a) The insurer did not answer the claim.
(b) The insurer asked for an itemized list of the goods which were damaged.
(c) There was no rejection of the claim

The Supreme Court said that the insurer cannot ask for an itemized list because the claim was for total loss. So there’s no need for a list of the goods damaged since the claim
is total.