III. CARRIAGE OF GOODS BY SEA ACT/COGSA (C.A. No. 65)

APPLICABILITY The transportation must be:

1. Water/maritime transportation;2. for the carriage of goods; and3. overseas/international/foreign (from

foreign port to Philippine port). It can be applied in domestic sea transportation if agreed upon by the parties. (Clause paramount or paramount clause)

IMPORTANT FEATURES:1. Amount of carrier’s liability2. Notice of damage3. Prescriptive period

AMOUNT OF CARRIER’S LIABILITY Under the Sec. 4(5), the liability limit is set at $500 per package or customary freight unit unless the nature and value of such goods is declared by the shipper. This is deemed incorporated in the bill of lading even if not mentioned in it. (Eastern Shipping vs. IAC, 150 SCRA 463) Note that Art. 1749, NCC applies to domestic/inter-island/coastwise trade.

NOTICE OF DAMAGE (SEC. 3(6)) Rules:a. Patent damage: shipper should file a

claim with the carrier immediately upon delivery

b. Latent damage: shipper should file a claim with the carrier within three days from delivery.

Note: The filing of a notice of claim is not a condition precedent.

PRESCRIPTIVE PERIOD Action for loss or damage to the cargo should be brought within one year after:

a. Delivery of the goods (delivered but damaged goods); or

b. The date when the goods should have been delivered (non-delivery). (Sec. 3[6])

“Loss or Damage” as applied to the COGSA contemplates a situation where no delivery at all was made by the shipper of the goods because the same had perished, gone out of commerce, or disappeared in such a way that their existence is unknown or they cannot be recovered. Thus, it is inapplicable in case of misdelivery or conversion. (Ang vs. American Steamship Agencies Inc.) and damage arising from delay or late delivery (Mitsui O.S.K. Lines Ltd. vs. CA). In such instance the, Civil Code rules on prescription shall apply.

The one-year prescriptive period is suspended by:

1. The express agreement of the parties

(Universal Shipping Lines, Inc. vs. IAC, 188 SCRA 170)

2. The filing of an action in court until it is dismissed. (Stevens & Co. vs. Nordeutscher Lloyd, 6 SCRA 180)

The one-year period shall run from delivery of the last package and is not suspended by extrajudicial demand. (Dole Phils.,Inc. vs. Maritime Co.,148 SCRA 118)

The one-year period shall run from delivery to the arrastre operator and not to the consignee. (Union Carbide Phils, Inc. vs. Manila Railroad Co.,SCRA 359)

The insurer exercising its right of subrogation is bound by the one-year prescriptive period. However, it does not apply to the claim against the insurer for the insurance proceeds. (Fil. Merchants Ins. Co. vs. Alejandro; Mayer Steel Pipe Corp. vs. CA)

ARTICLE 366 COGSA Sec.3 (6)

Applicability1. Domestic/inter-island/coastwise transportation2. Land, water, air transportation3. Carriage of goods

1. International/overseas/foreign (from foreign country to Phils.)Note: subject to the rule on Paramount Clause2. Water/maritime transportation3. Carriage of goods

Notice of damage1.precedent2.for claiming latent damage

1. Not a condition precedent2. 3-day period for claiming latent damage

Prescriptive periodNone provided; Civil Code applies.

One year from the date of delivery (delivered but damaged goods), or date when the vessel left port or from the date of delivery to the arrastre (non-delivery or loss).