Transportation Law

THE AWESOME NOTES COMMERCIAL LAW

MARITIME COMMERCE

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NOTES: where the bill of lading has been issued covering goods shipped aboard the vessel under a charter party, and the charterer remains the holder of bill of lading - the bill of lading operates as a receipt of the goods and as a document of title passing the property of the goods,

but not as a contract of carriage in a charter of the entire vessel

CLASSES OF CHARTER PARTY BAREBOAT OR DEMISE the charterer provides the crew, food and fuel. - the charterer is liable for the consequences of the voyage as if he were the owner

EXE: when the liability arise from the unseaworthiness of the vessel

* entire surrender by the owner of the vessel to the charterer, who provides the officers and the provisions. - hence, in case of damages, the liability ordinarily due to the shipowner shall be borne by the charterer * OWNER PRO HAC VICE: charterer will generally be considered as owner for the voyage or service or purpose stipulated. REQ: the owner of the vessel myst completely and exclusively relinquish possession, command and navigation thereof ti the charterer. - anything short, it is a contract of affreightment TIME CHARTER the vessel is chartered for a period of time or duration of the voyage. - the charterer acquires the right to use the carrying capacity, facilities of the vessel and he could designate the destination.

HOWEVER the owner retains possession and control of the vessel

VOYAGE OR TRIP CHARTER the condition of the charter are the same as in time charter. - it is a contract for the hire of a vessek for one or series of voyage usually for the purpose of transporting goods for the charterer IN RE: LIABILITY - it is usual for the parties to provide that responsibility for cargo loss shall falls on the one who agreed to perform the duty involved.

R I G H T S A N D O B L I G A T I O N S O F CHARTERER 1. to pay the agreed charter price 2. to pay freightage on unboarded cargo 3. to pay losses to others for loading

uncontracted cargo and illicit cargo 4. to wait if the vessel needs repair; and 5. to pay expenses for deviation

CHARTER PARTY CONTRACT OF AFFREIGHTMENT

a contract by which an entire ship, or some principal part thereof is let by the owner to another p e r s o n f o r a specified time or use

owner of a ship or other vessel lets the whole or a part of her to a merchant or other person for the c o n v e y a n c e o f g o o d s , o n a particular voyage, in consideration of the payment of freight.

2 KINDS 1 . c o n t r a c t o f affreightment; 2 . d e m i s e o r bareboat charter

hire is for the vessel o n l y o r s p a c e thereof may be either: 1. time charter; or 2. voyage charyer

IN RE: DEMISE OR B A R E B O A T CHARTER

o w n e r r e t a i n s p o s s e s s i o n , c o m m a n d a n d navigation of the ship

common carrier is not converted to a private carrier

cha r te re r i s no t liable for damages in general

required to exercise e x t r a o r d i n a r y dlegence

required to exercise ordinary diligence to p r o v i d e f o r t h e berthing space for l o a d i n g a n d unloading

governed principally by their stipulations

governed by rules for common carriers

prepared by: ronie ablan AAA - BASTE / ATB

CHARTER PARTIES


MARITIME COMMERCE

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NOTE: the rights and obligations of the parties are determined primarily by stipulations in their contract of private carriage or charter party.

IN RE: RISK OF LOSS GEN RULE: the merchandise shall be transported at the risk and venture of the shipper, EXE: if the contrary has not been expressly stipulated. DEMURRAGE is the sum fixed in a charter party as a remuneration as a renumeration to the owner of the ship for the detention of his vessel

- beyond the number of days allowed by the charter party for loading or unloading or for sailing

*available only if expressly stipulated as to determination of lay days, it may be either a fixed laydays or couched in an indefinite words such as customary quick dispatch customary quick dispatch - loading and unloading of cargo should be within a reasonable period of time. - due diligence should be exercised according to the customs and usage of the port or ports of call demurrage/dispatch: NONE - means as a waiver to claim for demurrage D E L A Y I N L O A D I N G A N D UNLOADING TO BE DEEMED AS DEMURRAGE; when the delay runs against the charterer as soon as the vessel is detained for an unreasonable length of time from the arrival of the vessel - because no available berthing space was provided for the vessel • due to the negligence of the

charterer or • by reason of circumstances caused

by the fault of the charterer interest rate for demurrage - since it is an obligation not arising from loan or forbearance of money

legal rate: 6%, in the absence of stipulation

DEADFREIGHT is the amount paid or recoverable from a charterer of a ship

for the portion of the ship's capacity the latter contracted for - but failed to occupy

PRIMATE bonus to be paid to the captain after successful voyage LAY DAYS period when vessel will be delayed in port for loading and unloading RESCISSION OF CHARTER PARTY GROUNDS 1. at the request of the charterer 2. at the ship owner's request 3. fortuitous causes

AT THE REQUEST OF CHARTERER either by: 1. by abandoning the charter and

paying half of the freightage (unilaterally; as distinguish from contract of lease which cannot be unilaterally terminated by one party)

2. error in tonnage or flag 3. failure to place the vessel at the

charter's disposal 4. return of the vessel due to pirates,

enemies or bad weather; and 5. arrival at port for repairs.

for #5 - if the repairs take less than 30 days; pay full freightage for voyage out - i f e x c e e d s 3 0 d a y s ; freightage must be paid in proportion to the distance covered.

AT THE SHIP OWNER'S REQUEST either due to: 1. if the extra lay days terminate

without the cargo being placed alongside the vessel (failure to load); and

2. sale by the owner of the vessel before loading by the charterer

the buyer is only bound to the charter party - when the new owner does not have any cargo to load on the vessel. - second distinction from ordinary lease contract, kasi in lease, if the buyer is aware, he must respect it.



MARITIME COMMERCE

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FORTUITOUS CAUSES 1. war 2. blockade 3. prohibition to receive cargo 4. embargo; and 5. inability of the vessel to navigate

PRELIMINARY SHIP OWNER; defined is the person who has possession, control and management of the vessel and the consequent right to direct her navigation and receive the freight earned and paid, while his possession continues.

if there are several co-owners - partnership is presumed; to be governed by the rule of the majority-the-co-owner with the smallest share being entitled to 1 vote, and the others, that number of votes in proportion to the smallest.

SHIP AGENT; defined is a person entrusted with provisioning and representing the vessel in the port in which it may be found

NOTE: • ship agent includes ship owner • is solidarily liable with the owner of

the vessel for losses or damage to the cargo

LIMITATION OF AUTHORITY OF A SHIP AGENT 1. cannot order a new voyage 2. cannot make a contract for a new

charter 3. cannot discharge a captain or a

crew member appointed by him for a definite period or voyage, exe for cause

4. cannot discharge a captain who us a co-owner, and who become a captain by virtue of a special agreement contained in the article

CIVIL LIABILITY OF SHIP AGENT AND/OR SHIPOWNER shall extends to 1. all contracts of the captain, whether

authorized or unauthorized, to repair, equip and provision the vessel.

2. loss and damage to the goods loaded on the. vessel without prejudice to the ship owner or ship agent freeing themselves

from liability by abandoning the vessel to the creditors

NOTE: abandonment of the vessel includes the ff objects a. the vessel itself b. equipments c. freightage; and d. insurance

note: abandonment only becomes essential if there is no total loss.

MARITIME LIEN ON THE VESSEL the persons who has lien over the vessel are the ff: • any person furnishing repairs, supplies,

towage, use of drydocks, or marine railway, or other necessaries, to any foreign or domestic vessel

ON THE ORDER OF 1. the owner of such vessel, or 2. of a person authorized by the

owner. NOTE bank which pays off the debt of the shipowner to a repair facility, becomes the transferee of all the rights of said facility as against the shipowner, including its maritime lien

• also; those who provide credit to a master of a vessel for the purpose of discharging a maritime lien

*lien may be enforced by an action in ren

MARITIME LIEN constitutes a present right of property in the ship, a jus in re, to be afterward enforced in admiralty process in rem, it relates back to the period when it first attached R I G H T S A N D O B L I G A T I O N S O F SHIPOWNER AND SHIP AGENTS 1. if the vessel is chartered wholly; not to

accept cargo from others 2. to observe represented capacity 3. to unload cargo clandestinely placed 4. to substitute another vessel if load is less

than 3/5 of capacity 5. to leave the port if the charterer does not

bring the cargo within the lay days and extra law days allowed

6. to place the vessel in a condition to navigate, otherwise freightage lost; and

7. to bring cargo to nearest neutral port in case of war or blockade


LIABILITIES OF SHIP OWNERS AND SHIPPING AGENTS


MARITIME COMMERCE

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AKA: HYPOTHECARY RULE no vessel, no liability CONCEPT: the shipowner's or agent's interest is merely co-extensive with his interest in the vessel (including the freight) such that a total loss thereof results in its extinction. EXE: WHEN LIMITED LIABILITY RULE DOES NOT APPLY 1. where the vessel is insured 2. where the claims are under Workmen's

Compensation aw or similar labor laws 3. repairs on the vessel before its loss 4. injury or damage due to the shipowner's

fault or to the concurrent negligence of the shipowner and the captain

NOTE: even if it is due to captain's fault only, without any concurrence by the shipowner, he may still be held liable and such liability shall not be hypothecated by abandonment or total loss of the vessel - when the liability is for the loss of life of passenger.

RATION: this is governed by civil code and not by code of commerce. - thus, extraordinary diligence is mandated of him, and the negligence of his agent will make him directly liable.

NOTES: • when the ship is unseaworthy, the shipowner

is always presumed negligent; since it is tasked with the maintenance of the vessel

• monsoon rains not considered as fortuitous event; as it is a seasonal occurrence and could have been foreseen and prepared fir

• shipowner is likewise presumed to be at fault when the vessel lacks proper equipment and the officers and crews lack proper training

• ALSO; limited liability does not apply when the vessel was used as a collateral, and the same was uninsured by the mortgagor when it sank. as the mortgagor has the duty to insure it.

SEAWORTHY; defined adequately equipped for the voyage and manned with sufficient number of competent officers and crew

NATURE OF LIABILITY solidarily liability of the shipowner and ship agent with the ship captain who is at fault, over the ff acts 1. damage to vessel and to cargo due to lack

of skill and negligence 2. thefts and robberies of the crew 3. losses and fines for violation of laws 4. damages due to mutinies 5. damages due to misuse of powers 6. for deviations 7. for arrival under stress 8. damages due to non-observance of marine

regulations


LIMITED LIABILITY LIABILITY FOR ACTS OF CAPTAIN


MARITIME COMMERCE

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AVERAGE; defined is an extraordinary or accidental expense incurred during the voyage - in order to preserve the cargo, the vessel or both, and all damages or deterioration suffered by the vessel,

f rom depar ture to the por t o f destination

- and to the cargo from the port of loading to the port of consignment.

CLASSES OF AVERAGE P A R T I C U L A R O R S I M P L E AVERAGE expenses and damages caused to the vessel or cargo - which have not inured to the common benefit, and - borne by their respective owners PRESUPPOSES THAT THE LOSS OR DAMAGE IS DUE TO 1. inherent defect of the goods 2. an accident of the sea 3. force majeure 4. negligence of the crew of the

carrier ie, repair cost due to the negligence of the captain. as a result of which, added expense for the provision of the crew, deterioration expense for the copra loaded on the vessel, and the towage cost of the vessel for it to pass the suez canal. - the repair cost is simple average as it did not inure to the benefit of all, as it was caused by the negligence of the captain. - the expense for the provision is as an incident of the delay in the repair of the vessel. since this expense is as a consequence of the repair, it is therefore a particular average - the deterioration of value is a particular average, borne by the copra owner - the towage expense is likewise a particular average, since it was incurred as an incident of navigation, to be borne by the owner. TEST: if both vessel and cargo are saved, it is general average. but if only either of one is saved, it is only a particular average. (?)

GROSS OR GENERAL AVERAGE all damages and expenses which are deliberately cause in order to save the vessel, its cargo or both at the same time, - from real and known risk R E Q U I S I T E S O F G E N E R A L AVERAGE 1. common danger 2. deliberate sacrifice 3. success; and 4. proper formalities and legal steps

RIGHTS OF THE OWNER OF JETTISONED GOODS entitled for general average, to be reimbursed for the value of goods jettisoned - less: portion of his cargo saved

TO WHOM HE IS ENTITLED FOR REIMBURSEMENT

1. to the owner of the vessel; and

2. the owner of the goods which were saved as a consequence o f the sacrifice

P R O V I D E D : t h e c a r g o jettisoned must be covered by a bill of lading

LIABILITY OF THE OWNERS OF THE CARGO SAVED will contribute to the reimbursement of the value of the goods jettisoned and to the damage suffered by the vessel. - less: his own share in the sacrifice RIGHTS OF THE OWNER OF THE VESSEL is entitled to reimbursement for the damage to the vessel resulting from the fortuitous evnt - less his own share of the sacrifice NOTE: once the ship master declare for the jettison of cargos after the all the requisite condition for general average to apply are present, - no particular shipper can refuse such declaration P R O C E D U R E I N G E N E R A L AVERAGE 1. before the loss is caused or the

expense incurred, the captain must call a meeting of the officers and any cargo owner who may be on board

2. they shall decide by voting, but the captain shall have the final vote.


ACCIDENT AND DAMAGES IN MARITIME COMMERCE


MARITIME COMMERCE

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HENCE; absence of call from the captain, it is only treated as a particular average. any jettisoned cargoes shall be borne by the owner thereof. O R D E R O F J E T T I S O N O F CARGOES 1. those on deck, and in the lower

deck 2. those of bigger bulk and smaller

value Q: when does an expense to put the vessel afloat a general average? A: if the vessel was intentionally stranded to save it and its cargo. - otherwise, a particular average, especially so where the stranding is a consequence of an accident I N R E : C O N T R I B U T I O N T O LIABILITY, RELATE TO YORK-ANTWERP RULES IN CASE OF OVERSEAS TRADE prohibits the loading of cargo in deck or even container. - in case such cargo is jettisoned, the owner thereof will not be entitled to reimbursement

in view of the violation. and if the cargo is saved, it must contribute to the general average IN CASE OF INTER-ISLAND TRADE deck cargo are allowed. - hence, if t is jettisoned, it is entitled to reimbursement if saved, it must contribute to general average.

R A T I O N O F Y O R K -ANTWERP RULE an inter-island trade, voyage is usually short and there are intervening island and the seas are by far generally not rough - while overseas trade are exposed to a greater risk, and deck cargo is dangerous for navigation, and therefore prohibited

ARRIVAL UNDER STRESS; defined is an arrival of the vessel at a port not the destination on account of 1. lack of provisions, 2. well-founded fear of seizure, 3. privateers, or 4. by reason of any accident of the sea

disabling it to navigate WHEN NOT JUSTIFIED 1. the lack of provision us due to

failure to carry the provisions necessary according to usage and customs

2. the risk of enemies is not well-known and manifest

3. the defector the vessel us a consequence of an improper repair; and

4. mal ice, negl igence, lack of foresight, lack of skill of the captain caused the damage

WHO BEARS EXPENSES the shipowner HOWEVER; when arrival under stress is not lawful - the shipowner shall likewise bear for t he damages su f fe red by the passenger and the cargo owner.

COLLISIONS; defined the impact of 2 vessels, both of which are moving

CONTRA: ALLISION; defined is an impact between a moving vessel and a stationary one ZONE OF TIME IN COLLISION FIRST ZONE; covers all the time up to the moment when the risk of collision begins SECOND ZONE; the time between the moment when the risk of collision begins and the moment it becomes a practical certainty THIRD ZONE; the time when collision is certain and the time of impact ERROR IN EXTREMIS a sudden movement made by a faultless vessel during the 3rd zone of collision with another vessel which is at fault during the 2nd zone. - in here, even i f the sudden m o v e m e n t w a s w r o n g , n o responsibility shall fall on said faultless vessel



MARITIME COMMERCE

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RULES AS TO LIABILITY ONE VESSEL AT FAULT owner of the vessel at fault during the second zone and the ship agent - are solidarily liable to the owner of the innocent vessel and to the cargo owners for all of their losses and damages. BOTH VESSEL AT FAULT as for the damage to the vessel, each shall bear their own loss for damage to the cargos of both vessels; - the ship owner and ship agent of both vessels shall be solidarily liable to the owners of the cargo. FAULT UNDETERMINABLE apply: doctrine of inscrutable fault same liability when collision is due to the fault of both vessel NOTE: DOCTRINE OF LAST CLEAR CHANCE DOES NOT APPLY IN COLLISION OF VESSELS - as the law on admiralty states that in case collision is due to the fault of both vessel or when it cannot be determined who is at fault, by applying doctrine of inscrutable fault, neither can successfully maintain a claim against each other for the loss or damage to their respective vessel. nor in case of error in extremis of a faultless vessel would not make it liable to other vessel. IF BOTH VESSELS ARE NEGLIGENT - it doesn't matter which one is the proximate cause and which is contributory. COLLISION DUE TO FORTUITOUS EVENT provided that there is no fault to either or both of the vessel - each vessel and each cargo owner will bear their respective damages IF CAUSED BY A THIRD VESSEL - the third vessel shall be liable. COLLISION OF A MOVING VESSEL AGAINST A STATIONARY OBJECT PRESUMPTION OF FAULT - against a moving vessel that strikes a stationary object (ie. docks or navigational aid) TO OVERCOME PRESUMPTION must exhaust every reasonable possibility which the circumstances admits and show that in each, they did all the reasonable care required.

PREREQUISITE TO RECOVERY any action for damages arising from collision should be preceded by a protest. MARITIME PROTEST - is a written statement made under oath by the captain or master of the vessel,

after the occurrence of an accident or disaster in which the vessel or cargo is lost or damaged with respect to the circumstances attending such occurrence.

TIMEFRAME WITHIN 24 HRS - before the competent authority at the place where the accident or disaster happened or at the first port of arrival, in the Phil, or to the Phil consul, if the incident took place abroad. NOTE: injuries to persons and damage to cargo of owners not on board on collision time, need not be protested. - dito bale, pag hindi on board yung shipper at the timeof the collision, it cannot file a protest even though part of his cargo was damaged due to the said collision. The person who can only file for maritime protest is the master or captain of the vessel involved in the collision.

IN RE: SHIPWRECK the only time the captain can be held liable by the owner of the vessel for indemnity is

- when it is due to its malice, negligence or lack of skill.

PRESUMPTION OF LOSS - if the vessel sinks and cannot be salvaged NOTES in case of negligence or fault of the pilot - it will not exempt the shipowner or the ship agent from liability the existence of pilotage, the master does not surrender his vessel to the pilot, and the pilot is not the master - the master still commands the vessel notwithstanding the presence of the pilot.



MARITIME COMMERCE

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APPLICABILITY: in carriage of goods from foreign ports to the Philippines NOTICE FOR LOSS OR DAMAGE WHEN IT MUST BE GIVEN • if the damage is extremely apparent; the

notice of the damage should be given on the receipt of the goods

• if the damage is not extremely visible; then within 3 days from receipt

NOTE: failure to give a notice will not bar the filing of the suit - if such is made within 1 yr stipulation in the bill of lading requiring that notice of damage must first be filed before one can file a claim for damages - is null and void stipulation. - COGSA; lack of notice is not a bar to the filing of a suit for damages within 1 year from receipt of the cargo. likewise, null and void stipulation reducing the 1 year prescriptive period.

IN CASE OF LOSS COGSA DEFINE LOSS; as where there is no delivery at all was made by the shipper of the goods because the same 1. had perished 2. gone out of commerce 3. disappeared in such a way that

their existence is unknown or they cannot be recovered

IT DOE NOT INCLUDE - misdelivery

hence; in case of misdelivery, the one year period does not apply. - no maritime hazard, in which the one year period is made to apply to meet its exigencies. 10 YEAR PRESCRIPTIVE PERIOD

PRESCRIPTIVE PERIOD 1 YEAR after the delivery of the goods or the date when the goods should have been delivered.

IT SHALL BE COUNTED EITHER FROM: • actual receipt of the shipper • d i r ec t l y de l i ve red upon t he

consignee • upon delivery of the goods to the

arrastre operator, and not upon the consignee

hence, supposing na receive ni arrastre yung damagd goods, but he neither file a claim nor notify the owner. and did so only after the expiration of the 1 year period - basta, in this instance, the consignee and/or the shipper has 2 year prescriptive period. or an additional one year counted from the expiration of the period within which the arrastre should have filed a claim.

AMOUNT OF LIABILITY THE LIABILITY LIMIT IS SET AT • $500 per package; or • the actual amount of the loss sustained; if

with declared value THIS: is deemed incorporated in the bill of lading even if not mentioned in it. NOTE: in case of transshipment, the original carrier is liable for any liability even if connecting carriers intervened,

this is without prejudice to the original carrier's right to recover from the connecting carrier. - this also applies in contract of carriage of passengers.


CARRIAGE OF GOODS BY SEA ACT

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Transportation Law