PHILIPPINES Law and Practice Contributed by: Valeriano Del Rosario, Daphne Ruby Grasparil, Patrick Sarmiento and Maria Francesca Bautista, VeraLaw
4. Cargo Claims 4.1 Bills of Lading
its own limitation regime based on its domestic laws. The UK Supreme Court’s recent judgment in MSC Flaminia will find no application in the Philippines. 3.5 Procedure and Requirements for Establishing a Limitation Fund A limitation action is an available remedy under the Admiralty Rules and is commenced by filing a verified (sworn) complaint impleading all known defendants any time after a marine casualty that causes damage, injury or death. The defendants are the parties that are known to the owner that have claims against the limitation fund. To avail itself of the limitation action, the ship-owner, charterer, or person in possession and control of the vessel must abandon the vessel with all its appurtenances, equipment and freightage by notarial act filed with the ship registry. However, abandonment by notarial act is not necessary in the case of a total loss. The amount of the limitation shall be determined dur - ing a hearing set by the Admiralty Court based on judicial affidavits submitted by the parties. The limita - tion fund is constituted either by making a deposit of money to the Admiralty Court or by producing a letter of undertaking from a P&I club. 3.6 Seafarers’ Safety and Owners’ Liability In an effort to align domestic legislation with interna - tional conventions such as the 2006 Maritime Labour Convention and the 1978 International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, so as to ensure that Filipino seafarers have protections and opportunities in line with global standards, the Republic Act 12021, entitled “An Act Providing for the Magna Carta of Filipino Seafarers”, was enacted in September 2024. This Magna Carta of Filipino Seafarers primarily ben - efits seafarers on international vessels. Domestic sea - farers are principally covered by the Labour Code of the Philippines; however, nine chapters of the Magna Carta also apply to them, including the chapter on seafarers’ rights.
The Philippine Carriage of Goods by Sea Act (COGSA) was enacted during the period when the Philippines was a commonwealth of the USA, and brought into force in the Philippines the US Carriage of Goods by Sea Act, which is effectively the Hague Rules. As for the general law governing carriage by sea involving common carriers, this is covered by the gen - The New Civil Code (Articles 1507–1520) defines a bill of lading as a negotiable document of title and provides the rights emanating therefrom. The valid holder of a bill of lading would be entitled to sue the carrier. Under Article 1518, the holder of a bill of lad - ing in good faith and for value would be a valid holder thereof. The New Civil Code defines a valid holder as: • the named consignee in the bill of lading; • in the case of a bearer bill of lading, the holder of the bill of lading transferred by delivery; and • in the case of a “to order” bill of lading, the holder of the bill of lading transferred by endorsement and delivery. 4.3 Ship-Owners’ Liability and Limitation of Liability for Cargo Damages For domestic carriage, the liability of the carrier is gov - erned primarily by the Civil Code. Under the Code, a common carrier cannot limit its liability for its own loss or loss to goods where such injury or loss was caused by its own negligence. In the absence of negligence, a ship-owner can limit its liability for domestic carriage to its interest in the vessel in keeping with the well- settled doctrine of the real and hypothecary nature of maritime law. eral provisions of the New Civil Code. 4.2 Title to Sue on a Bill of Lading In the case of foreign carriage, neither the carrier nor the ship shall be liable for any loss or damage in an amount exceeding USD500 per package, or in the case of goods not shipped in packages, per custom - ary freight unit, or the equivalent of that sum in another currency. The exception to this is when the shipper
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