MARITIME LAW: system of laws which particularly relates to the affairs and business of the sea, ships, crew and navigation, and to maritime conveyance of persons and property.

MARITIME LAW= ADMIRALTY LAW

Governed by: Special laws: Maritime Commerce,

Salvage Law, COGSA, Ship Mortgage Decree of 1978 and other laws

CIVIL CODE as primary law, Code of Commerce and Special Laws only apply suppletorily

Treaties and Conventions: Phils adopts generally accepted principles of International Law as part of the law of the land. (UNCLOS, International Conventions for the safety of Life at Sea, 1974, Tonnage Convention

International Customs (Convention for the International Regulations on the Prevention of Collisions at Sea 1972

REAL and HYPOTHECARY NATURE

REAL NATURE: Similar to transactions over real property with respect to effectivity against third persons which is done through registrations

As evidence, we have: The limitation of the liability of the

agents to the actual value of the vessel and freight money

Right to retain the cargo and the embargo and detention of the vessel

HYPOTHECARY NATURE: real and hypothecary nature of Maritime Law simply means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel which stands as a guaranty for their settlement.

LIMITED LIABILITY RULE: NO VESSEL NO LIABILITYThe shipowner or the agent’s liability is merely co-extensive with his interest in the vessel such that a total loss thereof results in its extinction. Because there is no longer any res to which it can attach.

Liability of owner and agent arising from the operation of such vessel were confined to the vessel itself, its equipment, freight and insurance, if any.

Designed to offset adverse conditions and to encourage people and entities to venture into maritime commerce despite the risks.

ART. 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons which arise from the conduct of the captain in the vigilance over the goods which the vessel carried; but he may exempt himself therefrom by abandoning the vessel with all her equipment and the freight he may have earned during the voyage.

ART. 590. The co-owners of the vessel shall be civilly liable in the proportion of their contribution to the common fund for the results of the acts of the captain, referred to in Article 587.

Each co-owner may exempt himself from this liability by the abandonment, before a notary, of that part of the vessel belonging to him.

ART. 643. If the vessel and her cargo should be totally lost, by reason of capture or wreck, all rights shall be extinguished, both as regards the crew to demand any wages whatsoever, and as regards the ship agent to recover the advances made.

If a portion of the vessel or of the cargo, or of both, should be saved, the crew engaged on wages, including the captain, shall retain their rights on the salvage, so far as they go, on the remainder of the vessel as well as on the amount of the freightage of the cargo saved; but sailors who are engaged on shares shall not have any right whatsoever on the salvage of the hull, but only on the portion of the freightage saved. If they should have worked to recover the remainder of the shipwrecked vessel they shall be given from the amount of the salvage an award in proportion of the efforts made and to the risks, encountered in order to accomplish the salvage.

ART. 837. The civil liability incurred by the shipowners in the cases prescribed in this section, shall be understood as limited to the value of the vessel with all her appurtenances and freight earned during the voyage.

EXCEPTIONS TO LIMITED LIABILITY1. Where the injury or death to a passenger is

due either to the fault of the shipowner or to the concurring negligence of the shipowner and the captain.

2. Where the vessel is insured3. In workmen’s compensation claims4. Total destruction of the vessel does not

affect the liability of the owner for repairs of the vessel completed before its loss.

5. When there is no total loss and vessel is not abandoned

NEGLIGENCE OF SHIPOWNER AND AGENTLimited Liability Rule applies if the captain or the crew caused damage or injury.

If the failure to maintain seaworthiness of the vessel can be ascribed to the shipowner alone or shipowner concurrently with the captain, the the LLR cannot be invoked.

Carrier is liable for the damages to the full extent and not up to the value of the vessel if it was established the carrier was guilty of negligence in allowing the captain and crew to play majhong, vessel was topheavy, excessive amount of cargo, authorizing voyage with knowledge of typhoon is NEGLIGENCE.

IN cases where collision was imputable to both of vessels, each shall suffer her own damages and both shall be solidarily liable for the damages occasioned to their cargoes.

BURDEN OF PROOF: The carrier or shipowner has the burden of showing that it exercised EOD (and not to its fault or neg) to invoke LLR.

NOT APPLICABLE TO INSURANCE CLAIMSTotal loss of the vessel did not extinguish liability of the carrier’s insurer. Its insurance still answers for the damages that a shipowner or agent may be held liable for by reason of the death of the passengers.

LLR applies to the paying insurer when it exercises its right of subrogation against the shipowner. Cause of action of the insurer is the same as the cause of action of the shipper. Hence, insurer is subject to the defenses available to the shipowner.

WORKMEN’S COMPENSATIONLLR does not apply in Workmen’s Compensation Act. Even if the vessel is lost, the liability is till enforeceable against the employer or ship owner.

WHY: It is a liability created by statute to compensate the employees and laborers in cases of injury inflicted upon them, while engaged in the performance of their work,or their heirs and dependents in the event of death caused by their employment. This must be included in the budget of any well-managed industry.

ABANDONMENTAbandonment of the vessel, its appurtenances and freightage is an indispensable requirement before the shipowner or ship agent can enjoy the benefits of LLR. If he does not want to

abandon, he is still liable even BEYOND the value of the vessel.

EXCEPTION: when vessel is totally lost.

IF THERE IS INSURANCE over the vessel, abandonment covers the insurance proceeds while the vessel shall be abandoned in favor o the insurer.

PROCEDURE FOR ENFORCEMENTRights of vessel owner or agent under the LLR are akin to those rights of the shareholders to limited liability under the Corpo laws.

In both insolvency of a corporation and the sinking of a vessel, the creditors are limited in their recovery to the remaining value of accessible assets.

WHO MAY INVOKE: SHIPOWNER.Charterer cannot invoke it as a defense especially against the shipowner.

RIGHT OF ABANDONMENT

Shipowner or Agent ConsigneeWHAT MAY BE ABANDONEDVessel Goods

INSTANCES1. In case of civil

liability from indemnities to

3rd persons

2. Sec 138, Insurance Code

3. In case of leakage of at least ¾ of the contents of a cargo containing liquids

1. Partial non delivery, goods are useless without the others

2. Goods are rendered useless for the sale or consumption for the purposes they were destined

3. In case of delay through the fault of carrier

EFFECTS1. Transfer of

Ownership of the vessel from the shipowner to shippers or insurer

2. In case of (2), the insurer must pay the insured as if there was actual loss of the vessel

1. transfer of ownership on good from shipper to carrier

2. carrier should pay the shipper the market value of the goods at the point of destination

PARTIES IN MARITIME COMMERCE

A. SHIP OWNERS and SHIP AGENTS

SHIP OWNER: Person who has the possession

Liability:- primarily liable for the damages

sustained in the operation of vessel. - Civilly liable for the acts of the captain

“NAVIERO” includes SHIP AGENT/ OWNER/ CHARTERER”

SHIP AGENT: person entrusted with the provisioning of the vessel, or who represents her in the port in which she happens to be.

Liability: solidarily (jointly and severally) liable with the owner

Extent of Liability: applies to both for breach of contract and extra contractual obligation such as tort.

ART. 586: Shipowner and ship agent shall be civilly liable for the acts of the captain and for the obligations contracted by the latter to repair, equip and provision the vessel, provided the creditor proves that the amount claimed was invested for the benefit of the same.

ART 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel; but he may exempt himself therefrom by abandoning the vessel with all her equipments and freight it might have earned during the voyage.

B. CAPTAINS AND MASTERS OF VESSELS

C. PILOTD. OFFICERS AND CREW OF VESSELE. SUPER CARGOES*