Summary

on COGSA

Prepared by:
Genevieve SANCHEZ BERMUDO
 Summary
on COGSA
When applicable

When applicable
A. Applies suppletorily to the Civil Code if
the goods are to be shipped form a foreign
port to the Philippines
B. COGSA is applicable in international
maritime commerce.
C. 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.
NOTE:
Thus, the New Civil Code is the primary law on goods that are being
transported from a foreign port to the Philippines. Nevertheless, the COGSA
remains to be a suppletory law for such type of transportation – international
shipping.

Bill of lading necessary for COGSA to apply

Bill of lading or any other document, is needed for the application of COGSA.
It can be an acknowledgement receipt, received or signed by the ship captain
involving the goods.
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.

When COGSA NOT applicable

1. When liability is based on a contract of insurance
2. 2. In cases of mis-delivery of goods
 Summary
on COGSA
Delivery to arrastre operator for purposes
of Sec. 3 (6)
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.
Delivery” means delivery to arrastre
operator
Union Carbide Phils v. Manila Railroad

“Delivery” within the meaning of Section 3

(6) of COGSA means delivery to the arrastre
operator. That delivery is evidenced by tally
sheets which show whether the goods were
landed in good order or in bad order, a fact
which the consignee or shipper can easily
ascertain through the customs broker.
NOTE:
To avoid confusion as to when and in whose hands the damage was caused,
delivery shall mean delivery to the arrastre operator, and not to the consignee.
However, in cases of ports not covered by arrastre operators, delivery shall
mean delivery to consignee.

Notice of claim

Section 3 (6)
COGSA If the loss or damage is not apparent, the notice must be given within
three (3) days of the delivery. Said notice of loss or damage may be endorsed
upon the receipt of 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.
 Summary
on COGSA
Delivery to arrastre operator for purposes
of Sec. 3 (6)
In any event, 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. Notice of claim A. If loss or damage is
apparent – notice must be given immediately B. If loss or damage is not apparent
– notice must be given within 3 days from delivery.
Important: 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.

Distinguished from the NCC

COGSA NCC

Notice of (a) If damage is (a) If damage is

Claim apparent – apparent –
immediately immediately
(b) (b) If not (b) (b) If not apparent
apparent – – within 24 hours
within 3 days
Prescriptive from delivery
period, when Prescription 1 year 10-6-4 years
reckoned

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.
 Summary
on COGSA
Prescriptive period
Suit for loss or damage to the cargo must be brought within 1 year from:
(a) Delivery of the goods, or
(b) The date when the goods should be delivered.

The one-year prescriptive period does not apply to cases of mis-

delivery or conversion.

Philam Insurance v. Heung-a

Loss contemplates merely 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. It does not include a situation where there was indeed delivery –
but delivery to the wrong person, or a misdelivery.

When prescription
reckoned.

Union Carbide Phils v. Manila Railroad

Claim against the carrier's agent has prescribed
The one-year period within which the consignee should sue the carrier is
computed from the delivery of the goods or the date when the goods should
have been delivered.
“Delivery” within the meaning of Section 3(6) of COGSA means delivery to
the arrastre operator. That delivery is evidenced by tally sheets which show
whether the goods were landed in good order or in bad order, a fact which the
consignee or shipper can easily ascertain through the customs broker.
To use as basis for computing the one-year period, the date of delivery to the
consignee would be unrealistic and might generate confusion between the loss
or damage sustained by the goods while in the carrier's custody and the loss or
damage caused to the goods while in the arrastre operator's possession.
Under the facts of this case, the one-year period was correctly reckoned from
December 19, 1961, when, as agreed upon by the parties and as shown in the
 Summary
on COGSA
the tally sheets, the cargo was discharged from the carrying vessel and
delivered to the arrastre operator. That one-year period expired on December
19, 1962. Inasmuch as the action was filed on December 21, 1962, it was
barred by the statute of limitations.
Claim against the arrastre operator has not prescribed
The action against the arrastre operator to enforce liability for loss of the
cargo or damage thereto should be filed within one year from the date when
the claim for the value of such goods has been rejected or denied by the
arrastre operator.
However, before such action can be filed a condition precedent should be
complied with and that is, that a claim (provisional or final) shall have been
previously filed with the arrastre operator within 15 from the date of the
discharge of the last package from the carrying vessel.
In this case, the provisional claim was filed on January 3, 1962 or on the 15th
day following December 19, 1961, the date of the discharge of the last
package from the carrying vessel. That claim was never formally rejected or
denied by the arrastre operator.
Having complied with the
condition precedent for
the filing of a claim within
the fifteen-day period,
Union Carbide could file
the court action within
one year, either from
December 19, 1961 or
from December 19, 1962.
This second date is
regarded as the expiration
of the period within which
the arrastre operator
should have acted on the
claim.
In other words, the consignee has a two-year prescriptive period, counted from
the date of the discharge of the goods, within which to file the action in the
event that the arrastre contractor, as in this case, has not rejected nor admitted
liability.
 Summary
on COGSA
When to apply the Hamburg or Hague Rule or Hague Visby
It would depend on who is suing.
(a) If it is a suit by Philippine shipper or consignee of the goods, the COGSA
will apply, especially if the destination is the Philippines as provided under
Section 1753 of the New Civil Code.
(b) But if it is a suit by the owner of a foreign vessel against a Filipino vessel –
COGSA will not apply. If the foreign vessel owner will file a case here in
the Phils, that is tantamount to an admission that the Phil. Law governs,
the New Civil Code, on quasi-delict.

Suspension of prescriptive period by parties

1. Modification in the prescriptive period

Hamburg provision
Provision recognizing the party’s right to extend the prescriptive period.
2. Exchange of correspondence
Universal Shipping v. 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 v. 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.
 Summary
on COGSA
4. Amended complaint
Wallen Phils v. 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 v. 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.

Package liability limitation

Under the COGSA, the liability of the

carrier shall be limited to $500 per
package or pallet in the absence of
declaration in the bill of lading of the value
of the shipped goods. Note further that
COGSA applies only when there is bill of
lading or similar document.

Section 4 (5)
COGSA 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 lawful money of the United
States, or in case of goods not shipped in packages, per customary freight
unit, or the equivalent of that sum in other currency, unless the nature and
value of such goods have been declared by the shipper before shipment and
inserted in the bill of lading. This declaration, if embodied in the bill of lading
shall be prima facie evidence, but shall be conclusive on the carrier.
 Summary
on COGSA
Philam Insurance v. Heung-a
Pursuant to Section 4 (5) of COGSA, when there is loss or damage to goods
covered by a contract of carriage from a foreign port to a Philippine port, the
carrier’s liability is limited to $500 per package, in the absence of a shipper’s
declaration of the value of the goods in the bill of lading.
Invocation of arrastre operator of
prescription
Section 3 (6), COGSA “In any event, 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.” Insurance Co. of NA vs. Asian 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.

Genevieve Sanchez Bermudo

Transportation Law – A
Atty. Chester C. Castaños
XU – Law