Submitted by Emmanuel Esmer 4D

UNIVERSITY OF STO. TOMAS-LEGAZPI

College of Law
ADMIRALTY AND MARITIME LAW

I.A

Section 108 of the Insurance Code provides that each party is bound to communicate, in
addition to what is required by Section 28, all the information which he possesses,
material to the risk, except such as is mentioned in Section 30, and to state the exact and
whole truth in relation to all matters that he represents, or upon inquiry discloses or
assumes to disclose. Simply put, disclosure pertains to the act of providing material facts
of the vessel. Material facts that will help the insurer to decide whether to take the risk or
not.

Representation is the actual state of the vessel. It is the material facts of things that can be
insured as provided by section 100 of the Insurance Code. The said code provides that if
a representation by a person insured by a contract of marine insurance, is intentionally
false in any material respect, or in respect of any fact on which the character and nature
of the risk depends, the insurer may rescind the entire contract.

Finally, in every marine insurance upon a ship or freight, or freightage, or upon anything
which is the subject of marine insurance, a warranty is implied that the ship is seaworthy.
A warranty of seaworthiness extends not only to the condition of the structure of the ship
itself, but requires that it be properly laden, and provided with a competent master, a
sufficient number of competent officers and seamen, and the requisite appurtenances and
equipment, such as ballasts, cables and anchors, cordage and sails, food, water, fuel and
lights, and other necessary or proper stores and implements for the voyage.

II.B

Insurable interest is one the most basic of all requirements in insurance.  In general, a
person is deemed to have insurable interest in the subject matter insured where he has a
relation or connection with or concern in it that he will derive pecuniary benefit or
advantage from its preservation and will suffer pecuniary loss or damage from its
destruction, termination, or injury by the happening of the event insured against.

I.C

II.A

The law of salvage is a principle of maritime law whereby any person who helps recover

another person's ship or cargo in peril at sea is entitled to a reward commensurate with
the value of the property salved.

II.B

A contract for towage is for agreed purposes and an agreed sum, i. e. the tug’s duties and
the price are fixed beforehand, usually according to the towage company’s tariff of rates.
The towing vessel’s services are not voluntary, and no salvage reward is due unless some
peril arises during the towage such as to require extraordinary aid from the tug. Salvage,
on the other hand, is governed by maritime law. It is a voluntary action, and any reward is
dependent on some measure of success: hence the term “no cure, no pay” in most salvage
agreements. The reward can only be determined after completion of the salvage services.

II.C

The Salvage law of the Philippines provides that if a vessel or its cargo shall have been
assisted or saved, entirely or partially, by another vessel, the reward for salvage or for
assistance shall be divided between the owner, the captain, and the remainder of the crew
of the latter vessel, so as to give the owner a half, the captain a fourth, and all the
remainder of the crew the other fourth of the reward, in proportion to their respective
salaries, in the absence of an agreement to the contrary. The express of salvage, as well as
the reward for salvage or assistance, shall be a charge on the things salvaged on their
value.

III.A

Section 5 AM No. 19-08-14-SC provides the lists of cases wherein the Admiralty Court
can exercise jurisdiction. The following are the cases:

(a)  Loss or damage caused by the operation of the ship; 

(b)  Loss of life or personal injury occurring, whether on land or on water, in direct
connection with the operation of the ship; 

(c)  Salvage operations or any salvage agreement, including, if applicable, special

compensation relating to salvage operations in respect of a ship which, by itself or its
cargo, has threatened damage to the environment; 

(d)  Damage or threat of damage caused by the ship to the environment, coastline or
related interests, including the carriage of waste, garbage, or pollution as cargo into the
Philippines; measures taken to prevent, minimize, or remove such damage; compensation
for such damage; costs of reasonable measures of reinstatement of the environment
actually undertaken or to be undertaken; loss incurred or likely to be incurred by third
parties in connection with such damage; and damage, costs, or loss of a similar nature to
those identified in this subparagraph (d); 

(e)  Costs or expenses relating to the raising, removal, recovery, destruction or rendering
harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything
that is or has been on board such ship, and costs or expenses relating to the preservation
of an abandoned ship and maintenance of its crew; 

(f)  Any agreement relating to the use of a ship, including bareboat charter, charter by
demise, time charter, voyage charter or contract of affreightment, and maritime contract
of carriage, whether of goods or people, including bills of lading; 

(g)  General average; 

(h)  Towage; 

(i)  Pilotage; 

(j) Goods, materials, provisions, bunkers, equipment (including containers) supplied or

services rendered to the ship for its operation, management, preservation, or maintenance;

(k) Construction, reconstruction, repair, converting or equipping of the ship; 

(l) Port, canal, dock, harbor and other waterway dues and charges; 

(m) Wages and other sums due to the master, officers and other members of the ship’s
complement who are not Filipino citizens, in respect of their employment on the ship,
including costs of repatriation and social insurance contributions payable on their behalf,
initiated while the vessel is within Philippine jurisdiction; 

(n) Disbursements incurred on behalf of the ship or its owners;

(o) Insurance premiums (including mutual insurance calls) in respect of the ship, payable
by or on behalf of the shipowner or demise charterer;
(p) Any commissions, brokerages or agency fees payable in respect of the ship by or on
behalf of the shipowner or demise charterer;

(q) Any dispute as to ownership or possession of the ship;

(r) Any dispute between co-owners of the ship as to the employment or earnings of the
ship;

(s) A mortgage or a “hypothèque” or a charge of the same nature on the ship; 

(t) Any dispute arising out of a contract for the sale of the ship; and 

(u) Enforcement of foreign judgments and arbitral awards in relation to claims, or

judgments and awards rendered under the Admiralty and maritime jurisdiction of a
foreign court or arbitral tribunal, and subject to the procedures under Rule 39, Section 48
of the Rules of Court and the requirements of Republic Act No. 9285. 

Provided, that such action, demand or claim shall be filed with the designated first- or
second-level Admiralty courts, as the case may be, in accordance with their jurisdictional
thresholds, as may be determined by law. In case the action, demand or claim is within
the jurisdictional threshold of first-level courts, the case shall be filed before the first-
level court and the Rules of Procedure for Admiralty Cases shall apply.

III.B

Before the arrest of the vessel, the applicant must post a bond in favor of the adverse
party, in an amount fixed by the court in its order granting the issuance of the Writ of
Arrest which may be equal to the applicant’s demand or to the value of the vessel to be
arrested.  The bond provides that the applicant will pay all the costs which may be
adjudged to the adverse party and all damages which he may sustain by reason of such
arrest, if the court shall finally adjudge that the applicant was not entitled thereto (Section
4, Rule 57, 1997 Rules of Civil Procedure).  Likewise, the applicant must advance
custodial expenses to the sheriff implementing the arrest/attachment by the court of the
vessel.

IV.A

Collision is when a vessel should collide with another through the fault, negligence, or
lack of skill of the captain, sailing mate, or any other member of the complement, the
owner of the vessel at fault shall indemnify the losses and damages suffered, after an
expert appraisal.
Whereas, Protest is a declaration on oath by the master, of the circumstances attending
the damage or loss of his vessel, intended to show that the loss accrued by the perils of
the sea, and conducting with the protestation against any liability of the owner to the
freighters.
IV.B
Contention is incorrect.
As a general rule the action for the recovery of losses and damages arising from
collisions cannot be admitted if a protest or declaration is not presented within twenty-
four hours to the competent authority of the point where the collision took place, however
if the person that is supposed to convey the protest is not in condition to make known his
wishes, the general rule is not applicable.
In the case at bar, the circumstances fall within the provision of Article 836. Thus, even if
the captain failed to convey a protest within 24 hours because of the injury he sustained,
he can still initiate an action for recovery of damages arising from collision.

V.A

Abandonment is made by giving notice thereof to the insurer, which may be done orally,
or in writing: Provided, that if the notice be done orally, a written notice of such
abandonment shall be submitted within seven (7) days from such oral notice. A notice of
abandonment must be explicit, and must specify the particular cause of the abandonment,
but need state only enough to show that there is probable cause therefor and need not be
accompanied with proof of interest or of loss.

V.B.i

No.

A person insured by a contract of marine insurance may abandon the thing insured, or
any particular portion thereof separately valued by the policy, or otherwise separately
insured, and recover for a total loss thereof, when the cause of the loss is more than three-
fourths (¾) thereof in value is actually lost, or would have to be expended to recover it
from the peril.

In the case at bar, only 5000 sacks or ½ of the entire cargo has been lost. Thus, Mr trump
will not be able to abandon the entire cargo.

V.B.ii
A valuation in a policy of marine insurance is conclusive between the parties thereto in
the adjustment of either a partial or total loss. A marine insurer is liable upon a partial
loss, only for such proportion of the amount insured by him as the loss bears to the value
of the whole interest of the insured in the property insured.

In the case at bar, since 5000 sacks has been lost, the insurer is liable to indemnify the
insured the value of the 5000 sacks.

V.B.iii

An abandonment is equivalent to a transfer by the insured of his interest to the insurer,

with all the chances of recovery and indemnity.

If a marine insurer pays for a loss as if it were an actual total loss, he is entitled to
whatever may remain of the thing insured, or its proceeds or salvage, as if there had been
a formal abandonment.