Week 16 Salvage Law

SALVAGE LAW
ATTY. PABLITO A. CARPIO

Salvage law (act 2616)
Salvage - Compensation allowed to
persons by whose voluntary
assistance a ship at sea or her cargo
or both have been saved in whole or in
part from an impending or actual
peril, shipwrecks, derelicts or
recapture
Salvage - Services one person render
to the owner of a ship or goods, by his
own labor, preserving the goods or
the ship which the owner or those
entrusted with the care of them have
either abandoned in distress at sea, or
are unable to protect or secure
Derelict – Ship or her cargo
which is abandoned and deserted
at sea by those who were in
charge of it, without any hope of
recovering it, or without any
intention of returning to it
Requisites for salvage award:
1. Valid object of salvage
2. Exposed to marine peril
3. Voluntary salvage services
4. Success in whole or in part, or
that services contributed to
success
Rules on salvage
award
1. Fixed by RTC in the absence of
agreement or where the latter is
excessive (Sec. 9)
Rules on salvage award
2. If sold (no claim being made within 3
months from publication)
a. Proceeds, after deducting expenses and
the salvage claim, shall go to the owner
b. If he does not claim it within 3 years, 50%
of the said proceeds shall go to the salvors,
and the other half to the government (Secs.
11-12)
Rules on salvage award
3. If a vessel is the salvor, the reward
shall be distributed as follows:
a. 50% to ship owner
b. 25% to captain
c. 25% to officers and crew in
proportion to their salaries (Sec. 13)
Persons without right to a
salvage reward:
1. Crew of the vessel saved
2. Persons who commenced salvage in spite
of opposition of the captain or his
representative
3. Person who fails to deliver a salvaged
vessel or cargo to the Collector of
Customs (Sec. 3)
towage
contract whereby one vessel,
usually motorized, pulls another
from one place to another, for
compensation. It is a contract for
services rather than a contract
of carriage.
salvage
✓ Governed by special law (act.
No. 2616)
✓ Requires success, otherwise no
payment
✓ Must be done with the consent
of the captain/crewmen
salvage
✓ Vessel must be involved in an
accident
✓ Fees distributed among crewmen
✓ Salvor takes possession and may
retain possession until paid
✓ Court can reduce amount of
remuneration if unconscionable.
towage
✓ Governed by ncc on contract of
lease
✓ Success not required
✓ Only the consent of the tugboat
owner is needed
✓ Vessel need not be involved in an
accident
towage
✓ Fees belong to the tugboat
owner
✓ Tower has no possessory lien;
only an action for sum of money
✓ Court cannot change amount in
towage even if unconscionable.
Carriage of goods by sea act
(ca 65)
• Requisites:
1. Contracts for carriage of goods
2. By sea
3. To and from Philippine ports
4. In foreign trade
Important features:
1. Amount of carrier’s
liability
2. Notice of damage
3. Prescriptive period
• Shipper guarantees at time of
shipment the accuracy of marks,
number quantity and weight as
furnished by him. He shall indemnify
the carrier against all loss,
damages and expenses arising from
inaccuracies in such particulars
• To recover loss or damage to
cargo, notice and general nature
thereof in writing must be given
by the shipper or consignee to the
carrier or his agent at the port
of discharge or at the time of
removal of the goods
1. If loss/damage not apparent – within
3 days from delivery
2. May be endorsed upon receipt for
the goods given by the person taking
delivery thereof
3. Need not be given if the state of
goods at the time of their receipt has
been the subject of joint inspection
Prescriptive periods:
1. To give notice if loss or damage is
apparent – notice in writing must be
given to carrier or agent at time of
removal of goods by persons entitled
to delivery.
2. To give notice if not apparent –
within 3 days from delivery.
3. To bring suits – 1 year after
delivery or when goods should
have been delivered a suit must be
filed (whether notice of
loss/damage is given), otherwise
prescribed.
• Stipulation reducing the 1 year
period is null and void, but a
written agreement to suspend it is
valid (Maritime Company of the
Philippines vs. CA, 164 SCRA 593)
• An extra-judicial demand does not
suspend the period
• An insurer who is exercising its right of
subrogation is also bound by the 1-year
period (Fil. Merchants vs. Alejandro 145
SCRA 42). It does not apply to a claim
against the insurer for the insurance
proceeds. The claim against the insurer is
based on contract that expires in 10 years
(Mayer Steel Pipe Corp. vs. CA 274 SCRA 432)
• If there is no delivery in case of
undelivered or lost cargo the one-
year period starts to run from the
day the vessel left port.
• When interrupted: Action is filed in
court
• contrary agreement between parties
4. Delivery to the wrong person –
prescriptive period is (i) 10 years
because there is a breach of
contract, or (ii) 4 years for quasi-
delict (Ang v. American SS
Agencies (19 SCRA 631)
• Delay or late delivery are not
the damage or loss contemplated
under the COGSA. The goods are
not actually lost or damaged.
The applicable period is 10 years
(Mitsui vs. CA 287 SCRA 366)
Liability under cogsa:
1. Maximum of $500 per package or, if not
shipped in packages, per customary
freight unit (e.g. metric ton)
2. Nature and value of goods may be
declared by shipper and inserted in bill
of lading; declaration is prima facie
evidence and not conclusive on carrier
No Liability under cogsa:
1. Nature or value of goods knowingly and
fraudulently misstated by shipper
2. Damage resulted from dangerous nature
of shipment loaded without consent of
carrier
3. Unseaworthiness not due to negligence of
carrier
4. Deviation was to save life or property at
sea
Ship mortgage decree
Purpose: To accelerate the growth and
development of the shipping industry in the
Philippines and to finance the acquisition,
construction, purchase or initial operation
of vessels Salient Features: Recognizes the
creation of preferred mortgage that must
be satisfied prior to all other claims and it
allows for the arrest of the vessel which in
effect treats the vessel itself as the
defendant in an action
No Liability under cogsa:
1. Nature or value of goods knowingly and
fraudulently misstated by shipper
2. Damage resulted from dangerous nature
of shipment loaded without consent of
carrier
3. Unseaworthiness not due to negligence of
carrier
4. Deviation was to save life or property at
sea
Ship mortgage decree
Purpose: To accelerate the growth and
development of the shipping industry in the
Philippines and to finance the acquisition,
construction, purchase or initial operation
of vessels Salient Features: Recognizes the
creation of preferred mortgage that must
be satisfied prior to all other claims and it
allows for the arrest of the vessel which in
effect treats the vessel itself as the
defendant in an action
Preferred mortgage lien
One constituted for the
financing, acquisition,
purchase, construction and
initial operation of vessels
under the provisions of PD 1521
requisites:
1. Recorded in MARINA
2. Affidavit of good faith
3. Mortgage does not stipulate the
waiver of preferred status of claim
4. Mortgage must be valid
5. Mortgage includes the whole vessel
of domestic ownership
If vessel is of foreign ownership
it will be recognized if:
1. Mortgage, hypothecation or
similar charge has been duly and
validly executed in accordance
with the laws of the country under
which the vessel is documented
If vessel is of foreign ownership
it will be recognized if:
2. Same has been duly registered in
accordance with such laws in a
public register – either at the port
of registry of vessel or at a central
office
Claims preferred over a
preferred mortgage lien:
1. Taxes
2. Judicial costs
3. Pilotage and tonnage charges and
other sea and port charges
4. Salaries of depositaries and keepers of
vessel
5. Captain and crew’s wages
Claims preferred over a
preferred mortgage lien:
6. General average
7. Salvage
8. Prior maritime liens
9. Damages arising out of tort
10. Prior preferred mortgage lien
END

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SALVAGE LAW

ATTY. PABLITO A. CARPIO

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