Insurance Co. of North America v. Asian Terminals

G.R. No. 180784 (February 15, 2012)

SC rules one-year limit doesn’t apply to arrastre claims; affirms insurer's right to recover damages.

Facts:

On November 9, 2002, Macro-Lite Korea Corporation shipped 185 packages of electrolytic tin free steel to San Miguel Corporation via the vessel M/V "DIMI P," with a declared value of US$169,850.35, insured under Marine Policy No. MOPA-06310 by the Insurance Company of North America (petitioner). The vessel arrived in Manila on November 19, 2002, and upon discharge, it was noted that seven packages were damaged. The shipment was then turned over to Asian Terminals, Inc. (respondent) for storage on November 21, 2002.

The consignee's customs broker, R.V. Marzan Brokerage Corp., withdrew the shipment on November 22, 23, and 29, 2002. A joint inspection on November 29 revealed that an additional five packages were damaged while in the custody of the respondent. On January 6, 2003, San Miguel Corporation filed claims against both the respondent and the petitioner for damages to 11,200 sheets of steel. The petitioner paid the consignee P431,592.14 for the damages and subsequently sought reimbursement from the respondent.

The Regional Trial Court (RTC) found that the respondent was liable for the damages but dismissed the petitioner's complaint on the grounds of prescription under the Carriage of Goods by Sea Act (COGSA), stating that the claim was filed beyond the one-year prescriptive period after delivery of the goods.

Legal Issues:

  1. Whether the one-year prescriptive period for filing a suit under COGSA applies to an action for damages against an arrastre operator.
  2. Whether the petitioner is entitled to recover actual damages from the respondent.

Arguments:

  • Petitioner’s Argument: The petitioner contended that the one-year limitation period under COGSA does not apply to actions against the arrastre operator, as the respondent is not a carrier as defined by COGSA. The petitioner argued that the damages claimed were for packages found damaged while in the custody of the respondent, which occurred after the goods were discharged from the vessel. Therefore, the prescriptive period under COGSA should not bar the claim.

  • Respondent’s Argument: The respondent maintained that the claim was indeed barred by the one-year prescriptive period under COGSA, asserting that the petitioner, as the insurer, could not acquire better rights than those of the insured. The respondent argued that the petitioner failed to act promptly on the claims, leading to the expiration of the prescriptive period.

Court’s Decision and Legal Reasoning:

The Supreme Court ruled in favor of the petitioner, reversing the RTC's decision. The Court held that the one-year prescriptive period under COGSA does not apply to actions against an arrastre operator, as the COGSA specifically pertains to carriers engaged in the transportation of goods by sea. The Court clarified that the period of "carriage of goods" under COGSA ends when the goods are discharged from the vessel, and any subsequent custody by an arrastre operator falls outside the purview of COGSA.

The Court also noted that the Request for Bad Order Survey and the subsequent examination report served the purpose of a formal claim, allowing the respondent to verify its liability. The Court found that the respondent was aware of the damages while the goods were in its custody, and thus, the lack of strict compliance with the 15-day claim filing period did not prejudice the respondent.

The Court determined that the petitioner was entitled to recover actual damages, but only for the four packages that were damaged while in the custody of the respondent, amounting to P164,428.76, as the claim for the other packages was already barred under COGSA.

Significant Legal Principles Established:

  1. The one-year prescriptive period under COGSA applies only to actions against carriers and does not extend to arrastre operators.
  2. A request for a bad order survey and the resulting examination report can satisfy the requirements for a formal claim, allowing for recovery even if the formal claim is filed beyond the stipulated period.
  3. An insurer, in subrogation, cannot acquire better rights than those of the insured.