ACCIDENTS AND DAMAGES IN MARITIME COMMERCE

What are the accidents in maritime commerce?

A. Averages
B. Arrival under stress
C. Collision
D. Shipwreck
Marine Protest or Protest
- is a written statement by the master of a vessel or any authorized
officer, attested by proper officer or a notary, to the effect that damages has
been suffered by the ship.
Required in the following instances:
1. Vessel makes an arrival under stress
2. Vessel is shipwrecked
3. Vessel has gone through hurricane or the captain has suffered damages or
averages
4. Maritime collisions
Note: Should be made within 24 hours following the arrival of the vessel at
the first port. Upon arrival at the place of destination, the captain shall ratify
the
protest within 24 hours.

A. AVERAGES

- is a loss or damage accidentally happening to a vessel or to its cargo

during a voyage. Also, a small duty paid to masters of ships, when goods are
sent in another mans ship, for their care of the goods, over and above the
freight.1
Averages may consist of:
1. Expense to the carrier
- Requisites:
a) such expense must be extraordinary or accidental;
b) the expense has been incurred during the voyage; and
c) the expense has been incurred for the preservation of the
vessel or cargo, or both.
2. Damage or Deterioration
- Requisites:
a) such must have been suffered from the time the vessel puts
to sea from the port of departure until it casts anchor in the port of
destination; and
b) have been suffered by the goods from the time they are
loaded in the port of shipment until they are unloaded in the port of
consignment.2
Classifications of Averages:
1. Simple or Particular Averages
2. Gross or General Averages3
1 Blacks Law Dictionary, Sixth Ed.
2 Art. 806, Code of Commerce.
3 Art. 808
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 In classifying averages into simple or particular and gross or general and

defining each class, Articles 809 and 811 of the Code of Commerce at the
same time enumerates specific cases as coming especially under one or the
other denomination.
Particular Averages
- include all damages or expenses caused to the vessel or cargo that
did not inure to the common benefit.4
- The owner of the things which gave rise to the expenses or suffered
the damages shall bear the simple or particular averages.5
- REIMBURSEMENT is NOT ALLOWED!!!
General Averages
- Damages or expenses deliberately caused in order to save the vessel, its
cargo or both from real and known risk.6
- All persons having an interest in the vessel and cargo therein at the time of
the occurrence of the average shall contribute.7
- REIMBURSEMENT is ALLOWED!!! Thus, the person who incurred such
damages or expenses can ask for reimbursement from persons who
benefited upon saving the vessel or cargo, or both.
Requisites of General Averages
a) A common danger is present;
- the danger must be imminent and apparently inevitable, except by
incurring loss a portion of the associated interests to save the remainder
b) There is deliberate sacrifice of part of the vessel or cargo, or both;
- there must be a voluntary sacrifice of a part for the benefit of the
whole
- example: a voluntary jettison
c) The sacrifice results to a successful saving of vessel or cargo, or both; and
- for if nothing is saved there cannot be any such contribution in any
case
d) Damages or expenses should have been incurred after taking proper
procedure and legal steps.8
- In order to incur the expenses and cause the damage corresponding to
general average, there must be:
a) assembly and deliberation of the sailing mate and other officers of the
vessel with the captain;
b) resolution of the caption;
c) entry of the resolution in the logbook;
d) minutes include the signature of both parties; and

4 Art. 809
5 Art. 810, Code of Commerce
6 Art. 811
7 Art. 812
8 Magsaysay, Inc. v. Agan, supra., 31 January 1955; The Star of Hope v. Annan, 76
U.S. 203, Justice Clifford.
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e) delivery of the minutes to the maritime judicial authority of the first port,
within 24hours from arrival9

What are the goods not covered by general average even if not
sacrificed?
1. Goods not recorded in the books or records of the vessel (Art. 855[2])
2. Fuel for the vessel if there is more than sufficient fuel for the voyage (Rule
IX, YorkAntwerp Rule)
Distinctions Between General Averages and Particular Averages

GENERAL
AVERAGE

PARTICULAR
AVERAGE

Both the ship and

cargo are subject to
the same danger
There is a deliberate
sacrifice of part of the
vessel, cargo, or both
Damage or expenses
incurred to the vessel,
its cargo, or both,
redounded
to
the
benefit
of
the
respective owners.
All those who have
benefited shall satisfy
the average.

No common danger
to both the vessel
and the cargo
Expenses
and
damages
are
not
deliberately made
Did not inure to
common benefit and
profit of all persons
interested
in
the
vessel and her cargo.
Only the owner of the
goods benefiting from
the
damage
shall
bear the expense of
average.

York-Antwerp Rules
- an international system of rules, providing among others, for liquidation
and payment of averages, provides that the rights to contribution in general
average shall not be affected, though the event which gave rise to the
sacrifice or expenditure may have been due to the fault of one of the parties
to the adventure. However, this shall not prejudice any remedies which may
be open against that party for such fault.
- Liability for contribution on averages under this rule:
1. Deck cargo is permitted in coastwise shipping but prohibited in overseas
shipping
2. Overseas trade must always contribute to general average, but should
the same be jettisoned, it would not be entitled to reimbursement because
there is violation of the Y-A Rules
3. Coastwise shipping must always contribute to general average and if
jettisoned would be entitled to reimbursement
Jettison
- Act of throwing overboard part of a vessels cargo or hull in hopes of
saving a ship from sinking.
Order of Goods to be Cast Overboard in case of Jettison
1. Those on deck, preferring the bigger bulk with least value.
9 Arts. 813 and 814, Code of Commerce.
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2. Those below upper deck, beginning with the heaviest with least utility.10
Things to Remember in Cases of Overseas and Interisland trade as
to Reimbursement and Payment of General Averages on Jettisoning
Cargoes

OVERSEAS TRADE

INTER-ISLAND
TRADE

In case of overseas
trade, the YorkAntwerp
Rules
prohibit
the
loading of cargo on
deck.
In case such cargo is
jettisoned, the owner
will not be entitled to
reimbursement in view
of the violation.

In case of interisland
trade,
the
York
Antwerp Rules allow
deck cargo

If the cargo loaded on

deck is jettisoned as a
result of which the
vessel was saved, the
cargo
owner
is
entitled
to
reimbursement.
If the cargo were If the cargo is saved,
saved, the owner must the cargo owner must
contribute to general contribute
to
the
average.
general average.
(Reason: voyages are
(Reason: the vessel is usually
short
and
exposed for many days there are intervening
to the peril of the sea islands and the seas
making deck cargo is are
generally
not
dangerous
to rough)
navigation)

B. ARRIVAL UNDER STRESS

- is the arrival under stress of a vessel at the nearest and most convenient
port upon the instance of the captain, if during the voyage the vessel cannot
continue the trip to the port of destination on account of the lack of
provisions, well-founded fear of seizure, privateers or pirates, or by reason of
any accident of the sea disabling it to navigate.11
Arrival Under Stress Becomes Unlawful in the following cases:
1. Lack of provisions is due to negligence to carry according to usage and
customs
10 Art. 815, Code of Commerce.
11 Code of Commerce.
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2. Risk of enemies, privateers or pirates not well known or manifest

3. Defect of vessel is due to improper repair; or
4. Malice, negligence, lack of foresight or skill of captain.12
Who Bears Expenses
1. The ship-owner or ship agent except for damages caused by the shippers
by reason of a lawful arrival.13
2. The captain shall be liable for damages caused by his delay, if after the
cause of the arrival under stress has ceased, he continues the voyage.14
If deviation of route does not constitute arrival under stress, then such
deviation is improper. Hence, as a general rule, the captain and the ship
owner shall be liable.
If the deviation constitutes arrival under stress, both the captain and the ship
owner shall not be liable. In arrival under stress, the captain must file a
Protest which is merely a disclaimer for the ship owner not to be liable.
Proper Procedure/ Formalities:
1. Captain determines during the voyage if there is well founded fear of
seizure, privateers and other valid grounds;
2. He shall then assemble the officers;
3. He shall summon the persons interested in the cargo who may be present
and who may attempt but without right to vote;
4. The officers determine and agree if there is well founded reason after
examining the circumstances. The captain shall have the deciding vote;
5. The agreement shall be drafted and the proper minutes shall be signed
and entered in the log book; and
6. Objections and protests shall likewise enter in the minutes.15

C. COLLISION
- is the impact of two vessels both of which are moving.
- the provisions of the Code of Commerce on Collision may be
applicable to cases of Allision.
Allision
- is the striking of a moving vessel against one that is stationary.
Rules Governing Liabilities of Parties in case of Collision?
1. If one (1) vessel is at fault or if the collision is due to the fault, negligence,
or want of skill of the captain, sailing mate, or any other member of the
compliment, the ship owner of such vessel shall be liable for all resulting
damages.16

12 Art. 820
13 Art. 821
14 Art. 825
15 Art. 819
16 Art. 826
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2. If both vessels are at fault, each vessel shall suffer their respective losses
but as regards the owners of the cargoes, both vessels shall be jointly and
severally liable.17
3. If there is failure to determine which of the two (2) vessels is at fault, each
vessel shall suffer its own losses and both shall be solidarily liable for losses
or damages on the cargo.18
- Doctrine of Inscrutable Fault
4. In case of fortuitous event or force majeure, each shall bear its own
damage.19
5. If the collision of the two vessels is due to the fault of a third vessel, the
third vessel shall be liable for losses and damages sustained. 20
6. If a vessel properly anchored and moored collides with those nearby by
reason of a storm or any force majeure, the vessel run into shall bear the
damages.21
Zones of Time in the Collision of a Vessel
1. First zone all time up to the moment when risk of collision begins.
Note: One vessel is a privileged vessel and the other is a vessel required to
take action to avoid collision.
2. Second zone time between moment when risk of collision begins and
moment it becomes practically a certainty.
Note: In this zone, the conduct of the vessels is primordial. It is in this zone
that vessels must observe nautical rules, unless a departure therefrom
becomes necessary to avoid imminent danger. The vessel which does not
make such strict observance is liable.
- Nautical Rules to be observed by vessels:
a) When 2 vessels are about to enter a port, the farther one
must allow the nearer to enter first; if they collide, the fault is presumed to
be imputable to the one who arrived later, unless it can be proved that there
was no fault on its part.
b) When 2 vessels meet, the smaller should give the right of way
to the larger one.
c) A vessel leaving port should leave the way clear for another
which may be entering the same port.
d) The vessel which leaves later is presumed to have collided
against one who has left earlier.
e) There is also a presumption against the vessel which sets sail
at night.
f) The presumption also works against the vessel with spread
sails which collides with another which is at anchor, and cannot move, even
when the crew of the latter has received word to lift anchor, when there was
not sufficient time to do so or there was fear of a greater damage or other
legitimate reason.
17 Art. 827
18 Art. 828, Code of Commerce.
19 Art. 830
20 Art. 831
21 Art. 832.
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g) The vessel which is not properly moored or does not observe

the proper distances, has the presumption against itself.
h) The vessel which is moored at a place not used for the
purpose, or which is improperly moored or does not have sufficient cables, or
which has been left without watch, has also against itself the presumption.
i) The same rule applies to those vessels which do not have
buoys to indicate the location of its anchors to prevent damage to these
vessels which may approach it.
3. Third Zone time when collision is certain and up to the time of impact.
Note: An error at this point no longer bears any consequence.
What is an Error in Extremis?
- The sudden movement made by a faultless vessel during the third
zone of collision with another vessel which is at fault under the second zone.
Even if sudden movement is wrong, no responsibility will fall on the faultless
vessel.
- If a vessel having a right of way(privileged vessel/ faultless vessel)
suddenly changes its course during the third zone, in an effort to avoid an
imminent collision due to the fault of another vessel, such act may be said to
be done in extremis, and even if wrong, cannot create responsibility on the
part of said vessel with the right of way.
Procedure for Recovery
1. Protest should be made within 24 hours before the competent authority at
the point of collision or at the first port of arrival, if in the Philippines and to
the Philippine consul, if the collision took place abroad.22
2. Injuries to persons and damage to cargo of owners not on board on
collision time need not be protested.23

D. SHIPWRECK
- a ship which has received injuries rendering it incapable of navigation.
- is the loss of a vessel at sea, either by being swallowed up by the
waves, by running against a thing at sea, or on the coast.24
General Rule: The loss of a ship and its cargo shall fall upon their respective
owners.25
Exception: If the wreck was due to malice, negligence, or lack of skill of the
captain, or because the vessel put to sea was insufficiently repaired and
equipped, the ship agent or the shippers may demand indemnity from the
captain for the damage caused to the vessel or to the cargo by the
accident.26
22 Art. 835, Code of Commerce.
23 Art. 836
24 Moreno, Phil. Law Dictionary, citing Phil. American Gen. Insurance v. Delgado
Stevedoring Co.,9 July 1974.
25 Art. 840, Code of Commerce
26 Art. 841
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SALVAGE LAW (Act 2616) February 04, 1916

Salvage
- is the compensation allowed to persons by whose voluntary
assistance a ship at sea or its cargo or both have been saved in whole or in
part from an impending or actual peril, shipwrecks, derelicts or recapture
- 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 its 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
SUBJECT OF SALVAGE:
1. Ship itself
2. Jetsam
3. Floatsam or Flotsam
4. Ligan or Lagan

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
Basis for entitlement of Salvage Award:

1. The labor expended by the salvors in rendering the salvage service.

2. The promptitude, skill and energy displayed in rendering the service
and saving the property.
3. The value of the property employed by the salvors in rendering the
service, and the danger to which such property was exposed.
4. The risk incurred by the salvors in rescuing the property salved.
5. The value of the property salved.
6. The degree of danger from which the property was rescued.

RIGHTS AND OBLIGATIONS OF SALVORS AND OWNERS

A salvor, in view of maritime law, has an interest in the property. This is

called a lien, but it never goes, in the absence of a contract expressly
made, upon the idea of a debt. He is, to all intents and purposes, a joint
owner and if the property is lost he must bear his share like the other joint
owners.
If the ship and its cargo are saved together by the salvor, the salvage
allowance should be charged against the ship and the cargo in proportion
of their respective values, as in the case of general average; and neither is
liable for the salvage due from the other.
The salvor has a right of possession of a derelict for purposes of a
salvage claim. A derelict is a boat or vessel found entirely deserted or
abandoned on the sea without hope or intention of recovery or return by
the master or the crew, whether resulting from wreck, accident, necessity,
or voluntary abandonment.

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
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3. Person who fails to deliver a salvaged vessel or cargo to the Collector of

Customs.27
Rules on Salvage Reward

1. The reward is fixed by the RTC judge in the absence of agreement or

where the latter is excessive. (Sec. 9)
2. The reward should constitute a sufficient compensation for the outlay
and effort of the salvors and should be liberal enough to offer an
inducement to others to render services in similar emergencies in the
future.
3. If sold at public auction (no claim being made within 3 months from
publication), the proceeds, after deducting expenses and the salvage
claim, shall go to the owner; if the latter does not claim it within 3 years,
50% of said proceeds shall go to the salvors, who shall divide it equitably,
and the other half to the government. (Sec. 11-12)
4. If a vessel is the salvor, the reward shall be distributed as follows:
a. 50% to the shipowner;
b. 25% to the captain; and
c. 25% to the officers and crew in proportion to their salaries. (Sec. 13)

Towage
- is a 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.
Distinctions between Salvage and Towage Contracts
SALVAGE
TOWAGE
Governed by special law (Act
No. 2616)
Requires success, otherwise no
payment
Must be done with the consent
of the captain/crewmen
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
renumeration if unconscionable

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
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

27 Sec. 3, Salvage Law

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