THE VESSEL DISPUTE: ASUKAL VS.

TITAN THE MEDIATION PROCESS

A Written Report Presented to Atty. Karen Olivia Jimeno School of Law San Beda Colle e!Ala"an

#n Partial $%lfillment of the Re&%irements in Alternative 'isp%te Resol%tion

Presented "y( Cristoffer ). )ariano Christian Rey L% t% *io Lim+oco )ar ,dward ,arl S. 'ales -i..i /ar%can 0*RO1P 23 $e"r%ary 456 4789

Alternative Dispute Res luti n Outline ( I. II. Pr !le" Interests # T$e Parties A. Interest # A%u&al '. Interest # Titan S$ippin( III. De"an)s # t$e Parties A. I)eal Opti n # r ea*$ part+ '. Opti ns Availa!le IV. Me)iati n Pr per A. Lan(ua(e '. Pla*e C. Ti"e D. Attire V. ,ettin( t -es A. Pe ple B. Interest C. Opti ns D. O!.e*tive Criteria VI. VII. A*tual A(ree"ent # t$e Parties 'ATNA

I. T$e Pr !le" /he pro"lem here is whether or not /itan is lia"le to As%.al for the payment of the 877 sac.s of s% ar that were destroyed "y the accident that came %pon the former:s vessel6 )/ Ariel. /his paper will foc%s on disc%ssin this matter and the pro"a"le remedies that came %pon the parties %nder the law and the s%rro%ndin circ%mstances6 as to what6 whom and why the claims can "e enforced. /he latter part will disc%ss the a reement "etween the parties as a res%lt of the mediation and the BA/-A for each party. II. Interest # t$e Parties Interest # A%u&al

8. /o "e paid the act%al val%e of the 877 sac.s of s% ar either in money or the same .ind and &%ality of s% ar with dama es. 4. /o "e indemnified of the costs of the transportation with additional dama es S%ch thin s are within the interest of As%.al since it was the one who s%stained a direct loss from the contamination of the sac.s of s% ar. Of co%rse6 it:s either they demand to "e paid with the e;act pec%niary val%e of s%ch oods that they lost or the oods when converted to monetary val%e. -ot to

mention the fact that it was the one who inc%rred the transportation costs. #t

sho%ld also "e indemnified for that "eca%se the specific %nderta.in for which the vessel was assi ned was not accomplished. 'ama es too are within the interest of As%.al since the incident co%ld have hampered their operations and compromised their s%pposed "%siness relations or investments.

Interest # Titan S$ippin(

8. /o "e a"solved from lia"ility or "e miti ated from their lia"ility 4. /o avoid liti ation "eca%se %nder article 859< of the -ew Civil Code6 common carriers are pres%med to have "een at fa%lt or to have acted ne li ently %nless they prove that they o"served e;traordinary dili ence On the other hand6 /itan Shippin 6 in the co%rse of the commotion6 will try all means to prevent inc%rrin lia"ility since "ased from it6 the Philippine Coast %ard were at fa%lt for not iss%in any charts indicative of the location of the s%n.en derelicts which was the ca%se of the contamination of the oods. #f ever they "e made lia"le6 it wo%ld also try to miti ate its lia"ility "eca%se "ein a company en a ed in the "%siness of shippin 6 financial fle;i"ility is a m%st. /he other interest of /itan Shippin is to avoid liti ation6 since it will "e tedio%s for "oth parties and will entail lots of time. -ot to mention the fact that there can "e a possi"ility that there can "e an increased lia"ility for them if ever they choose to liti ate and not mediate.

III. De"an)s # t$e Parties A=%.al 8. /o "e indemnified of the act%al val%e of the 877 sac.s of s% ar either in money or the same .ind and &%ality6 pl%s dama es. I)eal Opti n: /itan Shippin 4. /o "e a"solved from lia"ility and ma.e the ins%rance company Si %rado lia"le instead

#n the #deal Option of As%.al6 it relied on the fact "ased on the circ%mstances that indeed /itan Shippin did not e;ercised the re&%ired ,;traordinary 'ili ence in the >i ilance over the *oods as mentioned in Art. 8599 of the Civil Code. Also6 with the res%lt of non!e;ercised of the re&%ired dili ence6 /itan sho%ld "e responsi"le for the loss6 destr%ction or deterioration of the oods as stated in Art. 859? of the Civil Code. On the other hand6 /itan Shippin @s #deal Option is "ased on the fact that it is not a common carrier "%t Aa "are"oatBdemise charter partyC which ma.es As%.al lia"le for the acts of the ship captain and crew with respect to the shipment of the sac.s of s% ar. Also6 the -avi ational Da=ard which the Philippine Coast %ard did not ive was the efficient ca%se of the accident. #t ma.es /itan a"solved from any lia"ilities.

#n this instance6 we m%st .now if /itan Shippin is a common carrier or private carrier of oods. /he test for common carrier( De m%st "e en a ed in the "%siness of carryin oods for others as a p%"lic employment and m%st hold oods for persons himself o%t as ready to en a e in the transportation of

enerally as a "%siness and not a cas%al occ%pation6 De m%st %nderta.e to carry oods of the .ind to which his "%siness is confined6 De m%st %nderta.e to carry "y the methods "y which his "%siness is cond%cted and the transportation is for hire.

A=%.al

Opti ns Availa!le: /itan Pay the e&%ivalent of the 877 sac.s of s% ar with a correspondin a reement with A=%.al to waive their claim for dama es. Offer free transportation services for a limited amo%nt of time for A=%.al as payment for the oods lost. Pay the val%e of the <7 sac.s and ive a 97E disco%nt to A=%.al when they avail of the ne;t shipment Pay the val%e of the <7 sac.s and render free shippin services for a specific n%m"er of .ilo rams 0F7 . 3

$ile a case a ainst /itan for indemnification and dama es

Collect the proceeds of the ins%rance proc%red from Si %rado Be indemnified for the val%e of the 5< sac.s only "%t "e entitled to free shippin service from /itan for two months Be indemnified for the val%e of the <7 sac.s only "%t "e entitled to free shippin service from /itan for fo%r months Be indemnified of the val%e of 877 sac.s in installments

#n the followin Options Availa"le6 each party has its own options on how the disp%te will "e resolved. /he said options are more "eneficial to their own

advanta es. As mentioned "y /homas and Kilmann 0822536 #n conflict sit%ations we are concerned a"o%t two thin s( the intention to satisfy o%r own needs 0assertiveness3 and the intention to satisfy personal the needs of the other a 0cooperativeness3. Johnson 082253 stated that we are concerned a"o%t two thin s in a conflict with others( achievin oals andBor maintainin ood relationship with other people. #f yo% will assess the list of options availa"le6 yo% will see what /homas and Kilmann and Johnson metioned a"o%t.

IV. Me)iati n Pr per: /. Lan(ua(e 0 En(lis$ an) 1ilipin /he lan %a e we %sed d%rin the )ediation was "oth ,n lish and $ilipino. /he reason for this was so that the parties and the mediator co%ld feel comforta"le comm%nicatin with each other "y %sin any of the two lan %a es. Lan %a e was not really an iss%e since all persons present d%rin the mediation %nderstood and spo.e "oth of the lan %a es properly. '%rin the mediation6 the parties %sed $ilipino for eneral and informal comm%nication while ,n lish was %sed to artic%late the more comple; and specific ideas. /hese incl%de the specific amo%nts6 terms and conditions that were %sed in ne otiatin towards an a reement "etween "oth parties. /he parties were free to choose which lan %a e they wanted to %se at any time d%rin the mediation6 and if there was somethin %nclear or was not completely %nderstanda"le6 the mediator wo%ld the mediation "%t is nonetheless an worthy o"servation. #t clarify what was said in one lan %a e and phrase it in another. /his rarely happened d%rin wo%ld "e hi hly impractical in mediation6 to force a party to %se a lan %a e that may not "e more comforta"le to him than the other6 when in fact "oth lan %a es were .nown "y all parties. 2. Pla*e 0 C ##ee 'ean an) Tea Lea#3 Ala!an( T 4n Center /he parties held the mediation process at the Coffee Bean and /ea Leaf coffee shop located in the o%tdoor area of Ala"an /own Center. /he

reason the parties a reed to meet in the specified location was "eca%se it was a location .nown6 and convenient for all the parties involved. $%rthermore6 the atmosphere and am"iance of the Coffee Shop was very welcomin their minds witho%t worryin and non! intimidatin . /his type of environment helps and enco%ra es parties to spea. a"o%t the formalities that "%siness ne otiations %s%ally s%ffer from whenever it is held in a "oardroom or an office. /his location was also considered Gne%tral ro%ndG for "oth parties6 since it was not "ein held in an office of either party. Dence6 there was a sense of impartiality6 free from coercion d%rin the mediation. #n the coffee shop6 the parties occ%pied two small ta"les. /he mediator sittin at one end of the ta"le6 while the parties in disp%te sat "eside each other facin the mediator. /his type of set %p was preferred over havin opposin parties sit opposite each other and havin the mediator sit in "etween. /he ne otiatin parties "enefited from this seatin arran ement as it allowed them to share written or ver"al information with one another efficiently with a sense of cooperation "etween the two in facin the mediator. )oreover6 the parties co%ld order food and coffee of ood &%ality. Coffee sho%ld always "e availa"le at a place %sed in mediation in order for the parties to have the ener y and attentiveness to ma.e disc%ssions less red%ndant. 5. Ti"e 0 2:66 p" /he set time for all the persons involved in the mediation was two o:cloc. in the afternoon or commonly .nown as Gafter l%nchG. /he parties a reed %pon this time in the middle of the day "eca%se the parties wo%ld ideally6 already have eaten their l%nch meals. /his ives the participants more time to foc%s on the mediation whereas if the parties met for l%nch6 there wo%ld "e time wasted d%rin the period wherein they had to eat witho%t "ein to comm%nicate with each other effectively. Altho% h a specific time was a reed %pon6 some participants came earlier. /he participants who came early were a"le to et to .now each other a little "it "efore the mediation proper too. place. S%ch practice of comin ahead of time ena"les the participants to personally converse a"o%t matters in their private lives or small tal. that leads parties to %nderstand each

other more "efore en a in

in mediation. /his in t%rn6 helps them reach an the do%"t in character of the participants from a f%ll meal6 this wasn:t an iss%e since

amica"le a reement "y lessenin people feel more drained6 comin

toward each other. Altho% h6 this time of the day is also infamo%s for ma.in coffee was served in the place of mediation. #t is a "ea%tif%l time in the day where the s%n is o%t and trees visi"le. /he time complimented the location that was chosen.

7. Attire 0 'usiness Casual /he participants too. into consideration the location and time of the mediation "efore decidin what attire wo%ld "e deemed proper. /hey a reed that they need not "e in s%its or ties. B%t nonetheless6 they had to a ree %pon a certain standard in attire. /hey a reed not to wear shorts6 slippers6 or t!shirts witho%t collars. /he description was G"%siness cas%al attireG which means leather shoes6 .ha.i pants6 slac.s or chinos and dress shirts with collars. S%ch attire is perfect for the mediation %nderta.en "eca%se it allows comforta"le clothin for the participants yet it is also proper eno% h to enco%ra e them to .eep in mind the p%rpose of why they were there in the first place6 which was to en a e in proper "%siness ne otiation with the help of a mediator. B%siness cas%al attire allows6 them to disc%ss "%siness matters freely or even informally if it wo%ld s%"se&%ently end in an amica"le a reement "etween the two. S%ch attire ta.es away the stress of feelin constricted6 %ncomforta"le or intimidated in formal attire while still remindin them that comin to a valid a reement "etween the parties is still the main concern of the meetin and not +%st en a in in senseless "anter with one another. /o reiterate6 GB%siness cas%alG attire was the perfect "alance "etween "ein too formal6 and informal.

V. ,ETTIN, TO -ES A. Separate t$e pe ple #r " t$e pr !le" ,ach party was a"le to separate the people from the pro"lem "y wor.in to ether and attac.in the pro"lem as partners instead of "lamin each other for the loss of the 877 sac.s of s% ar. /he parties were a"le to identify each other@s interests and perceptions and %nderstand each other@s point of view to the pro"lem.

Also6 the parties did not have any emotional o%t"%rsts d%rin

the

mediation process. ,ach party allowed the other side to respond to each of the pointers iven "y the other party. Both parties listened actively and attentively to each other@s side. Both parties also ac.nowled ed each other@s interests and options.

'. 1 *us n t$e interests n t n t$e p siti ns

As%.al and /itan Shippin were a"le to reconcile their interests d%rin the mediation process. /his was done "y ar %in not over positions "%t "y the interest of the parties. /he interest of As%.al is to "e paid for the val%e of the 877 sac.s lost in the accident whereas the interest of /itan Shippin is

to "e miti ated from lia"ility or if possi"le "e a"solved from lia"ility over the val%e of the perished 877 sac.s.

/he parties were a"le to ac.nowled e each other@s interests as part of the pro"lem. /his was helpf%l "eca%se the parties were a"le to identify the motivatin factors "ehind their offers and address these thro% h alternative positions in order to reconcile the interests of "oth parties.

C. Invent Opti ns # r Mutual ,ain

/he parties were also s%ccessf%l in "rainstormin ideas for the different options for an accepta"le a reement. '%rin the mediation process6 "oth parties +%st had a freewheelin flow of ideas as to what they want in an a reement witho%t critici=in or eval%atin each other@s options. s

#n fact6 the mediation process lasted for almost three ho%rs coverin inventin options %ntil an act%al a reement was reached "y the parties. /he parties were also a"le to invent improvements to some of the most promisin ideas and to ma.e some of the more eneral options to specific ones.

D. Insist n usin( an O!.e*tive Criteria

/he parties decided to %se the -ew Civil Code provisions on common carriers as o"+ective criteria for reachin a ne otiated a reement. #n partic%lar6 the provisions %sed "y the parties are the followin (

Art. 8594. Common carriers are persons6 corporations6 firms or associations en a ed in the "%siness of carryin passen ers or compensation6 offerin their services to the p%"lic. Art. 8599. Common carriers6 from the nat%re of their "%siness and for reasons of p%"lic policy6 are "o%nd to o"serve e;traordinary dili ence in the vi ilance over the oods and for the safety of the passen ers transported "y them6 accordin to all the circ%mstances of each case. S%ch e;traordinary dili ence in the vi ilance over the oods is or transportin oods or "oth6 "y land6 water6 or air6 for

f%rther e;pressed in Articles 859?6 859<6 and 85?<6 -os. <6 F6 and 56 while the e;traordinary dili ence for the safety of the passen ers is f%rther set forth in Articles 85<< and 85<F. Art. 859?. Common carriers are responsi"le for the loss6 destr%ction6 or deterioration of the oods6 %nless the same is d%e to any of the followin ca%ses only( 083 $lood6 storm6 earth&%a.e6 li htnin 6 or other nat%ral disaster or calamityH 043 Act of the p%"lic enemy in war6 whether international or civilH 093 Act of omission of the shipper or owner of the oodsH 0?3 /he character of the oods or defects in the pac.in or in the containersH

0<3 Order or act of competent p%"lic a%thority. Art. 859<. #n all cases other than those mentioned in -os. 86 46 96 ?6 and < of the precedin article6 if the oods are lost6 destroyed or deteriorated6 common carriers are pres%med to have "een at fa%lt or to have acted ne li ently6 %nless they prove that they o"served e;traordinary dili ence as re&%ired in Article 8599.

/h%s6 %sin the applica"le law as the o"+ective criteria6 the parties have a reed that /itan Shippin is really responsi"le for the loss of the oods and m%st pay the val%e of 877 sac.s of s% ar lost. B%t instead of inc%rrin more costs and lia"ilities in terms of dama es if it were to "e s%ed "y As%.al thro% h liti ation6 /itan Shippin a reed to enter into a ne otiated a reement with As%.al. As%.al in t%rn6 a reed to enter into a ne otiated a reement to avoid liti ation costs and attorneys fees.

VI. ACTUAL A,REEMENT O1 THE PARTIES Titan will pay the value of the 100 sacks of sugar, half of which will be paid immediately while the remaining half will be paid in installments. Furthermore, Titan will give A ukal 1!."# discount on its accumulated transactions for each month, for a period of two months$ /he parties had several conditions "efore they arrived at this one. /he said a reement is "rea.even for the interest of the parties6 since the first cla%se6 in which /itan will pay the val%e of the 877 sac.s of s% ar6 is favora"le to A=%.al since %nder the law6 they are really entitled to s%ch ri ht. Dowever6 on /itan:s part6 in order to minimi=e s%dden loss d%e to s%ch payment of installments6 to which the latter %nconditionally a reed. oods6 it convinced A=%.al to pay the first half immediately and the second on stated

/he second cla%se6 which entitles A=%.al to a disco%nt on acc%m%lated transactions each month with /itan for two months6 was so% ht "y the former in order to compensate the fact that no liti ation will "e "ro% ht "y them and in addition6 other claims s%ch as dama es and transportation e;penses. A=%.al demanded 8<E initially6 to which /itan o"+ected. the latter insisted for 87E "%t event%ally "oth parties have arrived to a decision to pin the disco%nt at 84.<E6 which was halfway.

VII. 'est Alternative T a Ne( tiate) A(ree"ent

Asu&al8 'ATNA %ollect the insurance proceeds from &igurado '&ec. (( and &ec. 1)" of the *nsurance %ode+ #nstead of s%in /itan Shippin Company6 the former is more via"le "eca%se the claim is s%pported "y law. #n case ne otiation fail and an a reement cannot "e reached6 it wo%ld "e "est for the interest of A=%.al claim the ins%rance proceeds and let Si %rado collect from /itan whatever claim it may have a ainst it. Titan8 'ATNA Free shipping services to A ukal instead of paying the value of 100 sacks of sugar.

#f /itan cannot "e a"solved from lia"ility or even red%ce the same6 it may opt to render free shippin services to A=%.al for a certain period even if the val%e of s%ch services e;ceed the amo%nt of the oods lost.