THE AWESOME NOTES !

1 of 8
!
COMMERCIAL LAW
MARITIME COMMERCE

CLASSES OF CHARTER PARTY

CHARTER PARTIES
CHARTER PARTY CONTRACT OF
AFFREIGHTMENT
a contract by which owner of a ship or
an entire ship, or other vessel lets the
some principal part whole or a part of
thereof is let by the her to a merchant or
owner to another other person for the
person for a conveyance of
specified time or use goods, on a
particular voyage, in
consideration of the
payment of freight.
BAREBOAT OR DEMISE
the charterer provides the crew, food
and fuel.
- the charterer is liable for the
consequences of the voyage as if he
were the owner
EXE: when the liability arise
from the unseaworthiness of
the vessel
* entire surrender by the owner of the
vessel to the charterer, who provides
the officers and the provisions.
- hence, in case of damages, the
liability ordinarily due to the shipowner
shall be borne by the charterer

2 KINDS hire is for the vessel * OWNER PRO HAC VICE: charterer
1. contract of only or space will generally be considered as owner
affreightment; thereof for the voyage or service or purpose
2. demise or stipulated.
bareboat charter may be either:
1. time charter; or REQ:
2. voyage charyer the owner of the vessel myst
completely and exclusively relinquish
IN RE: DEMISE OR possession, command and navigation
B A R E B O A T thereof ti the charterer.
CHARTER - anything short, it is a contract of
owner retains affreightment
possession,
command and
navigation of the TIME CHARTER
ship the vessel is chartered for a period of
time or duration of the voyage.
common carrier is - the charterer acquires the right to use
not converted to a the carrying capacity, facilities of the
private carrier vessel and he could designate the
destination.
charterer is not HOWEVER
liable for damages in the owner retains possession
general and control of the vessel

required to exercise required to exercise VOYAGE OR TRIP CHARTER

extraordinary ordinary diligence to the condition of the charter are the
dlegence provide for the same as in time charter.
berthing space for - it is a contract for the hire of a vessek
loading and for one or series of voyage usually for
unloading the purpose of transporting goods for
the charterer
governed principally governed by rules
by their stipulations for common carriers IN RE: LIABILITY
- it is usual for the parties to provide
that responsibility for cargo loss shall
NOTES:
falls on the one who agreed to perform
where the bill of lading has been issued
the duty involved.
covering goods shipped aboard the vessel
under a charter party, and the charterer
R I G H T S A N D O B L I G AT I O N S O F
remains the holder of bill of lading
CHARTERER
- the bill of lading operates as a receipt of the
1. to pay the agreed charter price
goods and as a document of title passing the
2. to pay freightage on unboarded cargo
property of the goods,
3. to pay losses to others for loading
but not as a contract of carriage in a
uncontracted cargo and illicit cargo
charter of the entire vessel
4. to wait if the vessel needs repair; and
5. to pay expenses for deviation

prepared by: ronie ablan

AAA - BASTE / ATB
 THE AWESOME NOTES
COMMERCIAL LAW
MARITIME COMMERCE
NOTE: the rights and obligations of the
parties are determined primarily by
stipulations in their contract of private
carriage or charter party.
IN RE: RISK OF LOSS
GEN RULE:
the merchandise shall be transported at the
risk and venture of the shipper,
EXE:
if the contrary has not been expressly
stipulated.
DEMURRAGE
is the sum fixed in a charter party as a
remuneration as a renumeration to the owner
of the ship for the detention of his vessel
- beyond the number of days allowed
by the charter party for loading or
unloading or for sailing
*available only if expressly stipulated
as to determination of lay days, it may
be either a fixed laydays or couched in
an indefinite words such as customary
quick dispatch
customary quick dispatch
- loading and unloading of cargo
should be within a reasonable period
of time.
- due diligence should be exercised
according to the customs and usage of
the port or ports of call
demurrage/dispatch: NONE
- means as a waiver to claim for
demurrage
D E L AY I N L O A D I N G A N D
UNLOADING TO BE DEEMED AS
DEMURRAGE; when
the delay runs against the charterer as
soon as the vessel is detained for an
unreasonable length of time from the
arrival of the vessel
- because no available berthing space
was provided for the vessel
• due to the negligence of the
charterer or
• by reason of circumstances caused
by the fault of the charterer
interest rate for demurrage
- since it is an obligation not arising
from loan or forbearance of money
legal rate: 6%, in the absence
of stipulation
DEADFREIGHT
is the amount paid or recoverable from a
charterer of a ship
!2 of 8
!
for the portion of the ship's capacity
the latter contracted for
- but failed to occupy
PRIMATE
bonus to be paid to the captain after
successful voyage
LAY DAYS
period when vessel will be delayed in port for
loading and unloading
RESCISSION OF CHARTER PARTY
GROUNDS
1. at the request of the charterer
2. at the ship owner's request
3. fortuitous causes
AT THE REQUEST OF CHARTERER
either by:
1. by abandoning the charter and
paying half of the freightage
(unilaterally; as distinguish from
contract of lease which cannot be
unilaterally terminated by one
party)
2. error in tonnage or flag
3. failure to place the vessel at the
charter's disposal
4. return of the vessel due to pirates,
enemies or bad weather; and
5. arrival at port for repairs.
for #5
- if the repairs take less than
30 days; pay full freightage for
voyage out
- if exceeds 30 days;
freightage must be paid in
proportion to the distance
covered.
AT THE SHIP OWNER'S REQUEST
either due to:
1. if the extra lay days terminate
without the cargo being placed
alongside the vessel (failure to
load); and
2. sale by the owner of the vessel
before loading by the charterer
the buyer is only bound to the
charter party
- when the new owner does
not have any cargo to load on
the vessel.
- second distinction from
ordinary lease contract, kasi in
lease, if the buyer is aware, he
must respect it.
prepared by: ronie ablan
AAA - BASTE / ATB
 THE AWESOME NOTES
COMMERCIAL LAW
MARITIME COMMERCE
FORTUITOUS CAUSES
1. war
2. blockade
3. prohibition to receive cargo
4. embargo; and
5. inability of the vessel to navigate
LIABILITIES OF SHIP OWNERS
AND SHIPPING AGENTS
PRELIMINARY
SHIP OWNER; defined
is the person who has possession, control and
management of the vessel and the consequent
right to direct her navigation and receive the
freight earned and paid, while his possession
continues.
if there are several co-owners
- partnership is presumed; to be
governed by the rule of the majority-
the-co-owner with the smallest share
being entitled to 1 vote, and the others,
that number of votes in proportion to
the smallest.
SHIP AGENT; defined
is a person entrusted with provisioning and
representing the vessel in the port in which it
may be found
NOTE:
• ship agent includes ship owner
• is solidarily liable with the owner of
the vessel for losses or damage to
the cargo
LIMITATION OF AUTHORITY OF A
SHIP AGENT
1. cannot order a new voyage
2. cannot make a contract for a new
charter
3. cannot discharge a captain or a
crew member appointed by him for
a definite period or voyage, exe for
cause
4. cannot discharge a captain who us
a co-owner, and who become a
captain by virtue of a special
agreement contained in the article
CIVIL LIABILITY OF SHIP AGENT AND/OR
SHIPOWNER
shall extends to
1. all contracts of the captain, whether
authorized or unauthorized, to repair, equip
and provision the vessel.
2. loss and damage to the goods loaded on
the. vessel without prejudice to the ship
owner or ship agent freeing themselves
!3 of 8
!
from liability by abandoning the vessel to
the creditors
NOTE:
abandonment of the vessel includes
the ff objects
a. the vessel itself
b. equipments
c. freightage; and
d. insurance
note: abandonment only becomes
essential if there is no total loss.
MARITIME LIEN ON THE VESSEL
the persons who has lien over the vessel are
the ff:
• any person furnishing repairs, supplies,
towage, use of drydocks, or marine railway,
or other necessaries, to any foreign or
domestic vessel
ON THE ORDER OF
1. the owner of such vessel, or
2. of a person authorized by the
owner.
NOTE
bank which pays off the debt of the
shipowner to a repair facility, becomes
the transferee of all the rights of said
facility as against the shipowner,
including its maritime lien
• also; those who provide credit to a master of
a vessel for the purpose of discharging a
maritime lien
*lien may be enforced by an action in
ren
MARITIME LIEN
constitutes a present right of property in the
ship, a jus in re, to be afterward enforced in
admiralty process in rem, it relates back to the
period when it first attached
R I G H T S A N D O B L I G AT I O N S O F
SHIPOWNER AND SHIP AGENTS
1. if the vessel is chartered wholly; not to
accept cargo from others
2. to observe represented capacity
3. to unload cargo clandestinely placed
4. to substitute another vessel if load is less
than 3/5 of capacity
5. to leave the port if the charterer does not
bring the cargo within the lay days and
extra law days allowed
6. to place the vessel in a condition to
navigate, otherwise freightage lost; and
7. to bring cargo to nearest neutral port in
case of war or blockade
prepared by: ronie ablan
AAA - BASTE / ATB
 THE AWESOME NOTES !4 of 8
!
COMMERCIAL LAW
MARITIME COMMERCE

LIMITED LIABILITY LIABILITY FOR ACTS OF

AKA: HYPOTHECARY RULE
no vessel, no liability
CONCEPT:
the shipowner's or agent's interest is merely
co-extensive with his interest in the vessel
(including the freight) such that a total loss
thereof results in its extinction.
EXE: WHEN LIMITED LIABILITY RULE
DOES NOT APPLY
1. where the vessel is insured
2. where the claims are under Workmen's
Compensation aw or similar labor laws
3. repairs on the vessel before its loss
4. injury or damage due to the shipowner's
fault or to the concurrent negligence of the
shipowner and the captain
CAPTAIN
NATURE OF LIABILITY
solidarily liability of the shipowner and ship
agent with the ship captain who is at fault, over
the ff acts
1. damage to vessel and to cargo due to lack
of skill and negligence
2. thefts and robberies of the crew
3. losses and fines for violation of laws
4. damages due to mutinies
5. damages due to misuse of powers
6. for deviations
7. for arrival under stress
8. damages due to non-observance of marine
regulations

NOTE: even if it is due to captain's fault only,

without any concurrence by the shipowner, he
may still be held liable and such liability shall
not be hypothecated by abandonment or total
loss of the vessel
- when the liability is for the loss of life of
passenger.

RATION:
this is governed by civil code and not
by code of commerce.
- thus, extraordinary diligence is
mandated of him, and the negligence
of his agent will make him directly
liable.

NOTES:
• when the ship is unseaworthy, the shipowner
is always presumed negligent; since it is
tasked with the maintenance of the vessel
• monsoon rains not considered as fortuitous
event; as it is a seasonal occurrence and
could have been foreseen and prepared fir
• shipowner is likewise presumed to be at fault
when the vessel lacks proper equipment and
the officers and crews lack proper training
• ALSO; limited liability does not apply when
the vessel was used as a collateral, and the
same was uninsured by the mortgagor when
it sank. as the mortgagor has the duty to
insure it.

SEAWORTHY; defined
adequately equipped for the voyage and
manned with sufficient number of competent
officers and crew

prepared by: ronie ablan

AAA - BASTE / ATB
 THE AWESOME NOTES
COMMERCIAL LAW
MARITIME COMMERCE
ACCIDENT AND DAMAGES IN
MARITIME COMMERCE
AVERAGE; defined
is an extraordinary or accidental expense
incurred during the voyage
- in order to preserve the cargo, the vessel or
both, and all damages or deterioration suffered
by the vessel,
from departure to the port of
destination
- and to the cargo
from the port of loading to the port of
consignment.
CLASSES OF AVERAGE
PA R T I C U L A R O R S I M P L E
AVERAGE
expenses and damages caused to the
vessel or cargo
- which have not inured to the common
benefit, and
- borne by their respective owners
PRESUPPOSES THAT THE LOSS
OR DAMAGE IS DUE TO
1. inherent defect of the goods
2. an accident of the sea
3. force majeure
4. negligence of the crew of the
carrier
ie,
repair cost due to the negligence of the
captain. as a result of which, added
expense for the provision of the crew,
deterioration expense for the copra
loaded on the vessel, and the towage
cost of the vessel for it to pass the
suez canal.
- the repair cost is simple average as it
did not inure to the benefit of all, as it
was caused by the negligence of the
captain.
- the expense for the provision is as an
incident of the delay in the repair of the
vessel. since this expense is as a
consequence of the repair, it is
therefore a particular average
- the deterioration of value is a
particular average, borne by the copra
owner
- the towage expense is likewise a
particular average, since it was
incurred as an incident of navigation,
to be borne by the owner.
TEST: if both vessel and cargo are
saved, it is general average. but if only
either of one is saved, it is only a
particular average. (?)
!5 of 8
!
GROSS OR GENERAL AVERAGE
all damages and expenses which are
deliberately cause in order to save the
vessel, its cargo or both at the same
time,
- from real and known risk
REQUISITES OF GENERAL
AVERAGE
1. common danger
2. deliberate sacrifice
3. success; and
4. proper formalities and legal steps
RIGHTS OF THE OWNER OF
JETTISONED GOODS
entitled for general average, to be
reimbursed for the value of goods
jettisoned
- less: portion of his cargo saved
TO WHOM HE IS ENTITLED
FOR REIMBURSEMENT
1. to the owner of the
vessel; and
2. the owner of the goods
which were saved as a
consequence of the
sacrifice
PROVIDED: the cargo
jettisoned must be covered by
a bill of lading
LIABILITY OF THE OWNERS OF THE
CARGO SAVED
will contribute to the reimbursement of
the value of the goods jettisoned and
to the damage suffered by the vessel.
- less: his own share in the sacrifice
RIGHTS OF THE OWNER OF THE
VESSEL
is entitled to reimbursement for the
damage to the vessel resulting from
the fortuitous evnt
- less his own share of the sacrifice
NOTE:
once the ship master declare for the
jettison of cargos after the all the
requisite condition for general average
to apply are present,
- no particular shipper can refuse such
declaration
PROCEDURE IN GENERAL
AVERAGE
1. before the loss is caused or the
expense incurred, the captain
must call a meeting of the officers
and any cargo owner who may be
on board
2. they shall decide by voting, but the
captain shall have the final vote.
prepared by: ronie ablan
AAA - BASTE / ATB
 THE AWESOME NOTES
COMMERCIAL LAW
MARITIME COMMERCE
HENCE; absence of call from the
captain, it is only treated as a
particular average. any jettisoned
cargoes shall be borne by the owner
thereof.
ORDER OF JETTISON OF
CARGOES
1. those on deck, and in the lower
deck
2. those of bigger bulk and smaller
value
Q: when does an expense to put the
vessel afloat a general average?
A: if the vessel was intentionally
stranded to save it and its cargo.
- otherwise, a particular average,
especially so where the stranding is a
consequence of an accident
IN RE: CONTRIBUTION TO
LIABILITY, RELATE TO YORK-
ANTWERP RULES
IN CASE OF OVERSEAS TRADE
prohibits the loading of cargo in deck
or even container.
- in case such cargo is jettisoned, the
owner thereof will not be entitled to
reimbursement
in view of the violation.
and if the cargo is saved, it must
contribute to the general average
IN CASE OF INTER-ISLAND TRADE
deck cargo are allowed.
- hence, if t is jettisoned, it is entitled to
reimbursement
if saved, it must contribute to general
average.
R AT I O N O F Y O R K -
ANTWERP RULE
an inter-island trade, voyage is
usually short and there are
intervening island and the
seas are by far generally not
rough
- while overseas trade are
exposed to a greater risk, and
deck cargo is dangerous for
navigation, and therefore
prohibited
!6 of 8
!
ARRIVAL UNDER STRESS; defined
is an arrival of the vessel at a port not the
destination on account of
1. lack of provisions,
2. well-founded fear of seizure,
3. privateers, or
4. by reason of any accident of the sea
disabling it to navigate
WHEN NOT JUSTIFIED
1. the lack of provision us due to
failure to carry the provisions
necessary according to usage and
customs
2. the risk of enemies is not well-
known and manifest
3. the defector the vessel us a
consequence of an improper
repair; and
4. m a l i c e , n e g l i g e n c e , l a c k o f
foresight, lack of skill of the
captain caused the damage
WHO BEARS EXPENSES
the shipowner
HOWEVER; when arrival under stress
is not lawful
- the shipowner shall likewise bear for
the damages suffered by the
passenger and the cargo owner.
COLLISIONS; defined
the impact of 2 vessels, both of which are
moving
CONTRA:
ALLISION; defined
is an impact between a moving vessel
and a stationary one
ZONE OF TIME IN COLLISION
FIRST ZONE;
covers all the time up to the moment
when the risk of collision begins
SECOND ZONE;
the time between the moment when
the risk of collision begins and the
moment it becomes a practical
certainty
THIRD ZONE;
the time when collision is certain and
the time of impact
ERROR IN EXTREMIS
a sudden movement made by a
faultless vessel during the 3rd zone of
collision with another vessel which is
at fault during the 2nd zone.
- in here, even if the sudden
movement was wrong, no
responsibility shall fall on said faultless
vessel
prepared by: ronie ablan
AAA - BASTE / ATB
 THE AWESOME NOTES
COMMERCIAL LAW
MARITIME COMMERCE
RULES AS TO LIABILITY
ONE VESSEL AT FAULT
owner of the vessel at fault during the second
zone and the ship agent
- are solidarily liable to the owner of the
innocent vessel and to the cargo owners for all
of their losses and damages.
BOTH VESSEL AT FAULT
as for the damage to the vessel, each shall
bear their own loss
for damage to the cargos of both vessels;
- the ship owner and ship agent of both
vessels shall be solidarily liable to the owners
of the cargo.
FAULT UNDETERMINABLE
apply: doctrine of inscrutable fault
same liability when collision is due to the fault
of both vessel
NOTE:
DOCTRINE OF LAST CLEAR CHANCE DOES
NOT APPLY IN COLLISION OF VESSELS
- as the law on admiralty states that in case
collision is due to the fault of both vessel or
when it cannot be determined who is at fault,
by applying doctrine of inscrutable fault,
neither can successfully maintain a claim
against each other for the loss or damage to
their respective vessel. nor in case of error in
extremis of a faultless vessel would not make it
liable to other vessel.
IF BOTH VESSELS ARE NEGLIGENT
- it doesn't matter which one is the proximate
cause and which is contributory.
COLLISION DUE TO FORTUITOUS EVENT
provided that there is no fault to either or both
of the vessel
- each vessel and each cargo owner will bear
their respective damages
IF CAUSED BY A THIRD VESSEL
- the third vessel shall be liable.
COLLISION OF A MOVING VESSEL
AGAINST A STATIONARY OBJECT
PRESUMPTION OF FAULT
- against a moving vessel that strikes a
stationary object (ie. docks or navigational aid)
TO OVERCOME PRESUMPTION
must exhaust every reasonable possibility
which the circumstances admits and show that
in each, they did all the reasonable care
required.
!7 of 8
!
PREREQUISITE TO RECOVERY
any action for damages arising from
collision should be preceded by a
protest.
MARITIME PROTEST
- is a written statement made under
oath by the captain or master of the
vessel,
after the occurrence of an
accident or disaster in which
the vessel or cargo is lost or
damaged with respect to the
circumstances attending such
occurrence.
TIMEFRAME
WITHIN 24 HRS
- before the competent authority at the
place where the accident or disaster
happened or at the first port of arrival,
in the Phil, or to the Phil consul, if the
incident took place abroad.
NOTE:
injuries to persons and damage to
cargo of owners not on board on
collision time, need not be protested.
- dito bale, pag hindi on board yung
shipper at the timeof the collision, it
cannot file a protest even though part
of his cargo was damaged due to the
said collision.
The person who can only file for
maritime protest is the master or
captain of the vessel involved in the
collision.
IN RE: SHIPWRECK
the only time the captain can be held liable by
the owner of the vessel for indemnity is
- when it is due to its malice,
negligence or lack of skill.
PRESUMPTION OF LOSS
- if the vessel sinks and cannot be salvaged
NOTES
in case of negligence or fault of the pilot
- it will not exempt the shipowner or the ship
agent from liability
the existence of pilotage, the master does not
surrender his vessel to the pilot, and the pilot is
not the master
- the master still commands the vessel
notwithstanding the presence of the pilot.
prepared by: ronie ablan
AAA - BASTE / ATB
 THE AWESOME NOTES !8 of 8
!
COMMERCIAL LAW
MARITIME COMMERCE

IT SHALL BE COUNTED EITHER

CARRIAGE OF GOODS
BY SEA ACT
APPLICABILITY:
in carriage of goods from foreign ports to the
Philippines
NOTICE FOR LOSS OR DAMAGE
WHEN IT MUST BE GIVEN
• if the damage is extremely apparent; the
notice of the damage should be given on the
receipt of the goods
• if the damage is not extremely visible; then
within 3 days from receipt
NOTE:
failure to give a notice will not bar the
filing of the suit
- if such is made within 1 yr
stipulation in the bill of lading requiring
that notice of damage must first be
filed before one can file a claim for
damages
- is null and void stipulation.
- COGSA; lack of notice is not a bar to
the filing of a suit for damages within 1
year from receipt of the cargo.
likewise, null and void stipulation
reducing the 1 year prescriptive period.
IN CASE OF LOSS
COGSA DEFINE LOSS; as
where there is no delivery at all was
made by the shipper of the goods
because the same
1. had perished
2. gone out of commerce
3. disappeared in such a way that
their existence is unknown or they
cannot be recovered
FROM:
• actual receipt of the shipper
• directly delivered upon the
consignee
• upon delivery of the goods to the
arrastre operator, and not upon the
consignee
hence, supposing na receive ni
arrastre yung damagd goods, but he
neither file a claim nor notify the
owner. and did so only after the
expiration of the 1 year period
- basta, in this instance, the consignee
and/or the shipper has 2 year
prescriptive period. or an additional
one year counted from the expiration
of the period within which the arrastre
should have filed a claim.
AMOUNT OF LIABILITY
THE LIABILITY LIMIT IS SET AT
• $500 per package; or
• the actual amount of the loss sustained; if
with declared value
THIS: is deemed incorporated in the bill of
lading even if not mentioned in it.
NOTE:
in case of transshipment, the original carrier is
liable for any liability even if connecting carriers
intervened,
this is without prejudice to the original
carrier's right to recover from the
connecting carrier.
- this also applies in contract of
carriage of passengers.

IT DOE NOT INCLUDE

- misdelivery

hence; in case of misdelivery,

the one year period does not
apply.
- no maritime hazard, in which
the one year period is made to
apply to meet its exigencies.

10 YEAR PRESCRIPTIVE
PERIOD

PRESCRIPTIVE PERIOD
1 YEAR
after the delivery of the goods or the date
when the goods should have been delivered.

prepared by: ronie ablan

AAA - BASTE / ATB