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Exemption of arrastre operator from negligence rule

Can the arrastre operator be exempt from the presumption of the fault/negligence rule?


Yes. And this is the story.


Sometime in 1989, ABC Trading [ABC] imported from Singapore 10 containers of soft wheat flour. The shipment was discharged from the carrier in good and complete order condition with seals in place into the custody of Manila Port Services [MPS], the then arrastre operator of the South Harbor.


The 10 containers were subsequently opened and examined by the Bureau of Customs. Thereafter, a Customs inspector closed the containers and re-sealed them. The containers were placed at the delivery area/container yard of MPS.


Later on, the loaded containers were withdrawn by ABC. But upon receipt of the containers at its warehouse, ABC discovered many missing bags of flour.


ABC filed a claim with MPS, which it denied. Hence, ABC sought insurance indemnity from its insurer, Marian Insurance, Inc. [MII]. MIC paid the value of the missing bags. ABC issued a subrogation receipt in favor of MII.


Thereafter, MII filed a complaint for damages against MPS before the Regional Trial Court [RTC].


After trial on the merits, the RTC rendered a decision dismissing MII’s complaint. It held that the evidence of MII failed to clearly show that the loss occurred while the shipment was still under MPS’s responsibility.


On appeal to the Court of Appeals, MPS was held liable in consonance with the presumption of fault or negligence as the arrastre operator.


When the case reached the Supreme Court, the court ruled:


“In case of claim for loss filed by the consignee or the insurer as the subrogee, it is the arrastre operator that carries the burden of proving compliance with the obligation to deliver the goods to the appropriate party. x x x Otherwise, it shall be presumed that the loss was due to its fault.


x x x


There being no exception as to bad order, the subject shipment, therefore, appears to have been accepted by ABC, in good order. It logically follows that the case at bar presents no occasion for the necessity of discussing the diligence required of an arrastre operator or of the theory of its prima facie liability, for all indications, the shipment did not suffer loss or damage while under the care of the arrastre operator.”



Hence, if the receipt of goods by the consignee is in good order, the presumption of fault or negligence on the part of the arrastre operator will not apply.



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