Wednesday, October 20, 2021
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Freight forwarder joint liability with ocean carrier

Is the freight forwarder solidarily liable with the ocean carrier?


Yes. And this is the story.


Sometime in 2000, Artis Trading Phils, Inc. [ARTIS] imported from Jen Trading Co. [JEN] of South Korea 200 rolls of plastic packaging materials.


In order to ship the goods to the Philippines, JEN engaged the services of Top Freight [TOP], a freight forwarder in South Korea to transport the goods to ARTIS as the consignee in the Philippines.


TOP issued its house bill of lading [in favor of JEN] and designating Gawa Express, Inc. [GAWA] as the delivery agent in the Philippines.


TOP shipped the FCL cargo through M/V Bangkok, an ocean carrier owned and operated by Hong Shipping Corp. [HONG] of South Korea.


When the FCL container reached Manila and was subsequently stripped at the premises of ARTIS, the packaging materials were all found to be wet and damp. The entire shipment was then considered a total loss.


ARTIS demanded indemnification from TOP and HONG for the damaged goods but these were all denied. Phil Insurance Co. as the insurer paid the insured value of the shipment to ARTIS. As the subrogee, it filed a complaint for damages against TOP and HONG with the Regional Trial Court of Manila [RTC].


The RTC adjudged HONG [and its ship Agent] liable as it/they failed to present evidence showing that it/they exercised the diligence of a common carrier in ensuring the safety of the shipment. TOP was likewise adjudged liable as it issued its house bill of lading, and thereby assuming the responsibility for loss and damage as a freight forwarder/common carrier.


The Court of Appeals sustained the decision of the trial court. And when the case was elevated to the Supreme Court, the Court ruled in the following tenor:

“ x x x


            TOP is solidarily liable with HONG for the lost/damaged shipment in view of the bill of lading the former issued to ARTIS. A bill of lading is a written acknowledgement of the receipt of goods and an agreement to transport and to deliver them at a specified place to a person named or his or her order. It operates both as a receipt and a contract. x x x TOP breached its contract with ARTIS when it failed to deliver the goods in the same quantity, quality and description as stated in the Bill of Lading.”


One last point. Can the “delivery agent” of the freight forwarder be made liable? I am of the view that the “delivery agent” may not be liable for the loss, destruction or deterioration of the goods as its role is merely to inform the consignee of the arrival of the goods in the Philippines and to facilitate the surrender of the original bill of lading.


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