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Q & A: The Rules of Procedure for Admiralty Cases

Atty Joey T. Banday

The Supreme Court, acting on the recommendation of the Chairperson of the Special Committee for the Rules of Procedure for Admiralty Cases, resolved to approve on 17 September 2019 the “Rules of Procedure for Admiralty Cases “ [Rules].  These Rules took effect on January 1, 2020.

 

  1. What are the Objectives of these Rules? These are intended to (a) provide the Regional Trial Courts with a special and summary procedure for Admiralty cases; (b) provide parties in Admiralty cases a fast, reliable, and efficient means of recourse to Philippine courts; and (c) enhance the administration of justice in Admiralty cases in the Philippines through the development of judicial expertise.

 

  1. Do these Rules apply to all actions/proceedings? No. These Rules shall govern the procedure only in civil actions before the designated Admiralty courts involving claims and cases in Admiralty filed on the basis of shipping and other related laws, rules and regulations as well as international standards and norms/conventions and instruments.

 

  1. What is the scope of the Admiralty jurisdiction of the Court? It covers the jurisdiction to hear and determine any of the following maritime claims: (a)Loss or damage caused by the operation of the ship; (b) Loss of life or personal injury occurring, whether on land or on water, in direct connection with the operation of the ship; (c) Salvage operations or any salvage agreement, including, if applicable, special compensation relating to salvage operations in respect of a ship which, by herself or her cargo, has threatened damage to the environment; (d) Damage or threat of damage caused by the ship to the environment, coastline or related interests, including the carriage of waste, garbage or pollution as cargo into the Philippines; measures taken to prevent, minimize, or remove such damage; compensation for such damage, or costs of reasonable measures of reinstatement of the environment actually undertaken or to be undertaken; loss incurred or likely to be incurred by third parties in connection with such damage; and damage, costs, or loss of a similar nature to those identified in this subparagraph; (e) Costs or expenses relating to the raising, removal, recovery, destruction or rendering harmless of a ship which is sunk, wrecked, stranded or abandoned, including anything that is or has been on board such ship, and costs or expenses relating to the preservation of an abandoned ship and maintenance of her crew;  (f)  Any agreement relating to the use of a ship, including bareboat charter, charter by demise, time charter, voyage charter or contract of affreightment, and maritime contract of carriage, whether of goods or people, including bills of lading;  (g) General average; (h) Towage; (i) Pilotage; (j)  Goods, materials, provisions, bunkers, equipment (including containers) supplied or services rendered to the ship for her operation, management, preservation, or maintenance; (k)  Construction, reconstruction, repair, converting or equipping of a ship; (l)  Port, canal, dock, harbour and other waterway dues and charges; (m)  Wages and other sums due to the master, officers and other members of the ship’s complement who are not Filipino citizens, in respect  of their employment on the ship, including costs of repatriation and social insurance contributions payable on their behalf, initiated while the vessel is within Philippine jurisdiction;  (n)  disbursements incurred on behalf of the ship or her owners; (o)  Insurance premiums (including mutual insurance calls) in respect of the ship, payable by or on behalf of the shipowner or demise charterer; (p)  Any commissions, brokerages or agency fees payable in respect of the ship by or on behalf of the shipowner or demise charterer; (q)  Any dispute as to ownership or possession of the ship;  (r) Any dispute between co-owners of the ship as to the employment or earnings of the ship; (s)  A mortgage or a “hypotheque” or a charge of the same nature on the ship; (t) Any dispute arising out of a contract for the sale of the ship; and (u) enforcement of foreign judgments and arbitral awards in relation to claims, or judgments and awards rendered under the Admiralty and maritime jurisdiction of a foreign court or arbitral tribunal, and subject to the procedures under Rule 39, Section 48 of the Rules of Court and the requirements of Republic Act No. 9285.

 

  1. May an action in rem be filed even if the ship is located outside the Philippines? Yes. And in the following cases:  (a)  Any claim to the possession or ownership of a ship or any share therein; (b)  Any question arising between the co-owners of a ship as to possession, employment, or earnings of that ship, including the settlement of any account outstanding and unsettled between the parties in relation to the ship; (c)  Any claim is respect of a mortgage of or a charge on a ship or any share therein; (d)  Any claim for the attachment, forfeiture or condemnation of a ship, or for the restoration of a ship; (e)  Any claim on the basis of a maritime lien or other charge on any ship, or other property for the amount claimed; and (f)  enforcement of an arbitral award or foreign judgment against a ship.

 

  1. What is the manner of service of the complaint/writs/summons? In the case of ships of Philippine Registry, service shall be made by sending a copy of the complaint and all its attachments personally or by personal courier upon the duly-designated receiving officer of the Maritime Industry Authority.  In the case of ships flying the flag of a foreign country, service shall be made by sending a copy of the complaint and all its attachments with the consulate of the ship’s flag State; provided, that if the foreign Ship’s Registry allows service through electronic means of court processes, legal notices, pleadings and documents, the party may use of such means subject to proof of such service.

 

The service shall be effected against a ship, cargo, or freight as follows: (i)  by serving the same personally upon the ship’s captain or master on board the ship while the vessel is within the jurisdiction of the Philippines; (ii)  by affixing a copy of the writ for a short time on any mast of the ship or on the outside of any suitable part of the vessel’s superstructure, visible to all who may board or enter the vessel; (iii)  by affixing a copy of the writ in a sheltered, conspicuous part of the vessel visible to the person in actual possession and control thereof, such as the windows in front of the wheelhouse or bridge of the vessel; and (iv)  in the case of cargo or freight in the custody of a person, by leaving the writ with such person.

 

  1. How many days can the defendant file a responsive pleading? The defendant shall file a verified answer to the complaint, third-party complaint, counterclaim, cross-claim, or intervention within ten (10) calendar days from receipt of the writ or summons.

 

  1. May the witnesses be examined via videoconferencing? Yes. And in accordance with the rules of the Supreme Court.

 

  1. What is the period given to the Court to decide the case? The court shall render judgment within fifteen (15) calendar days from the expiration of the period for filing of position papers [with or without position papers filed].

 

  1. May the court issue a Warrant of Arrest [WOA] of Vessel, Cargo, or Freight? Yes.  Upon the commencement of the action, the plaintiff or defendant, as the case may be, may apply for a WOA for the arrest of a ship, cargo, or freight against which the action or any counterclaim in the action may be brought.  However, no WOA shall be issued unless the arresting party has given a bond or security, including a corporate surety from a surety company accredited by the Supreme Court, executed in favor of the Admiralty court in the amount of thirty percent (30%) of the claim, but in no case less than five million pesos (PHP5,000,000.00), conditioned that the arresting party will pay all the costs which may be adjudged to the adverse party and all damages.

 

  1. May a WOA be issued ex-parte? Yes.  In case/s of extreme urgency where the complainant may suffer irreparable injury or gross inconvenience on account of the mobility or transportability of the ship, or the cargo, or the person in the custody of the freight, against which an action in rem is directed.

 

  1. While a ship is under WOA, may her cargo be discharged? Yes.

 

  1. How may the WOA be lifted? A bail bond or security, including a corporate surety from a surety company accredited by the Supreme Court, in sufficient amount to answer for the arresting party’s claims, may be given on behalf of a party to an action in rem to secure the release of the ship, cargo, or freight from arrest.

 

  1. May the shipowner, charterer, or other person in control or possession of a ship limit his/her liability? How? He/she may file a “limitation action” by a verified complaint, impleading any and all known defendants any time after a marine casualty that caused damage, injury, or death, and the subsequent abandonment of the vessel.  And upon order of the court, constitute a Limitation Fund by making a deposit to the court, or by producing a letter of undertaking from a Protection and Indemnity Club acceptable to the court.  [The Rules of Procedure for Admiralty Cases, A.M. No. 19-08-14-SC]

 

For comments of questions, please email jtb@pac-atlantic.com.ph.

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