666 SCRA 226

Ponente: Peralta, J.


The term “carriage of goods” in the Carriage of Goods by Sea Act (COGSA) covers the period from the time the goods are loaded to the vessel to the time they are discharged therefrom.

•    The carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.


•    On November 9, 2002, Macro-Lito Corporation, through M/V “DIMI P” vessel, 185 packages of electrolytic tin free steel, complete and in good condition.
•    The goods are covered by a bill of lading, had a declared value of $169,850.35 and was insured with the Insuracne Company of North America (Petitioner) against all risk.
•    The carrying vessel arrived at the port of Manila on November 19, 2002, and when the shipment was discharged therefrom, it was noted that 7 of the packages were damaged and in bad condition.
•    On Novermber 21, 2002, the shipment was then turned over to the custody of Asian Terminals. Inc. (Respondent) for storage and safekeeping pending its withrawal by the consignee.
•    On November 29, 2002, prior to the withrawal of the shipment, a joint inspection of the said cargo was conducted. The examination report showed that an additional 5 packages were found to be damaged and in bad order.
•    On January 6, 2003, the consignee, San Miguel Corporation filed separate claims against both the Petioner and the Respondent for the damage caused to the packages.
•    The Petitioner then paid San Miguel Corporation the amound of PhP 431,592.14 which is based on a report of its independent adjuster.
•    The Petitioner then formally demanded reparation against the Respondent for the amount it paid San Miguel Corporation.
•    For the failure of the Respondent to satisfy the demand of the Petitioner, the Petitioner filed for an action for damages with the RTC of Makati.
•    The trial court found that indeed, the shipment suffered additional damage under the custody of the Respondent prior to the turn over of the said shipment to San Miguel.
•    As to the extent of liability, Respondent invoked the Contract for Cargo Handling Services executed between the Philippine Ports Authority and the Respondent. Under the contract, the Respondent’s liability for damage to cargoes in its custody is limited to PhP5,000 for each package, unless the value of the cargo shipment is otherwise specified or manifested in writing together with the declared Bill of Lading. The trial Court found that the shipper and consignee with the said requirements.
•    However, the trial court dismissed the complaint on the ground that the Petitioner’s claim was barred by the statute of limitations. It held that the Carriage of Goods by Sea Act (COGSA), embodied in Commonwealth Act No. 65 is applicable. The trial court held that under the said law, the shipper has the right to bring a suit within one year after the delivery of the goods or the date when the goods should have been delivered, in respect of loss or damage thereto.
•    Petitioner then filed before the Supreme Court a petition for review on certiorari assailing the trial court’s order of dismissal.


1.)    Whether or not the trial court committed an error in dismissing the complaint of the petitioner based on the one-year prescriptive period for filing a suit under the COGSA to an arrastre operator? YES.

2.)    Whether or not the Petitioner is entitled to recover actual damages against the Respondent? YES, but only PhP164,428.76


•    The term “carriage of goods” covers the period from the time when the goods are loaded to the time when they are discharged from the ship. Thus, it can be inferred that the period of time when the goods have been discharged from the ship and given to the custody of the arrastre operator is not covered by the COGSA.

•    The Petitioner, who filed the present action for the 5 packages that were damaged while in the custody of the respondent was not fortright in its claim, as it knew that the damages it sought, based on the report of its adjuster covered 9 packages. Based on the report, only four of the nine packages were damaged in the custody of the Respondent. The Petitioner can be granted only the amount of damages that is due to it.