Important Features of the COGSA

The following are important features of the Carriage of Goods by Sea Act:

1.) It acts as a supplement to the Civil Code and applies to all contracts of carriage of goods coming to or from Philippine ports in foreign trade.

2.) When there is damage to the goods, notice must be given by the recipient to the carrier or his agent upon receipt of the goods. But if the damage is apparent/externally visible, notice must be given within 3 days from receipt of the goods.

3.) Failure of the recipient to notify the carrier will not prevent the filing of a suit for the loss/damage of the goods.

4.) The maximum liability is US$500.00 per package/customary freight unit unless the shipper or owner of the goods declares a higher value. It may be lowered by agreement put down in the bill of lading.

The purpose of limiting the common carrier's liability is to protect it from fraud, such as by allowing it to take insurance to protect itself. If, for example, the shipper or consignee/recipient understated the value of the goods, it not only violates a valid contractual stipulation; it has also committed fraud against the common carrier by trying to make it liable for an amount greater that what was stipulated in the bill of lading (Cokaliong Shipping Lines vs. UCPB General Insurance Co., GR 146018, June 25, 2003.)

Prescriptive Period

The prescriptive period is 1 year from date of delivery or the date when they should have been delivered. Take note of the following:

1.) Delivery is to the arrastre operator not the recipient

2.) It won't apply if the goods were delivered to the wrong person

3.) An extra-judicial claim/demand from the recipient won't interrupt the prescriptive period

It will apply only to goods damaged/lost in transit, which is why prescription begins when the goods are handed over to the arrastre operator. If the arrastre service was responsible for damaging the goods, another law will apply.

The SC has been known to bend the rules on the prescriptive period, especially if certain unfortunate things would take place. If, for instance, a case was dismissed for lack of jurisdiction and the prescriptive period expired, it ruled that the recipient could file a new case within 1 year from the dismissal of the previous case (Stevens & Co vs. Nordeutscher Lloyd, 6 SCRA 180.) If, however, the case was filed against the wrong party, the prescriptive period won't be interrupted.

The prescriptive period is interrupted by the following instances:

1.) An action has been filed in court

2.) There is an express agreement that extra-judicial claims/demands for damages will suspend the running of the prescriptive period.

If the goods were delivered to the wrong person, the recipient of the goods has 10 years to file an action (for breach of contract) or 4 years (for a quasi-delict.)