keppel cebu shi pyard, inc. vs. pioneer insurance and surety corporation, g.r. nos. 180880-8

8/13/2019 Keppel Cebu Shi pyard, Inc. vs. Pioneer Insurance and Surety Corporation, G.R. Nos. 180880-8

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THIRD DIVISIONKEPPEL CEBU SHIPYARD, INC.,Petitioner, - versus -

PIONEER INSURANCE AND SURETY CORPORATION,

Reson!ent.

" - - - - - - - - - - - - - - - - - - - - - - - - - - - - "

PIONEER INSURANCE AND SURETY CORPORATION,

Petitioner, - versus -

KEPPEL CEBU SHIPYARD, INC.,

Reson!ent.

#.R. Nos. $%&%%&-%$

#.R. Nos. $%&%'(-')Present*

YNARES-SANTIA#O, +.,

Cirerson,

CHICO-NA/ARIO,

VELASCO, +R.,

NACHURA, n!

PERALTA, ++.

Pro0u12te!*

Sete03er 45, 4&&'

6------------------------------------------------------------------------------------6

DECISIONNACHURA, +.*


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Be7ore us re te 8onso1i!te! etitions 7i1e! 39 te rties:Pioneer Insurn8e n!Suret9 Corortion;$< =Pioneer> n! Kee1 Ce3u Si9r!, In8.;4< =KCSI>:to revie? on8ertiorri te De8ision;@< !te! De8e03er $), 4&& n! te A0en!e! De8ision;< !te!

De8e03er 4&, 4&&) o7 te Court o7 Ae1s =CA> in CA-#.R. SP Nos. )&$% n! )@'@.

On +nur9 4(, 4&&&, KCSI n! #A +e3sens Si0n2e0ent, In8. =#A>e6e8ute! Sireir A2ree0ent;5< ?erein KCSI ?ou1! renovte n! re8onstru8t #AsFV GSuer7err9 @ usin2 its !r9 !o8in2 78i1ities ursunt to its restri8tive s7et9 n! se8urit9ru1es n! re2u1tions. Prior to te e6e8ution o7 te Sireir A2ree0ent, GSuer7err9 @ ?s1re!9 insure! 39 #A ?it Pioneer 7or USJ%,)4,5%$.)%. Te Sireir A2ree0ent re!s:

SHIPREPAIR A#REEENT;( enter into n 2ree0ent tt te Dr9!o8in2 n! Reir o7 te3ove-n0e! vesse1 or!ere! 39 te O?ners Autorie! Reresenttive s11 3e 8rrie! outun!er te Kee1 Ce3u Si9r! Stn!r! Con!itions o7 Contr8t 7or Sireir, 2ui!e1ines n!re2u1tions on s7et9 n! se8urit9 issue! 39 Kee1 Ce3u Si9r!. In !!ition, te 7o11o?in2re 0utu119 2ree! uon 39 te rties*

$. Te O?ner s11 in7or0 its insurer o7 C1use 4&;)< n! 44 =>;%< =re7er t te 38 ereo7>n! s11 in81u!e Kee1 Ce3u Si9r! s 8o-ssure! in its insurn8e o1i89.

4. Te O?ner s11 ?ive its ri2t to 81i0 7or n9 1oss o7 ro7it or 1oss o7 use or !02es8onseMuenti1 on su8 1oss o7 use resu1tin2 7ro0 te !e19 in te re!e1iver9 o7 te 3ove vesse1.


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@. O?ners su3-8ontr8tors or ?orers re not er0itte! to ?or in te 9r! ?itout te?ritten rov1 o7 te Vi8e Presi!ent Oertions.

. In 8onsi!ertion o7 Kee1 Ce3u Si9r! 11o?in2 O?ner to 8rr9 out o?n reirs

on3or! te vesse1, te O?ner s11 in!e0ni79 n! o1! Kee1 Ce3u Si9r! r01ess 7ro0n9 or 11 81i0s, !02es, or 1i3i1ities risin2 7ro0 !et or 3o!i19 inuries to O?ners ?orers,or !02es to te vesse1 or oter roert9 o?ever 8use!.

5. On rriv1, te O?ner Reresenttive, Ctin, Cie7 O77i8er n! Cie7 En2ineer ?i11 3einvite! to tten! 8on7eren8e ?it our Pro!u8tion, S7et9 n! Se8urit9 ersonne1 ?ere39 te9

?i11 3e 3rie7e! on, n! 2iven 8oies o7 Si9r! s7et9 re2u1tions.

(. An !eMute nu03er o7 o77i8ers n! 8re? 0ust re0in on 3or! t 11 ti0es to ensure tes7et9 o7 te vesse1 n! 8o01in8e o7 s7et9 re2u1tions 39 8re? n! o?ner e01o9e!

?or0en.

). Te sis o77i8ersF8re? or o?ner ointe! se8urit9 ersonne1 s11 0intin ?t82inst i17er2e n! 8ts o7 s3ot2e.

%. Te 9r! 0ust 3e in7or0e! n! instru8te! to rovi!e te ne8essr9 se8urit9 rrn2e0ent

8over2e sou1! tere 3e in!eMute or no 8re? on 3or! to rovi!e te e6resse! s7et9 n!se8urit9 en7or8e0ent.

'. Te O?ner s11 3e 1i31e to Kee1 Ce3u Si9r! 7or n9 !et n!For 3o!i19 inuries7or te ;K


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Our C1i0 Re7* H-NIL-H&-''-&&&$%

USJ%,)4,5%$.)%

------------------------------------------------

RECEIVED 7ro0 PIONEER INSURANCE SURETY CORPORATION te su0 o7 U.S.DOLLARS EI#HT ILLION OUR HUNDRED SEVENTY-TO THOUSAND IVE HUNDREDEI#HTY-ONE )%F$&& =USJ %,)4,5%$.)%> eMuiv1ent to PESOS THREE HUNDRED SI"TYILLION &&F$&& =P @(&,&&&,&&&.&&>, in 7u11 stis78tion, 8o0ro0ise n! !is8r2e o7 1181i0s 7or 1oss n! e6enses sustine! to te vesse1 GSUPERERRY @ insure! un!er Po1i89Nos. H-H&-''-&&&&$(%-&&-D =H> n! H-H&-''-&&&&$(' =I.V.> 39 reson s 7o11o?s*

ire on 3or! t Kee1 Ce3u Si9r!

on &% e3rur9 4&&&

n! in 8onsi!ertion o7 ?i8 te un!ersi2ne! ere39 ssi2ns n! trns7ers to te si!8o0n9 e8 n! 11 81i0s n! !e0n!s 2inst n9 erson, ersons, 8orortion orroert9 risin2 7ro0 or 8onne8te! ?it su8 1oss or !02e n! te si! 8o0n9 issu3ro2te! in te 18e o7 n! to te 81i0s n! !e0n!s o7 te un!ersi2ne! 2inst si!erson, ersons, 8orortion or roert9 in te re0ises to te e6tent o7 te 0ount 3ove-0entione!.

ILLIA, #OTHON# ABOITI/, INC.

FOR ABOITI/ SHIPPIN# CORP.

B9* =Si2ne!>

QQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQQ

itnesses* =Si2ne!>


=Si2ne!>



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Ar0e! ?it te su3ro2tion re8eit, Pioneer trie! to 8o11e8t 7ro0 KCSI, 3ut te 1tter !enie! n9resonsi3i1it9 7or te 1oss o7 te su3e8t vesse1. As KCSI 8ontinuous19 re7use! to 9 !esitereete! !e0n!s, Pioneer, on Au2ust ), 4&&&, 7i1e! ReMuest 7or Ar3itrtion 3e7ore teConstru8tion In!ustr9 Ar3itrtion Co00ission =CIAC> !o8ete! s CIAC Cse No. 4$-4&&&,seein2 te 7o11o?in2 re1ie7s*

$. To 9 to te 81i0nt Pioneer Insurn8e n! Suret9 Corortion te su0 o7 U.S.J%,)4,5%$.)% or its eMuiv1ent 0ount in Pi1iine Curren89, 1us interest tereon 8o0ute!7ro0 te !te o7 te GLoss n! Su3ro2tion Re8eit on $( +une 4&&& or 7ro0 te !te o7 7i1in2o7 ;te< GReMuest 7or Ar3itrtion, s 09 3e 7oun! roer

4. To 9 to 81i0nt #A, INC. n!For A3oiti Siin2 Corortion n! #A+e3sens Si0n2e0ent, In8. te su0 o7 P5&&,&&&,&&&.&& 1us interest tereon 7ro0 te !te

o7 7i1in2 ;o7 te< GReMuest 7or Ar3itrtion or !te o7 te r3itr1 ?r!, s 09 3e 7oun! roer

@. To 9 to te 81i0nts erein te su0 o7 P@,&&&,&&&.&& 7or n! s ttorne9s7ees 1us oter !02es s 09 3e est31ise! !urin2 te ro8ee!in2s, in81u!in2 r3itrtion7ees n! oter 1iti2tion e6enses, n! te 8osts o7 suit.

It is 1ie?ise 7urter r9e! tt C1uses $ n! 4 on te unsi2ne! 2e $ o7 te GSireirA2ree0ent =Anne6 GA> s ?e11 s te r!19 1e2i31e C1uses 4& n! 44 => n! oter si0i1r

81uses rinte! in ver9 7ine rint on te unsi2ne! !ors1 2e tereo7, 3e 11 !e81re! i11e21 n!voi! 3 initio n! ?itout n9 1e21 e77e8t ?tsoever.;$& on+nur9 4(, 4&&&, FV GSuer7err9 @ rrive! t KCSI in Lu-Lu Cit9, Ce3u, 7or !r9 !o8in2n! reirs =4> on te s0e !te, #A si2ne! si reir 2ree0ent ?it KCSI n! =@> 7ire 3roe out on 3or! FV GSuer7err9 @ on e3rur9 %, 4&&&, ?i1e sti11 !r9 !o8e! in KCSIssi9r!.;$$ is te re1 rt9 in interest in tis 8se n! tt Pioneer s 3eensu3ro2te! to te 81i0 o7 its ssure!. Te C1i0nt 81i0s tt it s te reon!ern8e o7evi!en8e over tt o7 te Reson!ent. C1i0nt 8ite! !o8u0entr9 re7eren8es on te Sttutor9Sour8e o7 te Prin8i1e o7 Su3ro2tion. C1i0nt ten ro8ee!e! to e61in tt te Ri2t o7Su3ro2tion*

Is 39 Oertion o7 L?

e6ists in Proert9 Insurn8e

is not Deen!ent Uon Privit9 o7 Contr8t.

C1i0nt ten r2ue! tt P90ent Oertes s EMuit31e Assi2n0ent o7 Ri2ts to Insurer n!tt te Ri2t o7 Su3ro2tion Entit1es Insurer to Re8over 7ro0 te Li31e Prt9.

Se8on!, Reson!ent Kee1 ! 8usto!9 o7 n! 8ontro1 over te FV GSuer7err9 @ ?i1e si!vesse1 ?s in Reson!ent Kee1s re0ises. In its Dr7t De8ision, C1i0nt stte!*

A. Te evi!en8e resente! !urin2 te erin2s in!u3it319 roves tt reson!ent noton19 too 8usto!9 3ut ssu0e! resonsi3i1it9 n! 8ontro1 over FV Suer7err9 @ in 8rr9in2 outte !r9-!o8in2 n! reir o7 te vesse1.

B. Te resen8e on 3or! te FV Suer7err9 @ o7 its o77i8ers n! 8re? !oes notre1ieve te reson!ent o7 its resonsi3i1it9 7or si! vesse1.

C. Reson!ent Kee1 ssu0e! resonsi3i1it9 over FV Suer7err9 @ ?en it 3rou2tte vesse1 insi!e its 2rvin2 !o8 n! 1ie! its o?n s7et9 ru1es to te !r9-!o8in2 n! reirso7 te vesse1.

D. Te r8ti8e o7 11o?in2 sio?ner n! its su3-8ontr8tors to er7or00intenn8e ?ors ?i1e te vesse1 ?s ?itin reson!ents re0ises !oes not !etr8t 7ro0te 78t tt 8ontro1 n! 8usto!9 over FV Suer7err9 @ ?s trns7erre! to te 9r!.


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ro0 te re8e!in2 stte0ents, C1i0nt 81i0s tt Kee1 is 81er19 1i31e 7or te 1oss o7 FVSuer7err9 @.

Tir!, te Vesse1s S7et9 nu1 8nnot 3e re1ie! uon s roo7 o7 te sters 8ontinuin28ontro1 over te vesse1.

ourt, te Reson!ent Yr! is 1i31e un!er te Do8trine o7 Res Is LoMuitur. A88or!in2 toC1i0nt, te Yr! is 1i31e un!er te ru1in2 1i! !o?n 39 te Sure0e Court in te Gni1 Cit98se. C1i0nt sserts tt si! ru1in2 is 1i831e ereto s Te L? o7 te Cse.

i7t, te 1i3i1it9 o7 Reson!ent !oes not rise 0ere19 7ro0 te 1i8tion o7 te Do8trine o7

Res Is LoMuitur, 3ut 7ro0 its ne21i2en8e in tis 8se.

Si6t, te Reson!ent Yr! ?s te e01o9er resonsi31e 7or te ne21i2ent 8ts o7 te ?e1!er.A88or!in2 to C1i0nt

In 8onte01tion o7 1?, Sevi11eo ?s not 1one! servntFe01o9ee. Te 9r!, 3ein2 ise01o9er, is so1e19 n! e681usive19 1i31e 7or is ne21i2ent 8ts. C1i0nt ro8ee!e! toenu0erte its resons*

A. Te GContro1 Test Te 9r! e6er8ise! 8ontro1 over Sevi11eo. Te o?er o78ontro1 is not !i0inise! 39 te 7i1ure to e6er8ise 8ontro1.

B. Tere ?s no in!een!ent ?or 8ontr8t 3et?een +oni2 n! Sevi11eo +oni2?s not te e01o9er o7 Sevi11eo, s Sevi11eo re0ine! n e01o9ee o7 te 9r! t te ti0e te1oss o88urre!.

C. Te 0ere 78t tt Dr. +oni2 reMueste! Sevi11eo to er7or0 so0e o7 te O?nersot ?ors un!er te 4( +nur9 4&&& ?or or!er !i! not 0e Dr. +oni2 te e01o9er o7Sevi11eo.


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C1i0nt ro77ers tt Dr. +oni2 ?s not Contr8tor o7 te Hot or Done on De8 A.C1i0nt r2ue! tt*

A. Te 9r!, not Dr. +oni2, 2ve te ?e1!ers teir 0r8in2 or!ers, n!

B. Dr. +oni2s utorit9 to reMuest te e6e8ution o7 o?ners ot ?ors in tessen2er res ?s e6ress19 re8o2nie! 39 te Yr! Proe8t Suerinten!ent Or8u11o.

Sevent, te sio?ner ! no 1e21 !ut9 to 19 7or ot?ors er0it sin8e it ?s notreMuire! 39 te 9r!, n! te o?ners ot?ors ?ere 8on!u8te! 39 ?e1!ers ?o re0ine!e01o9ees o7 te 9r!. C1i0nt 8onten!s tt te nee!, i7 n9, 7or n o?ners 1i8tion 7or ot ?or er0it ?s 8n8e1e! out 39 te 9r!s 8tu1 no?1e!2e o7 Sevi11eos ?ere3outs

n! te 78t tt e ?s in !e8 A !oin2 o?ners ot?ors.

Ei2t;


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in119, C1i0nt !isute! te teories rooun!e! 39 te Reson!ent =Te Yr!>. C1i0ntresente! its 8se 2inst*

=i> Non-re0ov1 o7 te 1i7e 8ets teor9.

=ii> Ho1e-in-te;- Nee! 7or 1n teor9.

=iv> Te unutorie! ot ?ors teor9.

=v> Te rin reort teor9.

Te C1i0nt 811e! te ttention o7 te Tri3un1 =CIAC> on te non-ern8e o7 te ?e1!erinvo1ve! in te 8use o7 te 7ire, r. Severino Sevi11eo. C1i0nt 81i0s tt tis is suressiono7 evi!en8e 39 Reson!ent.

KCSIs Teor9 o7 te Cse

$. Te C1i0nt s no stn!in2 to 7i1e te ReMuest 7or Ar3itrtion n! te Tri3un1 s nouris!i8tion over te 8se*

=> Tere is no v1i! r3itrtion 2ree0ent 3et?een te Yr! n! te Vesse1 O?ner.On +nur9 4(, 4&&&, ?en te si reir 2ree0ent =?i8 in81u!es te r3itrtion2ree0ent> ?s si2ne! 39 #A +e3sens on 3e17 o7 te Vesse1, te s0e ?s sti11 o?ne! 39A3oiti Siin2. ConseMuent19, ?en noter 7ir0, #A, utorie! #A +e3sens to0n2e te V Suer7err9 @, it ! no utorit9 to !o so. Tere is, s resu1t, no 3in!in2r3itrtion 2ree0ent 3et?een te Vesse1 O?ner n! te Yr! to ?i8 te C1i0nt 8n 81i0to 3e su3ro2te! n! ?i8 8n suort CIAC uris!i8tion.

=3> Te C1i0nt is not re1 rt9 in interest n! s no stn!in2 3e8use it s not3een su3ro2te! to te Vesse1 O?ner. or te reson stte! 3ove, te insurn8e o1i8ies on

?i8 te C1i0nt 3ses its ri2t o7 su3ro2tion ?ere not v1i!19 o3tine!. In n9 event, teC1i0nt s not 3een su3ro2te! to n9 ri2ts ?i8 te Vesse1 09 ve 2inst te Yr!3e8use*


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i. Te C1i0nt s not rove! 90ent o7 te ro8ee!s o7 te o1i8ies to n9se8i7i8 rt9. As 8onseMuen8e, it s 1so not rove! 90ent to te Vesse1 O?ner.

ii. Te C1i0nt ! no 1e2119 !e0n!31e o31i2tion to 9 un!er te o1i8ies n!!i! so on19 vo1untri19. Un!er te o1i8ies, te C1i0nt n! te Vesse1 2ree! tt tere is noConstru8tive Tot1 Loss Gun1ess te e6ense o7 re8overin2 n! reirin2 te vesse1 ?ou1!e68ee! te A2ree! V1ue o7 P@(& 0i11ion ssi2ne! 39 te rties to te Vesse1, treso1!

?i8 te 8tu1 reir 8ost 7or te Vesse1 !i! not re8. Sin8e te C1i0nt ote! to 98ontrr9 to te rovisions o7 te o1i8ies, its 90ent ?s vo1untr9, n! tere ?s no resu1tin2su3ro2tion to te Vesse1.

iii. Tere ?s 1so no su3ro2tion un!er Arti81e $4@( o7 te Civi1 Co!e. irst, i7 te

C1i0nt sserts ri2t o7 90ent on19 39 virtue o7 Arti81e $4@(, ten tere is no 1e21su3ro2tion un!er Arti81e 44&) n! it !oes not su88ee! to te Vesse1s ri2ts un!er te Si;R Un8ontroverte! evi!en8e rove! tt Dr. +oni2 ne21e8te! or !e8i!e! not to o3tin ot ?or er0it 7or te 3u1e! 8uttin2 n! 1so ne21e8te! or re7use! to ve te 8ei1in2 n!te 710031e 1i7e8ets re0ove! 7ro0 un!ernet te re ?ere e instru8te! An2e1ino


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Sevi11eo to 8ut te 3u1e! !oor. Tese !e8isions or oversi2ts 2urntee! tt te 8uttin2?ou1! 3e !one in e6tre0e19 r!ous 8on!itions n! ?ere te ro6i0te 8use o7 te 7ire n!te resu1tin2 !02e to te Vesse1.

=8> Te Yr!s e6ert ?itness, Dr. Eri8 u11en 2ve te on19 8re!i31e 88ount o7 te8use n! te 0e8ni8s o7 i2nition o7 te 7ire. He est31ise! tt* i> te 7ire strte! ?en te8uttin2 o7 te 3u1e! !oor resu1te! in srs or ot 0o1ten s12 ?i8 7e11 trou2 re-e6istin2o1es on te !e8 71oor n! 80e into 8ont8t ?it n! i2nite! te 710031e 1i7e8ets store!in te 8ei1in2 voi! !ire8t19 3e1o? n! ii> te 3otto0 1eve1 o7 te 3u1e! !oor ?s i00teri1,3e8use te srs n! s12 8ou1! ve 8o0e 7ro0 te 8uttin2 o7 n9 o7 te si!es o7 te !oor.ConseMuent19, te 8uttin2 itse17 o7 te 3u1e! !oor un!er te r!ous 8on!itions 8rete! 39Dr. +oni2, rter tn te ositionin2 o7 te !oors 3otto0 e!2e, ?s te ro6i0te 8use o7te 7ire.

=!> Te ni1 Cit9 8se is irre1evnt to tis !isute n! in n9 8se, !oes not est31is2overnin2 re8e!ent to te e77e8t tt ?en si is !02e! in !r9 !o8, te si9r! isresu0e! t 7u1t. Art 7ro0 te !i77eren8es in te 78tu1 settin2 o7 te t?o 8ses, te ni1Cit9 ronoun8e0ents re2r!in2 te res is 1oMuitur !o8trine re o3iter !i8t ?itout v1ue s3in!in2 re8e!ent. urter0ore, even i7 te rin8i1e ?ere 1ie! to 8rete resu0tion o7ne21i2en8e 39 te Yr!, o?ever, tt resu0tion is 8on81usive19 re3utte! 39 te evi!en8e onre8or!.

=e> Te Vesse1s !e1i3erte 8ts n! its ne21i2en8e 8rete! te inerent19 r!ous8on!itions in ?i8 te 8uttin2 ?or tt 8ou1! oter?ise 3e !one s7e19 en!e! u 8usin2 7ire

n! te !02e to te Vesse1. Te 7ire ?s !ire8t n! 1o2i81 8onseMuen8e o7 te Vesse1s!e8isions to* =$> te An2e1ino Sevi11eo ?9 7ro0 is ?e1!in2 ?or t te Pro0en!e De8resturnt n! inste! to reMuire i0 to !o unutorie! 8uttin2 ?or in De8 A n! =4> to vei0 !o tt ?itout stis79in2 te reMuire0ents 7or n! o3tinin2 ot ?or er0it in vio1tion o7te Yr!s S7et9 Ru1es n! ?itout re0ovin2 te 710031e 8ei1in2 n! 1i7e 8ets 3e1o?,8ontrr9 to te reMuire0ents not on19 o7 te Yr!s S7et9 Ru1es 3ut 1so o7 te !e0n!s o7stn!r! s7e r8ti8e n! te Vesse1s o?n e61i8it s7et9 n! ot ?or o1i8ies.

=7> Te vesse1 s not resente! n9 roo7 to so? tt te Yr! ?s re0iss in its 7ire7i2tin2 rertions or in te 8tu1 8on!u8t o7 7i2tin2 te % e3rur9 4&&& 7ire. Te Yr! !

te ne8essr9 eMui0ent n! trine! ersonne1 n! e01o9e! 11 tose resour8es i00e!ite19n! 7u119 to uttin2 out te % e3rur9 4&&& 7ire.

. Even ssu0in2 tt An2e1ino Sevi11eo 8ut te 3u1e! !oor 81ose to te !e8 71oor, n!tt tis 8ir8u0stn8e rter tn te e6tre0e19 r!ous 8on!itions 8rete! 39 Dr. +oni2 n!te Vesse1 7or tt 8tivit9 8use! te 7ire, te Yr! 09 sti11 not 3e e1! 1i31e 7or te resu1tin2!02e.


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=> Te Yr!s on19 8ontr8tu1 o31i2tion to te Vesse1 in rese8t o7 te 4( +nur94&&& or Or!er ?s to su19 ?e1!ers 7or te Pro0en!e De8 resturnt ?o ?ou1! tener7or0 ?e1!in2 ?or Ger o?ner;s< instru8tion. ConseMuent19, on8e it ! rovi!e! tose

?e1!ers, in81u!in2 An2e1ino Sevi11eo, its o31i2tion to te Vesse1 ?s 7u119 !is8r2e! n! no81i0 7or 8ontr8tu1 3re8, or 7or !02es on 88ount tereo7, 09 3e rise! 2inst teYr!.

=3> Te Yr! is 1so not 1i31e to te Vesse1FC1i0nt on te 3sis o7 Musi-!e1i8t.

i. Te Vesse1 e6er8ise! suervisionn! 8ontro1 over An2e1ino Sevi11eo ?en e ?s !oin2 ?or t te Pro0en!e De8 resturnt

n! ese8i119 ?en e ?s instru8te! 39 Dr. +oni2 to 8ut te 3u1e! !oor. ConseMuent19,te Vesse1 ?s te rt9 ?it 8tu1 8ontro1 over is tss n! is !ee0e! is true n! e77e8tivee01o9er 7or uroses o7 est31isin2 Arti81e 4$%& e01o9er 1i3i1it9.

ii. Even ssu0in2 tt te Yr! ?sAn2e1ino Sevi11eos e01o9er, te Yr! 09 neverte1ess not 3e e1! 1i31e un!er Arti81e 4$%&3e8use An2e1ino Sevi11eo ?s 8tin2 3e9on! te s8oe o7 is tss ssi2ne! 39 te Yr!=?i8 ?s on19 to !o ?e1!in2 7or te Pro0en!e De8 resturnt> ?en e 8ut te 3u1e!!oor ursunt to instru8tions 2iven 39 te Vesse1.

iii. Te Yr! is nonete1ess not 1i31eun!er Arti81e 4$%& 3e8use it e6er8ise! !ue !i1i2en8e in te se1e8tion n! suervision o7An2e1ino Sevi11eo.

5. Assu0in2 tt te Yr! is 1i31e, it 8nnot 3e 8o0e11e! to 9 te 7u11 0ount o7 P@(&0i11ion i! 39 te C1i0nt.

=> Un!er te 1?, te Yr! 09 not 3e e1! 1i31e to te C1i0nt, s su3ro2ee, 7or n0ount 2reter tn tt ?i8 te Vesse1 8ou1! ve re8overe!, even i7 te C1i0nt 09ve i! i2er 0ount un!er its o1i8ies. In turn, te ri2t o7 te Vesse1 to re8over is 1i0ite!to 8tu1 !02e to te V Suer7err9 @, t te ti0e o7 te 7ire.


14/32

=3> Un!er te Si ;R Te Vesse1 3re8e! its o31i2tion un!er C1use 44 => o7 te Yr!s Stn!r!Ter0s to n0e te Yr! s 8o-ssure! un!er te o1i8ies 3re8 ?i8 0es te Vesse11i31e 7or !02es. Tis 1i3i1it9 sou1! in turn 3e set-o77 2inst te C1i0nts 81i0 7or!02es.

Te Reson!ent 1iste! ?t it 3e1ieves te C1i0nt ?nte! to i0ress uon te Tri3un1.Reson!ent enu0erte! n! !isute! tese s 7o11o?s*

$. C1i0nts 8ounse1 8onten!s tt te 8uttin2 o7 te 3u1e! !oor ?s 8overe! 39te 4( +nur9 4&&& or Or!er.

4. C1i0nts 8ounse1 8onten!s tt Dr. +oni2 to1! #err9 Or8u11o 3out is intentionto ve An2e1ino Sevi11eo !o 8uttin2 ?or t te De8 A 3u1e! on te 0ornin2 o7 % e3rur94&&&.

@. C1i0nts 8ounse1 8onten!s tt un!er Arti81e $)4) o7 te Civi1 Co!e, GTe8ontr8tor is resonsi31e 7or te ?or !one 39 ersons e01o9e! 39 i0.

. C1i0nts 8ounse1 8onten!s tt G;t


15/32

Te Tri3un1 2rees tt te 8ontr8tu1 o31i2tion o7 te Yr! is to rovi!e te ?e1!ersn! eMui0ent to te ro0en!e !e8. ;Te< Tri3un1 2rees tt te 8uttin2 o7 te 3u1e!!oor ?s not 8ontr8tu1 o31i2tion o7 te Yr!. Ho?ever, 39 reMuirin2, 88or!in2 to its o?nre2u1tions, tt on19 Yr! ?e1!ers re to un!erte ot?ors, it 7o11o?s tt tere re 8ertin

Mu1i7i8tions o7 Yr! ?e1!ers tt ?ou1! 3e reMuisite o7 9r! ?e1!ers 2inst tose o7 te vesse1?e1!ers. To te Tri3un1, tis 0ens tt 9r! ?e1!ers re ?re o7 te Yr! s7et9 ru1es n!re2u1tions on ot?ors su8 s 19in2 7or ot?or er0it, !is8ussin2 te ?or in ro!u8tion 0eetin2, n! 8o019in2 ?it te 8on!itions o7 te ot?or er0it rior toi01e0enttion. B9 te reMuire0ent tt 11 ot?ors re to 3e !one 39 te Yr!, te Tri3un17in!s tt Sevi11eo re0ins 9r! e01o9ee. Te 8t o7 Sevi11eo is o?ever 0iti2te! in tte ?s not even 7ore0n, n! tt te instru8tions to i0 ?s =si8> 39 n utorie! erson.Te Tri3un1 notes tt te ot?ors er0it reMuire;s< reMuest 39 t 1est 7ore0n. Te 78ttt no 7ore0n ?s in81u!e! in te 7ive ?e1!ers issue! to te Vesse1 ?s never rise! in tis!isute. As !is8usse! er1ier 39 te Tri3un1, ?it te 78t tt ?t ?s s =si8> o7 Sevi11eo

?s outsi!e te ?or or!er, te Vesse1 is 8onsi!ere! eMu119 ne21i2ent. Tis Tri3un1 7in!s te8on8urrent ne21i2en8e o7 te Yr! trou2 Sevi11eo n! te Vesse1 trou2 Dr. +oni2 s 3ot

8ontri3utor9 to te 8use o7 te 7ire tt !02e! te vesse1.;$ is #RANTED, !is0issin2etitioners 81i0s in its entiret9. No 8osts.

Te Yr! n! Te #A re ere39 or!ere! to 9 te r3itrtion 8osts ro-rt.


16/32

SO ORDERED.;$( is PARTIALLY #RANTED s te Yr! isere39 or!ere! to 9 Pioneer P45 i11ion ?itout 1e21 interest

4. Te Yr! is ere39 !e81re! s eMu119 ne21i2ent, tus, te tot1 #RANTIN# o7 its Petition=CA-#.R. SP No. )@'@> is no? re!u8e! to PARTIALLY #RANTED, in so 7r s it is or!ere! to9 Pioneer P45 i11ion, ?itout 1e21 interest, ?itin $5 !9s 7ro0 te 7in1it9 o7 tis A0en!e!De8ision n!

@. Te rest o7 te !isosition in te ori2in1 De8ision re0ins te s0e.

SO ORDERED.;$%


17/32

Hen8e, tese etitions. Pioneer 3ses its etition on te 7o11o?in2 2roun!s*

I

THE COURT O APPEALS ERRED IN BASIN# ITS ORI#INAL DECISION ON NON-ACTS LEADIN# IT TO AKE ALSE LE#AL CONCLUSIONS NON-ACTS REAIN TOINVALIDATE THE AENDED DECISION. THIS ALSO VIOLATES SECTION $, ARTICLE VIIIO THE CONSTITUTION.

II

THE COURT O APPEALS ERRED IN LIITIN# THE LE#AL LIABILITY O THEYARD TO THE SU O P5&,&&&,&&&.&&, IN THAT*

A. STARE DECISIS RENDERS INAPPLICABLE ANY INVOCATION O LIITEDLIABILITY BY THE YARD.

B. THE LIITATION CLAUSE IS CONTRARY TO PUBLIC POLICY.

C. THE VESSEL ONER DID NOT A#REE THAT THE YARDS LIABILITY OR LOSSOR DAA#E TO THE VESSEL ARISIN# RO YARDS NE#LI#ENCE IS LIITED TO THESU O P5&,&&&,&&&.&& ONLY.

D. IT IS INIUITOUS TO ALLO THE YARD TO LIIT LIABILITY, IN THAT*

=i> THE YARD HAD CUSTODY AND CONTROL OVER THE VESSEL =FVGSUPERERRY @> ON &% EBRUARY 4&&& HEN IT AS #UTTED BY IRE


18/32

=ii> THE DAA#IN# IRE INCIDENT HAPPENED IN THE COURSE O THE REPAIRSE"CLUSIVELY PERORED BY YARD ORKERS.

III

THE COURT O APPEALS ERRED IN ITS RULIN# THAT #A ASCONCURRENTLY NE#LI#ENT, CONSIDERIN# THAT*

A. DR. +ONI#A, THE VESSELS PASSA#E TEA LEADER, DID NOT SUPERVISE ORCONTROL THE REPAIRS.

B. IT AS THE YARD THROU#H ITS PRO+ECT SUPERINTENDENT #ERINIANOORCULLO THAT SUPERVISED AND CONTROLLED THE REPAIR ORKS.

C. SINCE ONLY YARD ELDERS COULD PEROR HOT ORKS IT OLLOS THATTHEY ALONE COULD BE #UILTY O NE#LI#ENCE IN DOIN# THE SAE.

D. THE YARD AUTHORI/ED THE HOT ORK O YARD ELDER AN#ELINOSEVILLE+O.

E. THE NE#LI#ENCE O AN#ELINO SEVILLE+O AS THE PRO"IATE CAUSE OTHE LOSS.

. #A AS NOT #UILTY O NE#LI#ENCE, BE IT DIRECT OR CONTRIBUTORYTO THE LOSS.

IV


19/32


20/32

@. AILURE OR REUSAL TO ADDRESS

KEPPELS OTION OR RECONSIDERATION

INALLY, IT AS ALSO #RIEVOUS ERROR OR THE COURT O APPEALS TO HAVEEECTIVELY DENIED, ITHOUT ADDRESSIN# IT AND ALSO ITHOUT E"PLANATION,KEPPELS PARTIAL OTION OR RECONSIDERATION O THE ORI#INAL DECISIONHICH SHOED* $> HY PIONEER AS NOT SUBRO#ATED TO THE RI#HTS O THEVESSEL ONER AND SO HAD NO STANDIN# TO SUE THE YARD 4> HY KEPPEL AYNOT BE REUIRED TO REIBURSE PIONEERS PAYENTS TO THE VESSEL ONER INVIE O THE CO-INSURANCE CLAUSE IN THE SHIPREPAIR A#REEENT AND @> HYPIONEER ALONE SHOULD BEAR THE COSTS O ARBITRATION.

. AILURE TO CREDIT OR SALVA#E RECOVERY

EVEN I THE COURT O APPEALS RULIN#S ON ALL O THE ORE#OIN# ISSUESERE CORRECT AND THE YARD AY PROPERLY BE HELD EUALLY LIABLE OR THEDAA#E TO THE VESSEL AND REUIRED TO PAY HAL O THE DAA#ES AARDED=P45 ILLION>, THE COURT O APPEALS STILL ERRED IN NOT DEDUCTIN# THESALVA#E VALUE O THE VESSEL RECOVERED AND RECEIVED BY THE INSURER,PIONEER, TO REDUCE ANY LIABILITY ON THE PART O THE YARD TO P'.%) ILLION.

;4&.An2e1ino Sevi11eo trie! to ut out te 7ire 39 ourin2 te 8ontents o7 7ive-1iter !rinin2 ?ter8ontiner on it n! s e !i! so, s0oe 80e u 7ro0 un!er De8 A. He 2ot noter 8ontinero7 ?ter ?i8 e 1so oure! ?en8e te s0oe ?s 8o0in2. In te 0enti0e, oter ?orersin te i00e!ite vi8init9 trie! to 7i2t te 7ire 39 usin2 7ire e6tin2uisers n! 3u8ets o7 ?ter.But 3e8use te 7ire ?s insi!e te 8ei1in2 voi!, it ?s e6tre0e19 !i77i8u1t to 8ontin ore6tin2uis n! it sre! ri!19 3e8use it ?s not ossi31e to !ire8t ?ter ets or te 7iree6tin2uisers into te s8e t te sour8e. i2tin2 te 7ire ?s e6tre0e19 !i77i8u1t 3e8use te1i7e 8ets n! te 8onstru8tion 0teri1s o7 te De8 B 8ei1in2 ?ere 8o03usti31e n! er0itte!te 7ire to sre! ?itin te 8ei1in2 voi!. ro0 tere, te 7ire !roe! into te De8 B88o00o!tion res t vrious 1o8tions, ?ere tere ?ere 8o03usti31e 0teri1s.

Reson!ent oints to 8ns o7 int n! tinner, in !!ition to te 19?oo! rtitions n! 7o00ttresses on !e8 B =E6. $-u11en,;4@< . )-%, $% E6. 4-u11en, . $$-$4>.;4, 7or 7i1in2 to re0ove te 1i7e 8ets 7ro0 te 8ei1in2 voi!,8usin2 te i00e!ite sre! o7 te 7ire to te oter res o7 te si.

e ru1e in 7vor o7 Pioneer.

irst. Te Sireir A2ree0ent is 81er tt #A, s o?ner o7 FV GSuer7err9 @,entere! into 8ontr8t 7or te !r9 !o8in2 n! reir o7 te vesse1 un!er KCSIs Stn!r!Con!itions o7 Contr8t 7or Sireir, n! its 2ui!e1ines n! re2u1tions on s7et9 n! se8urit9.Tus, te CA erre! ?en it si! tt #A ?ou1! renovte n! re8onstru8t its o?n vesse10ere19 usin2 te !r9 !o8in2 78i1ities o7 KCSI.

Se8on!. Pursunt to KCSIs ru1es n! re2u1tions on s7et9 n! se8urit9, on19 e01o9eeso7 KCSI 09 un!erte ot ?ors on te vesse1 ?i1e it ?s in te 2rvin2 !o8 in Lu-LuCit9, Ce3u. Tis is suorte! 39 C1use @ o7 te Sireir A2ree0ent reMuirin2 te rior

?ritten rov1 o7 KCSIs Vi8e Presi!ent 7or Oertions 3e7ore #A 8ou1! e77e8t n9 ?orer7or0e! 39 its o?n ?orers or su3-8ontr8tors. In te e6er8ise o7 tis utorit9, KCSIs Vi8e-Presi!ent 7or Oertions, in te 1etter !te! +nur9 4, $''), 3nne! n9 ot ?ors 7ro0 3ein2!one e68et 39 KCSIs ?orers, vi.*

Te Yr! ?i11 restri8t 11 ot ?ors in te en2ine roo0, 88o00o!tion 83in, n! 7ue1 oi1tns to 3e 8rrie! out on19 39 si9r! ?orers 6 6 6.;4( te 1i7e 8ets ?ere not even 8ontri3utor9 to te o88urren8e o7 te 7ire n! =4> it

?s not in8u03ent uon i0 to re0ove te s0e. It ?s so?n !urin2 te erin2s 3e7ore teCIAC tt te re0ov1 o7 te 1i7e 8ets ?ou1! not ve 0!e 0u8 o7 !i77eren8e. Te 7ire

?ou1! sti11 ve o88urre! !ue to te resen8e o7 oter 8o03usti31e 0teri1s in te re. Tis?s te uni7or0 8on81usion o7 3ot #As;&< n! KCSIs;$< 7ire e6erts. It ?s 1so roven!urin2 te CIAC ro8ee!in2s tt KCSI !i! not see te 1i7e 8ets s 3ein2 in te ?9 o7 te ot

?ors, tus, 0in2 teir re0ov1 7ro0 stor2e unne8essr9.;4 I7 0ore tn tree-7ourts tereo7 in v1ue is 8tu119 1ost, or ?ou1! ve to 3ee6en!e! to re8over it 7ro0 te eri1

=3> I7 it is inure! to su8 n e6tent s to re!u8e its v1ue 0ore tn tree-7ourts 66 6.

It ers, o?ever, tt in te e6e8ution o7 te insurn8e o1i8ies over FV GSuer7err9@, #A n! Pioneer in8ororte! 39 re7eren8e te A0eri8n Institute Hu11 C1uses 4F(F)),te Tot1 Loss Provision o7 ?i8 re!s:

Tot1 Loss

In s8ertinin2 ?eter te Vesse1 is 8onstru8tive Tot1 Loss te A2ree! V1ue s113e ten s te reire! v1ue n! notin2 in rese8t o7 te !02e! or 3re-u v1ue o7 teVesse1 or ?re8 s11 3e ten into 88ount.


28/32

Tere s11 3e no re8over9 7or 8onstru8tive Tot1 Loss ereun!er un1ess te e6enseo7 re8overin2 n! reirin2 te Vesse1 ?ou1! e68ee! te A2ree! V1ue in o1i8ies on Hu11 n!8iner9. In 0in2 tis !eter0intion, on19 e6enses in8urre! or to 3e in8urre! 39 reson o7 sin21e 88i!ent or seMuen8e o7 !02es risin2 7ro0 te s0e 88i!ent s11 3e ten into

88ount, 3ut e6enses in8urre! rior to ten!er o7 3n!on0ent s11 not 3e 8onsi!ere! i7 su8re to 3e 81i0e! serte19 un!er te Sue n! L3or 81use. 6 6 6.

In te 8ourse o7 te r3itrtion ro8ee!in2s, Pioneer !!u8e! in evi!en8e te esti0tes 0!e39 tree =@> !isintereste! n! Mu1i7ie! si9r!s 7or te 8ost o7 te reir o7 te vesse1,se8i7i8119* => P4'(,45(,)$).&&, 3se! on te Pi1iine 8urren89 eMuiv1ent o7 te Muottion!te! Ari1 $), 4&&& turne! in 39 Tsuneisi Hev9 In!ustries =Ce3u> In8. =3> P@&',)%&,@%.$5,3se! on te Pi1iine 8urren89 eMuiv1ent o7 te Muottion o7 Se03?n2 Si9r! Pte. Lt!.,

Sin2ore n! =8> P@&$,%@',').&&, 3se! on te Pi1iine 8urren89 eMuiv1ent o7 teMuottion o7 Sin2ore Te8no1o2ies rine Lt!. A11 te esti0tes so?e! tt te reire6ense ?ou1! e68ee! P4)&,&&&,&&&.&&, te 0ount eMuiv1ent to o7 te vesse1s insure!v1ue o7 P@(&,&&&,&&&.&&. Tus, #A ote! to 3n!on FV GSuer7err9 @ n! 81i0e!7ro0 Pioneer te 7u11 0ount o7 te o1i8ies. Pioneer i! #As 81i0, n! no? !e0n!s7ro0 KCSI te 7u11 0ount o7 P@(&,&&&,&&&.&&, 39 virtue o7 su3ro2tion.

KCSI !enies te 1i3i1it9 3e8use, si!e 7ro0 its 81i0 tt it 8nnot 3e e1! 8u131e 7orne21i2en8e resu1tin2 in te !estru8tive 7ire, tere ?s no 8onstru8tive tot1 1oss, s te 0ount o7!02e ?s on19 USJ@,%&&,&&&.&& or P$)&,($$,4(&.&&, te 0ount o7 reir e6ense Muote!

39 Si0son, Sen8e Youn2.

In te 78e o7 tis rent 8on71i8t, ?e o1! tt Se8tion $@' o7 te Insurn8e Co!e sou1!2overn, 3e8use =$> Pi1iine 1? is !ee0e! in8ororte! in ever9 1o8119 e6e8ute! 8ontr8tn! =4> te 0rine insurn8e o1i8ies in Muestion e6ress19 rovi!e! te 7o11o?in2*

IPORTANT

Tis insurn8e is su3e8t to En21is uris!i8tion, e68et in te event tt 1oss or 1ossesre 931e in te Pi1iines, in ?i8 8se i7 te si! 1?s n! 8usto0s o7 En21n! s11 3e in8on71i8t ?it te 1?s o7 te Reu31i8 o7 te Pi1iines, ten te 1?s o7 te Reu31i8 o7 tePi1iines s11 2overn. =Un!ers8orin2 su1ie!.>


29/32

Te CA e1! tt Se8tion $@' o7 te Insurn8e Co!e is 0ere19 er0issive on 88ount o7te ?or! G09 in te rovision. Tis is in8orre8t. Proer19 8onsi!ere!, te ?or! G09 in terovision is inten!e! to 2rnt te insure! =#A> te otion or !is8retion to 8oose te3n!on0ent o7 te tin2 insure! =FV GSuer7err9 @>, or n9 rti8u1r ortion tereo7

serte19 v1ue! 39 te o1i89, or oter?ise serte19 insure!, n! re8over 7or tot1 1oss?en te 8use o7 te 1oss is eri1 insure! 2inst. Tis otion or !is8retion is e6resse! s ri2t in Se8tion $@$ o7 te s0e Co!e, to ?it*

Se8. $@$. A 8onstru8tive tot1 1oss is one ?i8 2ives to erson insure! ri2t to3n!on un!er Se8tion one un!re! tirt9-nine.

It 8nnot 3e !enie! tt FV GSuer7err9 @ su77ere! ?i!esre! !02e 7ro0 te 7ire tto88urre! on e3rur9 %, 4&&&, 8overe! eri1 un!er te 0rine insurn8e o1i8ies o3tine! 39#A 7ro0 Pioneer. Te esti0tes 2iven 39 te tree !isintereste! n! Mu1i7ie! si9r!sso? tt te !02e to te si ?ou1! e68ee! P4)&,&&&,&&&.&&, or o7 te tot1 v1ue o7 teo1i8ies P@(&,&&&,&&&.&&. Tese esti0tes 8onstitute! 8re!i31e n! 88et31e roo7 o7 tee6tent o7 te !02e sustine! 39 te vesse1. It is si2ni7i8nt tt tese esti0tes ?ere8on7ir0e! 39 te A!ust0ent Reort !te! +une 5, 4&&& su30itte! 39 Ri8r!s Ho22 Lin!1e9=Pi1s.>, In8., te ver2e !uster tt Pioneer ! en1iste! to veri79 n! 8on7ir0 te e6tent o7te !02e. Te A!ust0ent Reort veri7ie! n! 8on7ir0e! tt te !02e to te vesse10ounte! to 8onstru8tive tot1 1oss n! tt te 81i0 7or P@(&,&&&,&&&.&& un!er te o1i8ies

?s 8o0ens31e.;(< It is 1so note?ort9 tt KCSI !i! not 8ross-e60ine Henson Li0,

Dire8tor o7 Ri8r!s Ho22, ?ose 77i!vit-!ire8t testi0on9 su30itte! to te CIAC 8on7ir0e!tt te vesse1 ?s 8onstru8tive tot1 1oss.

Consi!erin2 te e6tent o7 te !02e, #A ote! to 3n!on te si n! 81i0e! tev1ue o7 its o1i8ies. Pioneer, 7in!in2 te 81i0 8o0ens31e, i! te 81i0, ?it #A issuin2 Loss n! Su3ro2tion Re8eit evi!en8in2 re8eit o7 te 90ent o7 te insurn8e ro8ee!s7ro0 Pioneer. On tis note, ?e 7in! s un88et31e te 81i0 o7 KCSI tt tere ?s no 01eroo7 o7 90ent si019 3e8use te erson ?o si2ne! te Re8eit ere! to 3e ne01o9ee o7 A3oiti Siin2 Corortion.;)< Te Loss n! Su3ro2tion Re8eit issue! 39#A to Pioneer is te 3est evi!en8e o7 90ent o7 te insurn8e ro8ee!s to te 7or0er, n!

no 8ontrovertin2 evi!en8e ?s resente! 39 KCSI to re3ut te resu0e! utorit9 o7 tesi2ntor9 to re8eive su8 90ent.

On te 0tter o7 su3ro2tion, Arti81e 44&) o7 te Civi1 Co!e rovi!es:


30/32

Art. 44&). I7 te 1inti77s roert9 s 3een insure! n! e s re8eive! in!e0nit9 7ro0 teinsurn8e 8o0n9 7or te inur9 or 1oss risin2 out o7 te ?ron2 or 3re8 o7 8ontr8t8o01ine! o7, te insurn8e 8o0n9 s11 3e su3ro2te! to te ri2ts o7 te insure! 2instte ?ron2!oer or te erson ?o s vio1te! te 8ontr8t. I7 te 0ount i! 39 te insurn8e8o0n9 !oes not 7u119 8over te inur9 or 1oss, te 22rieve! rt9 s11 3e entit1e! to re8over

te !e7i8ien89 7ro0 te erson 8usin2 te 1oss or inur9.

Su3ro2tion is te su3stitution o7 one erson 39 noter ?it re7eren8e to 1?7u1 81i0 or ri2t,so tt e ?o is su3stitute! su88ee!s to te ri2ts o7 te oter in re1tion to !e3t or 81i0,in81u!in2 its re0e!ies or se8urities. Te rin8i1e 8overs sitution ?erein n insurer s i! 1oss un!er n insurn8e o1i89 is entit1e! to 11 te ri2ts n! re0e!ies 3e1on2in2 to teinsure! 2inst tir! rt9 ?it rese8t to n9 1oss 8overe! 39 te o1i89. It 8onte01tes 7u11su3stitution su8 tt it 18es te rt9 su3ro2te! in te soes o7 te 8re!itor, n! e 09 use

11 0ens tt te 8re!itor 8ou1! e01o9 to en7or8e 90ent.;% n! USJ@(@,4%'.5&, rese8tive19. #As 81i0 7or te uee o7 te ?re8unti1 te s0e ?ere so1! 0ounts to P%,54$,)@).)5 =or USJ$5),%&'.'(>, to 3e !e!u8te! 7ro0te ro8ee!s o7 te s1e o7 te 08iner9 n! te u11, 7or net re8over9 o7 USJ()@,%$4.%), oreMuiv1ent to P@&,454,(%.&', t P.%'))FJ$, te revi1in2 e68n2e rte ?en te ReMuest


32/32

7or Ar3itrtion ?s 7i1e!. Not 8onsi!erin2 tis s1v2e v1ue in te ?r! ?ou1! 0ount to unustenri80ent on te rt o7 Pioneer.

C. On te i0osition o7 interest

Pursunt to our ru1in2 in Estern Siin2 Lines, In8. v. Court o7 Ae1s,;55< te ?r!in 7vor o7 Pioneer in te 0ount o7 P@5&,$(,)%(.%' sou1! ern interest t ( er nnu07ro0 te 7i1in2 o7 te 8se unti1 te ?r! 3e8o0es 7in1 n! e6e8utor9. Tere7ter, te rte o7interest s11 3e $4 er nnu0 7ro0 te !te te ?r! 3e8o0es 7in1 n! e6e8utor9 unti1 its7u11 stis78tion.

D. On te 90ent 7or te 8ost o7 r3itrtion

It is on19 7ittin2 tt 3ot rties sou1! sre in te 3ur!en o7 te 8ost o7 r3itrtion, on ro rt 3sis. e 7in! tt Pioneer ! v1i! reson to institute suit 2inst KCSI, s it3e1ieve! tt it ?s entit1e! to 81i0 rei03urse0ent o7 te 0ount it i! to #A. Ho?ever,

?e !is2ree ?it Pioneer tt on19 KCSI sou1! sou1!er te r3itrtion 8osts. KCSI 8nnot 3e7u1te! 7or !e7en!in2 itse17 7or er8eive! ?ron27u1 8ts n! 8on!itions. Oter?ise, ?e ?ou1! 3euttin2 ri8e on te ri2t to 1iti2te on te rt o7 Pioneer.

HEREORE, te Petition o7 Pioneer Insurn8e n! Suret9 Corortion in #.R. No. $%&%'(-')n! te Petition o7 Kee1 Ce3u Si9r!, In8. in #.R. No. $%&%%&-%$ re PARTIALLY#RANTED n! te A0en!e! De8ision !te! De8e03er 4&, 4&&) o7 te Court o7 Ae1s isODIIED. A88or!in219, KCSI is or!ere! to 9 Pioneer te 0ount o7 P@(&,&&&,&&&.&& 1essP@&,454,(%.&', eMuiv1ent to te s1v2e v1ue re8overe! 39 Pioneer 7ro0 FV GSuer7err9 @,or te net tot1 0ount o7 P@4',)),@5$.'$, ?it si6 er8ent =(> interest er nnu0 re8one!7ro0 te ti0e te ReMuest 7or Ar3itrtion ?s 7i1e! unti1 tis De8ision 3e8o0es 7in1 n!e6e8utor9, 1us t?e1ve er8ent =$4> interest er nnu0 on te si! 0ount or n9 31n8etereo7 7ro0 te 7in1it9 o7 te De8ision unti1 te s0e ?i11 ve 3een 7u119 i!. Te r3itrtion8osts s11 3e 3orne 39 3ot rties on ro rt 3sis. Costs 2inst KCSI.

SO ORDERED.

keppel cebu shi pyard, inc. vs. pioneer insurance and surety corporation, g.r. nos. 180880-8

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