SC re-opens Keppel shipyard case

CEBU, Philippines - The Supreme Court En Banc granted Keppel Cebu Shipyard Inc. KCSI’s motion for the re-opening of their case after arguing they were deprived of due process.

In its 14-page resolution, the high tribunal en banc shall determine whether or not KCSI’s arguments are meritorious.

Earlier, the Second Division, thru Justice Antonio Eduardo B. Nachura, in its consolidated decision of two cases (KCSI vs. Pioneer Insurance and Security Corporation and vice versa) dated September 25, 2009 partially granted and modified the ruling of the Court of Appeals (CA) dated December 20, 2007.

Nachura ordered KCSI to pay P329,747,351.91 to the insurance company with six percent per annum from the time the request for arbitration was filed.

The Pioneer Insurance and Security Corporation shouldered the expenses of the William, Gothong and Aboitiz Lines (WG&A) Superferry 3 that caught fire on February 8, 2000.

The KCSI filed a motion for reconsideration twice but it was denied with finality for lack of merit.

In its motion to re-open the proceedings, the KCSI questioned how the court can decide on the petition when both party (KCSI and Pioneer) did not attach and supply the transcripts and that the court has none of the transcript of records.

KCSI asserted in its motion, that without the transcript of records, the court had no basis to review the issues of facts and to reverse the findings of the CA and the Construction Industry Arbitration Commission CIAC, which they said have actually read the evidence and transcript of records.

They added the “most crucial finding of fact of the CA was that both insurance company and KCSI were guilty of negligence that caused the fire which destroyed the vessel, M/V Super Ferry 3.”

The KCSI said the CIAC and CA based their findings on the testimony of a dozen witnesses, whose statements were also included in the transcript of records.

“Even as it raised prohibited factual issues in its petition before the Court, Pioneer did not attach any of those transcripts to its petition. Since it, KCSI appealed only questions of law it had not need to attach said transcripts, and therefore, did not supply any of those transcripts to the Court,” the KCSI said.

The KCSI also claimed that the limitation-of-liability clause under the Ship Repair Agreement between them and WG&A was valid.

KCSI pointed out that based on their agreement, their total liability is only limited to P50 million with regards to any defects or events.

However, the court en banc ruled that clause 20 of the agreement was void and an ineffectual waiver of WG&A’s right to be compensated for the full insured value of the vessel.

“There was clearly no intention on the part of WG&A to relinquish such right. It is an elementary rule that a waiver must be positively proved, since a waiver by implication is not normally countenanced.”

Meanwhile, ten members or two thirds of the court en banc, voted to grant KCSI”s motion for the re-opening of the proceedings, while three members dissented.

However, in Brion’s dissenting opinion, he expressed his objections against the re-opening of the final judgment of the case and its acceptance by the court en banc for the review of its merits.

“In considering the review of a final and executory decision, the nature of the decision must be taken into account. When the final decision is valid, it cannot be the subject of review, even by the Court En Banc,” Brion said.

The KCSI had entered into an agreement to renovate the SuperFerry 3 in its dry docking facilities in Cebu on January 26, 2000. Prior to the agreement, SuperFerry was already insured with Pioneer Insurance Company.

However, on February 8, 2000, SuperFerry 3 caught fire when the sparks landed on life jackets while KCSI employee Angelino Sevillejo was doing welding works.

The WG&A filed a claim with the insurance company and on June 16, 2000 Pioneer paid the full amount of insurance coverage. The insurance company tried to collect money from Keppel but the latter refused to pay prompting them to file a complaint before the CIAC. (FREEMAN)