Facts:

The case involves petitioners Belchem Philippines, Inc., United Philippine Lines (UPL), and Fernandino T. Lising against respondent Eduardo A. Zafra, Jr. The events leading to the case began when Zafra was hired as a "wiper" by Belchem through UPL for a four-month contract. On September 30, 2009, while aboard the MT Chemtrans Havel, Zafra sustained injuries to his left knee after falling while checking for leaks in the ship's engine room. Following an initial examination in Amsterdam on October 16, 2009, he was advised to undergo an x-ray and was repatriated to the Philippines on October 22, 2009, for further treatment. Upon his return, Zafra reported to UPL and was examined by Dr. Robert D. Lim, the company-designated physician, who diagnosed him with a probable medial meniscal tear and an anterior cruciate ligament (ACL) tear in his left knee, necessitating surgery. Zafra underwent an arthroscopic ACL reconstruction on January 5, 2010, which required extensive...

Facts:

Parties and Procedural History

• Petitioners: Belchem Philippines, Inc., United Philippine Lines, and Fernando T. Lising.
• Respondent: Eduardo A. Zafra, Jr.
• The case arose from Zafra’s claim for permanent total disability benefits, which initially was decided by the Labor Arbiter, reversed by the NLRC awarding US$60,000.00, and subsequently affirmed by the Court of Appeals (CA).
• Petitioners assailed the CA decisions (June 4, 2012 and December 7, 2012) through a petition for review on certiorari before the Supreme Court.

Employment and Injury Background

• Zafra was hired as a “wiper” by Belchem through its local manning agent, United Philippine Lines, under a contract valid for four (4) months.
• On July 17, 2009, Zafra boarded MT Chemtrans Havel.
• On September 30, 2009, while heading to the ship’s engine room to check machinery leaks, he sustained injuries on his left knee when he hit the floor.

Medical Treatment and Diagnosis

• Initial Medical Evaluation
• On October 16, 2009, Zafra was initially examined in Amsterdam by a doctor who recommended further x-ray examinations.
• He was repatriated to the Philippines on October 22, 2009 for additional medical treatment.
• Subsequent Medical Management in the Philippines
• Upon arrival on October 22, 2009, he reported to the UPL office and was attended by the petitioners’ designated physician, Dr. Robert D. Lim, at Metropolitan Medical Center, Marine Medical Services.
• Dr. Lim diagnosed him with “probable Medial Meniscal Tear, Left knee” and “Anterior Cruciate Ligament (ACL) Tear, Left Knee,” noting the need for surgical intervention.
• Surgical and Postoperative Developments
• Zafra underwent “Arthroscopic ACL Reconstruction” on January 5, 2010 and spent over a week in confinement followed by rehabilitation to regain mobility.
• An interim assessment by Dr. Lim on January 20, 2010 gave a Grade 10 disability for the injuries.
• Expert Opinion and Additional Assessments
• On April 19, 2010, Dr. William Chuasuan, Jr. (not the company-designated physician) wrote a letter suggesting a disability grading of 20% of Grade 10, equated to US$3,590.73 under the POEA-SEC guidelines.
• On August 20, 2010, the Assistant Medical Coordinator issued a Brief Clinical History, reaffirming Zafra’s diagnosis with the same final assessment (noting also an incidental urinary tract infection).

Filing of the Claim and Subsequent Proceedings

• On July 5, 2010, Zafra filed a complaint seeking:
• Payment of permanent total disability benefits.
• Moral and exemplary damages.
• Attorney’s fees.
• In response, the petitioners attempted an amicable settlement; however, the case proceeded litigiously.
• The Labor Arbiter, on October 21, 2010, ruled in favor of Zafra but limited the award to US$3,590.73 based on the Grade 10 assessment.
• The NLRC reversed the Labor Arbiter ruling, awarding full US$60,000.00 permanent total disability benefits because Zafra remained unfit to resume work beyond the required period.
• The CA affirmed the NLRC decision in its June 4, 2012 Decision and later denied the petitioners’ motions for reconsideration on December 7, 2012.

Divergent Positions of the Parties

• Petitioners’ Position
• Argue that the disability compensation should be based strictly on the gradings provided under the POEA-SEC (i.e., Grade 10 corresponding to US$3,590.73).
• Contend that a failure to issue a certificate of fitness within the 120-day (or extended 240-day) period does not automatically render the injury total and permanent.
• Assert that attorney’s fees should not be awarded under the present circumstances.
• Respondent’s Position
• Insist that the absence of any definitive declaration of fitness to work within the 240-day period conclusively proves his permanent total disability.
• Maintain that his persistent inability to perform sea duties and his unchanged medical condition justify the full disability award of US$60,000.00.

Relevant Statutory and Jurisprudential Framework

• The POEA-SEC governs the relationship between the parties regarding disability benefits, not the Labor Code.
• The case law cited (e.g., Abante, Fernandez, Vergara, Fil-Star Maritime, Fil-Pride Shipping, Carcedo) underscores the need for a definitive and timely assessment by the company-designated physician.
• The legal debate focused on whether the lack of a final medical certification automatically converts the disability from partial to total.

Issue:

Whether the absence of a definitive declaration of fitness to work or a comprehensive assessment of disability by the company-designated physician within the prescribed 120- to 240-day period can automatically render a seafarer permanently and totally disabled.

• The legal threshold for establishing permanent total disability.
• The relevance of the medical assessments provided by non-designated physicians versus the mandatory certification required under the POEA-SEC.

Whether the CA erred in disregarding the gradings set forth in the POEA-SEC, particularly when a company-designated physician’s final assessment was either absent or ambiguous, thereby affecting the quantification of disability benefits (i.e., partial disability benefit of US$3,590.73 versus full benefit of US$60,000.00).

• The proper interpretation and application of the medical reports and interim assessments.
• The significance of the “extended period” in which no declaration of fitness to work was issued.

Whether the award of attorney’s fees amounting to 10% of the claim (US$6,000.00) was appropriate under the circumstances.

• The justification for awarding attorney’s fees given the conduct and actions of the parties.
• The criteria for awarding such fees in disability benefit cases governed by the POEA-SEC and relevant jurisprudence.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)