G.R. No. 98242 - Radio Communications of the Philippines, Inc. vs. National Labor Relations Commission

Petitioners: Regional Container Lines (RCL) of Singapore and its domestic agent, EDSA Shipping Agency.
Respondent: The Netherlands Insurance Co. (Philippines), Inc. (a domestic corporation engaged in marine underwriting).
Cargo: 405 cartons of Epoxy Molding Compound consigned from Singapore to Manila for Temic Telefunken Microelectronics Philippines (Temic).

On October 20, 1995, the cargo was prepared for shipment.
U-Freight Singapore PTE Ltd., acting as the forwarding agent, contracted Pacific Eagle Lines PTE. Ltd. to transport the shipment.
The cargo was packed, stored, and sealed by Pacific Eagle in Refrigerated Container No. 6105660 (Seal No. 13223) to maintain a temperature of 0°C due to its highly perishable nature.

The refrigerated container was loaded aboard the M/V Piya Bhum, a vessel owned by RCL, under a slot charter agreement with Pacific Eagle.
RCL issued its own Bill of Lading in favor of Pacific Eagle.
To insure the cargo, Netherlands Insurance issued a Marine Open Policy (MPO-21-05081-94 and Marine Risk Note MRN-21 14022) covering all losses or damages.

On October 25, 1995, the M/V Piya Bhum docked in Manila and unloaded the refrigerated container.
After unloading, the container was plugged into the pier’s power terminal to maintain the required temperature.
A protective survey was conducted by Fidel Rocha of Marines Adjustment Corporation and two surveyors.

They recorded a constant temperature of 0°C from October 18 to October 25, 1995.
At midnight on October 25, 1995—after unloading—the temperature spiked to 33°C, an anomaly attributed by Rocha to a burnt condenser fan motor.

Temic received the cargo on November 9, 1995 and found it completely damaged.
Temic filed a claim with Netherlands Insurance, which subsequently paid P1,036,497.00 under the coverage of the Marine Open Policy.
Temic executed a loss and subrogation receipt in favor of Netherlands Insurance.

On June 4, 1996, Netherlands Insurance filed a subrogation complaint (Civil Case No. 96-78612) against the “unknown owner of M/V Piya Bhum” and TMS Ship Agencies, believed to be the local agent.
The complaint was later amended to include additional defendants: EDSA Shipping, RCL, Eagle Liner Shipping Agencies, U-Freight Singapore, and U-Ocean (Phils.), Inc.
During the pendency, various defendants, including RCL and EDSA Shipping, filed answers with cross-claims and compulsory counterclaims.
RCL and EDSA Shipping later filed motions to dismiss based on demurrer to evidence, arguing:

Netherlands Insurance failed to prove valid subrogation.
They were not negligent because any damage occurred after the cargo was discharged from the ship.

On May 22, 2002, the trial court dismissed the complaint on demurrer to evidence, holding that the liabilities of RCL and EDSA Shipping ended upon discharge of the cargo at Manila Port.
Netherlands Insurance appealed.
On May 26, 2004, the Court of Appeals (CA) reversed the dismissal of the complaint against RCL and EDSA Shipping, ordering them to reimburse Netherlands Insurance the sum paid to Temic with interest, while dismissing the complaint against the other defendants on prescription grounds.

RCL and EDSA Shipping filed a motion for reconsideration; however, the CA maintained its ruling.
The sole issue for review was whether the CA correctly held RCL and EDSA Shipping liable as common carriers under the presumption of negligence.

Whether the Court of Appeals correctly imposed liability on RCL and EDSA Shipping as common carriers under the presumption of negligence.
Whether the temperature fluctuation—recorded after the cargo was discharged—exonerates RCL and EDSA Shipping from exercising the required extraordinary diligence.
Whether RCL and EDSA Shipping properly established that the damage occurred exclusively after the turnaround of custody and thus is attributable to another party (arrastre operator/ICTSI).