Case Digest (G.R. No. 196072)
Facts:
In Steamship Mutual Underwriting Association (Bermuda) Limited v. Sulpicio Lines, Inc. (G.R. Nos. 196072 & 208603, September 20, 2017), Sulpicio Lines, Inc. (“Sulpicio”) entered its M/V Princess of the World for Protection & Indemnity insurance with Steamship Mutual Underwriting Association (Bermuda) Limited (“Steamship”) under a Certificate of Entry and Acceptance covering the policy year from February 20, 2005 to February 20, 2006. On July 7, 2005, the vessel’s cargo was a total loss by accidental fire. Sulpicio claimed indemnity, but Steamship denied coverage and rescinded other vessel entries, alleging gross negligence. On June 28, 2007, Sulpicio sued Steamship, its director Gary Rynsard, and local agents Pioneer Insurance and Seaboard-Eastern in RTC Makati (Civil Case No. 07-577) for specific performance and damages. Steamship moved to dismiss or refer the dispute to arbitration under Rule 47 of its 2005/2006 Club Rules and Republic Act No. 9285 (ADR Law). RTC Branch 149 deCase Digest (G.R. No. 196072)
Facts:
- Parties and Insurance Contract
- Steamship Mutual Underwriting Association (Bermuda) Limited (Steamship) – a Bermuda‐based Protection & Indemnity (P&I) Club, insuring shipowners against third‐party death/injury, cargo loss/damage, and collision liabilities; membership governed by Club Act, By‐laws, and annual Rules.
- Sulpicio Lines, Inc. (Sulpicio) – Philippine shipowner, entered its inter‐island vessels (including M/V Princess of the World) with Steamship for P&I coverage via local brokers Pioneer Insurance and Sureboard-Eastern Insurance.
- Certificate of Entry and Incidents
- Steamship issued a “Certificate of Entry and Acceptance” for Sulpicio’s vessels (Feb 20, 2005–Feb 20, 2006), referencing the Club’s Act, By‐laws, and 2005/2006 Rules (printed annually and sent to members), but containing no separate arbitration clause text.
- On July 7, 2005, a fire (ruled accidental) destroyed cargo aboard M/V Princess of the World. Sulpicio claimed indemnity; Steamship denied liability and rescinded coverage for other Sulpicio vessels citing gross negligence.
- Court Proceedings
- June 28, 2007 – Sulpicio filed Complaint (RTC Makati, Civil Case No. 07-577) against Steamship, one director, and its local agents for specific performance and damages.
- Steamship moved to dismiss or refer to arbitration per RA 9285 (Alternative Dispute Resolution Act) and Rule 47 of the 2005/2006 Club Rules; RTC denied (July 11, 2008 and Sept 24, 2008 Orders).
- Steamship petitioned the Court of Appeals (CA-GR SP No. 106103); CA dismissed in November 2010. Steamship filed a Rule 45 petition (G.R. No. 196072) to the Supreme Court.
- Sept 6, 2013 – Sulpicio filed a Petition for Indirect Contempt (G.R. No. 208603), alleging Steamship clandestinely initiated and concluded an arbitration in London and unilaterally offset US$69,570.99 from a separate refund.
Issues:
- Procedural
- Is Steamship’s petition a proper Rule 45 petition for review, and did it comply with verification and certification against forum shopping?
- Arbitration Agreement
- Does a valid and binding arbitration agreement exist between Steamship and Sulpicio?
- Was Sulpicio furnished with the Club’s Rulebook containing the arbitration clause?
- Referral to Arbitration
- Did the Court of Appeals err in affirming RTC’s denial to refer the dispute to arbitration under the Club Rules and RA 9285 Sec. 25?
- Indirect Contempt
- Is Steamship guilty of indirect contempt for initiating London arbitration and offsetting its costs without Sulpicio’s or the Court’s consent?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)