G.R. No. 195661 - Unknown Owner of the Vessel M/V China Joy vs. Asian Terminals, Inc.

The case involves petitioners—Unknown Owner of the Vessel M/V China Joy, Samsun Shipping Ltd., and Inter-Asia Marine Transport, Inc.—and respondent Asian Terminals, Inc. (ATI).
The dispute arose from damage sustained by ATI’s unloading equipment during the discharge of soybean meal cargo from M/V China Joy at the Mariveles Grain Terminal Wharf.
The vessel was employed under a Charter Party Agreement where ContiQuincyBunge L.L.C. acted as the charterer with San Miguel Foods, Inc. as co-charterer and Samsun as the agent of the shipowners. Notably, Samsun is a foreign corporation not doing business in the Philippines and transacts its business through Inter-Asia Marine Transport, Inc.

On January 25, 1997, M/V China Joy arrived with soybean meal cargo shipped by ContiQuincyBunge in favor of several Philippine consignees.
On February 3, 1997, during unloading using ATI’s Siwertell Unloader No. 2—a pneumatic vacubator designed to vertically extract heavy bulk grain—the operation was abruptly halted.
The incident occurred when the unloader’s head struck a flat, low-carbon steel bar (measuring roughly 8–10 inches in length, 4 inches in width, and about 1-1/4 inch in thickness) that had become co-mingled with the soybean meal cargo in Hold No. 2.
The metal bar lodged between the vertical screws of the unloader, causing cracks and shearing off portions of screws numbered 2 and 3.
The damages were quantified based on a quotation from BMH Marine AB Sweden: replacement cost of US$24,790 for both screws (US$12,395 each plus freight) and an additional US$2,000 for labor in removal and re-assembly.

On February 4, 1997, ATI sent a Note of Protest to the vessel’s Master regarding the damage, who responded by stating that the damage was not the vessel’s responsibility, noting that the metal originated from the cargo.
On March 5, 1997, ATI submitted a claim for US$37,185 plus labor costs to Inter-Asia Marine Transport, Inc.
Inter-Asia rejected the claim on the basis that, as the vessel was loaded under a Free-In-and-Out (FIOST) clause and due to its role merely as an agent (or even as the agent of an agent), it had no liability for the damage.
The petitioners argued that the physical evidence (the metal bar co-mingled with the cargo) indicated that the metal did not come from any part of the vessel.

ATI filed a Complaint for Damages against all involved parties on March 9, 1999.
The Regional Trial Court (RTC) dismissed the complaint on January 30, 2009 for insufficiency of evidence, citing uncertainty as to who caused the foreign metal object to combine with the cargo.
The Court of Appeals (CA) reversed the RTC ruling, holding that ATI proved damage, and awarded ATI damages of US$30,300.00 based on the doctrine of res ipsa loquitur.
The petitioners then filed a motion for reconsideration before the CA, which was denied on February 14, 2011.

Central to the facts is the nature of the accident: a foreign metal object, unexpected in free-flowing soybean meal, caused critical damage to ATI’s unloader.
The Charter Party Agreement, particularly Clause 22 and the interpretation of the FIOST (or FISTFO) clause, plays a crucial role in determining which party bore the duty of care during the cargo loading operations.
Testimonies and documentary evidence (including the vessel Master’s note and witness statements) provided conflicting accounts regarding the control and supervision of the loading process.

Whether the CA erred in applying the doctrine of res ipsa loquitur given that the foreign metal object was found co-mingled with the soybean meal cargo.
Whether this doctrine sufficiently establishes a presumption of negligence regarding the damage incurred by ATI’s unloader.

Whether the petitioners participated in the loading and discharge operations beyond merely providing the vessel and its gear.
Whether the foreign metal object could have originated from the vessel or its appurtenances, or whether it was introduced during cargo loading by the charterer.

Whether the terms of the Charter Party Agreement (including the FIOST/FISTFO clause and Clause 22 regarding the Master’s control) should allocate liability solely to the shipowner.
Whether the exemption arguments raised by the petitioners, concerning their limited role and non-participation in cargo handling, preclude their liability.