Keppel shipyard liable for fire that gutted Aboitiz ship


Posted at Nov 16 2010 12:51 PM | Updated as of Nov 16 2010 08:51 PM

MANILA, Philippines - The Supreme Court is standing pat on its decision ordering Keppel Cebu Shipyard, Inc. to pay a minimum of P330 million for the fire that burned down Aboitiz Transport System Corp.’s M/V Superferry 3 in 2000.

In a 5-page resolution, the high court’s 2nd division said there are no new grounds that would merit a reversal of its September 25, 2009 decision.

There, the high court saw that the shipyard was negligent in its duties.

The issue stemmed from the ship repair agreement that the then William, Gothong & Aboitiz, Inc. had executed with Keppel.

The agreement allowed the latter to renovate and reconstruct Superferry 3 in its dry docking facility.

While repairs were ongoing, a fire broke out and caused “evasive” damage to the ship. The fire was caused by hot works at a certain portion of the ship that were done despite the absence of a safety permit.

WG&A then subrogated its rights to Pioneer Insurance and Surety Corp., which then sought damages from the shipyard. The vessel had been insured for some P360 million.

The Construction Industry Arbitration Commission, where the case was first elevated, ordered Keppel to pay the insurer a minimum of P25 million.
The legal liability went up to P50 million when the Court of Appeals acquired jurisdiction over the case.

Pioneer however insisted that Keppel is liable for a bigger amount, prompting it to proceed to the high court.

Siding with the insurer, the high court said Keppel said could not make use of the WG&A’s subrogation of its rights to Pioneer in order to ask for limited liabilities.

It had said: “Subrogation is the substitution of one person by another with reference to a lawful claim or right, so that he who is substituted succeeds to the rights of the other in relation to a debt or claim, including its remedies or securities.”

The high court computed the liability at around P329.7 million, excluding interests.

This was later affirmed, but Keppel lodged a second motion for reconsideration in an attempt to have the full court look at its case.

In its latest ruling, the high court said “[the full court] is not an appellate court to which unfavorable decisions or resolutions of a division may be appealed.”

It stressed: “Insistent reiteration, in one form or another of arguments already passed upon and rejected cannot be countenanced. Under no circumstances may a litigant or counsel engage the court in indeterminable squabbling about the correctness of its orders and dispositions.”