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    Steamship Vs Sulpicio

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    Koko
    1) Sulpicio Lines insured its fleet of vessels with Steamship Mutual and one of Sulpicio's vessels caught fire resulting in a total loss. Sulpicio filed a claim which Steamship denied. 2) The issue was whether there was a valid arbitration agreement between the parties. 3) The Supreme Court ruled that the dispute must be referred to arbitration in London as the insurance policy incorporated the club rules by reference, which included a provision to submit all disputes to arbitration. As a long-standing member of Steamship, Sulpicio was bound by the club rules.

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    Steamship Vs Sulpicio

    Uploaded by

    Koko
    1K views1 page
    1) Sulpicio Lines insured its fleet of vessels with Steamship Mutual and one of Sulpicio's vessels caught fire resulting in a total loss. Sulpicio filed a claim which Steamship denied. 2) The issue was whether there was a valid arbitration agreement between the parties. 3) The Supreme Court ruled that the dispute must be referred to arbitration in London as the insurance policy incorporated the club rules by reference, which included a provision to submit all disputes to arbitration. As a long-standing member of Steamship, Sulpicio was bound by the club rules.

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    Insurance digest

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    Steamship vs Sulpicio

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    1) Sulpicio Lines insured its fleet of vessels with Steamship Mutual and one of Sulpicio's vessels caught fire resulting in a total loss. Sulpicio filed a claim which Steamship denied. 2) The issue was whether there was a valid arbitration agreement between the parties. 3) The Supreme Court ruled that the dispute must be referred to arbitration in London as the insurance policy incorporated the club rules by reference, which included a provision to submit all disputes to arbitration. As a long-standing member of Steamship, Sulpicio was bound by the club rules.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views1 page

    Steamship Vs Sulpicio

    Uploaded by

    Koko
    1) Sulpicio Lines insured its fleet of vessels with Steamship Mutual and one of Sulpicio's vessels caught fire resulting in a total loss. Sulpicio filed a claim which Steamship denied. 2) The issue was whether there was a valid arbitration agreement between the parties. 3) The Supreme Court ruled that the dispute must be referred to arbitration in London as the insurance policy incorporated the club rules by reference, which included a provision to submit all disputes to arbitration. As a long-standing member of Steamship, Sulpicio was bound by the club rules.

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    Steamship Mutual v.

    Sulpicio Lines
    G.R. No. 196072 (2017)

    FACTS:

     Sulpicio Lines (Sulpicio) insured its fleet of inter-island vessels with Steamship Mutual
    (Steamship) for protection and indemnity risks through local insurance agents.
     On July 7, 2005, one of its vessels, M/V Princess of the World was gutted by fire while on voyage
    from Iloilo to Zamboanga City resulting in total loss of its cargoes. The fire incident was found as
    accidental.
     Sulpicio claimed indemnity from Steamship under the policy, however, Steamship denied the
    claim and subsequently rescinded the insurance coverage of Sulpicio’s other vessels on the
    ground that “Sulpicio was grossly negligent in conducting its business regarding safety.”
     Sulpicio filed a complaint against Steamship for specific performance and damages, while
    Steamship filed its motion to dismiss and or refer case to arbitration, which is provided for in the
    club rules.
     The RTC and CA decided against Steamship, thus this petition.

    ISSUE: Whether or not there was a valid arbitration agreement between the parties and referral to
    arbitration was imperative.

    HELD:

    Yes, petition was granted. The dispute was referred to arbitration in London.

    RATIO DECIDENDI:

    An insured member may be compelled to arbitration pursuant to the Rules of the Protection and
    Indemnity Club, which were incorporated in the insurance policy by reference. Where there are multiple
    parties, the court must refer to arbitration the parties covered by the agreement while proceeding with the
    civil action those who were not bound by the arbitration agreement.

    A party is not relieved of the duty to exercise the ordinary care and prudence that would be exacted in
    relation to other contracts. The conformity of the insured to the terms of the policy is implied from [its]
    failure to express any disagreement with what is provided for.” The agreement to submit all disputes to
    arbitration is a long-standing provision in the Club Rules. It was incumbent upon Sulpicio to familiarize
    itself with the Club Rules, under the presumption that a person takes due care of its concerns. Being a
    member of Steamship for 20 years, it has been bound by its Rules and has been expected to abide by
    them in good faith.

    It is the State’s policy to promote party autonomy in the mode of resolving disputes. Under the freedom of
    contract principle, parties to a contract may stipulate on a particular method of settling any conflict
    between them. Arbitration and other alternative dispute resolution methods like mediation, negotiation,
    and conciliation are favored over court action.

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