G.R. Nos. 180880-81. September 18, 2012.
FACTS
In 2000, KCSI and WG&A Jebsens entered into Shiprepair Agreement wherein KCSI to carry out renovation and reconstruction of M/V Superferry 3. Prior to the execution of the Shiprepair Agreement, Superferry 3 was already insured by WG&A with Pioneer for US$8,472,581.78. While undergoing repair, Superferry 3 was gutted by fire. WG&A declared the vessel’s damage as a “total constructive loss” and filed an insurance claim with Pioneer. Pioneer paid the insurance claim of WG&A, and in exchange, WG&A executed a Loss and Subrogation Receipt in favor of Pioneer. Pioneer tried to collect the amount of US$8,472,581.78 from KCSI but it was frustrated. Thus, Pioneer sought arbitration with the CIAC, which found that both WG&A and KCSI were equally guilty of negligence which resulted in the fire and loss of Superferry 3. The Court of Appeals affirmed the decision of CIAC.