Del Rosario & Del Rosario

Shipping and the Law

Singapore Court upholds POEA Contract; dismisses Filipino seafarer’s claim

By: Ruben Del Rosario, Managing Partner, Del Rosario & Del Rosario, August 19, 2005

Seafarer was injured when a shard of metal hit his right eye while repairing the accommodation ladder. He received medical treatment in Yangon. Thereafter, he was repatriated via Singapore. An operation was carried out on his eye in Manila.

On 05 November 2003, seafarer filed a Complaint in the NLRC claiming US$80,000.00 as disability compensation. However, on 30 December 2003, seafarer commenced an admiralty action in Singapore against owners for negligence and/or breach of contract or duty resulting in his eye injury. On 15 January 2004, seafarer withdrew his claim with the NLRC which was consequently dismissed “without prejudice”.

On 17 May 2004, the owners applied to have the action stayed (i.e. dismissed). The Singapore Judge dismissed the action based on forum non conveniens.

On appeal by the seafarer, the Singapore Court of Appeal (highest court of the land) upheld the ruling of the Judge as follows:

1. The Singapore court was correct in declining to exercise jurisdiction based on forum non conveniens which means that “there is some other available forum, having competent jurisdiction, which is more appropriate for the trial of the action.” Although NLRC is not strictly a court of law, the fact remains that it is a forum competent to try the dispute in the Philippines.

2. When the parties specify the governing law in the employment contract, said stipulation should prevail. In this case, Section 31 of POEA Standard Employment Contract clearly provides that any dispute or claim in connection with the contract shall be governed by the laws of the Philippines. Further, the Court cited the decision of the United States Court of Appeals, Eleventh Circuit in Rizalyn Bautista vs. Star Cruises (“SS Norway” case) which held that the POEA contract should govern as it provided for claims and disputes to be submitted to the NLRC or arbitrators (Section 29). It also noted the POEA’s role in supervising, regulating, promoting and monitoring overseas employment programs for the purpose of ensuring the best terms and conditions of employment for Filipino contract workers. Finally, it ruled that tort claims are covered by the phrase “claims and disputes arising from this employment” under Section 29 of the POEA contract considering that said contract “obligates the shipowner to provide a seaworthy vessel and further regulates the payment of sick pay, repatriation and medical care.”

3. While it is true that the shipowner did not sign the seafarer’s POEA contract, the fact that it was executed by the ship manager and local manning agent acting as shipowner’s agents makes the POEA contract binding on the shipowner.

4. The clause in the Hong Kong Merchant Shipping (Seafarers) Ordinance (“the Hong Kong Agreement” executed by the seafarer) which states that “Any terms and conditions of service annexed to this agreement should not be less favorable than those under the provisions of the laws of Hong Kong” cannot be construed as a jurisdiction or applicable law clause. Said clause only indicates that there is a separate agreement annexed thereto and its terms should not be less beneficial than what Hong Kong law provides. This is an issue which the Court noted can be passed upon by the competent forum in Manila (NLRC).

5. In general, the Court considered the overwhelming connection of the case with the Philippines. First, the entire crew including subject seafarer are Filipinos and reside in the Philippines. Second, medical witnesses will be from the Philippines. Third, the employment contract is governed by Philippine laws which were enacted to protect its citizens who are serving on foreign vessels. Fourth, the hearing of the claim in the Philippines will avoid the need of engaging an interpreter. Fifth, a performance bond has been posted by the manning agents to the Philippine authorities serving as security for the claim. Sixth, the shipowners have expressed agreement to submit to jurisdiction of the Philippines. On the other hand, the case has no material link to Singapore except the fact that seafarer joined the vessel in and was repatriated via Singapore which are wholly irrelevant to the claim.

Paquito L. Buton vs. The Owners of the ship or vessel “RAINBOW JOY”, Civil Appeal No. 116 of 2004, 20 July 2005, [2005] SGCA 36 (Court of Appeals of the Republic of Singapore)

Note: Mr. Yap Yin Soon of Allen & Gledhill handled the case for vessel interests in Singapore. Attys. Charles Jay Dela Cruz and Ruben Del Rosario of Del Rosario & Del Rosario assisted Allen & Gledhill by rendering advice on Philippine laws.

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Ruben T. Del Rosario is managing partner of Del Rosario & Del Rosario. He is former president of the Maritime Law Association of the Philippines and is currently president of the Philippine Maritime Voluntary Arbitrators Association. Del Rosario is correspondent of several P & I Clubs.

For complete copy of the decision or for further information, please call 63 2 810 1791 or fax 63 2 817 1740 or email ruben.delrosario@delrosario-pandiphil.com

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