Philippine Supreme Court Did It Again

There's a saying that goes like this: "Old habits die hard" This is true, at least in the case of the Supreme Court, which was criticized recently for its fickle-mindedness. The alarming part of this flip-flopping issue at SC is the fact that it happened not just once but a few times already. If this will continue, I'm afraid that SC will soon lose its credibility, especially to common Filipino citizens like me.

This comes to mind after reports that the High Tribunal also retracted and even reversed its own decision involving a P329 Million liability claim of a property insurance company against a Singapore-based multinational company which, due to negligence, set ablaze and gutted down a WG&A “Superferry” vessel which was brought to their shipyard in Cebu for repair.

Atty. Arthur Lim has all the reasons to be alarmed on this newly-discovered flip-flopping case by the Supreme Court especially because the original decision was already recorded in the Book of Entries of Judgment.

This means that the SC ruling has already formed part of the law of the land and of Philippine jurisprudence only to be withdrawn on the basis of a prohibited THIRD motion for reconsideration filed without leave of court and after the issuance of Entry of Judgment and a mere letter addressed to then Chief Justice Corona, who ironically, was impeached by Congress and convicted by the Senate Impeachment Court amid growing frustration over the SC’s flip-flopping on its decisions, among which was the issue on the cityhood of 16 municipalities and the Hacienda Luisita case.

According to Lim, the new case involves a liability claim being pursued by Pioneer Insurance and Surety Corporation, which is one of the country’s biggest locally-grown property insurance companies against Keppel Cebu Shipyard Inc, which is a subsidiary of Keppel Group, a Singapore-based multinational company with interests in offshore and marine services, real estate and property development and investment.

Pioneer was the insurer of the Superferry ship that went on fire on February 8, 2000 while it was dry docked on Keppel’s shipyard in Lapu-Lapu, Cebu supposedly for repair. The cause? Improper welding procedure by one of Keppel’s personnel who also turns out to have no “hot work permit” and therefore, should not have been authorized by Keppel to do “hot works.”

Being the insurer, Pioneer, upon investigation of the incident, paid WG&A’s insurance claim for a total of P360 Million but since third-party negligence was involved, the insurance company naturally filed a liability suit against Keppel to recover the amount paid to WG&A.

This is the standard practice of insurance companies and it is for this reason that even when claiming an insurance after a car accident, the claimant needs to submit a traffic accident report and if a third party is involved in the accident, the insurer takes the brunt of filing a liability suit to recover cost. And if insurance companies would go through the legal trouble just to recover cost for a mere car repair cost, what more if it involves a whopping P360 Million? That’s a colossal amount and Keppel obviously wanted to run away from its responsibility.

As part of its mandate, the Construction Industry Arbitration Commission (CIAC) stepped in and on November 18, 2002, it awarded Pioneer the sum of P25 Million plus 6% interest per annum from the date of filing of the complaint.

CIAC’s decision was appealed by both Keppel and Pioneer to the Court of Appeals (CA). On December 17,2004, the CA reversed the CIAC decision by completely deleting the CIAC’s award of P25 Million plus 6% interest per annum for Pioneer which prompted the insurance company to immediately seek relief by filing a motion for reconsideration.

Nearly three years later, December 20,2007, the CA Special Division of Five, by a majority vote, partially granted Pioneers Motion for Reconsideration by promulgating an Amended Decision which basically reinstated CIAC’s ruling except that it deleted the 6% per annum interest. In that decision however, two of the CA Justices who voted against the Special Division ruling, issued a strongly worded dissenting opinion declaring that Keppel should be held solely responsible for the incident and therefore the P50 Million limitation as contained in its Ship Repair Agreement with WG&A is not valid, hence, Keppel must be held liable for P360 Million which is the full value of the loss.

After nearly five years of legal wrangling in the CA, the case was elevated to the Supreme Court and two years later, on September 25,2009, the High Court’s Third Division rendered its decision modifying the CA ruling by awarding Pioneer the amount of P360 Million (full value of the loss), less P30,252,648 salvage proceeds realized by WG&A from the sale of the vessel’s wreck or a net amount of P329,747,351 with 6% interest per annum counted from August 22, 2000 until finality and 12% interest on the total value from date of finality until fully paid.

Keppel wasted no time to file a Motion for Reconsideration but on June 21, 2010, the SC rendered a resolution denying with finality Keppel’s motion. This prompted Keppel to file a second MR with a request to refer the case to the SC en banc.

Four months later, on October 20,2010, SC denied Keppel’s second MR and its request to refer the case to en banc.

Finally on November 18, 2010, the SC issued an Entry of Judgment certifying the that SC decision dated September 25,2009 became final and executory on November 4, 2010.

But there seems to be no such thing as “final and executory” at the Supreme Court.

“If a decision of court is recorded in the Book of Entries of Judgment, it becomes a permanent evidence of the rendition by the court of a judgment and becomes a part of our statutes. Under ordinary circumstances especially in ordinary civil cases such as the case of Pioneer and Keppel, decisions that have reached entry of judgment are considered final and can no longer be challenged,” Lim observed.

But when Keppel filed a 3rd motion for reconsideration disguised as a motion to re-open the case,the SC En Banc accepted on June 7, 2011 the review the already final SC Decision of September 25, 2009. This decision by the En Banc to review an already final decision of the Court itself was questioned in a strongly worded dissenting opinion made by Associate Justice Arturo Brion who declared that “by accepting the referral and reopening the case despite its finality, the SC violated the most basic principle underlying the legal system – the immutability of final judgments – thereby acting without authority and outside of its jurisdiction.”

Under the Constitution, a decision rendered by a Division of the SC is considered a decision of the Court itself, and is not reviewable by the Banc.

And despite questions on the jurisdiction of the SC en banc to review on a case already decided with finality by the Court through its Third Division, it issued a resolution on September 18, 2012 practically erasing SC’s earlier decision which was already recorded in its Book of Entries of Judgment.

In its September 18, 2012 decision, the SC modified its own September 25,2009 ruling, which was already final, by reducing the award of P329,747,351 (excluding interests) to a mere P50,000,000 (excluding interest at 6%). It held WG&A and Keppel liable as jointly negligent and applied the limitation of liability to P50 Million.

In his dissenting opinion, Associate Justice Bienvenido Reyes echoed the concern of Justice Brion and Attorney Lim that reversing an SC decision that has already been recorded in the Book of Entries of Judgment and therefore a part and parcel of Philippine law and jurisprudence is “indeed distasteful and an affront to one’s sense of justice and fairness.”

“What runs throughout these cases, where the Court took an extraordinary step is the presence of an exceptionally justifying circumstance of a fundamental value which goes beyond the interests of the litigants. It is the presence of this exceptional character that imposes upon the Court a measure of self-regulation to prevent itself from committing the very grave abuse of discretion which under the Constitution it is designed to perform as a checking measure. Without this exceptional character the underlying public policy in the crafting and applying the doctrine of immutability should dictate the Court’s action; for, parties come to court to litigate on a dispute and not to prolong and perpetuate the dispute itself at the expense of supposed victor,” Brion stressed.


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