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TSUNEISHI HEAVY INDUSTRIES Vs MIS MARITIME CORPORATION

Tsuneishi Heavy Industries contracted with MIS Maritime Corporation to dry dock and repair MIS' vessel M/T MIS-1. After completing repairs, Tsuneishi conducted an engine test that damaged the vessel's engine. The parties disagreed on who was responsible for the damage. Tsuneishi sued MIS to enforce a maritime lien and obtain a writ of preliminary attachment. However, the Supreme Court ruled that a maritime lien already functions as an attachment on the property. A writ of preliminary attachment is not necessary to enforce an existing lien, as its purpose is to create a lien rather than enforce one. Tsuneishi only needed to file a proper action in court to enforce the maritime lien.

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2K views1 page

TSUNEISHI HEAVY INDUSTRIES Vs MIS MARITIME CORPORATION

Tsuneishi Heavy Industries contracted with MIS Maritime Corporation to dry dock and repair MIS' vessel M/T MIS-1. After completing repairs, Tsuneishi conducted an engine test that damaged the vessel's engine. The parties disagreed on who was responsible for the damage. Tsuneishi sued MIS to enforce a maritime lien and obtain a writ of preliminary attachment. However, the Supreme Court ruled that a maritime lien already functions as an attachment on the property. A writ of preliminary attachment is not necessary to enforce an existing lien, as its purpose is to create a lien rather than enforce one. Tsuneishi only needed to file a proper action in court to enforce the maritime lien.

Uploaded by

Lara Cacal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

G.R. No.

193572, APRIL 4, 2018


TSUNEISHI HEAVY INDUSTRIES vs MIS MARITIME CORPORATION

FACTS:

Respondent contracted Tsuneishi to dry dock and repair its vessel M/T MIS-1
through an Agreement dated. Tsuneishi rendered the required services. However, about a
month later and while the vessel was still dry docked, Tsuneishi conducted an engine test
on M/T MIS-1. The vessel's engine emitted smoke. The parties eventually discovered that
this was caused by a burnt crank journal. The crankpin also showed hairline cracks due to
defective lubrication or deterioration, Tsuneishi insists that the damage was not its fault
while MIS insists on the contrary. Tsuneishi billed MIS the amount of US$318,571.50 for
payment of its repair and dry-docking services. MIS refused to pay this amount. Instead, it
demanded that Tsuneishi pay US$471,462.60 as payment for the income that the vessel lost
in the six months that it was not operational and dry docked at Tsuneishi's shipyard.
Tsuneishi filed a complaint against MIS before the RTC, invoking the admiralty jurisdiction
of the RTC to enforce a maritime lien under Section 21 of the Ship Mortgage Decree with a
prayer for the issuance of a writ of preliminary attachment under the Rules of Court.

ISSUE:

Whether or not a maritime lien under Section 21 of the Ship Mortgage Decree may
be enforced through a writ of preliminary attachment under Rule 57 of the Rules of Court.

HELD:

No. A lien is a "legal claim or charge on property, either real or personal, as a


collateral or security for the payment of some debt or obligation. It attaches to a property
by operation of law and once attached, it follows the property until it is discharged. While a
writ of preliminary attachment allows the levy of a property which shall then be held by
the sheriff. This property will stand as security for the satisfaction of the judgment that the
court may render in favor of the attaching party.

In this case, Tsuneishi's argument is rooted on a faulty understanding of a lien and a


writ of preliminary attachment. When a maritime lien exists, this means that the party in
whose favor the lien was established may ask the court to enforce it by ordering the sale of
the subject property and using the proceeds to settle the obligation. On the other hand, a
writ of preliminary attachment is issued precisely to create a lien. When a party moves for
its issuance, the party is effectively asking the court to attach a property and hold it liable
for any judgment that the court may render in his or her favor. This is similar to what a lien
does. It functions as a security for the payment of an obligation. The Court ruled that when
a lien already exists, this is already equivalent to an attachment. All Tsuneishi had to do is
to file a proper action in court for its enforcement. The issuance of a writ of preliminary
attachment on the pretext that it is the only means to enforce a maritime lien is
superfluous.

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