Commercial Law, 2011 Bar — Question 2

MULTIPLE CHOICE

A cargo ship of X Shipping, Co. ran aground off the coast of Cebu during a storm and lost all its cargo amounting to Php50 Million. The ship itself suffered damages estimated at Php80 Million. The cargo owners filed a suit against X Shipping but it invoked the doctrine of limited liability since its vessel suffered Php80 Million damage, more than the collective value of all lost cargo. Is X Shipping correct? A) Yes, since under that doctrine, the value of the lost cargo and the damage to the ship can be set-off. B) No, since each cargo owner has a separate and individual claim for damages. C) Yes, since the extent of the ship's damage was greater than that of the value of the lost cargo. D) No, since X Shipping neither incurred a total loss nor abandoned its ship.

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