G.R. No. 71604 August 11, 1989
JOSE B. ATIENZA, petitioner, vs. PHILIMARE SHIPPING AND EQUIPMENT SUPPLY, TRANS OCEAN LINER (Pte) LTD., PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION and NATIONAL LABOR RELATIONS COMMISSION, respondents.

FACTS

Jose B. Atienza was employed by Philimare Shipping, as agent for Trans Ocean Liner, to work as Third Mate on board the MV Tibati. The Crew Agreement, validated by the National Seamen Board (NSB), stipulated a monthly salary and provided that insurance benefits would be “as per NSB Standard Format.” On May 12, 1981, Atienza died in an accident while the vessel was in Bombay, India. His father, the petitioner, filed a claim for death benefits computed under the Workmen’s Compensation Law of Singapore, amounting to US$30,600.00.
The private respondents admitted liability but contended it was limited to P40,000.00 under the NSB Standard Format. The Philippine Overseas Employment Administration (POEA) sustained this position, applying Philippine law. The National Labor Relations Commission (NLRC) affirmed but increased the award to P75,000.00, applying NSB Memorandum Circular No. 71, Series of 1981. The petitioner sought reversal, arguing for the application of Singaporean law citing the Norse Management case, while the private respondents questioned the retroactive application of Memorandum Circular No. 71.

ISSUE

The primary issues were: (1) whether Singaporean law or the NSB Standard Format governed the death benefits claim, and (2) whether NSB Memorandum Circular No. 71 could be applied retroactively to increase the award.

RULING

The Supreme Court ruled that Singaporean law was not applicable. The legal logic centered on the specific stipulations of the employment contract. In Norse Management, the Crew Agreement expressly provided that compensation would be paid under Philippine law or the law of the vessel’s registry, whichever was greater. In contrast, Atienza’s contract explicitly stated benefits were “as per NSB Standard Format,” with no comparative stipulation for applying foreign law. The contract is the law between the parties, and absent a clause adopting a foreign law for greater benefits, the agreed NSB format controls. The Court cited Bagong Filipinas Overseas Corporation v. NLRC, reinforcing that the shipboard employment contract is controlling and Norse is not a precedent due to its distinct contractual provision.
On the second issue, the Court held that NSB Memorandum Circular No. 71 could not be applied retroactively. The seaman’s death occurred on May 12, 1981, while the circular took effect only in December 1981, as certified by the POEA. The applicable law at the time of death was NSB Memorandum Circular No. 46, Series of 1979, which provided for a P40,000.00 benefit. It would be unjust to impose liability based on a law not yet in effect when the contingency occurred, as established in Sta. Rita v. NLRC. Consequently, the NLRC decision was set aside, and the POEA’s original award of P40,000.00 was reinstated.