THIRDDIVISION

[G.R.No.120105.March27,1998]

BF CORPORATION, petitioner, vs. COURT OF APPEALS, SHANGRILA

PROPERTIES,COLAYCO,ALFREDOC.RAMOS,INC.,RUFOB. MAXIMO G.
LICAUCOIIIandBENJAMINC.RAMOS,respondents.

DECISION
ROMERO,J.:

The basic issue in this petition for review on certiorari is whether or not the contract for the
construction of the EDSA Plaza between petitioner BF Corporation and respondent Shangrila
Properties, Inc. embodies an arbitration clause in case of disagreement between the parties in the
implementationofcontractualprovisions.
Petitioner and respondent Shangrila Properties, Inc. (SPI) entered into an agreement whereby
thelatterengagedtheformertoconstructthemainstructureoftheEDSAPlazaProject,ashopping
mallcomplexintheCityofMandaluyong.
TheconstructionworkwasinprogresswhenSPIdecidedtoexpandtheprojectbyengagingthe
servicesofpetitioneragain.Thus,thepartiesenteredintoanagreementforthemaincontractworks
afterwhichconstructionworkbegan.
However, petitioner incurred delay in the construction work that SPI considered as serious and
substantial.[1]Ontheotherhand,accordingtopetitioner,theconstructionworksprogressedinfaithful
compliancewiththeFirstAgreementuntilafirebrokeoutonNovember30,1990damagingPhaseIof
theProject.[2]Hence,SPIproposedtherenegotiationoftheagreementbetweenthem.
Consequently,onMay30,1991,petitionerandSPIenteredintoawrittenagreementdenominated
asAgreementfortheExecutionofBuildersWorkfortheEDSAPlazaProject.Saidagreementwould
covertheconstructionworkonsaidprojectasofMay1,1991untilitseventualcompletion.
AccordingtoSPI,petitionerfailedtocompletetheconstructionworksandabandonedtheproject.
[3]Thisresultedindisagreementsbetweenthepartiesasregardstheirrespectiveliabilitiesunderthe
contract. On July 12, 1993, upon SPIs initiative, the parties respective representatives met in
conferencebuttheyfailedtocometoanagreement.[4]
BarelytwodayslateroronJuly14,1993,petitionerfiledwiththeRegionalTrialCourtofPasiga
complaint for collection of the balance due under the construction agreement. Named defendants
thereinwereSPIandmembersofitsboardofdirectorsnamely,AlfredoC.Ramos,RufoB.Colayco,
AntonioB.Olbes,GerardoO.Lanuza,Jr.,MaximoG.LicaucoIIIandBenjaminC.Ramos.
OnAugust3,1993,SPIanditscodefendantsfiledamotiontosuspendproceedingsinsteadof
filingananswer.Themotionwasanchoredondefendantsallegationthattheformaltradecontractfor
theconstructionoftheprojectprovidedforaclauserequiringpriorresorttoarbitrationbeforejudicial
intervention could be invoked in any dispute arising from the contract. The following day, SPI
submitted a copy of the conditions of the contract containing the arbitration clause that it failed to
appendtoitsmotiontosuspendproceedings.
 Petitioner opposed said motion claiming that there was no formal contract between the parties
although they entered into an agreement defining their rights and obligations in undertaking the
project.Itemphasizedthattheagreementdidnotprovideforarbitrationandthereforethecourtcould
not be deprived of jurisdiction conferred by law by the mere allegation of the existence of an
arbitrationclauseintheagreementbetweentheparties.
Inreplytosaidopposition,SPIinsistedthattherewassuchanarbitrationclauseintheexisting
contractbetweenpetitionerandSPI.Itallegedthatsuspensionofproceedingswouldnotnecessarily
deprivethecourtofitsjurisdictionoverthecaseandthatarbitrationwouldexpediteratherthandelay
thesettlementofthepartiesrespectiveclaimsagainsteachother.
InarejoindertoSPIsreply,petitionerreiteratedthattherewasnoarbitrationclauseinthecontract
betweentheparties. It averred that granting that such a clause indeed formed part of the contract,
suspensionoftheproceedingswasnolongerproper.Itaddedthatdefendantsshouldbedeclaredin
defaultforfailuretofiletheiranswerwithinthereglementaryperiod.
Initssurrejoinder,SPIpointedoutthesignificanceofpetitionersadmissionofthedueexecution
of the Articles of Agreement. Thus, on page D/6 thereof, the signatures of Rufo B. Colayco, SPI
president, and Bayani Fernando, president of petitioner appear, while page D/7 shows that the
agreementisapublicdocumentdulynotarizedonNovember15,1991byNotaryPublicNilbertoR.
BrionesasdocumentNo.345,page70,bookNo.LXX,Seriesof1991ofhisnotarialregister.[5]
Thereafter, upon a finding that an arbitration clause indeed exists, the lower court[6] denied the
motiontosuspendproceedings,thus:
ItappearsfromthesaiddocumentthatintheletteragreementdatedMay30,1991(AnnexC,
Complaint),plaintiffBFanddefendantShangriLaProperties,Inc.agreeduponthetermsand
conditionsoftheBuildersWorkfortheEDSAPlazaProject(PhasesI,IIandCarpark),subject
totheexecutionbythepartiesofaformaltradecontract.Defendantshavesubmittedacopy
oftheallegedtradecontract,whichisentitled`ContractDocumentsForBuildersWorkTrade
Contractordated01May1991,page2ofwhichisentitled`ContentsofContractDocuments
withalistofthedocumentsthereincontained,andSectionAthereofconsistsofthe
abovementionedLetterAgreementdatedMay30,1991.SectionCofthesaidContract
Documentsisentitled`ArticlesofAgreementandConditionsofContractwhich,peritsIndex,
consistsofPartA(ArticlesofAgreement)andB(ConditionsofContract).ThesaidArticlesof
AgreementappearstohavebeendulysignedbyPresidentRufoB.ColaycoofShangriLa
Properties,Inc.andPresidentBayaniF.FernandoofBFandtheirwitnesses,andwas
thereafteracknowledgedbeforeNotaryPublicNilbertoR.BrionesofMakati,MetroManilaon
November15,1991.ThesaidArticlesofAgreementalsoprovidesthatthe`Contract
Documents'thereinlisted`shallbedeemedanintegralpartofthisAgreement,andoneofthe
saiddocumentsisthe`ConditionsofContractwhichcontainstheArbitrationClauserelied
uponbythedefendantsintheirMotiontoSuspendProceedings.
ThisCourtnotes,however,thatthe`ConditionsofContractreferredto,containsthefollowing
provisions:
`3.ContractDocument.
ThreecopiesoftheContractDocumentsreferredtointheArticlesof
Agreementshallbesignedbythepartiestothecontractanddistributedtothe
OwnerandtheContractorfortheirsafekeeping.(underscoringsupplied)
Anditissignificanttonotefurtherthatthesaid`ConditionsofContractisnotdulysignedby
thepartiesonanypagethereofalthoughitbearstheinitialsofBFsrepresentatives(Bayani
F.FernandoandReynaldoM.delaCruz)withouttheinitialsthereonofanyrepresentativeof
ShangriLaProperties,Inc.
 ConsideringtheinsistenceoftheplaintiffthatthesaidConditionsofContractwasnotduly
executedorsignedbytheparties,andthefailureofthedefendantstosubmitanysignedcopy
ofthesaiddocument,thisCourtentertainsseriousdoubtwhetherornotthearbitrationclause
foundinthesaidConditionsofContractisbindinguponthepartiestotheArticlesof
Agreement.(Underscoringsupplied.)
Thelowercourtthenruledthat,assumingthatthearbitrationclausewasvalidandbinding,still,it
was too late in the day for defendants to invoke arbitration. It quoted the following provision of the
arbitrationclause:
Noticeofthedemandforarbitrationofadisputeshallbefiledinwritingwiththeotherpartyto
thecontractandacopyfiledwiththeProjectManager.Thedemandforarbitrationshallbe
madewithinareasonabletimeafterthedisputehasarisenandattemptstosettleamicably
havefailedinnocase,however,shallthedemandhemadebelaterthanthetimeoffinal
paymentexceptasotherwiseexpresslystipulatedinthecontract.
Against the above backdrop, the lower court found that per the May 30, 1991 agreement, the
projectwastobecompletedbyOctober31,1991.Thereafter,thecontractor would payP80,000 for
eachdayofdelaycountedfromNovember1,1991withliquified(sic)damagesuptoamaximumof
5%ofthetotalcontractprice.
Thelowercourtalsofoundthataftertheprojectwascompletedinaccordancewiththeagreement
that contained a provision on progress payment billing, SPI took possession and started operations
thereofbyopeningthesametothepublicinNovember,1991.SPI,havingfailedtopayfortheworks,
petitionerbilledSPIinthetotalamountofP110,883,101.52,containedinademandlettersentbyitto
SPI on February 17, 1993. Instead of paying the amount demanded, SPI set up its own claim of
P220,000,000.00andscheduledaconferenceonthatclaimforJuly12,1993.Theconferencetook
placebutitprovedfutile.
Upontheabovefacts,thelowercourtconcluded:
ConsideringthefactthatunderthesupposedArbitrationClauseinvokedbydefendants,itis
requiredthat`Noticeofthedemandforarbitrationofadisputeshallbefiledinwritingwiththe
otherpartyxxxxinnocasexxxxlaterthanthetimeoffinalpaymentxxxxwhich
apparently,hadelapsed,notonlybecausedefendantshadtakenpossessionofthefinished
worksandtheplaintiffsbillingsforthepaymentthereofhadremainedpendingsince
November,1991uptothefilingofthiscaseonJuly14,1993,butalsoforthereasonthat
defendantshavefailedtofileanywrittennoticeofanydemandforarbitrationduringthesaid
longperiodofoneyearandeightmonths,thisCourtfindsthatitcannotstaytheproceedings
inthiscaseasrequiredbySec.7ofRepublicActNo.876,becausedefendantsareindefault
inproceedingwithsucharbitration.
The lower court denied SPIs motion for reconsideration for lack of merit and directed it and the
otherdefendantstofiletheirresponsivepleadingoranswerwithinfifteen(15)daysfromnotice.
Insteadoffilingananswertothecomplaint,SPIfiledapetitionforcertiorariunderRule65ofthe
RulesofCourtbeforetheCourtofAppeals.Saidappellatecourtgrantedthepetition,annulledandset
aside the orders and stayed the proceedings in the lower court. In so ruling, the Court of Appeals
held:
ThereasonsgivenbytherespondentCourtindenyingpetitionersmotiontosuspend
proceedingsareuntenable.

1.ThenotarizedcopyofthearticlesofagreementattachedasAnnexAtopetitionersreplydated
August26,1993,hasbeensubmittedbythemtotherespondentCourt(AnnexG,petition).Itbears
thesignatureofpetitionerRufoB.Colayco,presidentofpetitionerShangriLaProperties,Inc.,andof
BayaniFernando,presidentofrespondentCorporation(AnnexG1,petition).AtpageD/4ofsaid
articlesofagreementitisexpresslyprovidedthattheconditionsofcontractare`deemedanintegral
partthereof(page188,rollo).AnditisatpagesD/42toD/44oftheconditionsofcontractthatthe
provisionsforarbitrationarefound(AnnexesG3toG5,petition,pp.227229).ClauseNo.35on
arbitrationspecificallyprovides:

ProvidedalwaysthatincaseanydisputeordifferenceshallarisebetweentheOwnerortheProject
ManageronhisbehalfandtheContractor,eitherduringtheprogressorafterthecompletionor
abandonmentoftheWorksastotheconstructionofthisContractorastoanymatterorthingof
whatsoevernaturearisingthereunderorinconnectiontherewith(includinganymatterorbeingleftby
thisContracttothediscretionoftheProjectManagerorthewithholdingbytheProjectManagerofany
certificatetowhichtheContractormayclaimtobeentitledorthemeasurementandvaluation
mentionedinclause30(5)(a)oftheseConditionsortherightsandliabilitiesofthepartiesunder
clauses25,26,32or33oftheseConditions),theOwnerandtheContractorherebyagreetoexertall
effortstosettletheirdifferencesordisputeamicably.Failingtheseeffortsthensuchdisputeor
differenceshallbereferredtoArbitrationinaccordancewiththerulesandproceduresofthePhilippine
ArbitrationLaw.

Thefactthatsaidconditionsofcontractcontainingthearbitrationclausebearonlytheinitialsof
respondentCorporationsrepresentatives,BayaniFernandoandReynaldodelaCruz,withoutthatof
therepresentativeofpetitionerShangriLaProperties,Inc.doesnotmilitateagainstitseffectivity.Said
petitionerhavingcategoricallyadmittedthatthedocument,AnnexAtoitsreplydatedAugust26,1993
(AnnexG,petition),istheagreementbetweentheparties,theinitialorsignatureofsaidpetitioners
representativetosignifyconformitytoarbitrationisnolongernecessary.Theparties,therefore,should
beallowedtosubmittheirdisputetoarbitrationinaccordancewiththeiragreement.

2.TherespondentCourtheldthatpetitioners`areindefaultinproceedingwithsucharbitration.Ittook
noteof`thefactthatunderthesupposedArbitrationClauseinvokedbydefendants,itisrequiredthat
Noticeofthedemandforarbitrationofadisputeshallbefiledinwritingwiththeotherpartyxxxinno
casexxxlaterthanthetimeoffinalpayment,whichapparently,hadelapsed,notonlybecause
defendantshadtakenpossessionofthefinishedworksandtheplaintiffsbillingsforthepayment
thereofhadremainedpendingsinceNovember,1991uptothefilingofthiscaseonJuly14,1993,but
alsoforthereasonthatdefendantshavefailedtofileanywrittennoticeofanydemandforarbitration
duringthesaidlongperiodofoneyearandeightmonths,xxx.

RespondentCourthasoverlookedthefactthatunderthearbitrationclause

Noticeofthedemandforarbitrationdisputeshallbefiledinwritingwiththeotherpartytothecontract
andacopyfiledwiththeProjectManager.Thedemandforarbitrationshallbemadewithina
reasonabletimeafterthedisputehasarisenandattemptstosettleamicablyhadfailedinnocase,
however,shallthedemandbemadelaterthanthetimeoffinalpaymentexceptasotherwise
expresslystipulatedinthecontract(underscoringsupplied)

quotedinitsorder(AnnexA,petition).AstherespondentCourttheresaid,afterthefinaldemandto
paytheamountofP110,883,101.52,insteadofpaying,petitionerssetupitsownclaimagainst
respondentCorporationintheamountofP220,000,000.00andsetaconferencethereononJuly12,
1993.Saidconferenceprovedfutile.Thenextday,July14,1993,respondentCorporationfiledits
complaintagainstpetitioners.OnAugust13,1993,petitionerswrotetorespondentCorporation
requestingarbitration.Underthecircumstances,itcannotbesaidthatpetitionersresorttoarbitration
wasmadebeyondreasonabletime.Neithercantheybeconsideredindefaultoftheirobligationto
respondentCorporation.

Hence,thispetitionbeforethisCourt.Petitionerassignsthefollowingerrors:
A.
THECOURTOFAPPEALSERREDINISSUINGTHEEXTRAORDINARYWRITOF
CERTIORARIALTHOUGHTHEREMEDYOFAPPEALWASAVAILABLETO
 RESPONDENTS.
B.
THECOURTOFAPPEALSERREDINFINDINGGRAVEABUSEOFDISCRETIONIN
THEFACTUALFINDINGSOFTHETRIALCOURTTHAT:
(i)THEPARTIESDIDNOTENTERINTOANAGREEMENTTOARBITRATE.
(ii)ASSUMINGTHATTHEPARTIESDIDENTERINTOTHEAGREEMENTTO
ARBITRATE,RESPONDENTSAREALREADYINDEFAULTIN
INVOKINGTHEAGREEMENTTOARBITRATE.
On the first assigned error, petitioner contends that the Order of the lower court denying the
motion to suspend proceedings is a resolution of an incident on the merits. As such, upon the
continuation of the proceedings, the lower court would appreciate the evidence adduced in their
totalityandthereafterrenderadecisiononthemeritsthatmayormaynotsustaintheexistenceofan
arbitrationclause.Adecisioncontainingafindingthatthecontracthasnoarbitrationclausecanthen
be elevated to a higher court in an ordinary appeal where an adequate remedy could be obtained.
Hence, to petitioner, the Court of Appeals should have dismissed the petition for certiorari because
theremedyofappealwouldstillbeavailabletoprivaterespondentsatthepropertime.[7]
Theabovecontentioniswithoutmerit.
Therulethatthespecialcivilactionofcertiorarimaynotbeinvokedasasubstitutefortheremedy
ofappealissuccinctlyreiteratedinOngsitcov.CourtofAppeals[8]asfollows:

xxx.Countlesstimesinthepast,thisCourthasheldthat`whereappealistheproperremedy,
certiorariwillnotlie.Thewritsofcertiorariandprohibitionareremediestocorrectlackorexcessof
jurisdictionorgraveabuseofdiscretionequivalenttolackofjurisdictioncommittedbyalowercourt.
`Wheretheproperremedyisappeal,theactionforcertiorariwillnotbeentertained.xxx.Certiorariis
notaremedyforerrorsofjudgment.Errorsofjudgmentarecorrectiblebyappeal,errorsofjurisdiction
arereviewablebycertiorari.

Rule65isveryclear.Theextraordinaryremediesofcertiorari,prohibitionandmandamusare
availableonlywhen`thereisnoappealoranyplain,speedyandadequateremedyintheordinary
courseoflawxxx.Thatiswhytheyarereferredtoas`extraordinary.xxx.

The Court has likewise ruled that certiorari will not be issued to cure errors in proceedings or
correcterroneousconclusionsoflaworfact.Aslongasacourtactswithinitsjurisdiction,anyalleged
errorscommittedintheexerciseofitsjurisdictionwillamounttonothingmorethanerrorsofjudgment
which are reviewable by timely appeal and not by a special civil action of certiorari.[9]v. Court of
Appeals,327Phil.1,4142(1996).9
Thisisnotexactlysointheinstantcase.WhilethisCourtdoesnotdenytheeventualjurisdiction
of the lower court over the controversy, the issue posed basically is whether the lower court
prematurely assumed jurisdiction over it. If the lower court indeed prematurely assumed jurisdiction
over the case, then it becomes an error of jurisdiction which is a proper subject of a petition for
certiorari before the Court of Appeals. And if the lower court does not have jurisdiction over the
controversy,thenanydecisionororderitmayrendermaybeannulledandsetasidebytheappellate
court.
However,thequestionofjurisdiction,whichisaquestionoflawdependsonthedeterminationof
theexistenceofthearbitrationclause,whichisaquestionoffact.Intheinstantcase,thelowercourt
found that there exists an arbitration clause. However, it ruled that in contemplation of law, said
arbitrationclausedoesnotexist.
 Theissue,therefore,posedbeforetheCourtofAppealsinapetitionforcertiorariiswhetherthe
ArbitrationClausedoesnotinfactexist.Onitsface,thequestionisoneoffactwhichisnotproperin
apetitionforcertiorari.
TheCourtofAppealsfoundthatanArbitrationClausedoesinfactexist.Inresolvingsaidquestion
offact,theCourtofAppealsinterpretedtheconstructionofthesubjectcontractdocumentscontaining
the Arbitration Clause in accordance with Republic Act No. 876 (Arbitration Law) and existing
jurisprudence which will be extensively discussed hereunder. In effect, the issue posed before the
Court of Appeals was likewise a question of law. Being a question of law, the private respondents
rightfullyinvokedthespecialcivilactionofcertiorari.
ItisthatmodeofappealtakenbyprivaterespondentsbeforetheCourtofAppealsthatisbeing
questioned by the petitioners before this Court. But at the heart of said issue is the question of
whether there exists an Arbitration Clause because if an Arbitration Clause does not exist, then
privaterespondentstookthewrongmodeofappealbeforetheCourtofAppeals.
ForthisCourttobeabletoresolvethequestionofwhetherprivaterespondentstooktheproper
mode of appeal, which, incidentally, is a question of law, then it has to answer the core issue of
whetherthereexistsanArbitrationClausewhich,admittedly,isaquestionoffact.
Moreover,wherearigidapplicationoftherulethatcertioraricannotbeasubstituteforappealwill
result in a manifest failure or miscarriage of justice, the provisions of the Rules of Court which are
technicalrulesmayberelaxed.[10]Asweshallshowhereunder,hadtheCourtofAppealsdismissed
thepetitionforcertiorari,theissueofwhetherornotanarbitrationclauseexistsinthecontractwould
nothavebeenresolvedinaccordancewithevidenceextantintherecordofthecase.Consequently,
thiswouldhaveresultedinajudicialrejectionofacontractualprovisionagreedbythepartiestothe
contract.
Inthesamevein,thisCourtholdsthatthequestionoftheexistenceofthearbitrationclauseinthe
contractbetweenpetitionerandprivaterespondentsisalegalissuethatmustbedeterminedinthis
petitionforreviewoncertiorari.
Petitioner, while not denying that there exists an arbitration clause in the contract in question,
assertsthatincontemplationoflawtherecouldnothavebeenoneconsideringthefollowingpoints.
First,thetrialcourtfoundthattheconditionsofcontractembodyingthearbitrationclauseisnotduly
signedbytheparties.Second,privaterespondentsmisrepresentedbeforetheCourtofAppealsthat
they produced in the trial court a notarized duplicate original copy of the construction agreement
becausewhatweresubmittedweremerephotocopiesthereof.Thecontract(s)introducedincourtby
private respondents were therefore of dubious authenticity because: (a) the Agreement for the
Execution of Builders Work for the EDSA Plaza Project does not contain an arbitration clause, (b)
privaterespondentssurreptitiouslyattachedasAnnexes`G3to`G5totheirpetitionbeforetheCourt
ofAppealsbutthesedocumentsarenotpartsoftheAgreementofthepartiesastherewasnoformal
tradecontractexecuted,(c)iftheentirecompilationofdocumentsisindeedaformaltradecontract,
then it should have been duly notarized, (d) the certification from the Records Management and
ArchivesOfficedatedAugust26,1993merelystatesthatthenotarialrecordofNilbertoBrionesxxx
isavailableinthefilesof(said)officeasNotarialRegistryEntryonly,(e)thesamecertificationattests
that the document entered in the notarial registry pertains to theArticles of Agreement only without
any other accompanying documents, and therefore, it is not a formal trade contract, and (f) the
compilationsubmittedbyrespondentsareamerehodgepodgeofdocumentsanddonotconstitutea
singleintelligibleagreement.
In other words, petitioner denies the existence of the arbitration clause primarily on the ground
that the representatives of the contracting corporations did not sign the Conditions of Contract that
contained the said clause. Its other contentions, specifically that insinuating fraud as regards the
alleged insertion of the arbitration clause, are questions of fact that should have been threshed out
below.
 This Court may as well proceed to determine whether the arbitration clause does exist in the
partiescontract.RepublicActNo.876providesfortheformalrequisitesofanarbitrationagreement
asfollows:

Section4.Formofarbitrationagreement.Acontracttoarbitrateacontroversythereafterarising
betweentheparties,aswellasasubmissiontoarbitrateanexistingcontroversy,shallbeinwriting
andsubscribedbythepartysoughttobecharged,orbyhislawfulagent.

Themakingofacontractorsubmissionforarbitrationdescribedinsectiontwohereof,providingfor
arbitrationofanycontroversy,shallbedeemedaconsentofthepartiesoftheprovinceorcitywhere
anyofthepartiesresides,toenforcesuchcontractofsubmission.(Underscoringsupplied.)

Theformalrequirementsofanagreementtoarbitratearethereforethefollowing:(a)itmustbein
writingand(b)itmustbesubscribedbythepartiesortheirrepresentatives.Thereisnodenyingthat
thepartiesenteredintoawrittencontractthatwassubmittedinevidencebeforethelowercourt.To
subscribemeanstowriteunderneath,asonesnametosignattheendofadocument.[11]Thatword
maysometimesbeconstruedtomeantogiveconsenttoortoattest.[12]
TheCourtfindsthat,uponascrutinyoftherecordsofthiscase,theserequisiteswerecomplied
withinthecontractinquestion.TheArticlesofAgreement,whichincorporatesalltheothercontracts
and agreements between the parties, was signed by representatives of both parties and duly
notarized.The failure of the private respondents representative to initial the `Conditions of Contract
wouldtherefornotaffectcompliancewiththeformalrequirementsforarbitrationagreementsbecause
thatparticularportionofthecovenantsbetweenthepartieswasincludedbyreferenceintheArticles
ofAgreement.
Petitionerscontentionthattherewasnoarbitrationclausebecausethecontractincorporatingsaid
provision is part of a hodgepodge document, is therefore untenable. A contract need not be
containedinasinglewriting.Itmaybecollectedfromseveraldifferentwritingswhichdonotconflict
with each other and which, when connected, show the parties, subject matter, terms and
consideration,asincontractsenteredintobycorrespondence.[13]Acontractmaybeencompassedin
severalinstrumentseventhougheveryinstrumentisnotsignedbytheparties,sinceitissufficientif
theunsignedinstrumentsareclearlyidentifiedorreferredtoandmadepartofthesignedinstrument
orinstruments.Similarly, a written agreement of which there are two copies, one signed by each of
the parties, is binding on both to the same extent as though there had been only one copy of the
agreementandbothhadsignedit.[14]
Theflawinpetitionerscontentionsthereforeliesinitshavingsegmentedthevariouscomponents
ofthewholecontractbetweenthepartiesintoseveralparts.Thisnotwithstanding,petitionerironically
admits the execution of the Articles ofAgreement. Notably, too, the lower court found that the said
ArticlesofAgreementalsoprovidesthatthe`ContractDocumentsthereinlisted`shallbedeemedan
integralpartofthisAgreement,andoneofthesaiddocumentsisthe`ConditionsofContractwhich
contains the Arbitration Clause. It is this Articles of Agreement that was duly signed by Rufo B.
Colayco, president of private respondent SPI, and Bayani F. Fernando, president of petitioner
corporation. The same agreement was duly subscribed before notary public Nilberto R. Briones. In
other words, the subscription of the principal agreement effectively covered the other documents
incorporatedbyreferencetherein.
ThisCourtlikewisedoesnotfindthattheCourtofAppealserredinrulingthatprivaterespondents
werenotindefaultininvokingtheprovisionsofthearbitrationclausewhichstatesthat(t)hedemand
for arbitration shall be made within a reasonable time after the dispute has arisen and attempts to
settle amicably had failed. Under the factual milieu, private respondent SPI should have paid its
liabilities under the contract in accordance with its terms. However, misunderstandings appeared to
havecroppedupbetweenthepartiesostensiblybroughtaboutbyeitherdelayinthecompletionofthe
constructionworkorbyforcemajeureorthefirethatpartiallyguttedtheproject.Thealmosttwoyear
delayinpayingitsliabilitiesmaynotthereforebewhollyascribedtoprivaterespondentSPI.
Besides,privaterespondentSPIsinitiativeincallingforaconferencebetweenthepartieswasa
steptowardstheagreedresorttoarbitration.However,petitionerposthastefiledthecomplaintbefore
thelowercourt.Thus,whileprivaterespondentSPIsrequestforarbitrationonAugust13,1993might
appear an afterthought as it was made after it had filed the motion to suspend proceedings, it was
becausepetitioneralsoappearedtoacthastilyinordertoresolvethecontroversythroughthecourts.
The arbitration clause provides for a reasonable time within which the parties may avail of the
reliefunderthatclause.Reasonablenessisarelativetermandthequestionofwhetherthetimewithin
whichanacthastobedoneisreasonabledependsonattendantcircumstances.[15]ThisCourtfinds
thatunderthecircumstancesobtaininginthiscase,aonemonthperiodfromthetimethepartiesheld
aconferenceonJuly12,1993untilprivaterespondentSPInotifiedpetitionerthatitwasinvokingthe
arbitrationclause,isareasonabletime.Indeed,petitionermaynotbefaultedforresortingtothecourt
to claim what was due it under the contract. However, we find its denial of the existence of the
arbitration clause as an attempt to cover up its misstep in hurriedly filing the complaint before the
lowercourt.
Inthisconnection,itbearsstressingthatthelowercourthasnotlostitsjurisdictionoverthecase.
Section7ofRepublicActNo.876providesthatproceedingsthereinhaveonlybeenstayed.Afterthe
special proceeding of arbitration[16] has been pursued and completed, then the lower court may
confirmtheaward[17]madebythearbitrator.
Itshouldbenotedthatinthisjurisdiction,arbitrationhasbeenheldvalidandconstitutional.Even
before the approval on June 19, 1953 of Republic Act No. 876, this Court has countenanced the
settlement of disputes through arbitration.[18] Republic Act No. 876 was adopted to supplement the
NewCivilCodesprovisionsonarbitration.[19]Itspotentialsasoneofthealternativedisputeresolution
methods that are now rightfully vaunted as the wave of the future in international relations, is
recognized worldwide. To brush aside a contractual agreement calling for arbitration in case of
disagreementbetweenthepartieswouldthereforebeastepbackward.
WHEREFORE, the questioned Decision of the Court of Appeals is hereby AFFIRMED and the
petitionforcertiorariDENIED.ThisDecisionisimmediatelyexecutory.Costsagainstpetitioner.
SOORDERED.
Narvasa,C.J.,(Chairman),Kapunan,andPurisima,JJ.,concur.

[1]Rollo,p.75.

[2]Ibid.,p.9.

[3]Ibid.,p.76.

[4]Ibid.

[5]AnnexesG1andG2ofReplytoOppositiontoMotiontoSuspendProceedingsRollo in CAG.R. SP No. 33412, pp.

190191.
[6]PresidedbyJudgeDomingoR.Garcia.

[7]Rollopp.1617.

[8]325Phil.1069,1076(1996).

[9]CommissionerofInternalRevenue
[10]Sps.Mejaresv.Hon.Reyes,324Phil.710,718(1996).

[11]GamidovNewBilibidPrisonsOfficials,312Phil.100,104.

[12]2BOUVIERSLAWDICTIONARY,3rdrevision,p.3171.

[13]17C.J.S.727728.

[14]Ibid.,pp.728&729.

[15]MORENO,PHILIPPINELAWDICTIONARY,3rded.,p.790.

[16]Sec.22,Rep.ActNo.876.

[17]Sec.23ofRep.ActNo.876provides:Confirmationofaward.Atanytimewithinonemonthaftertheawardismade,
anypartytothecontroversywhichwasarbitratedmayapplytothecourthavingjurisdiction,asprovidedinsectiontwenty
eight, for an order confirming the award and thereupon the court must grant such order unless the award is vacated,
modifiedorcorrected,asprescribedherein.Noticeofsuchmotionshallbeservedupontheadversepartyorhisattorneyas
prescribedbylawfortheserviceofsuchnoticeuponanattorneyinactioninthesamecourt.
[18]Puromines,Inc.v.CourtofAppeals,G.R.No.91228,March22,1993,220SCRA281,289290.

[19]ChungFuIndustries(Phils.),Inc.v.CourtofAppeals,G.R.No.96283,February25,1992,206SCRA545,551.