(#1) BF CORPORATION V.

COURT OF APPEALS
G.R. No. 120105, March 27, 1998

FACTS:
BF Corporation entered into an agreement with Shangri-la Properties (SPI) for the construction of the main
structure of the EDSA Plaza Project, a shopping mall complex in Mandaluyong City. The parties entered
into an Agreement for the Execution of Builders Work for the EDSA Plaza Project. The said agreement
consists of several documents one of which is Conditions of Contract which contained an arbitration
clause.

SPI claims that BF Corporation failed to complete the construction works and abandoned the project. The
parties met in conference but they failed to come to an agreement with respect to their respective liabilities
under the contract. BF Corporation filed a complaint for collection of the balance under the construction
agreement with the Regional Trial Court. SPI filed a motion to suspend the proceedings on the ground of
the existence of arbitration clause in the contract. BF Corporation denied its existence. The trial court found
that an arbitration clause did exist but it denied the motion to suspend proceedings on grounds that the
Conditions of Contract is not duly signed by the parties and no written notice of demand for arbitration was
made to the BF Corporation. SPI filed a petition for certiorari under Rule 65 before the Court of Appeals.
The latter granted the petition, annulled and set aside the orders and stayed the proceedings of the lower
court on the ground that the said articles of agreement is expressly provided that the conditions of contract
are deemed an integral part thereof.

ISSUE:
Did the contract enter into by the parties embodies an arbitration clause?

RULING:
YES. Sec.4 of RA 876 provides that a contract to arbitrate a controversy thereafter arising between the
parties, as well as a submission to arbitrate an existing controversy, shall be in writing and subscribed by
the party sought to be charged, or by his lawful agent. The Articles of Agreement, which incorporated all the
other contracts and agreements between the parties, was signed by representatives of both parties and
duly notarized. The failure of the SPIs representative to initial the Conditions of Contract would therefore
not affect compliance with the formal requirements for arbitration agreements because that particular
portion of the covenants between the parties was included by reference in the Articles of Agreement. A
contract need not be contained in a single writing. It may be collected from several different writings which
do not conflict with each other and which, when connected, show the parties, subject matter, terms and
consideration, as in contracts entered into by correspondence. A contract may be encompassed in several
instruments even though every instrument is not signed by the parties, since it is sufficient if the unsigned
instruments are clearly identified or referred to and made part of the signed instrument or instruments. BF
Corporation ironically admits the execution of the Articles of Agreement. The same agreement was duly
signed by the presidents of both Corporations and was duly subscribed before the notary public. In other
words, the subscription of the principal agreement effectively covered the other documents incorporated by
reference therein.
(#2) ABS-CBN V. WORLD INTERACTIVE NETWORK SYSTEMS (WINS) JAPAN
CO., LTD.
G.R. No. 169332 February 11, 2008

FACTS:
Petitioner ABS-CBN entered into an agreement with respondent World Interactive Network Systems
(WINS). Under the agreement, respondent was granted the exclusive license to distribute and sublicense
the distribution of the television service known as "The Filipino Channel" (TFC) in Japan.

A dispute arose when petitioner accused respondent of inserting nine episodes of WINS WEEKLY, into the
TFC programming from March to May 2002, claiming that such insertions were unauthorized thus
constituting a material breach of their agreement. As a result, petitioner notified respondent of its intention to
terminate their licensing agreement.

Thereafter, respondent filed an arbitration suit pursuant to the arbitration clause of its agreement with
petitioner and contended that the airing of WINS WEEKLY was made with petitioner's prior approval. It also
alleged that petitioner only threatened to terminate their agreement because it wanted to renegotiate the
terms thereof to allow it to demand higher fees. Respondent also prayed for damages for petitioner's
alleged grant of an exclusive distribution license to another entity, NHK (Japan Broadcasting Corporation).

The parties appointed a sole arbitrator in the person of Professor Alfredo F. Tadiar and the latter reached a
decision in favor of respondent.

Petitioner filed in the CA a petition for review under Rule 43 of the Rules of Court or, in the alternative, a
petition for certiorari under Rule 65 of the same Rules, with application for temporary restraining order and
writ of preliminary injunction.

The CA rendered the assailed decision dismissing ABS-CBNs petition for lack of jurisdiction. It ruled that it
is the RTC which has jurisdiction over questions relating to arbitration. It held that the only instance it can
exercise jurisdiction over an arbitral award is an appeal from the trial court's decision confirming, vacating or
modifying the arbitral award. It further stated that a petition for certiorari under Rule 65 of the Rules of Court
is proper in arbitration cases only if the courts refuse or neglect to inquire into the facts of an arbitrator's
award.

ISSUE:
Whether or not an aggrieved party in a voluntary arbitration dispute may avail of, directly in the CA, a
petition for review under Rule 43 or a petition for certiorari under Rule 65 of the Rules of Court, instead of
filing a petition to vacate the award in the RTC when the grounds invoked to overturn the arbitrators
decision are other than those for a petition to vacate and award enumerated under R.A. 876

RULING:
The CAs decision is sound. A petition for review under Rule 43 or a petition for certiorari under Rule 65
directly in the CA is NOT the proper remedy.

RA 876 itself mandates that it is the Court of First Instance, now the RTC, which has jurisdiction over
questions relating to arbitration, such as a petition to vacate an arbitral award.

As RA 876 did not expressly provide that errors of fact and/or law and grave abuse of discretion, which is
the proper grounds for a petition for review under Rule 43 and a petition for certiorari under Rule 65, This
means that such ground is not acceptable for maintaining a petition to vacate an arbitral award in the RTC.
Thus, it follows that a party may not avail of the remedies under Rule 43 and Rule 65 on the grounds of
errors of fact and/or law or grave abuse of discretion to overturn an arbitral award.
(#3) REAL BANK, INC., V. SAMSUNG MABUHAY CORPORATION
G.R. No. 175862, 13 October 2010, FIRST DIVISION (Perez, J.)

It being daylight clear that the withdrawal of Samsungs original counsel was sufficient as the same carried
the stamp of approval of the client, the notice of mediation sent to Samsungs original counsel was
ineffectual as the same was sent at the time when such counsel had already validly withdrawn its
representation. Corollarily, the absence of respondent Samsung during the scheduled mediation
conference was excusable and justified.

FACTS:
Conpinco Trading, a regular dealer of Samsung in Davao City, issued five (5) postdated hecks payable to
the order of Samsung Mabuhay Electronics Corporation (Samsung). The three (3) of the five (5) checks
were not remitted by Reynaldo Senson to Samsung. Instead, Senson, using an alias name, Edgardo
Bacea, opened an account with Real Bank, Malolos, Bulacan branch under the account name of one
Mabuhay Electronics Company (Mabuhay), a business entity in no way related to Samsung.

Senson through the negligence of Real Bank, indorsed the checks and then deposited all the three (3)
checks in the account of Mabuhay. Subsequently, Senson was able to withdraw. The checks were
negligently credited by Real Bank to the account of Mabuhay, a single proprietorship, although the check
was payable only to Samsung, a juridical entity, and to no one else. Despite Samsungs demands, Real
Bank ignored and refused to reimburse them with the value of the three (3) checks. Samsung filed a
Complaint for damages against Real Bank.

On 19 October 2000, the counsel of Samsung filed a Notice of Withdrawal of Appearance with the
conformity of Samsung. Meanwhile, the trial court issued an Order requiring both to appear in a mediation
proceeding. This Order of the trial court was sent to Samsungs former counsel, V.E. Del Rosario and
Partners which had at that time already filed a notice of withdrawal of appearance.

The complaint of Samsung was dismissed for failure to appear at the mediation conference. It was
challenged by Samsungs new counsel alleging that the dismissal is improper and inappropriate as it was
not notified of the scheduled mediation conference. Besides, the notice of the scheduled mediation was
sent to the previous counsel of Samsung who had already withdrawn and not to the new lawyers. Samsung
then filed before the Court of Appeals a petition for certiorari under Rule 65. It rendered a decision in favor
of Samsung.

ISSUE:
Whether the RTC acted properly in dismissing Civil Case for failure on the part of Samsung to appear on
the scheduled mediation conference

RULING:
Petition DENIED.

In Senarlo v. Judge Paderanga, the Court accentuated that mediation is part of pre-trial and failure of the
plaintiff to appear thereat merits sanction on the part of the absent party. This court held:
A.M. No. 01-10-5-SC-PHILJA dated 16 October 2001, otherwise known as the
Second Revised Guidelines for the Implementation of Mediation Proceedings and Section 5,
Rule 18 of the Rules of Court grant judges the discretion to dismiss an action for failure of the
plaintiff to appear at mediation proceedings.
A.M. No. 01-10-5-SC-PHILJA considers mediation a part of pre-trial and provides
sanctions for the absent party:
Under Rule 18, Section 5 of the Rules of Court, failure of the plaintiff to appear at
pre-trial shall be cause for dismissal of the action.

However, the ruling in Senarlo will not resolve the present case where the basic issue is whether or not
Samsungs non-appearance at the mediation proceedings is justifiable from the records
In this case, it is uncontroverted that the withdrawal of Samsungs original counsel, V.E. Del Rosario and
Partners on 19 October 2000, was with the clients consent. Thus, no approval thereof by the trial court was
required because a courts approval is indispensable only if the withdrawal is without the clients consent.

It being daylight clear that the withdrawal of Samsungs original counsel was sufficient as the same carried
the stamp of approval of the client, the notice of mediation sent to Samsungs original counsel was
ineffectual as the same was sent at the time when such counsel had already validly withdrawn its
representation. Corollarily, the absence of respondent Samsung during the scheduled mediation
conference was excusable and justified. Therefore, the trial court erroneously dismissed the case.

We cannot sustain petitioner Real Bank, Inc.s argument that respondent Samsung was negligent in the
conduct of its case.

The calendar of hearings document the fact that respondent Samsung has been willing and able to
prosecute its case. Except for the lone instance, reasonable as already shown, of absence during
the scheduled mediation conference on 3 April 2001, respondent Samsung had, till then, promptly
and religiously attended the hearings set by the RTC. In fact, respondent Samsung exhibited
diligence and dispatch in prosecuting its case against petitioner Real Bank, Inc. by immediately
moving to set the case for pre-trial after it had filed its reply and momently filing a motion for
reconsideration of the RTC Order dismissing Civil Case No. 97-86265.

Accordingly, the ends of justice and fairness would be best served if the parties are given the full
opportunity to thresh out the real issues in a full blown trial. Besides, Real Bank, Inc. would not be
prejudiced should the RTC proceed with Civil Case as it is not stripped of any affirmative defenses nor
deprived of due process of law.
(#4) LM POWER ENGINEERING CORPORATION V. CAPITOL INDUSTRIAL
CONSTRUCTION GROUPS, INC.
FACTS:
There was a Subcontract Agreement between LM Power Engineering Corporation (LM for brevity) and
Capitol Industrial Construction Groups, Inc. (Capitol) involving electrical work at the Third Port of
Zamboanga. On April 25, 1985, respondent took over some of the work contracted to petitioner. Allegedly,
the latter had failed to finish it because of its inability to procure materials.

Upon completion of the project, LM billed Capitol in the amount of 6, 711,813.90. Capitol questioned the
billed amount and refused to pay. Capitol alleged that the amount of the work took over by them should be
deducted from the amount billable.

Felt aggrieved LM filed a collection suit against Capitol. Capitol then filed a motion to dismiss on the ground
that the complaint was premature, because there was no prior recourse to arbitration. Capitol alleged that
the subcontract agreement has an arbitration clause. Hence, before the case may be filed there must be a
prior recourse to arbitration.

LM countered and advanced the argument that the dispute does not involve interpretation or the
implementation of the agreement, which was contemplated in the arbitration clause. Hence, the dispute was
not arbitrable.

Furthermore, LM contended that assuming arguendo that the dispute is arbitrable, the failure to file a formal
request for arbitration with the Construction Industry Arbitration Commission (CIAC) precluded the latter
form acquiring jurisdiction over the question.

RTC ruled in favor of LM. According to the RTC, the dispute was not one of the subjects of the arbitration
clause. Therefore, the dispute cannot be referred to arbitration.

The CA, however, reversed the ruling of the CA and ordered the referral of the dispute to arbitration.

ISSUES:
1. Whether the dispute between the parties was arbitrable?
2. Whether prior request for arbitration was needed to sanction the referral of the dispute to arbitration?

RULING:
Regarding on the first issue, the Supreme Court ruled in the positive. The factual allegations of the parties
revealed that they differ on the following questions: (1) did a take-over/termination occur? (2) May the
expenses incurred by respondent in the take-over be set off against the amounts it owed petitioner? (3)
How much were the advances and billable accomplishments? Clearly, the resolution of the foregoing lies in
the interpretation of the provisions of the agreement. The dispute in the case at hand involved technical
discrepancies that are better left to an arbitral body that has expertise in those areas.

As regards to the second issue, the Supreme Court ruled on the negative. Indubitably in the old rule a prior
request for arbitration was needed to allow the referral of the dispute to arbitration before the CIAC.
However, as the law now stands does not provide that the parties should agree to submit disputes arising
from their agreement specifically to the CIAC for the latter to acquire jurisdiction over the same. Section 1 of
Article III of the new Rules of Procedure Governing Construction Arbitration, recourse to the CIAC may now
be availed of whenever a contract contains a clause for the submission of a future controversy to
arbitration. E.O. No. 1008 vested upon the CIAC original and exclusive jurisdiction over disputes arising
from, or connected with, contracts entered into by parties involved in construction in the Philippines.
(#5)
(#6) RIZALINA P. POSITOS V. JACOB M. CHUA
FACTS:
Petitioner had since 1980 been occupying a portion of a parcel of land situated in Leon Garcia St., Davao
City. The land was likewise occupied by members of the Sto. Tomas de Villanueva Settlers Association, of
which petitioner was a member. On December 26, 1994, the registered owner of the land transferred its
rights and interests thereover to respondent. The Association thereupon filed a complaint against
respondent for prohibitory injunction before the RTC of Davao City. A compromise agreement was
thereafter forged wherein the Association agreed to vacate the premises provided respondent extends
financial assistance to its members. Petitioner refused to abide by the compromise agreement.

The conflict was referred for conciliation before the Lupon. Respondent did not appear during the
proceedings but sent a representative on his behalf. No settlement having been reached, respondent filed a
complaint against petitioner for Unlawful Detainer with prayer for damages and attorneys fees before the
MTCC, Davao City. In her Answer to the complaint, petitioner alleged that the failure of respondent to
appear personally during the proceedings is equivalent to non-compliance with the Local Government Code
to thus render the complaint dismissible, among others.

The MTCC rendered judgment in favor of respondent. Petitioner appealed to the RTC of Davao City. As she
did not file a supersedeas bond to stay the execution of its decision, the MTCC, upon motion of respondent,
issued a Writ of Execution, drawing petitioner to file a Petition for Certiorari and Prohibition with Prayer for
Injunctive Relief before the Davao City RTC. By Order of the RTC, a TRO was issued to stay the execution
of the MTCC decision. Meanwhile, Branch 8 of the Davao City RTC affirmed the MTCC decision, since
respondent was duly represented in the conciliation proceedings by an attorney-in-fact, the Local
Government Code was substantially complied with.

Petitioner elevated the case to the CA which issued the challenged Decision dismissing without prejudice
respondents complaint for unlawful detainer on the ground of lack of cause of action, he having failed to
comply with the barangay conciliation procedure. Petitioner filed a motion for reconsideration of the
appellate courts decision, alleging that during the pendency of the appeal she was dispossessed from the
premises, hence, she prayed that she be restored thereto. The appellate court, noting that respondents
complaint was dismissed without prejudice, petitioners cause of action should be ventilated in a separate
action.

ISSUE:
Whether or not respondents failure to comply with the conciliation process warrants the dismissal of his
complaint

RULING:
Respondents complaint was dismissed for failure to comply with the conciliation process. Non-compliance
affected the sufficiency of his cause of action and rendered the complaint susceptible, as in fact it resulted
to dismissal on the ground of prematurity. A dismissal without prejudice does not operate as a judgment on
the merits, for there is no unequivocal determination of the rights and obligations of the parties with respect
to the cause of action and subject matter thereof.

At the outset, petitioners present availment of a petition for review on certiorari under Rule 45 is doomed.
Section 1, Rule 41 of the Rules of Court provides that the remedy of appeal is not available from an order
dismissing an action without prejudice. Since the present petition prays for the modification of the appellate
courts decision, this Court cannot treat it as one for certiorari, petitioners allegations therein not being
constitutive of grave abuse of discretion amounting to lack or excess of jurisdiction.

Furthermore, petitioners claim of dispossession during the pendency of her appeal, which claim is disputed
by respondent, is a question of fact which is not a proper subject for this Court to decide, the general rule
being that only questions of law can be raised before it. Petitioner has not, however, presented convincing
circumstances to take her case out from the general rule.
(#7) UNIWIDE SALES REALTY & RESOURCES CORPORATION V. TITAN-
IKEDA CONSTRUCTION & DEVELOPMENT CORPORATION
December 20, 2006; Tinga, J.

As a rule, findings of fact of administrative agencies and quasi-judicial bodies, which have acquired
expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect,
but also finality, especially when affirmed by the Court of Appeals. In particular, factual findings of
construction arbitrators are final and conclusive and not reviewable by this Court on appeal. This rule,
however admits of certain exceptions.
In the present case, only the first issue presented for resolution of this Court is a question of law
while the rest are factual in nature. However, we do not hesitate to inquire into these factual issues for the
reason that the CIAC and the Court of Appeals, in some matters, differed in their findings.

FACTS:
The case originated from an action for a sum of money filed by Titan-Ikeda Construction and Development
Corporation (Titan) against Uniwide Sales Realty and Resources Corporation (Uniwide) with the Regional
Trial Court (RTC), Branch 119, Pasay City arising from Uniwides non-payment of certain claims billed by
Titan after completion of three projects covered by agreements they entered into with each other. Upon
Uniwides motion to dismiss/suspend proceedings and Titans open court manifestation agreeing to the
suspension, Civil Case No. 98-0814 was suspended for it to undergo arbitration. Titans complaint was thus
re-filed with the CIAC.

The first agreement (Project 1) was a written Construction Contract entered into by Titan and Uniwide
sometime in May 1991 whereby Titan undertook to construct Uniwides Warehouse Club
and Administration Building in Libis, Quezon City for a fee of P120,936,591.50, payable in monthly progress
billings to be certified to by Uniwides representative. The parties stipulated that the building shall be
completed not later than 30 November 1991. As found by the CIAC, the building was eventually finished
on 15 February 1992 and turned over to Uniwide.

Sometime in July 1992, Titan and Uniwide entered into the second agreement (Project 2) whereby the
former agreed to construct an additional floor and to renovate the latters warehouse located at the EDSA
Central Market Area in Mandaluyong City. There was no written contract executed between the parties for
this project. Construction was allegedly to be on the basis of drawings and specifications provided by
Uniwides structural engineers. The parties proceeded on the basis of a cost estimate of P21,301,075.77
inclusive of Titans 20% mark-up. Titan conceded in its complaint to having received P15,000,000.00 of this
amount. This project was completed in the latter part of October 1992 and turned over to Uniwide.

The parties executed the third agreement (Project 3) in May 1992. In a written Construction Contract, Titan
undertook to construct the Uniwide Sales Department Store Building in Kalookan City for the price
of P118,000,000.00 payable in progress billings to be certified to by Uniwides representative. It was
stipulated that the project shall be completed not later than 28 February 1993. The project was completed
and turned over to Uniwide in June 1993.

ISSUES:
1. Whether Uniwide is entitled to a return of the amount it allegedly paid by mistake to Titan for
additional works done on Project 1;
2. Whether Uniwide is liable for the payment of the Value-Added Tax (VAT) on Project 1;
3. Whether Uniwide is entitled to liquidated damages for Projects 1 and 3; and
4. Whether Uniwide is liable for deficiencies in Project 2

RULING:
1. NO. Even conceding that the additional works on Project 1 were not authorized or committed into
writing, the undisputed fact remains that Uniwide paid for these additional works. Thus, to claim a
refund of payments made under the principle of solutio indebiti, Uniwide must be able to establish
that these payments were made through mistake. Again, this is a factual matter that would have
 acquired a mantle of invulnerability had it been determined by both the CIAC and the Court of
Appeals. However, both bodies failed to arrive at such a conclusion.

2. Without any documentary evidence than Exhibit H to show the extent of tax liability assumed by
[Uniwide], the Tribunal holds that the parties is [sic] obliged to pay only a share of the VAT payment
up to P60,000,000.00 out of the total contract price of P120,936,591.50. As explained by Jimmy
Gow, VAT is paid on labor only for construction contracts since VAT had already been paid on the
materials purchased. Since labor costs is [sic] proportionately placed at 60%-40% of the contract
price, simplified accounting computes VAT at 4% of the contract price. Whatever is the balance for
VAT that remains to be paid on Project 1 Libis shall remain the obligation of Titan.

3. On the third issue of liquidated damages, the CIAC rejected such claim while the Court of Appeals
held that the matter should be left for determination in future proceedings where the issue has been
made clear.

In rejecting Uniwides claim for liquidated damages, the CIAC held that there is no legal basis for
passing upon and resolving Uniwides claim for the following reasons: (1) no claim for liquidated
damages arising from the alleged delay was ever made by Uniwide at any time before the
commencement of Titans complaint; (2) the claim for liquidated damages was not included in the
counterclaims stated in Uniwides answer to Titans complaint; (3) the claim was not formulated as an
issue to be resolved by the CIAC in the TOR; and (4) no attempt was made to modify the TOR to
accommodate the same as an issue to be resolved.

4. Uniwide had the burden of proving that there was defective construction in Project 2 but it failed to
discharge this burden. Even the credibility of its own witness was severely impaired. Further, it was
found that the concrete slab placed by Titan was not attached to the old columns where cracks were
discovered. The CIAC held that the post-tensioning of the new concrete slab could not have caused
any of the defects manifested by the old columns. We are bound by this finding of fact by the CIAC.
(#8) PHILROCK, INC. V. CONSTRUCTION INDUSTRY ARBITRATION
COMMISSION
G.R. No. 132848-49
June 26, 2001

FACTS:
Private respondent Cid spouses filed a complaint for damages against Philrock and its officers. At the initial
trial date, both parties agreed to refer the matter to the Construction Industry Arbitration Commission
(CIAC). A preliminary conference was held among the parties and their appointed arbitrators. At these
conferences, disagreements arose as to whether moral and exemplary damages and tort should be
included as an issue along with breach of contract, and whether the seven officers and engineers of
Philrock who are not parties to the Agreement to Arbitrate should be included in the arbitration proceedings.
No common ground could be reached by the parties; hence, both the Cid spouses and Philrock requested
that the case be remanded to the trial court. The Court ordered that it no longer had jurisdiction over the
case and remanded the same to CIAC for arbitral proceeding. The parties proceeded to finalize, approve
and sign the Terms of Reference which stated that the parties agree that their differences be settled by an
Arbitral Tribunal. Thereafter, the petitioner filed a Motion to dismiss alleging that the CIAC has lost
jurisdiction over the case.

ISSUE:
Whether or not the Construction Industry Arbitration Commission (CIAC) has jurisdiction over the case

RULING:
The petition has no merit.

Section 4 of Executive Order 1008 expressly vests in the CIAC original and exclusive jurisdiction over
disputes arising from or connected with construction contracts entered into by parties that have agreed to
submit their dispute to voluntary arbitration.

It is undisputed that the parties submitted themselves to the jurisdiction of the Commission by virtue of their
Agreement to Arbitrate Petitioners contention is untenable because first, private respondents removed the
obstacle to the continuation of the arbitration, precisely by withdrawing their objection to the exclusion of the
seven engineers. Second, petitioner continued participating in the arbitration even after the CIAC Order had
been issued. It even concluded and signed the Terms of Reference in which the parties stipulated the
circumstances leading to the dispute; summarized their respective positions, issues, and claims; and
identified the composition of the tribunal of arbitrators. The document clearly confirms both parties intention
and agreement to submit the dispute to voluntary arbitration. In view of this fact, we fail to see how the CIAC
could have been divested of its jurisdiction.

The Court will not countenance the effort of any party to subvert or defeat the objective of voluntary
arbitration for its own private motives. After submitting itself to arbitration proceedings and actively
participating therein, petitioner is estopped from assailing the jurisdiction of the CIAC, merely because the
latter rendered an adverse decision.
(#9) AGAN JR. V. PIATCO
GR No. 155001 | May 5, 2003

FACTS:
In 1993, six business leaders expolored the possibility of investing in a new airport terminal for NAIA
forming the ASians Emerging Dragon Corp. They submitted proposals to the government to develop NAIA
IPT III. NEDA approved the project. Bidders were invited to such and among all of them Paircargo was
chosen as the best bidder. AEDC protested to such preference but the project was still awarded to the
Paircargo Consortium. Paircargo incorporated into PIATCO. The DOTC and PIATCO entered into a
concession agreement in 1997 to franchise and operate NAIA 3 for 21 years. In 1998, the concession
agreement was amended in matters of the obligations given to concessionaires, development of the
facilities and proceeds, fees, charges etc. MIAA onn the other hand maintains and operates NAIA 1 and 2
in which it has several contract service providers. The workers filed the petition for prohibition as going
through with the agreement would oust them their jobs. A group of congressmen filed their petition to
prevent the agreement from happening as it was unconstitutional. Pres. Arryo declared in a speech that she
will not honor the PIATCO contracts for it being null and void. PIATCO claims that the court had no
jurisdiction over the case at it had entered into an arbitration agreement with the government.

ISSUES:
(1) Whether or not the Arbitration Agreement divests the court of its jurisdiction
(2) Whether or not the petitioners have Locus Standi
(3) Whether or not the SC can immediately take cognizance of the case
(4) Whether or not the 1997 Concession agreement is void

RULING:
(1) NO. In Del Monte Corporation-USA v. Court of Appeals, even after finding that the arbitration clause
in the Distributorship Agreement in question is valid and the dispute between the parties is
arbitrable, this Court affirmed the trial court's decision denying petitioner's Motion to Suspend
Proceedings pursuant to the arbitration clause under the contract. In so ruling, this Court held that as
contracts produce legal effect between the parties, their assigns and heirs, only the parties to the
Distributorship Agreement are bound by its terms, including the arbitration clause stipulated therein.
This Court ruled that arbitration proceedings could be called for but only with respect to the parties to
the contract in question. Considering that there are parties to the case who are neither parties to the
Distributorship Agreement nor heirs or assigns of the parties thereto, this Court, citing its previous
ruling in Salas, Jr. v. Laperal Realty Corporation, held that to tolerate the splitting of proceedings by
allowing arbitration as to some of the parties on the one hand and trial for the others on the other
hand would, in effect, result in multiplicity of suits, duplicitous procedure and unnecessary delay.
Thus, we ruled that the interest of justice would best be served if the trial court hears and
adjudicates the case in a single and complete proceeding.

It is established that petitioners in the present cases who have presented legitimate interests in the
resolution of the controversy are not parties to the PIATCO Contracts. Accordingly, they cannot be
bound by the arbitration clause provided for in the ARCA and hence, cannot be compelled to submit
to arbitration proceedings. A speedy and decisive resolution of all the critical issues in the present
controversy, including those raised by petitioners, cannot be made before an arbitral tribunal. The
object of arbitration is precisely to allow an expeditious determination of a dispute. This objective
would not be met if this Court were to allow the parties to settle the cases by arbitration as there are
certain issues involving non-parties to the PIATCO Contracts which the arbitral tribunal will not be
equipped to resolve.

(2) YES. The question on legal standing is whether such parties have "alleged such a personal stake in
the outcome of the controversy as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court so largely depends for illumination of difficult
constitutional questions." Accordingly, it has been held that the interest of a person assailing the
constitutionality of a statute must be direct and personal. He must be able to show, not only that the
 law or any government act is invalid, but also that he sustained or is in imminent danger of
sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby in
some indefinite way. It must appear that the person complaining has been or is about to be denied
some right or privilege to which he is lawfully entitled or that he is about to be subjected to some
burdens or penalties by reason of the statute or act complained of.

We hold that petitioners have the requisite standing. In the above-mentioned cases, petitioners have
a direct and substantial interest to protect by reason of the implementation of the PIATCO Contracts.
They stand to lose their source of livelihood, a property right which is zealously protected by the
Constitution. Moreover, subsisting concession agreements between MIAA and petitioners-
intervenors and service contracts between international airlines and petitioners-intervenors stand to
be nullified or terminated by the operation of the NAIA IPT III under the PIATCO Contracts. The
financial prejudice brought about by the PIATCO Contracts on petitioners and petitioners-intervenors
in these cases are legitimate interests sufficient to confer on them the requisite standing to file the
instant petitions.

(3) YES. The rule on hierarchy of courts will not also prevent this Court from assuming jurisdiction over
the cases at bar. The said rule may be relaxed when the redress desired cannot be obtained in the
appropriate courts or where exceptional and compelling circumstances justify availment of a remedy
within and calling for the exercise of this Court's primary jurisdiction.

It is easy to discern that exceptional circumstances exist in the cases at bar that call for the
relaxation of the rule. Both petitioners and respondents agree that these cases are of transcendental
importance as they involve the construction and operation of the country's premier international
airport. Moreover, the crucial issues submitted for resolution are of first impression and they entail
the proper legal interpretation of key provisions of the Constitution, the BOT Law and its
Implementing Rules and Regulations. Thus, considering the nature of the controversy before the
Court, procedural bars may be lowered to give way for the speedy disposition of the instant cases.

(4) YES. The 1997 concession agreement is void for being contrary to public policy. The amendments
have the effect of changing it into and entirely different agreement from the contract bidded upon.
The amendments present new terms and conditions which provide financial benefit to PIATCO
which may have the altered the technical and financial parameters of other bidders had they know
that such terms were available. The 1997 concession agreement, the amendments and
supplements thereto are set aside for being null and void.
(#10) TRANSFIELD PHILIPPINES INCORPORATED (TPI) V. LUZON HYDRO
CORPORATION (LHC), AUSTRALIA AND NEW ZEALAND BANKING GROUP
LIMITED AND SECURITY BANK CORPORATION
G.R. No. 146717, May 19, 2006

DOCTRINE:
As a fundamental point, the pendency of arbitral proceedings does not foreclose resort to the courts for
provisional reliefs.

FACTS:
This is a continuation of the two-stage process of the adjudication of this case. The first stage relating to the
merits of the case was already resolved in the main decision dated November 22, 2004. The second stage
involving the issue of forum-shopping is disposed of in this Resolution.

The disposal of the forum-shopping charge is crucial to the parties to this case on account of its profound
effect on the final outcome of the international arbitral proceedings which they have chosen as their
principal dispute resolution mechanism.

LHC claims that Transfield Philippines, Inc. (TPI) is guilty of forum-shopping when it filed the following suits:
1. Civil Case No. 04-332 filed on 19 March 2004, pending before RTC of Makati, Branch 56 for
confirmation, recognition and enforcement of the Third Partial Award rendered by the Arbitral
Tribunal of the ICC;
2. ICC Case No. 11264/TE/MW, Transfield Philippines, Inc. v. Luzon Hydro Corporation filed before
the International Court of Arbitration, International Chamber of Commerce (ICC) a request for
arbitration; and
3. G.R. No. 146717, Transfield Philippines, Inc. v. Luzon Hydro Corporation, Australia and New
Zealand Banking Group Limited and Security Bank Corp. filed on 5 February 2001, which was an
appeal by certiorari with prayer for TRO/preliminary prohibitory and mandatory injunction.

On the other hand, TPI claims that it is LHC which is guilty of forum-shopping when it raised the issue of
forum-shopping not only in this case, but also in Civil Case No. 04-332, and even asked for the dismissal of
the other case based on this ground.

Meanwhile, ANZ Bank and Security Bank moved to be excused from filing a memorandum, which the court
granted. They claim that with the finality of the Courts Decision dated 22 November 2004, any resolution by
the Court on the issue of forum-shopping will not materially affect their role as the banking entities involved
are concerned.

TPI moved to set the case for oral argument, positing that the resolution of the Court on the issue of forum-
shopping may have significant implications on the interpretation of the Alternative Dispute Resolution Act of
2004, as well as the viability of international commercial arbitration as an alternative mode of dispute
resolution in the country. LHC opposed said motion.

During the pendency of the motion for reconsideration, the International Chamber of Commerce (ICC)
arbitral tribunal issued its final award ordering LHC to pay TPI.

ISSUES:
1. Whether or not there is forum shopping in this case
2. Whether or not a party to an arbitration proceeding can go to the court

RULING:
1. NO. There is no forum shopping in this case. The essence of forum-shopping is the filing of multiple
suits involving the same parties for the same cause of action, either simultaneously or successively,
for the purpose of obtaining a favorable judgment. For forum-shopping to exist, there must be (a)
 identity of parties, or at least such parties as represent the same interests in both actions; (b) identity
of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the
identity of the two preceding particulars is such that any judgment rendered in the other action will,
regardless of which party is successful, amount to res judicata in the action under consideration.

There is no identity of causes of action between and among the arbitration case, the instant petition,
and Civil Case No. 04-332. The arbitration case is an arbitral proceeding commenced pursuant to
the Turnkey Contract between TPI and LHC, to determine the primary issue of whether the delays in
the construction of the project were excused delays, which would consequently render valid TPIs
claims for extension of time to finish the project. Together with the primary issue to be settled in the
arbitration case is the equally important question of monetary awards to the aggrieved party. On the
other hand, Civil Case No. 00-1312, the precursor of the instant petition, was filed to enjoin LHC
from calling on the securities and respondent banks from transferring or paying the securities in case
LHC calls on them. However, in view of the fact that LHC collected the proceeds, TPI, in its appeal
and petition for review asked that the same be returned and placed in escrow pending the resolution
of the disputes before the ICC arbitral tribunal. While, in Civil Case No. 04-332, TPI no longer seeks
the issuance of a provisional relief, but rather the issuance of a writ of execution to enforce the Third
Partial Award.

Neither is there an identity of parties between and among the three (3) cases. The ICC case only
involves TPI and LHC. While the instant petition includes Security Bank and ANZ Bank, the banks
sought to be enjoined from releasing the funds of the letters of credit. Civil Case No. 04-322, on the
other hand, logically involves TPI and LHC only, they being the parties to the arbitration agreement
whose partial award is sought to be enforced.

2. YES. As a fundamental point, the pendency of arbitral proceedings does not foreclose resort to the
courts for provisional reliefs. The Rules of the ICC, which governs the parties arbitral dispute, allows
the application of a party to a judicial authority for interim or conservatory measures. Likewise,
Section 14 of Republic Act (R.A.) No. 876 (The Arbitration Law) recognizes the rights of any party to
petition the court to take measures to safeguard and/or conserve any matter which is the subject of
the dispute in arbitration. In addition, R.A. 9285, otherwise known as the Alternative Dispute
Resolution Act of 2004, allows the filing of provisional or interim measures with the regular courts
whenever the arbitral tribunal has no power to act or to act effectively.
(#11) KOREAN TECHNOLOGIES CO. LTD. V. HON. ALBERTO LERMA
FACTS:
Korea Technologies Co., Ltd. which is engaged in the supply and installation of Liquefied Petroleum Gas
(LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp.
(PGSMC) is a domestic corporation. Pacific General Steel Manufacturing Corp and Korea Tech had an
agreement wherein the latter will ship and install in Pacific Generals site in Carmona, Cavite the machinery
and facilities necessary for manufacturing LPG cylinders, and to initially operate the plant after it is installed.
PGSMC would pay USD 1,224,000. KOGIES would install and initiate the operation of the plant for which
PGSMC bound itself to pay USD 306,000 upon the plants production of the 11-kg. LPG cylinder samples.
Thus, the total contract price amounted to USD 1,530,000. After the installation of the plant, the initial
operation could not be conducted as PGSMC encountered financial difficulties affecting the supply of
materials, thus forcing the parties to agree that KOGIES would be deemed to have completely complied
with the terms and conditions of the contract.

For the remaining balance of USD306,000 for the installation and initial operation of the plant, PGSMC
issued two postdated checks which were dishonored upon presentment. According to Pacific General, it
stopped payment because Korea Tech had delivered a hydraulic press which was different in kind and of
lower quality than that agreed upon. Korea Tech also failed to deliver equipment parts already paid for by it.
It threatened to cancel the contract with Korea Tech and dismantle the Carmona plant. PGSMC filed before
the Office of the Public Prosecutor an Affidavit-Complaint for estafa. Korea Tech initiated arbitration before
the Korea Commercial Arbitration Board in Seoul, Korea. Pacific General opposed the application and
argued that the arbitration clause was null and void, being contrary to public policy as it ousts the local court
of jurisdiction. It also alleged that Korea Tech was not entitled to the payment of the amount covered by the
two checks, and that Korea Tech was liable for damages.

The trial court denied the application for preliminary injunction and declared the arbitration agreement null
and void. Korea Tech moved to dismiss the counterclaims for damages. Meanwhile, Pacific General filed a
motion for inspection of things to determine whether there was indeed alteration of the quantity and
lowering of quality of the machineries and equipment and whether these were properly installed. Korea
Tech opposed the motion arguing that these issues were proper for determination in the arbitration
proceeding.

The court denied the motion to dismiss and granted the motion for inspection of things. The court also
directed the Branch Sheriff to proceed with the inspection of the machineries and equipment in the plant.
The Branch Sheriff later reported his finding that the enumerated machineries and equipment were no t fully
and properly installed.

Korea Tech filed a petition for certiorari before the Court of Appeals. The court dismissed the petition and
held that an arbitration clause which provided for a final determination of the legal rights of the parties to the
contract by arbitration was against public policy.

ISSUE:
Whether or not the arbitration clause stated in Article 15 of the contract is to be deemed null and void

RULING:
The arbitration clause is valid. It has not been shown to be contrary to any law, or against morals, good
customs, public order or public policy. The arbitration clause stipulates that the arbitration must be done in
Seoul, Korea in accordance with the Commercial Arbitration Rules of the KCAB, and that the award is final
and binding. This is not contrary to public policy. The court finds no reason why the arbitration clause
should not be respected and complied with by both parties. The Court further emphasized that a
submission to arbitration is a contract. As a rule, contracts are respected as the law between the contracting
parties and produce effect between them, their assigns and heirs. Courts should liberally review arbitration
clauses. Any doubt on the contract with regard to the agreement of the parties should be resolved in favor
of arbitration.
(#12) KOPPEL INC. V. MAKATI ROTARY CLUB FOUNDATION
G.R. No. 198075, September 4, 2013
Perez, J.

FACTS:
Fedders Koppel Inc was the registered owner of a parcel of land located in Paraaque City. It then
bequeathed its property in favor of the respondent by way of a conditional donation. Fedders Koppel Inc.
executed a deed of donation and stated therein is the condition that required the respondent to lease back
the property to Fedders Koppel for 25 years and renewable for another 25 years upon mutual agreement. It
also contained an arbitration clause in case of disagreement. Two days the lease contract expired on 2000,
they executed another lease contract, renewing the lease for another 5 years and incorporated the
arbitration clause contained in the former lease agreement. When the 2000 lease agreement expired, they
executed the 2005 lease agreement to renew for another 5 years, to pay annual rents and to give donation
to Makati Rotary Club Foundation. The 2005 lease agreement likewise contained the arbitration clause
incorporated in the former agreement. Almost 2 years before the contract expires, Fedders Koppel executed
a Deed of Assignment and Assumption of Lease and Donation wherein Fedders Koppel, with the conformity
of the respondent, formally assigned all of its interests and obligations under the Amended Deed of
Donation and the 2005 Lease Contract in favor of petitioner Koppel Inc.

Petitioner discontinued the payment of the rent and donation under the contract believing that the rental
stipulations cannot be given effect because they violated one of the material conditions of the donation.
Petitioner said that the rental stipulations cannot be enforced because it is exorbitant exactions. Because of
the default in payment of petitioner, respondent sent two demand letters, demanding the respondent to pay
the due rents and donation and demanding petitioner to immediately vacate the premises in case if it does
not comply. Petitioner refused to comply and instead filed with the RTC a complaint for the
rescission/cancellation of the deed of donation.

Respondent filed with the MeTC an unlawful detainer case against petitioner. Petitioner filed an answer
interposing that (a) the MeTC did not validly acquire jurisdiction because of insufficiency of demand letters
(b) It may not exercise its jurisdiction yet because the case must be referred to arbitration (c) the lease
agreement is void ab initio. The MeTC rendered a judgment in favor of petitioner. Refusing to dismiss the
case on the ground that the dispute is subject to arbitration, the MeTC nonetheless sided with the petitioner
finding that the demand letters are insufficient and the lease agreement is void.

The RTC reversed the decision of the MeTC and directed petitioner to pay respondent the due rents and to
vacate the subject propert, rationating that (a) respondent had adequately complied with the requirement of
demand as a jurisdictional precursor to an unlawful detainer action (b) petitioner cannot validly invoke the
arbitration clause of the 2005 Lease Contract while, at the same time, impugn such contracts validity (c)
2005 Lease Contract must be sustained as a valid contract since petitioner was not able to adduce any
evidence to support its allegation that the same is void. The CA affirmed the RTC decision. Hence the
petition to the Supreme Court by Koppel Inc.

ISSUES:
1. Whether or not the dispute is arbitrable.
2. Whether or not the respondents may validly invoke the case of Gonzales vs. Climax Mining for the
reason that the disagreement will inevitably touch the issue of validity of the 2005 lease agreement
3. Whether or not petitioner can validly invoke the arbitration clause of 2005 lease agreement while at
the same time impugn such contracts validity of the
4. Whether or not, even if the arbitration clause may be invoked, the petitioners act of not filing a
formal application for arbitration renders such clause operational
5. Whether or not the JDR proceedings or the fact that it is an ejectment case, which is summary in
nature, would render the arbitration clause not necessary.
RULING:
The Supreme Court granted the petition and referred the parties to arbitration.

1. The dispute is arbitrable. It is discernable that the dispute between the petitioner and respondent
emanates from the rental stipulations of the 2005 Lease Contract. The respondent insists upon the
enforce ability and validity of such stipulations, whereas, petitioner, in substance, repudiates them. It
is from petitioners apparent breach of the 2005 Lease Contract that respondent filed the instant
unlawful detainer action. The arbitration clause of the 2005 Lease Contract stipulates that "any
disagreement" as to the " interpretation, application or execution " of the 2005 Lease Contract ought
to be submitted to arbitration.

2. The respondent may not invoke the Gonzales case. Their application is misplaced because in the
Gonzales case, the In holding that the PA-MGB was devoid of any jurisdiction to take cognizance of
the complaint for arbitration, this Court pointed out to the provisions of R.A. No. 7942, or the Mining
Act of 1995, which granted the PA-MGB with exclusive original jurisdiction only over mining
disputes. The real consideration behind the ruling was the limitation that was placed by R.A. No.
7942 upon the jurisdiction of the PA-MGB as an arbitral body.

3. Petitioner may still invoke the arbitration clause of the 2005 Lease Contract notwithstanding the fact
that it assails the validity of such contract. This is due to the doctrine of separability, which states
that an arbitration agreement is considered as independent of the main contract. Being a separate
contract in itself, the arbitration agreement may thus be invoked regardless of the possible nullity or
invalidity of the main contract.

4. The operation of the arbitration clause in this case is not at all defeated by the failure of the
petitioner to file a formal "request" or application therefor with the MeTC. We find that the filing of a
"request" pursuant to Section 24 of R.A. No. 9285 is not the sole means by which an arbitration
clause may be validly invoked in a pending suit. Attention must be paid, however, to the salient
wordings of Rule 4.1.It reads: "a party to a pending action filed in violation of the arbitration
agreement x x x may request the court to refer the parties to arbitration in accordance with such
agreement." In using the word " may " to qualify the act of filing a " request " under Section 24 of
R.A. No. 9285, the Special ADR Rules clearly did not intend to limit the invocation of an arbitration
agreement in a pending suit solely via such "request." After all, non-compliance with an arbitration
agreement is a valid defense to any offending suit and, as such, may even be raised in an answer
as provided in our ordinary rules of procedure.

5. The fact that the petitioner and respondent already under went through JDR proceedings before the
RTC, will not make the subsequent conduct of arbitration between the parties unnecessary or
circuitous. The JDR system is substantially different from arbitration proceedings. In JDR, the JDR
judge lacks the authority to render a resolution of the dispute that is binding upon the parties in
conflict. In arbitration, on the other hand, the dispute is submitted to an arbitrator/s a neutral third
person or a group of thereof who shall have the authority to render a resolution binding upon the
parties.

Neither would the summary nature of ejectment cases be a valid reason to disregard the
enforcement of the arbitration clause of the 2005 Lease Contract. Notwithstanding the summary
nature of ejectment cases, arbitration still remains relevant as it aims not only to afford the parties an
expeditious method of resolving their dispute.
(#13) GONZALES V. CLIMAX MINING LTD.
[G.R. No. 161957 | February 28, 2005]

JORGE GONZALES and PANEL OF ARBITRATORS v CLIMAX MINING LTD., CLIMAX-ARIMCO MINING
CORP., and AUSTRALASIAN PHILIPPINES MINING INC.

FACTS:
Petitioner Gonzales entered into a co-production, joint venture and/or production-sharing letter-
agreement with Geophilippines, Inc, and Inmex Ltd. Petitioner granted to Geophil and Inmex the
exclusive right to explore and survey the mining claims.
Thereafter, petitioner Gonzales, Arimco Mining Corporation, Geophilippines Inc., Inmex Ltd., and
Aumex Philippines, Inc. signed an Addendum Contract. Under the Addendum Contract, Arimco
would apply to the Government for permission to mine the claims as Governments contractor under
a Financial and Technical Assistance Agreement (FTAA).
Respondents executed the following contracts: (1) Operating and Financial Accommodation
Contract,(2) Assignment Accession Agreement, and (3) Memorandum of Agreement, wherein
Climax transferred its FTAA to AMPI.
In 1991, petitioner Gonzales filed before the Panel of Arbitrators a complaint against respondents
seeking the declaration of the nullity or termination of the contracts on the grounds of fraud,
oppression and violation of the Constitution.
The Panel of Arbitrators dismissed the complaint for lack of jurisdiction. Upon motion for
reconsideration of the petitioner, Panel of Arbitrators granted such motion believing that the case
involved a mining dispute.
Respondent assailed the orders of the Panel of Arbitrators via a petition for certiorari before the CA.
CA granted the petition declaring that the Panel of Arbitrators did not have jurisdiction over the
complaint filed by the petitioner as their jurisdiction is limited only to the resolution of mining
disputes. The complaint alleged fraud, oppression and violation of the Constitution, which called for
the interpretation and application of laws, and did not involve any mining dispute.
Hence, the petition.

ISSUE/S:
(1) Whether or not the respondents were guilty of forum-shopping
(2) Whether or not the signor of the petition for certioraris Verification and Certification of Non-forum
shopping was authorized to sign in behalf of respondent Climax
(3) Whether or not the Panel of Arbitrators has jurisdiction over the complaint filed by the petitioner
(4) Whether or not the dispute should be brought for arbitration

RULING:
(1) NO. The Court ruled that there was no determination if the Petition and the Petition to Compel for
Arbitration involved related causes of action or same reliefs. The petition for certiorari raises the
issue on grave abuse of discretion, while the petition to compel for arbitration seeks the
implementation of the arbitration clause.
(2) NO. The signor Manzanas had no authority to file the petition in behalf of respondent Climax.
However, the issue is irrelevant since the petition for review was denied for lack of jurisdiction by the
Panel of Arbitrators.
(3) NO. The Complaint raised the issue of the constitutionality of the FTAA which is a judicial question,
thus, exclusively within the jurisdiction of the courts to resolve. The Panel does not have jurisdiction
over such issue.
(4) NO. As ruled by the SC, the case cannot be brought under the Arbitration Law since the question
involves the validity of the contract containing the agreement to submit to arbitration, thus affecting
the applicability of the arbitration clause itself.

WHEREFORE, in view of the foregoing, the Petition for Review on Certiorari Under Rule 45 is DENIED.
(#14) CARGILL PHILIPPINES, INC. V. SAN FERNANDO REGALA TRADING,
INC.
G.R. No. 175404; January 31, 2011

FACTS:
Respondent San Fernando Regala Trading, Inc. filed with the RTC of Makati a Complaint for Rescission of
Contract with Damages against petitioner Cargill Philippines, Inc.

In its Complaint, respondent alleged that it entered into a contract with petitioner wherein it was agreed
upon that the former would purchase from the latter 12,000 metric tons of Thailand origin cane blackstrap
molasses at the price of US$192 per metric ton; and payment was to be made by means of an Irrevocable
Letter of Credit payable at sight. Petitioner, as seller, failed to comply with its obligations under the contract,
despite demands from respondent, thus, the latter prayed for rescission of the contract and payment of
damages.

The petitioner filed a Motion to Dismiss/Suspend Proceedings and To Refer Controversy to Voluntary
Arbitration, wherein it argued that the alleged contract between the parties, was never consummated
because respondent never returned the proposed agreement bearing its written acceptance or conformity
nor did respondent open the Irrevocable Letter of Credit at sight. Petitioner contended that the controversy
between the parties was based on the existence of the contract such that the RTC was not the proper forum
to ventilate such issue. It claimed that the contract contained an arbitration clause which provided that any
dispute shall be settled by arbitration in the City of New York before the American Arbitration Association,
and that the award shall be final and binding on both parties, thus respondent must first comply with the
arbitration clause before resorting to court.

The respondent argued that the RTC had jurisdiction and could not be changed by the subject arbitration
clause. It cited cases wherein arbitration clauses, such as the subject clause in the contract, had been
struck down as void for being contrary to public policy since it provided that the arbitration award shall be
final and binding on both parties, thus, ousting the courts of jurisdiction.

Ruling of the RTC

The RTC denied petitioners motion on the ground that the Arbitration Law directed the court concerned
only to stay the action or proceeding brought upon an issue arising out of an agreement providing for the
arbitration thereof, but did not impose the sanction of dismissal. However, the RTC did not find the
suspension of the proceedings warranted, since the Arbitration Law contemplates an arbitration proceeding
that must be conducted in the Philippines under the jurisdiction and control of the RTC; before an arbitrator
who resides in the country; the arbitral award is subject to court approval, disapproval and modification; and
that there must be an appeal from the judgment of the RTC. The RTC found that the arbitration clause in
question contravened these procedures, i.e., the arbitration clause contemplated an arbitration proceeding
in New York before a non-resident arbitrator and that the arbitral award would be final and binding on both
parties.

Petitioner filed a petition for certiorari with the CA raising the sole issue that the RTC acted in excess of
jurisdiction or with grave abuse of discretion in refusing to dismiss or at least suspend the proceedings a
quo, despite the fact that the party's agreement to arbitrate had not been complied with.

Ruling of the CA
In denying the petition, the CA found that stipulation providing for arbitration in contractual obligation is both
valid and constitutional. The CA found that there was nothing in the Civil Code, or R.A. No. 876, that
requires that arbitration proceedings must be conducted only in the Philippines and the arbitrators should be
Philippine residents. It held that the case cannot be brought under the Arbitration Law for the purpose of
suspending the proceedings before the RTC since petitioner alleged, as one of the grounds, that the subject
contract between the parties did not exist or it was invalid thus the issue involved a question of fact that the
RTC should first resolve. Arbitration is not proper when one of the parties repudiated the existence or
validity of the contract.
Petitioner thus filed the instant petition upon the denial of its motion for reconsideration.

ISSUE:
Whether or not the parties should proceed with arbitration despite the fact that the matter of the controversy
is the validity of the contract embodying the arbitration clause

RULING:
The parties should proceed with arbitration before resorting to the court.

A contract is required for arbitration to take place and to be binding. The provision to submit to arbitration
any dispute arising therefrom and the relationship of the parties is part of the contract and is itself a
contract. As posited by petitioner, it is their contention that the said contract, bearing the arbitration clause,
was never consummated by the parties. However, as previously ruled, the validity of the contract
containing the agreement to submit to arbitration does not affect the applicability of the arbitration
clause itself. A contrary ruling would suggest that a party's mere repudiation of the main contract is
sufficient to avoid arbitration.

In so ruling that the validity of the contract containing the arbitration agreement does not affect the
applicability of the arbitration clause itself, the court applied the doctrine of separability which enunciates
that an arbitration agreement is independent of the main contract. The arbitration agreement is to be treated
as a separate agreement and the arbitration agreement does not automatically terminate when the contract
of which it is a part comes to an end.

The separability of the arbitration agreement is especially significant to the determination of whether the
invalidity of the main contract also nullifies the arbitration clause. Indeed, the doctrine denotes that the
invalidity of the main contract, also referred to as the "container" contract, does not affect the validity of the
arbitration agreement. Irrespective of the fact that the main contract is invalid, the arbitration
clause/agreement still remains valid and enforceable.

It is worthy to note that respondent filed a complaint for rescission of contract and damages with the RTC. In
so doing, respondent alleged that a contract exists between respondent and petitioner. The arbitration
agreement clearly expressed the parties' intention that any dispute between them as buyer and seller
should be referred to arbitration. It is for the arbitrator and not the courts to decide whether a contract
between the parties exists or is valid.

DISPOSITIVE PORTION
WHEREFORE, the petition is GRANTED. The Decision dated July 31, 2006 and the Resolution dated
November 13, 2006 of the Court of Appeals in CA-G.R. SP No. 50304 are REVERSED and SET ASIDE.
The parties are hereby ORDERED to SUBMIT themselves to the arbitration of their dispute, pursuant to
their July 11, 1996 agreement.
(#15) ELPIDIO UY V. EDISON DEVELOPMENT & CONSTRUCTION
G.R. Nos. 147925-26, June 8, 2009, (THIRD DIVISION) (Nachura, J.)

With the filing of the motion for correction, the running of the period to appeal was effectively interrupted.

FACTS:
Public Estates Authority (PEA) was designated as project manager by the Bases Conversion Development
Authority (BCDA), primarily tasked to develop its 105-hectare demilitarized lot in Fort Bonifacio, Taguig City
into a first-class memorial park to be known as Heritage Park. PEA then engaged the services of Makati
Development Corporation (MDC) to undertake the horizontal works on the project; and Uy, doing business
under the name and style Edison Development and Construction (EDC), to do the landscaping. For a
contract price of P355,080,141.15, EDC undertook to complete the landscaping works in four hundred fifty
(450) days. PEA, however, could not deliver any work area to EDC because the horizontal works of MDC
were still ongoing. EDC commenced the landscaping works only on January 7, 1997 when PEA finally
made an initial delivery of a work area. PEA continuously incurred delay in the turnover of work areas.
Resultantly, the contract period of 450 days was extended to 693 days. PEA also failed to turn over the
entire 105-hectare work area due to the presence of squatters.

In view of the delay in the delivery of work area, EDC claimed additional cost from the PEA-PMO amounting
to P181,338,056.30. Specifically, Uy alleged that he incurred additional rental costs for the equipment, labor
costs, extra costs for the topsoil, the cost for the construction of nursery shade. The PEA-PMO evaluated
the EDCs claim and arrived at a lesser amount of P146,484,910. The evaluation of PEA-PMO was then
referred to the Heritage Park Executive Committee (ExCom) for approval. PEA fully paid all the progress
billings up to August 26, 1999, but it did not heed EDCs additional claims.

Consequently, Uy filed a Complaint with the Construction Industry Arbitration Commission (CIAC). The
CIAC, however, failed to resolve Uys motion and amended motion for correction within the 30-day period
as provided in its rules, and Uy considered it as denial of the motion. Hence, on July 24, 2000, Uy filed a
petition for review with the CA. On September 25, 2000, the CA rendered the now assailed Joint Decision
dismissing both petitions on both technical and substantive grounds. PEAs petition was dismissed because
the verification thereof was defective. Uys petition, on the other hand, was dismissed upon a finding that it
was belatedly filed. Likewise, Uy posits that PEA already admitted its liability, pegged at P146,484,910.10,
in its memorandum dated January 6, 2000. Thus, he faults the CA for awarding a lesser amount.

ISSUES:
1. Whether Uys petition is belatedly filed
2. Whether Uy is entitled for the cost claimed

RULING:
1. NO. The filing of the motion for correction shall interrupt the running of the period. No resolution was
issued for the the motion for correction of computation despite the lapse of the 30-day period, and
Uy considered it as a denial of his motion. When Uy filed his petition for review with the CA, the
period to appeal had not yet lapsed; it was interrupted by the pendency of his motion for
computation. There is no basis, therefore, to conclude that the petition was belatedly filed.

2. NO. The Court failed to discern any admission of liability on the part of PEA. First, nowhere in the
memorandum does it say that PEA is admitting its liability. The evaluation contained in the above
memorandum is merely a verification of the accuracy of EDCs claims. Second, Mr. Ignacio and
Urcia had no legal authority to make admissions on behalf of PEA. Hence, such cannot bind PEA.
Third, Uy filed his complaint with the CIAC because PEA did not act on EDCs various claims. This
supports our conclusion that PEA never admitted, but on the contrary denied, whatever additional
liabilities were claimed by Uy under the landscaping contract. What was admitted by PEA was that
PMO evaluated the claim at the lesser amount of P146,484,910.
However, the court modified the additional cost the petitioner is entitled. On the days that EDC was
waiting for the turn over of additional work areas, it was paying rentals for the equipment on standby.
Hence, he award for standby equipment cost is increased. As to the awards of P2,275,721.00, for
the cost of idle manpower, and P6,050,165.05, for the construction of the nursery shade net area,
the Court finds no reason to disturb the same, as Uy never raised this issue in his petition. With
regard to the claims for costs for the additional hauling distance of topsoil and for mobilization of
water truck, the Court cited Article 1724 of the Civil Code. Under the said provision, the contractor
must obtain a written authorization from the owner is required before the he can validly recover his
claim for the change in plans and specifications. Admittedly, EDC did not secure the required written
approval of PEAs general manager before obtaining the topsoil from a farther source. There is,
therefore, no legal right based upon the landscaping agreement or a change order that would
impose such a liability upon PEA. By proceeding to obtain topsoil up to a 40-kilometer radius without
written approval from the PEA general manager, Uy cannot claim the additional cost he incurred.
Also, Uy cannot claim additional cost for providing generator sets. Neither can PEA be liable based
on solutio indebiti because through his own act or omission, took the risk of being denied payment
for additional costs by not giving prior notice of such costs and/or by not securing written consent
thereto.
(#16) SHINRYO (PHILIPPINES) COMPANY, INC. V. RRN INCORPORATED
G.R. No. 172525; October 20, 2010
Peralta, J.

FACTS:
Shinryo and RRN executed an Agreement and Conditions of Sub-contract. RRN signified its willingness to
accept and perform for Shinryo in any of its projects, a part or the whole of the works more particularly
described in Conditions of Sub-Contract and other Sub-contract documents.

RRN was not able to finish the entire works with petitioner due to financial difficulties. Shinryo paid RRN a
total amount of 26,547,624.76. RRN sent a letter to Shinryo demanding for the payment of its unpaid
balance amounting to 5,275,184.17. Shinryo claimed material back charges in the amount of
4,063,633.43. RRN only acknowledged 2,371,895.33 as material back charges.

RRN sent another letter to Shinryo regarding the cost of equipment rental and the use of scaffolding.
Thereafter, Shinryo denied any unpaid account. Because the parties failed to amicably settle, RRN filed a
claim for arbitration against Shinryo before CIAC for recovery of unpaid account which consists of unpaid
portions of the sub-contract, variations and unused materials in the total sum of 5,275,184.17 and legal
interest in the amount of 442,014.73. Shinryo filed a counterclaim for overpayment in the amount of
2,512,997.96.

The CIAC ruled in favor of RRN. Shinryo accepted the rulings of the CIAC except for the charges regarding
RRNs use of the manlift. Thus, Shinryo elevated the case before the CA. The CA upheld the CIAC ruling
that petitioner failed to adduce sufficient proof that the parties had an agreement regarding charges for
RRN's use of the manlift. As to the other charges for materials, the CA held that the evidence on record
amply supports the CIAC findings. Shinryo moved for reconsideration of said ruling, but the same was
denied

ISSUES:
1. WON the Supreme Court is duty-bound to examine, appraise and analyze anew the evidence
presented before the arbitration body
2. WON Shinryo is entitled to payment for RRNs use of its manlift equipment based on the principle of
unjust enrichment

RULING:
1. NO. It is settled that findings of fact of quasi-judicial bodies, which have acquired expertise because
their jurisdiction is confined to specific matters, are generally accorded not only respect, but also
finality, especially when affirmed by the Court of Appeals. In particular, factual findings of
construction arbitrators are final and conclusive and not reviewable by the Supreme Court on
appeal.

This rule, however, admits of certain exceptions. As exceptions, factual findings of construction
arbitrators may be reviewed by the Court when the petitioner proves affirmatively that:
a. the award was procured by corruption, fraud or other undue means;
b. there was evident partiality or corruption of the arbitrators or any of them;
c. the arbitrators were guilty of misconduct in refusing to hear evidence pertinent and material
to the controversy;
d. one or more of the arbitrators were disqualified to act as such under Section nine of Republic
Act No. 876 and willfully refrained from disclosing such disqualifications or of any other
misbehavior by which the rights of any party have been materially prejudiced;
e. the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final
and definite award upon the subject matter submitted to them was not made;
f. when there is a very clear showing of grave abuse of discretion resulting in lack or loss of
jurisdiction as when a party was deprived of a fair opportunity to present its position before
 the Arbitral Tribunal or when an award is obtained through fraud or the corruption of
arbitrators;
g. when the findings of the Court of Appeals are contrary to those of the CIAC; and
h. when a party is deprived of administrative due process.

A perusal of the records would reveal that none of the aforementioned circumstances, which would
justify exemption of this case from the general rule, are present here. Such being the case, the
Court, not being a trier of facts, is not duty-bound to examine, appraise and analyze anew the
evidence presented before the arbitration body.

2. NO. Unjust enrichment claims do not lie simply because one party benefits from the efforts or
obligations of others, but instead it must be shown that a party was unjustly enriched in the sense
that the term unjustly could mean illegally or unlawfully. the essential elements must be present:
a. that the defendant has been enriched;
b. that the plaintiff has suffered a loss;
c. that the enrichment of the defendant is without just or legal ground; and
d. that the plaintiff has no other action based on contract, quasi-contract, crime or quasi-delict.

As found by both the CIAC and affirmed by the CA, petitioner failed to prove that respondent's free
use of the manlift was without legal ground based on the provisions of their contract. Thus, the third
requisite is missing. In addition, petitioner's claim is based on contract, hence, the fourth requisite is
also absent. Clearly, the principle of unjust enrichment is not applicable in this case.
(#17) HEUNGHWA INDUSTRY CO., LTD. V. DJ BUILDERS CORPORATION
G.R. No. 169095 Dec. 8, 2008

FACTS:
Petitioner Heunghwa Industry Co., Ltd. is a Korean corporation doing business in the Philippines, while
Respondent DJ Builders Corporation is a domestic corporation. Heunghwa was able to secure a contract
with the Department of Public Works and Highways (DPWH) to construct the Roxas-Langogan Road in
Palawan.

Heunghwa entered into a subcontract agreement with DJ Builders to do earthwork, sub base course and
box culvert of said project in the amount of 113,228,918. The agreement contained an arbitration clause.

Heunghwa was not able to fully pay the agreed amount of the sub-contract, hence DJ Builders filed before
RTC Puerto Prinsesa a complaint for Breach of Contract, Collection of Sum of Money with Applications for
Preliminary Injunction, Preliminary Attachment, and Prayer for Temporary Restraining Order and Damages.

Heunghwa in its counterclaim said that it was not obliged to pay DJ Builders because the latter caused the
stoppage of work. Heunghwa further claimed that it failed to collect from DPWH due to DJ Builders poor
equipment performance.

Heunghwa and DJ Builders agreed to submit few specific issues of their complaint to the Construction
Industry Arbitration Commission (CIAC), leaving other claims to RTC. RTC granted the motion. Heunghwa
later on added some matters to be referred to CIAC.

DJ Builders thereafter filed with CIAC a Request for Adjudication of the complaint. However, Heunghwa
informed the CIAC that it will abandon its earlier submission to CIAC and it shall pursue the case before the
RTC instead.

CIAC ordered DJ Builders to move for the dismissal of the case pending before the RTC and directed
Heunghwa to file an answer. However, Heunghwa moved to suspend the proceeding before the CIAC.

Heunghwa, through its new counsel, filed with the RTC a motion to withdraw the Order of referral of the
case to CIAC, claiming it never authorized the referral. DJ Builders opposed the motion, contending that
petitioner was already estopped.

Heunghwa filed before the CIAC a motion to dismiss informing that it was abandoning the submission of the
case to it and asserting that the RTC had original and exclusive jurisdiction over the case.

Thereafter, Heunghwa also filed a motion to suspend before CIAC because of the pending motion to recall
in RTC. CIAC granted the suspension. RTC granted the motion of Heunghwa and ordered the recall of
Order of referral to CIAC. DJ Builders moved for reconsideration however it was denied by RTC without
prejudice to the former filing a motion to dismiss. So, DJ Builders filed a motion to dismiss before the RTC,
in which the same is granted. Heunghwa moved for reconsideration alleging it was denied due process.

DJ Builders filed a motion for the resumption of the proceedings before the CIAC citing the dismissal of the
case in RTC. Heunghwa filed a counterclaim asserting that the order of RTC was not yet final. CIAC
maintained the suspension, however after five months, ordered to set the case for preliminary conference.
Heunghwa filed a motion for reconsideration but was denied. CIAC proceeded with the preliminary
conference.

However, one month after the start of the preliminary conference, RTC resolved that its order dismissing the
case was without force and effect and set the case for hearing. In lieu of this, Heunghwa filed a
manifestation before the CIAC stating that it has no authority to hear the case. CIAC proceeded with the
hearing and asserted its jurisdiction over the case. DJ Builders moved for reconsideration of the resolution
of the RTC, but was denied.
Thereafter, the parties filed two separate petitions for certiorari before the Court of Appeals. Heunghwa
questioned the jurisdiction of the CIAC; while respondent questioned the jurisdiction of the RTC over the
case. CA ruled against Heunghwa.

In procedural aspect, CA took note of the fact that Heunghwa did not file a motion for reconsideration of the
order of the CIAC and held that it is in violation of the well-settled rule that a motion for reconsideration
should be filed to allow the respondent tribunal to correct its error before a petition can be entertained. CA
also ruled that a denial of a motion to dismiss, being an interlocutory order, is not the proper subject for a
petition for certiorari.

In substantive issues, CA held that CIAC had jurisdiction over the controversy because the construction
agreement contained a provision to submit any dispute for arbitration, and there was a joint motion to
submit certain issues to the CIAC for arbitration. Anent Heunghwas argument that its previous lawyer was
not authorized to submit the case for arbitration, CA held that what is required for a dispute to fall under the
jurisdiction of the CIAC is for the parties to agree to submit to voluntary arbitration. The authorization
insisted upon by Heunghwa was a mere superfluity. CA also said that active participation in the arbitration
proceedings serves to estop a party from denying that it had in fact agreed to submit the dispute for
arbitration.

Heunghwa moved for the reconsideration of the petition but was denied by CA. Hence, this petition.

ISSUE(S):
1. Whether the non-filing of a motion for reconsideration was fatal to the petition for certiorari filed
before the CA.
2. Whether the denial of the motion to dismiss by CIAC constitute grave abuse of discretion, therefore
a proper subject of petition for certiorari
3. Whether CIAC has jurisdiction over the complaint

RULING:
1. NO. As a general rule, a petition for certiorari before a higher court will not prosper unless the
inferior court has been given, through a motion for reconsideration, a chance to correct the errors
imputed to it. This rule, though, has certain exceptions: (1) when the issue raised is purely of law, (2)
when public interest is involved, or (3) in case of urgency.

The Court agreed with Heunghwa that the main issue of the petition for certiorari filed before the CA
undoubtedly involved a question of jurisdiction as to which between the RTC and the CIAC had
authority to hear the case. Whether the subject matter falls within the exclusive jurisdiction of a
quasi-judicial agency is a question of law. Thus, given the circumstances present in the case at bar,
the non-filing of a motion for reconsideration by petitioner to the CIAC Order should have been
recognized as an exception to the rule.

2. NO. As a general rule, an order denying a motion to dismiss cannot be the subject of a petition for
certiorari. However, the Supreme Court has provided exceptions thereto: (a) when the trial court
issued the order without or in excess of jurisdiction; (b) where there is patent grave abuse of
discretion by the trial court; or (c) appeal would not prove to be a speedy and adequate remedy as
when appeal would not promptly relieve a defendant from the injurious effects of the patently
mistaken order maintaining the plaintiff's baseless action and compelling the defendant needlessly to
go through a protracted trial and clogging the court dockets by another futile case.

Heunghwa argued that when its motion to dismiss was denied by the CIAC, the latter acted without
jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction; thus, the
same is the proper subject of a petition for certiorari.
 Records show that the CIAC acted within its jurisdiction and it did not commit patent grave abuse of
discretion when it issued the assailed Order denying petitioner's motion to dismiss.

3. YES. Executive Order 1008 grants to the CIAC original and exclusive jurisdiction over disputes
arising from, or connected with, contracts entered into by parties involved in construction in the
Philippines.

In the case at the bar, it is undeniable that the controversy involves a construction dispute as can be
seen from the issues referred to the CIAC, to wit: 1. Manpower and equipment standby time; 2.
Unrecouped mobilization expenses; 3. Retention; 4. Discrepancy of billings; and 5. Price escalation
for fuel and oil usage.

The Court noted that the Subcontract Agreement between the Heunghwa and DJ Builders provided
for an arbitration clause, to wit: Any controversy or claim between the Contractor and the
Subcontractor arising out of or related to this Subcontract, or the breach thereof, shall be settled by
arbitration, which shall be conducted in the same manner and under the same procedure as
provided in the Prime Contract.

Heunghwa insisted that the general provisions of the contract provided for a specific venue for
arbitration, which should be in the International Chamber of Commerce. The Court said that under
the present rules, for a particular construction contract to fall within the jurisdiction of CIAC, it is
merely required that the parties agree to submit the same to voluntary arbitration. There are two acts
which may vest the CIAC with jurisdiction over a construction dispute. One is the presence of an
arbitration clause in a construction contract, and the other is the agreement by the parties to submit
the dispute to the CIAC.

The first act is applicable to the case at bar. The bare fact that the parties incorporated an arbitration
clause in their contract is sufficient to vest the CIAC with jurisdiction over any construction
controversy or claim between the parties. To stress, the CIAC was already vested with jurisdiction
the moment both parties agreed to incorporate an arbitration clause in the sub-contract agreement.
Thus, a subsequent consent by the parties would be superfluous and unnecessary. Foregoing the
submission of the parties, CIAC still has jurisdiction over the construction dispute because of the
mere presence of the arbitration clause in the subcontract agreement.
Court also said that the CIAC aptly ruled that the recall of the referral order by the RTC did not
deprive the CIAC of the jurisdiction it had already acquired.

In the case at bar, the RTC was indecisive of its authority and capacity to hear the case. On the
other hand, the CIAC's assertion of its jurisdiction over the dispute was consistent from the moment
the RTC allowed the referral of specific issues to it. The Court also added that the proceeding
cannot be voided merely because of the non-participation of Heunghwa. Section 4.2 of the CIAC
Rules provided that the failure despite due notice which amounts to a refusal of the Respondent to
arbitrate, shall not stay the proceedings notwithstanding the absence or lack of participation of the
Respondent. The CIAC simply followed its rules when it proceeded with the hearing of the dispute
notwithstanding that Heunghwas refusal to participate therein.

Thus, the CIAC did not commit any patent grave abuse of discretion, nor did it act without
jurisdiction.
(#18) TUNA PROCESSING, INC. V..PHILIPPINE KINGFORD, INC.
G.R. No. 185582/February 29, 2012

FACTS:
On 14 January 2003, Kanemitsu Yamaoka (licensor), co-patentee of a U.S. Patent, a Philippine Letters
Patent, and an Indonesian Patent (collectively referred to as the "Yamaoka Patent"), and five (5) Philippine
tuna processors, namely, Angel Seafood Corporation, East Asia Fish Co., Inc., Mommy Gina Tuna
Resources, Santa Cruz Seafoods, Inc., and respondent Kingford (sponsors/licensees) entered into a
Memorandum of Agreement (MOA), with provisions stating that Yamaoka wishes to form an alliance with
Sponsors for purposes of enforcing his three aforementioned patents, granting licenses under those
patents, and collecting royalties and that the Sponsors wish to be licensed under the aforementioned
patents in order to practice the processes claimed in those patents in the United States, the Philippines, and
Indonesia, enforce those patents and collect royalties in conjunction with Licensor.

Under the MOA, the parties agreed to the establishment of Tuna Processors, Inc. ("TPI"), a corporation
established in the State of California, in order to implement the objectives of the Agreement.

The parties likewise executed a Supplemental Memorandum of Agreement dated 15 January 2003 and an
Agreement to Amend Memorandum of Agreement dated 14 July 2003.

Due to a series of events not mentioned in the petition, the licensees, including respondent Kingford,
withdrew from petitioner TPI and correspondingly reneged on their obligations. Petitioner submitted the
dispute for arbitration before the International Centre for Dispute Resolution in the State of California, United
States and won the case against respondent with the court ordering Philippine Kingford to pay TPI specific
amounts for breach of the MOA by not paying past due assessments, for breach of the MOA in failing to
cooperate with TPI in fulfilling the objectives of the MOA, and for violation of the Lanham Act and
infringement of the Yamaoka 619 Patent.

To enforce the award, petitioner TPI filed on 10 October 2007 a Petition for Confirmation, Recognition, and
Enforcement of Foreign Arbitral Award before the RTC of Makati City. Judge Cedrick O. Ruiz of Branch 61,
to which the case was re-raffled, dismissed the petition on the ground that the petitioner lacked legal
capacity to sue in the Philippines.

Hence, this petition for review on certiorari under Rule 45.

Parties Arguments
The basis of the court a quo in dismissing the petition for corfirmation, recognition and enforcement of
foreign arbitral award is Sec. 133 of the Corporation Code of the Philippines stating that no foreign
corporation transacting business in the Philippines without a license, or its successors or assigns, shall be
permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of
the Philippines. The court a quo reiterated that TPI is a foreign corporation established in the State of
California and that it does not have a license to do business in the Philippines thus negating a legal
personality to sue in the Philippines.

The petitioner counters, however, that it is entitled to seek for the recognition and enforcement of the
subject foreign arbitral award in accordance with Republic Act No. 9285 (Alternative Dispute Resolution Act
of 2004), the Convention on the Recognition and Enforcement of Foreign Arbitral Awards drafted during the
United Nations Conference on International Commercial Arbitration in 1958 (New York Convention), and the
UNCITRAL Model Law on International Commercial Arbitration (Model Law), as none of these specifically
requires that the party seeking for the enforcement should have legal capacity to sue.

ISSUES:
1. Whether or not the court a quo was correct in using Section 133 of the Corporation Code thus
dismissing the petition on the ground of petitioners lack of legal capacity to sue
 2. Whether or not a foreign corporation not licensed to do business in the Philippines have legal
capacity to sue under the provisions of the Alternative Dispute Resolution Act of 2004

RULING:
1. NO, the Alternative Dispute Resolution Act of 2004 shall apply in this is the law especially enacted
"to actively promote party autonomy in the resolution of disputes or the freedom of the party to make
their own arrangements to resolve their disputes. It specifically provides exclusive grounds available
to the party opposing an application for recognition and enforcement of the arbitral award.

Inasmuch as the Alternative Dispute Resolution Act of 2004, a municipal law, applies in the instant
petition, the court held that New York Convention and the Model Law are already incorporated in the
ADR Act of 2004.

In particular, the Alternative Dispute Resolution Act of 2004 incorporated the New York Convention
in the Act by specifically providing:
SEC. 42. Application of the New York Convention. - The New York Convention shall govern the
recognition and enforcement of arbitral awards covered by the said Convention.
Xxx
SEC. 45. Rejection of a Foreign Arbitral Award. - A party to a foreign arbitration proceeding may
oppose an application for recognition and enforcement of the arbitral award in accordance with the
procedural rules to be promulgated by the Supreme Court only on those grounds enumerated under
Article V of the New York Convention. Any other ground raised shall be disregarded by the regional
trial court.

It also expressly adopted the Model Law, to wit:

Sec. 19. Adoption of the Model Law on International Commercial Arbitration. International
commercial arbitration shall be governed by the Model Law on International Commercial Arbitration
(the "Model Law") adopted by the United Nations Commission on International Trade Law on June
21, 1985 xxx."

2. YES. Sec. 45 of the Alternative Dispute Resolution Act of 2004 provides that the opposing party in
an application for recognition and enforcement of the arbitral award may raise only those grounds
that were enumerated under Article V of the New York Convention and clearly, not one of these
exclusive grounds touched on the capacity to sue of the party seeking the recognition and
enforcement of the award.

Pertinent provisions of the Special Rules of Court on Alternative Dispute Resolution, which was
promulgated by the Supreme Court, likewise support this position.

Rule 13.1 of the Special Rules provides that "[a]ny party to a foreign arbitration may petition the
court to recognize and enforce a foreign arbitral award." The contents of such petition are
enumerated in Rule 13.5. Capacity to sue is not included. Oppositely, in the Rule on local arbitral
awards or arbitrations in instances where "the place of arbitration is in the Philippines," it is
specifically required that a petition "to determine any question concerning the existence, validity and
enforceability of such arbitration agreement" available to the parties before the commencement of
arbitration and/or a petition for "judicial relief from the ruling of the arbitral tribunal on a preliminary
question upholding or declining its jurisdiction" after arbitration has already commenced should state
"[t]he facts showing that the persons named as petitioner or respondent have legal capacity to sue
or be sued."

Indeed, it is in the best interest of justice that in the enforcement of a foreign arbitral award, we deny
availment by the losing party of the rule that bars foreign corporations not licensed to do business in
the Philippines from maintaining a suit in our courts. When a party enters into a contract containing a
foreign arbitration clause and, as in this case, in fact submits itself to arbitration, it becomes bound
by the contract, by the arbitration and by the result of arbitration, conceding thereby the capacity of
the other party to enter into the contract, participate in the arbitration and cause the implementation
of the result.

Clearly, on the matter of capacity to sue, a foreign arbitral award should be respected not because it
is favored over domestic laws and procedures, but because Republic Act No. 9285 has certainly
erased any conflict of law question.

Finally, even assuming, only for the sake of argument, that the court a quo correctly observed that
the Model Law, not the New York Convention, governs the subject arbitral award, petitioner may still
seek recognition and enforcement of the award in Philippine court, since the Model Law prescribes
substantially identical exclusive grounds for refusing recognition or enforcement.
(#19) F. F. CRUZ CO. INC. V. HR CONSTRUCTION
G.R. No. 187521

FACTS:
F. F. Cruz (FFC) entered into a contract with DPWH for the construction of the Magsaysay Viaduct, known
as the Lower Agusan Developmental Project. F. F. Cruz then entered into a subcontract agreement with HR
Construction (HRC) for the supply of materials, labor, equipment, tools, and supervision for the construction
of a portion of the said project in accordance with the specifications of the main contract.

Pursuant to the subcontract agreement HRC would submit to FFC a monthly progress billing which the
latter would pay. The progress billing should contain progress accomplishment of its completed works as
approved by FFC. Additionally they agreed to conduct a joint measurement of the completed works of HRC
together with the representative of DPWH and consultants to arrive in common quantity. Thereafter, HRC
commenced the construction of the work pursuant to Subcontract Agreement.

HRC submitted the first progress billing for works completed during the period of August 16, 2004 to
September 15, 2004 amounting to 2,029,081.59 Pesos. FFC asserted that the DPWH was then able to
evaluate the completed works of HRCC only until July 25, 2004. Thus, FFC only approved payment up to
the said date amounting to 423,502.88 Pesos. FFC deducted retention fees and withholding tax which
reduced the 373,452.54 Pesos. FFC and DPWH jointly evaluated the work done by HRC for the period of
July 25, 2004 to September 25, 2004. FFC claims that the amount of work done totaled to 2,008,837.52
Pesos and again reduced by withholding tax and retention fee now amounts to 1,771,429.45.

HRC submitted the second progress billing for work completed during the period of July 26 to September
25. FFC did not pay such because it already paid for the work rendered in the said period.

The third progress billing for work done in the period of September 26 to October 25 amounting to
2,569,543.57 Pesos. FFC did no immediately pay the amount stating that it must evaluate the work done by
HRC. Then the fourth billing which amounts to 1,527,112.95 for works completed on October 26 to
november 25. Meanwhile after evaluation FFC approved the amount of 1,505,507.99 pesos to HRC, which
is again reduced to 1,327,639.87.

HRC then sent a letter demanding the payment of 7,340,046.09 plus interest. Subsequently, HRC stopped
the construction of the subcontracted project after taking its Christmas Break. HRC also submit such dispute
to the CIAC pursuant to the arbitration clause of the Subcontract Agreement with the prayer for the payment
of 4,096,656.53 with interest, 1,500,000.00 attorney's fees, 80,000.00 acceptance and representation fee,
cost of litigation.

FFC argued that it already made three payment of the works completed by HRC as shown by the survey it
conducted jointly with the DPWH FFC further asserted that the delay in the payment processing was
primarily attributable to HRC inasmuch as it presented unverified work accomplishments contrary to the
stipulation in the Subcontract Agreement regarding requests for payment. FFC also contends the need of
joint measurement of the complete works.

The issues submetted to Ciac are:

1. What is the correct amount of [HRCs] unpaid progress billing?
2. Did [HRC] comply with the conditions set forth in subparagraph 4.3 of the Subcontract Agreement for
the submission, evaluation/processing and release of payment of its progress billings?
3. Did [HRC] stop work on the project?
3.1. If so, is the work stoppage justified?
3.2. If so, what was the percentage and value of [HRCs] work accomplishment at the time it stopped
work on the project?
4. Who between the parties should bear the cost of arbitration or in what proportion should it be shared
by the parties?
CIAC decided in favor of HRC stating in their decision that the scheme used by FFC is not in accordance to
the subcontract agreement which their right to hold and refuse payment submitted by HRC. CIAC also ruled
that FFC waived their right to the joint measurement by repeated ommisions and therefore also waived.
CIAC also ruled that the non-payment of FFC gave HRC the right to rescind the contract, therefore the
stoppage of work was justified. CA affirmed CIACs decision.

ISSUE:
1. What is the effect of FFCs non-compliance with the stipulation in the Subcontract Agreement
requiring a joint quantification of the works completed by HRCC on the payment of the progress billings
submitted by the latter;
2. Whether there was a valid rescission of the Subcontract Agreement by HRCC;
3. Whether the FFC may appeal the cases decided by the CIAC;
4. Who should bear the cost of arbitration.

RULING:
(1) The court ruled that decision of the CIAC may still be appealed to the SC by rule 45 due to questions
of law. The court states the it is true that CIAC decisions are final and inappealable but there are
exceptions to this rule and one of the exceptions are pure questions of law. The court will not review
the factual finding of the CIAC. On the surface, the instant petition appears to merely raise factual
questions as it mainly puts in issue the appropriate amount that is due to HRC. However, a more
thorough analysis of the issues raised by FFC would show that it actually asserts questions of law.
FCCI primarily seeks from this Court a determination of whether amount claimed by HRCC in its
progress billing may be enforced against it in the absence of a joint measurement of the formers
completed works. Otherwise stated, the main question advanced by FFCCI is this: in the absence of
the joint measurement agreed upon in the Subcontract Agreement, how will the completed works of
HRCC be verified and the amount due thereon be computed?

(2) The court ruled that FFCs non-compliance to the joint measurement qualification results to their
waiver of such measure. And therefore they cannot claim to hold and reduce the amount submitted
by HRC in the pregress billing. FFC did not comply because there was no joint measurement with
FFC, DPWH, and the HRC. The SC cited the ruling of the CA when it correctly ruled that :Verily, the
joint measurement that [FFCCI] claims it conducted without the participation of [HRCC], to which
[FFCCI] anchors its claim of full payment of its obligations to [HRCC], cannot be applied, nor
imposed, on [HRCC]. In other words, [HRCC] cannot be made to accept a quantification of its works
when the said quantification was made without its participation. As a consequence, [FFCCIs] claim
of full payment cannot be upheld as this is a result of a quantification that was made contrary to the
express provisions of the Subcontract Agreement.

(3) HRC has no valid right to rescind the contract, the court ruled that in spite of the existence of dispute
or controversy between the parties during the course of the Subcontract Agreement, HRC had
agreed to continue the performance of its obligations pursuant to the Subcontract Agreement. In
view of the provision of the Subcontract Agreement quoted above, HRC is deemed to have
effectively waived its right to effect extrajudicial rescission of its contract with FFC. Accordingly, HRC,
in the guise of rescinding the Subcontract Agreement, was not justified in implementing a work
stoppage.

(4) The court ruled that although, generally, costs are adjudged against the losing party, courts
nevertheless have discretion, for special reasons, to decree otherwise.

Here, considering that the work stoppage of HRCC is not justified, it is only fitting that both parties should
share in the burden of the cost of arbitration equally. HRCC had a valid reason to institute the complaint
against FFCCI in view of the latters failure to pay the full amount of its monthly progress billings. However,
we disagree with the CIAC and the CA that only FFCCI should shoulder the arbitration costs. The arbitration
costs should be shared equally by FFCCI and HRCC in view of the latters unjustified work stoppage.
(#20) ESTATE OF NELSON R. DULAY represented by his wife MERRIDY JANE
P. DULAY V. ABOITIZ JEBSEN MARITIME, INC. & GENERAL CHARTERERS,
INC.
PERALTA, J.

FACTS:
Nelson R. Dulay (Nelson, for brevity) was employed by General Charterers Inc. (GCI) since 1986. He
initially worked as an ordinary seaman and later as bosun on a contractual basis. From September 3, 1999
up to July 19, 2000 Nelson was detailed in the vessel MV Kickapoo Belle. 25 days after the completion of
his employment contract Nelson died of acute renal failure secondary to septicemia. At the time of his death
Nelson was a bonafide member of the Associated Marine Officers and Seaman's Union (AMOSUP) which
was GCI's collective bargaining agent. Nelson's widow Merridy Jane claimed for death benefits through the
grievance procedure of the collective bargaining agreement between AMOSUP and GCI. However GCI
refused to grant the benefits sought by the widow.

In 2001, Merridy Jane filed a complaint with the NLRC in General Santos City for against GCI for the death
and medical benefits and damages. Later on Joven Mar, the brother of nelson received 20, 000.00 from
GCI pursuant to Art. 20 (A)2 of the CBA and signed a 'certification' acknowledging the receipt of the amount
and releasing AMOSUP from further liability. Merridy Jane contended that she is entitled to $ 90, 000.00
pursuant to Art. 20 (A)1 of the CBA. She said that the 20, 000.00 was only an advance payment of the
total claim.

Aboitiz then contested that the NLRC did not have the jurisdiction over the case because there was no
employer-employee relationship between GCI and Nelson at the time of his death and that GCI can only be
liable if the death occurred during his contract and such is not work-related.

The Labor Arbiter ruled in favor of Merridy Jane and ordered the payment of the $90,
000.00 or 4, 621, 300. 00 as its peso equivalent with the 20, 000. 00 to be considered as advance
payment. He also ruled that the proximate cause of Nelson's death was not work-related. Such was also
upheld by the NLRC.

Aboitiz filed a special civil action for certiorari with the CA. The CA then reversed the decision of the Labor
Arbiter that the death was not work-related and in setting aside the quitclaim executed by the attorney-in-
fact and not considering the 20, 000. 00 Merridy Jane already received. The Court of Appeals also
referred the matter to arbitration because even though the suit that Merridy Jane filed is a money claim it
involved the interpretation of the CBA hence the jurisdiction belongs to the voluntary arbitrator and not the
LA. Her MR was denied.

The petitioners contends that Sec. 10 of RA 8042 or the Migrant Workers and Overseas Filipino Act of
1995, vests jurisdiction on the appropriate branches of the NLRC to entertain disputes regarding the
interpretation of a CBA involving migrant or overseas Filipino workers. Petitioner argues that the above-
mentioned section amended Article 217 (c) of the Labor Code which confers the jurisdiction upon voluntary
arbitrators.

Respondents however insist that in the present case, it is Article 217 (c) and 261 of the Labor Code that
remains to be the governing provisions of law with respect to unresolved grievances arising from the
interpretation and implementation of the CBA.

Hence, jurisdiction still remains with voluntary arbitrators.

ISSUE:
Whether or not the CA committed error in ruling that the Labor Arbiter has no jurisdiction over the case

RULING:
NO, the Court of Appeals did not commit any error.

It is true that RA 8042 is a special law however it does not provides for a specific provision which provides
for the jurisdiction over disputes or unresolved grievances regarding the interpretation or implementation of
a CBA. Unlike Article 217 (c) and 261 of the Labor Code which are very specific in stating that voluntary
arbitrators have jurisdiction over cases arising from the interpretation or implementation of CBAs. The issue
raised by Merridy Jane in the NLRC was: which provision of the subject CBA applies insofar as death
benefits due to the heirs of Nelson are concerned. This Court agrees with the CA that such involves the
interpretation of the said CBA. Thus, specific or special provisions of the Labor Code governs.

In any case, this Court agrees with the petitioner's contention that the CBA is the law or contract between
the parties. Hence, it is clear that the parties, in the first place, intended to bring to conciliation or voluntary
arbitration any dispute or conflict in the interpretation or application of the provisions of their CBA. It is
settled that when the parties have validly agreed on a procedure for resolving grievances and to submit a
dispute to voluntary arbitration then that procedure should be strictly observed.

Also, according to Sec. 29 of the prevailing Standard Terms and Conditions Governing Employment of
Filipino Seafarers on Board Ocean Going Vessels, promulgated by the POEA that in case there is a CBA
the parties must submit to the original and exclusive jurisdiction of the voluntary arbitrator or panel of
arbitrators and only when there is no such CBA can the parties submit themselves to the NLRC's
jurisdiction. Such rules and regulations by administrative bodies are accorded due respect because it is of
their expertise. Hence, the Court finds no cogent reason to depart from such rules.

Petition denied, CA decision affirmed. Case is sent to arbitration.

(#21) LETICIA AGBAYANI V. COURT OF APPEALS, DOJ, AND LOIDA
MARCELINA GENABE
G.R. No. 183623, June 25, 2012
Reyes, J.,

FACTS:
Agbayani and Genabe were both employees of RTC Branch 275 of Las Pinas City working as court
stenographer and legal researcher III respectively
Agbayani filed a complaint for grave oral defamation against Genabe before the Office of the City
Prosecutor of Las Pinas City for allegedly uttering
o ANG GALING MO LETY, SINABI MO NA TINAPOS MO YUNG MARVILLA CASE, ANG
GALING MO. FEELING LAWYER KA KASI, BAKIT DI KA MAGDUTY NA LANG,
STENOGRAPHER KA MAGSTENO KA NA LANG, ANG GALING MO, FEELING LAWYER
KA TALAGA. NAGBEBENTA KA NG KASO, TIRADOR KA NG JUDGE. SIGE HIGH BLOOD
DIN KA, MAMATAY KA SANA SA HIGH BLOOD MO.
In a Resolution, Office of the City Prosecutor of Las Pinas City found probable cause
DOJ Undersecretary Ernesto Pineda, reversed and set aside the resolution, finding that the subject
utterances constitute only slight oral defamation and was dismissed for non-compliance with the
provisions of Book III, Title I (Katarungang Pambarangay) of RA 7610 ( Local Government Code)
o Failed to show that the case was previpusly referred to the Katarungang Pambarangay for
conciliation in compliance with Sec. 408 and 409(d) of the LGC
Motion for Reconsideration was denied
Agbayani filed a Petition for Cetiorari and Motion for Reconsideration with CA but was dismissed

ISSUES:
1. WON the DOJ abused its discretion when it reversed the resolution of the Office of the Prosecutor of
Las Pinas City
2. WON the crime committed by respondent was slight oral defamation
3. WON the complaint should be dismissed for non-compliance with the provisions of the LGC
4. WON requirements under DOJ circular no. 70 (2000 NPS Rule on Appeals) is mandatory.

RULING:
1. There was substantial compliance with the rules of procedure. There was proper service of the
petition as required by the rules. As to the charge that there were illegal insertions of documents the
Court agrees with the CA that this is a serious charge, especially if made against the Undersecretary
of Justice; and in order for it to prosper, it must be supported by clear and convincing
evidence. However, petitioner Agbayani's only proof is her bare claim that she personally checked
the records and found that her Comment was missing and 36 new documents had been
inserted. This matter was readily brought to the attention of Undersecretary Pineda by petitioner
Agbayani in her motion for reconsideration, who however must surely have found such contention
without merit, and thus denied the motion.

2. The Court rule that the determination by Undersecretary Pineda that the defamation was uttered
while the respondent was in extreme excitement or in a state of passion and obfuscation, rendering
her offense of lesser gravity than if it had been made with cold and calculating deliberation, is
beyond the ambit of our review. The CA concurred that the complained utterances constituted only
slight oral defamation, having been said in the heat of anger and with perceived provocation from
Agbayani. Respondent Genabe was of a highly volatile personality prone to throw fits (sumpongs),
who thus shared a hostile working environment with her co-employees, particularly with her
superiors, Agbayani and Hon. Bonifacio Sanz Maceda, the Presiding Judge of Branch 275, whom
she claimed had committed against her grievous acts that outrage moral and social conduct. That
there had been a long-standing animosity between Agbayani and Genabe is not denied.
3. Undeniably, both petitioner Agbayani and respondent Genabe are residents of Las Pinas City and
both work at the RTC, and the incident which is the subject matter of the case happened in their
workplace. Agbayanis complaint should have undergone the mandatory barangay conciliation for
possible amicable settlement with respondent Genabe, pursuant to Sections 408 and 409 of
Republic Act No. 7160 or the Local Government Code of 1991. The compulsory process of
arbitration is a pre-condition for the filing of the complaint in court. Where the complaint (a) did not
state that it is one of excepted cases, or (b) it did not allege prior availment of said conciliation
process, or (c) did not have a certification that no conciliation had been reached by the parties, the
case should be dismissed. Petitioner Agbayani failed to show that the instant case is not one of the
exceptions enumerated above. Neither has she shown that the oral defamation caused on her was
so grave as to merit a penalty of more than one year.

4. Technical rules of procedure like those under Sections 5 and 6 thereof should be interpreted in such
a way to promote, not frustrate, justice. Sections 7 and 10 of DOJ Circular No. 70 clearly give the
Secretary of Justice, or the Undersecretary in his place, wide latitude of discretion whether or not to
dismiss a petition.

CA did not commit reversible error in upholding the Resolution dated May 17, 2007 of the DOJ as
we, likewise, find the same to be in accordance with law and jurisprudence.
(#22) METROPOLITAN CEBU WATER DISTRICT V. MACTAN ROCK
INDUSTRIES, INC.
G.R. No. 172438 (July 4, 2012)

FACTS:
Metropolitan Cebu Water District/MCWD (petitioner) is a government-owned and controlled corporation. It
is mandated to supply water within its service area in the cities of Cebu, Talisay, Mandaue, and Lapu-Lapu
and the municipalities of Compostela, Liloan, Consolacion, and Cordova in the Province of Cebu.

Metro Rock Industries, Inc./MRII (respindent) is a domestic corporation with principal office address at the
2nd Level of the Waterfront Cebu Hotel and Casino, Lahug, Cebu City.

In 1997, petitioner entered into a Water Supply Contract (the Contract) with respondent wherein it was
agreed that the latter would supply petitioner with potable water.

On March 15, 2004, respondent filed a Complaint against petitioner with the Construction Industry
Arbitration Commission (CIAC), citing the arbitration clause (Clause 18) of the Contract. In the said
complaint, respondent sought the reformation of Clause 17 of the Contract.

Petitioner filed its Answer which included a motion to dismiss the complaint on the ground that the CIAC
had no jurisdiction over the case. The CIAC denied petitioners motion to dismiss, and called the parties to
a preliminary conference for the review and signing of the Terms of Reference.

Petitioner, thus, filed a petition for certiorari under Rule 65 with the CA, questioning the jurisdiction of the
CIAC (First Petition).

Meanwhile, the CIAC proceeded with the preliminary conference to which CIAC and respondent both
signed the Terms of Reference.

On August 27, 2004, respondent submitted its Formal Offer of Evidence and its memorandum of arguments
in the form of a proposed/draft decision. Petitioner did not attend the hearings. It did not submit evidence
other than those annexed to its Answer. Neither did it file a formal offer of evidence, or a memorandum of
legal arguments.

The CIAC promulgated its Decision in favor of the respondent.

Meanwhile, on October 28, 2005, the CA in its decision in the First Petition upheld the jurisdiction of the
CIAC over the case. The CA held that when parties agree to settle their disputes arising from or connected
with construction contracts, the CIAC acquires primary jurisdiction.

Petitioners motion for reconsideration of the decision in the First Petition was still pending when it filed the
petition for review under Rule 43 (Second Petition) appealing the decision of the CIAC. The motion for
reconsideration was eventually denied in a Resolution to which the Petitioner did not appeal thus it became
final and executory.

ISSUES:
1. Whether or not CIAC has jurisdiction over disputes arising from a water supply contract
2. Whether or not the CA erred in refusing to render judgment on the issue of jurisdiction
3. Whether or not the CIAC has jurisdiction over a complaint praying for a reformation of contract
4. Whether or not the petitioner can validly refuse to participate in the Arbitration proceedings

RULING:
1. YES. In its Decision in the First Petition, the CA affirmed the arbitral bodys finding in CIAC that the
case was within its jurisdiction. Such decision having become final, it is beyond the jurisdiction of this
 Court, or any court or body, for that matter, to review or modify, even supposing for the sake of
argument, that it is indeed erroneous.
Also, the parties apparently characterized the Contract as one involving construction, as its
arbitration clause specifically refers disputes, controversies or claims arising out of or relating to the
Contract or the breach, termination or validity thereof, if the same cannot be settled amicably, to an
arbitration tribunal, in accordance with E.O. No. 1008, or the Construction Industry Arbitration Law:

18. Any dispute, controversy or claim arising out of or relating to this contract or the breach,
termination or invalidity thereof, if the same cannot be settled amicably, may be submitted for
arbitration to an Arbitration Tribunal in accordance with Executive Order No. 1008 (Construction
Industry Arbitration Law) and the place of arbitration shall be the City of Cebu, Philippines, otherwise
said dispute or controversy arising out of the contract or breach thereof shall be submitted to the
court of law having jurisdiction thereof in the city where MCWD is located.

2. NO. The 19th Division was correct in refusing to render judgment on the issue of jurisdiction as, at
that time, the issue was still pending before another division of the CA.

Litis pendentia is predicated on the principle that a party should not be allowed to vex another more
than once regarding the same subject matter and for the same cause of action.

3. YES. The jurisdiction of courts and quasi-judicial bodies is determined by the Constitution and the
law. It cannot be fixed by the will of the parties to the dispute, nor can it be expanded or diminished
by stipulation or agreement. The text of Section 4 of E.O. No. 1008 is broad enough to cover any
dispute arising from, or connected with, construction contracts, whether these involve mere
contractual money claims or execution of the works. This jurisdiction cannot be altered by
stipulations restricting the nature of construction disputes, appointing another arbitral body, or
making that bodys decision final and binding.

Thus, unless specifically excluded, all incidents and matters relating to construction contracts are
deemed to be within the jurisdiction of the CIAC.

4. YES. Though one party can refuse to participate in the arbitration proceedings, this cannot prevent
the CIAC from proceeding with the case and issuing an award in favor of one of the parties.

Section 4.2 of the Revised Rules of Procedure Governing Construction Arbitration (CIAC Rules)
specifically provides that where the jurisdiction of the CIAC is properly invoked by the filing of a
Request for Arbitration in accordance with CIAC Rules, the failure of a respondent to appear, which
amounts to refusal to arbitrate, will not stay the proceedings, notwithstanding the absence of the
respondent or the lack of participation of such party. In such cases, the CIAC is mandated to appoint
the arbitrator/s in accordance with the Rules, and the arbitration proceedings shall continue. The
award shall then be made after receiving the evidence of the claimant.

In this case, there being a valid arbitration clause mutually stipulated by the parties, they are both
contractually bound to settle their dispute through arbitration before the CIAC. Although petitioner
refused to participate it does not affect the authority of the CIAC to conduct the proceedings, and,
thereafter, issue an arbitral award.

WHEREFORE, the petition is DENIED.

(#23) RCBC CAPITAL CORPORATION V. BANCO DE ORO UNIBANK INC
In RCBC Capital Corporation v Banco de Oro Unibank Inc (GR 196171, December 10 2012) the respondent
refused to pay its share of the advance on arbitration costs, as fixed by the International Chamber of
Commerce (ICC) International Court of Arbitration. The respondent claimed that the amount of the claim
was substantially higher more than 40 times than the total amount of the counterclaims. The court
instructed the arbitration tribunal to suspend its work unless the parties paid the balance of the advance
within 15 days. In view of the respondent's ongoing refusal to pay its share, the claimant was compelled to
pay all advance costs and sought to declare the respondent in default, with no right to participate in the
proceedings.

Decision
In a letter to the parties, the chairman wrote that the tribunal had no power under ICC rules to order the
respondent to pay the advance costs sought by the ICC or to give the claimant relief. It may have been
possible for the claimant, in the course of the arbitral hearing, to make submissions based on the failure of
the respondent to pay its share. Relief, if any, would need to be determined by the tribunal after hearing
submissions from the respondent.

The majority of the tribunal rendered a first partial award, which reserved a resolution on costs to a further
or final award.

In another letter, the claimant reiterated its plea that the respondent be declared in default and the
counterclaims deemed withdrawn. In response, the chairman ruled that the tribunal had no jurisdiction to
declare that the respondent had no right to participate in the proceedings. Article 36(4) of the ICC rules
applies only to counterclaims. The tribunal interpreted the claimant's letter as an application to the tribunal
for the issuance of a partial award against the respondent in respect of its failure to pay. The claimant
confirmed the tribunal's interpretation.

In the ensuing hearing, the chairman advised the parties as follows:

"1. The Tribunal acknowledges the Respondent's response to the Claimant's application for a Partial
Award, based on the Respondent's failure to pay its share of the costs, as requested by the ICC.
2. The Tribunal notes that neither party has referred to an article by Mat[t]hew Secomb on this very
subject which appears in the ICC Bulletin Vol. 14 No.1 (Spring 2003). To assist both sides and to
ensure that the Tribunal does not consider material on which the parties have not been given an
opportunity to address, I attach a copy of this article, which also contains reference to other scholarly
works on the subject.
3. The Tribunal will give each party seven days within which to submit further written comments as a
consequence of being alerted to the above authorities."

The parties submitted their comments with the claimant contending that based on Secomb's article, whether
the contractual or provisional measures approach was applied, the tribunal was vested with jurisdiction and
authority to render an award with respect to the reimbursement of costs paid by the non-defaulting party.
The respondent, on the other hand, maintained that the claimant's application for reimbursement of costs
had no basis under the ICC rules. According to the respondent, the matter of costs for arbitration is between
the ICC and the parties, not the tribunal and the parties. An arbitration tribunal can issue decisions only on
those costs not fixed by the ICC.

The respondent also argued that a party's reimbursement for payments of the defaulting party's share
depends on the final arbitral award where the party liable for costs would be determined. The tribunal then
rendered a second partial award requiring the respondent to pay the claimant the costs it advanced and to
consider the respondent's counterclaim withdrawn.

Thereafter, the claimant filed a motion in court to confirm the second partial award, while the respondent
filed a motion to vacate the second partial award. The court confirmed the second partial award and denied
the respondent's motion to vacate the same.
Acting on a petition for certiorari, the Court of Appeals reversed the order of the lower court and set aside
the second partial award.

On petition for review, the Supreme Court upheld the Court of Appeals' ruling that in treating the letter of the
claimant as an application for a partial award and in furnishing the parties with a copy of Secomb's article -
which favoured the claimant by advancing its cause - the chairman acted with partiality. The Supreme Court
adopted the reasonable impression of partiality standard and held that the act of furnishing the parties with
Secomb's article, considering the attendant circumstances, was indicative of partiality such that a
reasonable individual would have to conclude that it was favouring the claimant. Even before the issuance
of the second partial award for the reimbursement of the advance on costs paid by the claimant, the
chairman exhibited strong inclination to grant such relief, notwithstanding his earlier categorical ruling that
the tribunal had no power under ICC rules to order the respondent to pay the advance on costs sought by
the ICC or to give the claimant any relief against respondent's refusal to pay.

Secomb's article, "Awards and Orders Dealing with the Advance on Costs in ICC Arbitration: Theoretical
Questions and Practical Problems", states:
"As we can see, the Rules have certain mechanisms to deal with defaulting parties. Occasionally,
however, parties have sought to use other methods to tackle the problem of a party refusing to pay its
part of the advance on costs. These have included seeking an order or award from the arbitral
tribunal condemning the defaulting party to pay its share of the advance on costs. Such applications
are the subject of this article."

According to the Supreme Court, by furnishing both parties with a copy of the article (although purportedly
done to assist both parties), the chairman provided the claimant with supporting legal arguments. This
bolstered the impression that the chairman was pre-disposed to grant relief to the claimant. The court found
the chairman's act clearly violated Article 15 of the ICC rules and declared that "in all cases, the Arbitration
Tribunal shall act fairly and in partiality and ensure that each party has a reasonable opportunity to present
its case".

Comment
In furnishing both parties with a copy of an article, and in providing both parties the opportunity to submit
their comments, the chairman did not act with partiality nor did he pre-judge the issue. It is quite common,
even in litigation, for a judge to call the attention of both parties to certain rules or decisions which the
parties may have omitted in argument, and to ask them to comment on their applicability or pertinence in
the resolution of an issue. Such action by itself does not amount to partiality or pre-judgment.

Indeed, the tribunal may have furnished the article in an effort to guide the parties, shorten proceedings and
conduct the arbitration in an expeditious manner. After the issuance of the second partial award (but before
the Supreme Court issued its resolution), the same tribunal rendered a final award in favour of the claimant.
After the court confirmed and ordered enforcement of the final award, both the Court of Appeals and the
Supreme Court refused to stay or enjoin its enforcement.