Korea Technologies Co., Ltd. Vs. Hon. Albert A. Lerma, et al. , G.R. No. 143581.

January 7, 2008
FACTS:

Petitioner KOGIES and respondent PGSMC executed a Contract whereby KOGIES would set up an LPG Cylinder
Manufacturing Plant for respondent. Respondent unilaterally cancelled the contract on the ground that petitioner had
altered the quantity and lowered the quality of the machineries and equipment it delivered. Petitioner opposed informing
the latter that PGSMC could not unilaterally rescind their contract nor dismantle and transfer the machineries and
equipment on mere imagined violations by petitioner. Petitioner then filed a Complaint for Specific Performance against
respondent before the RTC. Respondent filed its Answer with Compulsory Counterclaim asserting that it had the full right
to dismantle and transfer the machineries and equipment because it had paid for them in full as stipulated in the contract.
KOGIES filed a motion to dismiss respondent’s counterclaims arguing that when PGSMC filed the counterclaims, it
should have paid docket fees and filed a certificate of non-forum shopping, and that its failure to do so was a fatal defect.
The RTC dismissed the petitioner’s motion to dismiss respondent’s counterclaims as these counterclaims fell within the
requisites of compulsory counterclaims.

ISSUE: Whether or not payment of docket fees and certificate of non-forum shopping were required in the respondent’s
Answer with counterclaim?

HELD: NO. The counterclaims of PGSMC were incorporated in its Answer with Compulsory Counterclaim in
accordance with Section 8 of Rule 11, 1997 Revised Rules of Civil Procedure, the rule that was effective at the time the
Answer with Counterclaim was filed. Sec. 8 on existing counterclaim or cross-claim states, “A compulsory counterclaim
or a cross-claim that a defending party has at the time he files his answer shall be contained therein.” As to the failure to
submit a certificate of forum shopping, PGSMC’s Answer is not an initiatory pleading which requires a certification
against forum shopping under Sec. 524 of Rule 7, 1997 Revised Rules of Civil Procedure. It is a responsive pleading,
hence, the courts a quo did not commit reversible error in denying KOGIES’ motion to dismiss PGSMC’s compulsory
counterclaims. At the time PGSMC filed its Answer incorporating its counterclaims against KOGIES, it was not liable to
pay filing fees for said counterclaims being compulsory in nature. We stress, however, that effective August 16, 2004
under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC, docket fees are now required to be paid in compulsory
counterclaim or cross-claims.

Tuna Processing v. Philippine Kingford G.R. No. 185582 February 29, 2012

FACTS:
Kanemitsu Yamaoka, co-patentee of a US Patent, Philippine Letters Patent, and an Indonesian Patent, entered into
aMemorandum of Agreement (MOA) with five Philippine tuna processors including Respondent Philippine Kingford, Inc.
(KINGFORD). The MOA provides for the enforcing of the abovementioned patents, granting licenses under the same,
and collecting royalties, and for the establishment of herein Petitioner Tuna Processors, Inc. (TPI).

Due to a series of events not mentioned in the Petition, the tuna processors, including Respondent KINGFORD, withdrew
from Petitioner TPI and correspondingly reneged on their obligations. Petitioner TPI 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 KINGFORD.
To enforce the award, Petitioner TPI filed a Petition for Confirmation, Recognition, and Enforcement of Foreign Arbitral
Award before the RTC of Makati City. Respondent KINGFORD filed a Motion to Dismiss, which the RTC denied for
lack of merit. Respondent KINGFORD then sought for the inhibition of the RTC judge, Judge Alameda, and moved for
the reconsideration of the order denying the Motion. Judge Alameda inhibited himself notwithstanding “[t]he unfounded
allegations and unsubstantiated assertions in the motion.” Judge Ruiz, to which the case was re-raffled, in turn, granted
Respondent KINGFORDS’s Motion for Reconsideration and dismissed the Petition on the ground that Petitioner TPI
lacked legal capacity to sue in the Philippines. Petitioner TPI is a corporation established in the State of California and not
licensed to do business in the Philippines.

Hence, the present Petition for Review on Certiorari under Rule 45.
ISSUE:
Whether or not a foreign corporation not licensed to do business in the Philippines, but which collects royalties from
entities in the Philippines, sue here to enforce a foreign arbitral award?
RULING:

YES. Petitioner TPI, although not licensed to do business in the Philippines, may seek recognition and enforcement of the
foreign arbitral award in accordance with the provisions of theAlternative Dispute Resolution Act of 2004. A foreign
corporation’s capacity to sue in the Philippines is not material insofar as the recognition and enforcement of a foreign
arbitral award is concerned.
The Resolution of the RTC is REVERSED and SET ASIDE.

Asset Privatization Trust vs Court of Appeals

300 SCRA 579 – Business Organization – Corporation Law – Corporation Generally Not Entitled To Moral Damages –
Power To Enter Into Contracts

In 1968, the government undertook to support the financing of Marinduque Mining and Industrial Corporation (MMIC).
The government then issued debenture bonds in favor of MMIC which enable the latter to take out loans from the
Development Bank of the Philippines (DBP) and the Philippine National Bank (PNB). The loans were mortgaged by
MMIC’s assets. In 1984 however, MMIC’s indebtedness reached P13.7 billion and P8.7 billion to DPB and PNB
respectively. MMIC had trouble paying and this exposed the government, because of the debenture bonds, to a P22 billion
obligation.

In order to mitigate MMIC’s loan liability, a financial restructuring plan (FRP) was drafted in the presence of MMIC’s
representatives as well as representatives from DBP and PNB. The two banks however never formally approved the said
FRP. Eventually, the staggering loans became overdue and PNB and DBP chose to foreclose MMIC’s assets, FRP no
longer feasible at that point. So the assets were foreclosed and were eventually assigned to the Asset Privatization Trust
(APT).

Later, Jesus Cabarrus, Sr., a stockholder of MMIC initiated a derivative suit against PNB and DBP with APT being
impleaded as the successor in interest of the two banks. The suit basically questioned the foreclosure as Cabarrus asserted
that the foreclosure was invalid because he insisted that the FRP was adopted by PNB and DBP as a consequence of the
presence of the banks’ representatives when the said FRP was drafted. Cabarrus asserts that APT should restore the assets
to MMIC and that PNB and DBP should honor the FRP. The suit was filed in the RTC of Makati but while the case was
pending, the parties agreed to submit the case for arbitration. Hence, Makati RTC dismissed the case upon motion of the
parties.

The Arbitration Committee (AC) which heard the case ruled in favor of Cabarrus. The AC granted Cabarrus prayer and at
the same time awarded him P10 million in moral damages. Not only that, the AC also awarded P2.5 billion in moral
damages in favor of MMIC to be paid by the government. APT’s MFR was denied. Cabarrus then filed before the Makati
RTC a motion to confirm the arbitration award. APT opposed the same as it alleged that the motion is improper. Makati
RTC denied APT’s opposition and confirmed the arbitration award. The Court of Appeals affirmed the ruling of the RTC.

ISSUE: Whether or not the ruling of the Arbitration Committee as affirmed by the Regional Trial Court of Makati
(Branch 62) and the Court of Appeals is correct.

HELD: No.

1. The award of damages in favor of MMIC is improper. First, it was not made a party to the case. The derivative
suit filed by Cabarrus failed to implead MMIC. So how can an award for damages be awarded to a non-party?
Second, even if MMIC, which is actually a real party in interest, was impleaded, it is not entitled to moral
 damages. It is not yet a well settled jurisprudence that corporations are entitled to moral damages. While the
Supreme Court in some cases did award certain corporations moral damages for besmirched reputations, such is
not applicable in this case because when the alleged wrongful foreclosure was done, MMIC was already in bad
standing hence it has no good wholesome reputation to protect. So it could not be said that there was a
“reputation” besmirched by the act of foreclosure. Likewise, the award of moral damages in favor of Cabarrus is
invalid. He cannot have possibly suffered any moral damages because the alleged wrongful act was committed
against MMIC. It is a basic postulate that a corporation has a personality separate and distinct from its
stockholders. The properties foreclosed belonged to MMIC, not to its stockholders. Hence, if wrong was
committed in the foreclosure, it was done against the corporation.
2. The FRP is not valid hence the foreclosure is valid. The mere presence of DBP’s and PNB’s representatives
during the drafting of FRP is not constitutive of the banks’ formal approval of the FRP. The representatives are
personalities distinct from PNB and DBP. PNB and DBP have their own boards and officers who may have
different decisions. The representatives were not shown to have been authorized by the respective boards of the
two banks to enter into any agreement with MMIC.
3. Further, the proceeding is procedurally infirm. RTC Makati had already dismissed the civil case when the parties
opted for arbitration. Hence, it should have never took cognizance of the Cabarrus’ motion to confirm the AC’
award. The same should have been brought through a separate action not through a motion because RTC Makati
already lost jurisdiction over the case when it dismissed it to give way for the arbitration. The arbitration was a
not a continuation of the civil case filed in Makati RTC.

A.C. Enterprises v. Construction Industry Arbitration Commission G.R. No. 101444 May 9, 1995

("Final and unappealable" vs. "final and executory")

F: There was an arbitral award under CIAC for AC Enterprises. However, (I'm guessing) Dee Construction Corporation
was not paying the award yet as they filed MR to SC.

AC Enterprises now argues that as the award was already FINAL AND UNAPPEALABLE, it should bear the 12%
interest rate imposed under the ruling in Eastern Shipping Lines case.

H: "FINAL AND UNAPPEALABLE" different from "final and executory"

A "final and inappealable (sic)" judgment is not the same as a "final and executory" one. The former becomes executory
only as in the case of an award by the CIAC after the lapse of 30 days from receipt of notice thereof and no petition for
review to the Supreme Court is made (Rules of Procedure Governing Construction Arbitration, Art. XVI, Sec. 1).
While the petition for review does not automatically suspend the execution of the award of the CIAC, the Supreme Court
may direct a stay of the execution. In the case at bench, the Court issued a temporary restraining order to stay the
execution of the award (Resolution, October 14, 1991).

The CIAC award did not become "final and executory" until after service of a copy of the Resolution dated April 8, 1992
of this Court, denying the motion for reconsideration. The award was fully paid to private respondent on May 6, 1992
(Rollo, p. 456). We consider the interest that accrued from April 8 to May 6, 1992, a period of less than a month, as de
minimis as to warrant its charging against the award.