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Jorge Gonzales v. Hon. Oscar Pimentel
Jorge Gonzales v. Hon. Oscar Pimentel
Oscar Pimentel covered by an arbitration agreement even without waiting for the outcome
G.R. No. 167994 of the issue of the validity of the arbitration agreement
January 22, 2007 ISSUE:
Whether it was proper to compel arbitration under R.A. No. 876 even though
FACTS: the twin issues of validity and nullity of the Addendum Contract and, consequently, of
1. The case is a consolidation of two petitions rooted in the same disputed the arbitration clause therein were raised
Addendum Contract entered into by the parties.
RULING:
2. In GR No. 161957, this Court had held that the DENR Panel of Arbitrators had
no jurisdiction over the complaint for the annulment of the Addendum Contract There is reason, therefore, to rule against Gonzales when he alleges that
on grounds of fraud and violation of the Constitution and that the action should Judge Pimentel acted with grave abuse of discretion in ordering the parties to proceed
have been brought before the regular courts as it involved judicial issues. with arbitration. Gonzales’s argument that the Addendum Contract is null and void and,
Both parties filed separate motions for reconsideration. therefore the arbitration clause therein is void as well, is not tenable. First, the
Gonzales averred that the DENR Panel of Arbitrators has jurisdiction proceeding in a petition for arbitration under R.A. No. 876 is limited only to the resolution
because the case involves a mining dispute that properly falls within the of the question of whether the arbitration agreement exists. Second, the separability of
ambit of the Panel’s authority. the arbitration clause from the Addendum Contract means that validity or invalidity of
On the other hand, Climax Mining Ltd., et al., filed their Motion for Partial the Addendum Contract will not affect the enforceability of the agreement to
Reconsideration and/or Clarification[3] seeking reconsideration of that arbitrate. Thus, Gonzales’s petition for certiorari should be dismissed.
part of the Decision holding that the case should not be brought for
arbitration. It argued that the arbitration clause in the Addendum Contract Arbitration, as an alternative mode of settling disputes, has long been
should be treated as an agreement independent of the other terms of the recognized and accepted in our jurisdiction. The Civil Code is explicit on the
contract, and that a claimed rescission of the main contract does not avoid matter.[33] R.A. No. 876 also expressly authorizes arbitration of domestic
the duty to arbitrate. disputes. Foreign arbitration, as a system of settling commercial disputes of an
3. In GR No. 167994, Gonzales challenged the order of the RTC requiring him international character, was likewise recognized when the Philippines adhered to the
to proceed with the arbitration proceedings which was sought by Climax- United Nations "Convention on the Recognition and the Enforcement of Foreign Arbitral
Arimco while the complaint for the nullification of the Addendum Contract was Awards of 1958," under the 10 May 1965 Resolution No. 71 of the Philippine Senate,
pending before the DENR Panel of Arbitrators. giving reciprocal recognition and allowing enforcement of international arbitration
Gonzales argued that the Addendum Contract was void, thus the agreements between parties of different nationalities within a contracting state. [34] The
arbitration clause contained therein was likewise void ab initio. He enactment of R.A. No. 9285 on 2 April 2004 further institutionalized the use of
contended that any issue as to the nullity, inoperativeness, or incapability alternative dispute resolution systems, including arbitration, in the settlement of
of performance of the arbitration clause/agreement raised by one of the disputes.
parties to the alleged arbitration agreement must be determined by the
court prior to referring them to arbitration. Disputes do not go to arbitration unless and until the parties have agreed to abide by
However, Climax-Arimco countered that Gonzales’s attack on or the arbitrator’s decision. Necessarily, a contract is required for arbitration to take place
repudiation of the Addendum Contract is not a ground to deny effect to and to be binding. R.A. No. 876 recognizes the contractual nature of the arbitration
the arbitration clause in the Contract. Section 2, par. 1 of RA 876 itself agreement, thus:
considers the arbitration stipulation an independent contract in its own
right whose enforcement may be prevented only on grounds which legally SEC. 2. Persons and matters subject to arbitration. Two or more
make the arbitration agreement itself revocable. persons or parties may submit to the arbitration of one or more
Likewise, Climax-Arimco emphasized that in Sec. 24 of RA 9285, the arbitrators any controversy existing, between them at the time
court, instead of trying the case, may, on request of either or both parties, of the submission and which may be the subject of an action, or the
refer the parties to arbitration, unless it finds that the arbitration parties to any contract may in such contract agree to settle by
agreement is null and void, inoperative or incapable of being performed. arbitration a controversy thereafter arising between them. Such
Arbitration may even be ordered in the same suit brought upon a matter submission or contract shall be valid, enforceable and
irrevocable, save upon such grounds as exist at law for the
revocation of any contract.