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(G.R. No. 96283) Chung-Fu Industries vs. Court of Appeals (Digest)
(G.R. No. 96283) Chung-Fu Industries vs. Court of Appeals (Digest)
Court of Appeals
[G.R. No. 96283] 25 February 1992
Facts
Chung-Fu Industries (Chung-Fu), herein petitioner, and Roblecor Philippines, Inc. (Roblecor),
herein private respondent, entered into a construction agreement whereby the latter undertakes
to build the former’s industrial complex.
In the event of disputes arising from the performance of the subject contract, it was stipulated
therein that the issue(s) shall be submitted for resolution before a single arbitrator chosen by
both parties.
When Roblecor failed to perform its contractual obligation, Chung-Fu took over the construction.
Hence, Roblecor filed a petition for Compulsory Arbitration to claim its unpaid billings.
Subsequent negotiations between the parties eventually led to the formulation of an arbitration
agreement, which stipulates that the parties mutually agree that the decision of the arbitrator
shall be final and unappealable. Therefore, there shall be no further judicial recourse if either
party disagrees with the whole or any part of the arbitrator's award. The Regional Trial Court
approved the Arbitration Agreement and selected an arbitrator.
The arbitrator ruled in favor of Roblecor. Aggrieved, Chung-Fu moved for further hearing but
was denied by the trial court. Its motion for reconsideration was also denied. The Court of
Appeals affirmed the trial court’s decision. The trial court and the appellate court both determined
that Chung-Fu is precluded from challenging the decision in accordance with the Arbitration
Agreement.
Issue:
Whether or not the parties may stipulate that the arbitration award shall be final, unappealable
and executory.
Ruling
Yes. The Civil Code recognizes the validity of a stipulation where the arbitration award shall be
final, unappealable and executory. However, this does not mean that the arbitration award is
beyond the ambit of judicial review. The finality of an arbitration award is not absolute; it may
be annulled or rescinded based on grounds provided by law.