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(G.R. No. 161957) Gonzales vs. Climax Mining (Digest)
(G.R. No. 161957) Gonzales vs. Climax Mining (Digest)
Facts:
This case is a consolidation of two petitions rooted in the same disputed Addendum
Contract entered into between petitioner Jorge Gonzales and the respondent mining companies.
The first case is a Motion for Reconsideration filed by both parties. Gonzales challenges
the decision of the Supreme Court ruling that the DENR Panel of Arbitrators (Panel) had no
jurisdiction over the complaint for the annulment of the Addendum Contract on grounds of
fraud and violation of the Constitution, which should have been filed with the regular courts.
Gonzales contends that that the Panel has jurisdiction because the case involves a
mining dispute that properly falls within the ambit of its authority.
In the second case, Gonzales challenged the order of the Regional Trial Court (RTC)
requiring him to proceed with the arbitration proceedings while the complaint for the
nullification of the Addendum Contract was pending before the Panel. He averred that any
issue as to the nullity, inoperativeness, or incapability of performance of the arbitration
clause/agreement raised by one of the parties to the alleged arbitration agreement must be
determined by the court prior to referring them to arbitration.
Issue:
Ruling:
No. Implicit in the summary nature of the judicial proceedings is the separable or
independent character of the arbitration clause or agreement. The Supreme Court had the
opportunity to expound on the doctrine of separability, which provides that an arbitration
agreement is independent of the main contract. The arbitration agreement is to be treated as a
separate agreement. Hence, the arbitration agreement does not automatically terminate when
the contract of which it is 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.