To: MSF

From: AHC
Date: 9 July 2020
Subject: Effect of delay of action by CIAC
CEM: 500.10.04

__________________________________________________________________________

Background

PGAI filed a Motion for Preliminary Hearing on Affirmative Defenses with a prayer to refer the
case to CIAC for arbitration. The Court ordered for the referral of the case to CIAC and the case
records were transferred to the same. However, the RTC’s ruling did not contain any dismissal
nor any decision with regard to the affirmative defenses raised by PGAI. Hence, the latter filed a
Motion for Partial Reconsideration praying for the dismissal of the case in the RTC and for the
ruling with regard to the affirmative defenses raised in the prior Motion.

PGAI has yet to receive any info/order from CIAC regarding PGAI’s case and no action coming
from the CIAC or the Plaintiff Rockwell. 

Issue:
What is the effect of such delay?
Will an argument of Failure to Prosecute prosper?

Basis:

Sec. 3 Rules 17 of the Rules of Court states that:

Section 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the plaintiff
fails to appear on the date of the presentation of his or her evidence in chief on the complaint, or
to prosecute his or her action for an unreasonable length of time, or to comply with these
Rules or any order of the court, the complaint may be dismissed upon motion of the defendant
or upon the court's own motion, without prejudice to the right of the defendant to prosecute his
or her counterclaim in the same or in a separate action. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise declared by the court.

Jurisprudence

 Knecht v. CA (G.R. No. 108015 20 May 1998)

An action may be dismissed for failure to prosecute in any of the following instances:
(1) if the plaintiff fails to appear at the time of trial; or (2) if he fails to prosecute the action
for an unreasonable length of time; or (3) if he fails to comply with the Rules of Court or
any order of the court. Once a case is dismissed for failure to prosecute, this has the effect of an
adjudication on the merits and is understood to be with prejudice to the filing of another action
unless otherwise provided in the order of dismissal. In other words, unless there be a
qualification in the order of dismissal that it is without prejudice, the dismissal should be
regarded as an adjudication on the merits and is with prejudice.

 In the case of Marahay v. Melicor (G.R. No. L-44980, 6 February 1990), the Supreme
Court laid down the test on how to determine if there is failure to prosecute, to wit:

While a court can dismiss a case on the ground of non prosequitur, the real test for the
exercise of such power is whether, under the circumstances, plaintiff is chargeable with
want of due diligence in failing to proceed with reasonable promptitude. In the absence of a
pattern or scheme to delay the disposition of the case or a wanton failure to observe the
mandatory requirement of the rules on the part of the plaintiff, as in the case at bar, courts should
decide to dispense with rather than wield their authority to dismiss.

 In the case of Soliman v. Fernandez (G.R. No. 176652, 4 June 2014), the Supreme Court
held that when the delay is caused by inadvertence of the officer of the court, there can be
no ground of failure to prosecute, to wit:

To be sure, the dismissal of the case cannot be for respondent’s "failing to take any
step for further prosecution of this case" because the further step is not his, but for the
clerk of court, to take.

 However, in the case of Regner v. Logarta (G.R. No. 168747, 19 October 2007), the
Supreme Court ruled that the case should be dismissed for failure to prosecute despite the
fact that the cause of the delay was the inadvertence of the clerk of court to serve
summons to the respondents, to wit:

Although Section 1, Rule 14 of the Rules, imposes upon the clerk of court the duty to
serve summons, this does not relieve the petitioner of her own duty as the plaintiff in a civil
case to prosecute the case diligently. If the clerk had been negligent, it was petitioner's duty
to call the court's attention to that fact. It must be noted that it was not even petitioner who
called the court's attention that summons had not been served on Cynthia, but Teresa. This
despite the fact that petitioner was aware, as early as 15 June 1999, when she filed her complaint,
that the summonses could not be served on Teresa and Cynthia, as she admitted therein that
Teresa and Cynthia were residing abroad. Petitioner as plaintiff should have asked that Cynthia
and Teresa be summoned by publication at the earliest possible time. She cannot idly sit by and
wait till this is done. She cannot afterwards wash her hands and say that the delay was not
her fault. She cannot simply "fold [her] hands" and say that it is the duty of the clerk of
court to have the summonses served on Cynthia and Teresa for the prompt disposition of
her case. If there were no means of summoning any of the defendants, petitioner should
have so informed the court within a reasonable period of time, so that the case could be
disposed of one way or another and the administration of justice would not suffer delay.
The non-performance of that duty by petitioner as plaintiff is an express ground for
dismissing an action. For, indeed, this duty imposed upon her was precisely to spur on the
slothful.

For failure to diligently pursue the complaint, petitioner trifled with the right of the
respondents to speedy trial. It also sorely tried the patience of the court and wasted its precious
time and attention. To allow petitioner to wait until such time that summonses were served on
respondents would frustrate the protection against unreasonable delay in the prosecution of cases
and violate the constitutional mandate of speedy dispensation of justice which would in time
erode the people's confidence in the judiciary. We take a dim view of petitioner's complacent
attitude. Ex nihilo nihil fit.

Likewise, petitioner's counsel inexplicably failed to diligently pursue the service of

summonses on respondents. These were acts of negligence, laxity and truancy which the
court could have very easily avoided or timely remedied. Petitioner and her counsel could
not avail themselves of this Court's sympathy, considering their apparent complacency, if
not delinquency, in the conduct of their litigation.

Considering the foregoing, we sustain the dismissal by the trial court of the
petitioner's complaint for failure to prosecute for a period of more than one year (from the
time of filing thereof on 15 June 1997 until Teresa's filing of a motion to dismiss)

 A similar ruling was laid down by the Supreme Court in the case of Producers Bank v.
CA (G.R. No. 125468, 9 October 2000), to wit:
 Although Section 1, Rule 14 of the Rules, imposes upon the clerk of court the
duty to serve summons, this does not relieve the plaintiff of his own duty to
prosecute the case diligently. If the clerk had been negligent, it was plaintiff's duty
to call the court's attention to that fact. The non-performance of that duty by
plaintiff is an express ground for dismissing an action. If there were no means of
summoning any of the defendants, plaintiffs should have so informed the court and
moved for their exclusion from the complaint, within a reasonable period of time, so that
the case could be disposed of one way or another and the administration of justice would
not suffer delay. Plaintiffs should have asked that the defendants be summoned by
publication at the earliest possible time. In this case, it was not petitioner who called the
court's attention that summons had not been served on the other defendants, it was private
respondent Kho who did. The bank was aware, as early as June 7, 1989, after the first
order to serve summonses was issued, the summonses could not be served on the three
other defendants. It was already aware then that the corporation was already dissolved
and Lan Shing Chin and Shin May Wan were reportedly in Hongkong. It took more than
one year, before the bank acted and applied for service of summons by publication.

 In the case of Cruz v. CIR (G.R. No. L-18277. 31 August 1963), the inaction of the court
led the complainant to file several motions for reconsideration and thereafter a petition
for mandamus. The Supreme Court held in this wise:

Although as heretofore stated, this is an action for mandamus, prohibition and

certiorari, primarily to compel the respondent court to act on petitioner’s motion for
reconsideration of November 29, 1960, nevertheless, in view of the inaction of the court,
notwithstanding the repeated petitions to pass upon the motions in question which could be
interpreted as an insistence on or adherence to the judges’ respective previous runnings
and, therefore, a denial of the motion for reconsideration, and considering that we have
already before us all the records of the case, it is believed that the interest of justice would
be better subserved if the present petition would be treated as one for review.

 Conclusion: Inaction/delay by the CIAC and/or the RTC in the disposition of the instant
case, coupled with Plaintiff’s negligence to call out such inaction/delay is a possible
ground for dismissal due to failure to prosecute.