CHUNG FU

2. The parties mutually agree that the arbitration shall proceed in accordance with the following terms
and conditions: — x x x x x x x x x d. The parties mutually agree that they will abide by the decision of
the arbitrator including any amount that may be awarded to either party as compensation, consequential
damage and/or interest thereon; e. 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.
In practice nowadays, absent an agreement of the parties to resolve their disputes via a particular
mode, it is the regular courts that remain the fora to resolve such matters. However, the parties may
opt for recourse to third parties, exercising their basic freedom to "establish such stipulation, clauses,
terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good
customs, public order or public policy." 12 In such a case, resort to the arbitration process may be
spelled out by them in a contract in anticipation of disputes that may arise between them. Or this may
be stipulated in a submission agreement when they are actually confronted by a dispute. Whatever be
the case, such recourse to an extrajudicial means of settlement is not intended to completely deprive
the courts of jurisdiction.
, in the event that they declare their intention to refer their differences to arbitration first before taking
court action, this constitutes a condition precedent, such that where a suit has been instituted
prematurely, the court shall suspend the same and the parties shall be directed forthwith to proceed to
arbitration
, may the parties who agree to submit their disputes to arbitration further provide that the arbitrators'
award shall be final, unappealable and executory?
We rule in the negative. It is stated explicitly under Art. 2044 of the Civil Code that the finality of the
arbitrators' award is not absolute and without exceptions. Where the conditions described in Articles
2038, 2039 and 2040 applicable to both compromises and arbitrations are obtaining, the arbitrators'
award may be annulled or rescinded. 19 Additionally, under Sections 24 and 25 of the Arbitration Law,
there are grounds for vacating, modifying or rescinding an arbitrator's award. 20 Thus, if and when the
factual circumstances referred to in the above-cited provisions are present, judicial review of the award
is properly warranted.
What if courts refuse or neglect to inquire into the factual milieu of an arbitrator's award to determine
whether it is in accordance with law or within the scope of his authority? How may the power of judicial
review be invoked? This is where the proper remedy is certiorari under Rule 65 of the Revised Rules
of Court. It is to be borne in mind, however, that this action will lie only where a grave abuse of discretion
or an act without or in excess of jurisdiction on the part of the voluntary arbitrator is clearly shown. For
"the writ of certiorari is an extra-ordinary remedy and that certiorari jurisdiction is not to be equated with
appellate jurisdiction. In a special civil action of certiorari, the Court will not engage in a review of the
facts found nor even of the law as interpreted or applied by the arbitrator unless the supposed errors
of fact or of law are so patent and gross and prejudicial as to amount to a grave abuse of discretion or
an exces de pouvoir on the part of the arbitrator.
HI PRECISION CASE
Executive Order No. 1008, as amended, provides, in its Section 19, as follows: Sec. 19. Finality of
Awards. — The arbitral award shall be binding upon the parties. It shall be final and inappealable except
on questions of law which shall be appealable to the Supreme Court.
Executive Order No. 1008 created an arbitration facility to which the construction industry in the
Philippines can have recourse. The Executive Order was enacted to encourage the early and
expeditious settlement of disputes in the construction industry, a public policy the implementation of
which is necessary and important for the realization of national development goals. 21 Aware of the
objective of voluntary arbitration in the labor field, in the construction industry, and in any other area for
that matter, the Court will not assist one or the other or even both parties in any effort to subvert or
defeat that objective for their private purposes. The Court will not review the factual findings of an
arbitral tribunal upon the artful allegation that such body had "misapprehended the facts" and will not
pass upon issues which are, at bottom, issues of fact, no matter how cleverly disguised they might be
as "legal questions." The parties here had recourse to arbitration and chose the arbitrators themselves;
they must have had confidence in such arbitrators. The Court will not, therefore, permit the parties to
relitigate before it the issues of facts previously presented and argued before the Arbitral Tribunal, save
only where a very clear showing is made that, in reaching its factual conclusions, the Arbitral Tribunal
committed an error so egregious and hurtful to one party as to constitute a grave abuse of discretion
resulting in lack or loss of jurisdiction
What petitioner Hi-Precision, in its above argument, disregards is that the determination of whether Hi-
Precision or Steel Builders was the "injured party" is not to be resolved by an application of Article 1191.
That determination is eminently a question of fact, for it requires ascertainment and identification of
which the two (2) contending parties had first failed to comply with what is incumbent upon it. In other
words, the supposed misapplication of Article 1191, while ostensibly a "legal issue," is ultimately a
question of fact, i.e., the determination of the existence or non-existence of a fact or set of facts in
respect of which Article 1191 may be properly applied. Thus, to ask this Court to correct a claimed
misapplication or non-application of Article 1191 is to compel this Court to determine which of the two
(2) contending parties was the "injured party" or the "first infractor
A second "legal issue" sought to be raised by petitioner Hi-Precision relates to the supposed failure of
the Arbitral Tribunal to apply the doctrines of estoppel and waiver as against Steel Builders. 25 The
Arbitral Tribunal, after declaring that the parties were mutually at fault, proceeded to enumerate the
faults of each of the parties. One of the faults attributed to petitioner Hi-Precision is that it had failed to
give the contractor Steel Builders the required 15-day notice for termination of the contract. 26 This
was clearly a finding of fact on the part of the Tribunal, supported by the circumstance that per the
record, petitioner had offered no proof that it had complied with such 15-day notice required under
Article 28.01 of the General Conditions of Contract forming part of the Contract Documents. Petitioner
Hi-Precision's argument is that a written Agreement dated 16 November 1990 with Steel Builders
concerning the take over of the project by Hi-Precision, constituted waiver on the part of the latter of its
right to a 15-day notice of contract termination. Whether or not that Agreement dated 16 November
1990 (a document not submitted to this Court) is properly characterized as constituting waiver on the
part of Steel Builders, may be conceded to be prima facie a question of law; but, if it is, and assuming
arguendo that the Arbitral Tribunal had erred in resolving it, that error clearly did not constitute a grave
abuse of discretion resulting in lack or loss of jurisdiction on the part of the Tribunal. A third "legal issue"
posed by Hi-Precision relates to the supposed failure on the part of the Arbitral Tribunal "to uphold the
supremacy of 'the law between the parties' and enforce it against private respondent [Steel Builders]."
27 The "law between that parties" here involved is the "Technical Specifications" forming part of the
Contract Documents. Hi-Precision asserts that the Arbitral Tribunal did not uphold the "law between
the parties," but instead substituted the same with "its [own] absurd inference and 'opinion' on mud."
Here again, petitioner is merely disguising a factual question as a "legal issue," since petitioner is in
reality asking this Court to review the physical operations relating, e.g., to site preparation carried out
by the contractor Steel Builders and to determine whether such operations were in accordance with the
Technical Specifications of the project
We consider that in asking this Court to go over each individual claim submitted by it and each individual
countering claim submitted by Steel Builders to the Arbitral Tribunal, petitioner Hi-Precision is asking
this Court to pass upon claims which are either clearly and directly factual in nature or require previous
determination of factual issues. This upon the one hand. Upon the other hand, the Court considers that
petitioner Hi-Precision has failed to show any serious errors of law amounting to grave abuse of
discretion resulting in lack of jurisdiction on the part of the Arbitral Tribunal, in either the methods
employed or the results reached by the Arbitral Tribunal, in disposing of the detailed claims of the
respective parties.
BF CORPORATION
The basic issue in this petition for review on certiorari is whether or not the contract for the construction
of the EDSA Plaza between petitioner BF Corporation and respondent Shangri-la Properties, Inc.
embodies an arbitration clause in case of disagreement between the parties in the implementation of
contractual provisions
petitioner filed with the Regional Trial Court of Pasig a complaint for collection of the balance due under
the construction agreement
It appears from the said document that in the letter-agreement dated May 30, 1991 (Annex C,
Complaint), plaintiff BF and defendant Shangri-La Properties, Inc. agreed upon the terms and
conditions of the Builders Work for the EDSA Plaza Project (Phases I, II and Carpark), subject to the
execution by the parties of a formal trade contract. Defendants have submitted a copy of the alleged
trade contract, which is entitled "Contract Documents For Builder's Work Trade Contractor" dated 01
May 1991,
The said Articles of Agreement appears to have been duly signed by President Rufo B. Colayco of
Shangri-La Properties, Inc. and President Bayani F. Fernando of BF and their witnesses, and was
thereafter acknowledged before Notary Public Nilberto R. Briones of Makati, Metro Manila on
November 15, 1991. The said Articles of Agreement also provides that the "Contract Documents"
therein listed "shall be deemed an integral part of this Agreement", and one of the said documents is
the "Conditions of Contract" which contains the Arbitration Clause relied upon by the defendants in their
Motion to Suspend Proceedings.
it is significant to note further that the said "Conditions of Contract" is not duly signed by the parties on
any page thereof — although it bears the initials of BF's representatives (Bayani F. Fernando and
Reynaldo M. de la Cruz) without the initials thereon of any representative of Shangri-La Properties, Inc.
Considering the insistence of the plaintiff that the said Conditions of Contract was not duly executed or
signed by the parties, and the failure of the defendants to submit any signed copy of the said document,
this Court entertains serious doubt whether or not the arbitration clause found in the said Conditions of
Contract is binding upon the parties to the Articles of Agreement."
SPI filed a petition for certiorari under Rule 65 of the Rules of Court before the Court of Appeals. Said
appellate court granted the petition, annulled and set aside the orders and stayed the proceedings in
the lower cour
. The notarized copy of the articles of agreement attached as Annex A to petitioners' reply dated August
26, 1993, has been submitted by them to the respondent Court (Annex G, petition). It bears the
signature of petitioner Rufo B. Colayco, president of petitioner Shangri-La Properties, Inc., and of
Bayani Fernando, president of respondent Corporation (Annex G-1, petition). At page D/4 of said
articles of agreement it is expressly provided that the conditions of contract are "deemed an integral
part" thereof
The fact that said conditions of contract containing the arbitration clause bear only the initials of
respondent Corporation's representatives, Bayani Fernando and Reynaldo de la Cruz, without that of
the representative of petitioner Shangri-La Properties, Inc. does not militate against its effectivity. Said
petitioner having categorically admitted that the document, Annex A to its reply dated August 26, 1993
(Annex G, petition), is the agreement between the parties, the initial or signature of said petitioner's
representative to signify conformity to arbitration is no longer necessary. The parties, therefore, should
be allowed to submit their dispute to arbitration in accordance with their agreement.
r. The demand for arbitration shall be made within a reasonable time after the dispute has arisen and
attempts to settle amicably had failed; in no case, however, shall the demand be made later than the
time of final payment except as otherwise expressly stipulated in the contract
The formal requirements of an agreement to arbitrate are therefore the following: (a) it must be in writing
and (b) it must be subscribed by the parties or their representatives. There is no denying that the parties
entered into a written contract that was submitted in evidence before the lower court. To "subscribe"
means to write underneath, as one's name; to sign at the end of a document. 11 That word may
sometimes be construed to mean to give consent to or to attest.12
The Court finds that, upon a scrutiny of the records of this case, these requisites were complied with
in the contract in question. The Articles of Agreement, which incorporates all the other contracts and
agreements between the parties, was signed by representatives of both parties and duly notarized. The
failure of the private respondent's representative to initial the "Conditions of Contract" would therefor
not affect compliance with the formal requirements for arbitration agreements because that particular
portion of the covenants between the parties was included by reference in the Articles of Agreement.
Petitioner's contention that there was no arbitration clause because the contract incorporating said
provision is part of a "hodge-podge" document, is therefore untenable. A contract need not be contained
in a single writing. It may be collected from several different writings which do not conflict with each
other and which, when connected, show the parties, subject matter, terms and consideration, as in
contracts entered into by correspondence. 13 A contract may be encompassed in several instruments
even though every instrument is not signed by the parties, since it is sufficient if the unsigned
instruments are clearly identified or referred to and made part of the signed instrument or instruments.
Similarly, a written agreement of which there are two copies, one signed by each of the parties, is
binding on both to the same extent as though there had been only one copy of the agreement and both
had signed it
. Notably, too, the lower court found that the said Articles of Agreement "also provides that the 'Contract
Documents' therein listed 'shall be deemed an integral part of this Agreement,' and one of the said
documents is the 'Conditions of Contract' which contains the Arbitration Clause.'" It is this Articles of
Agreement that was duly signed by Rufo B. Colayco, president of private respondent SPI, and Bayani
F. Fernando, president of petitioner corporation. The same agreement was duly subscribed before
notary public Nilberto R. Briones. In other words, the subscription of the principal agreement effectively
covered the other documents incorporated by reference therein.
The arbitration clause provides for a "reasonable time" within which the parties may avail of the relief
under that clause. "Reasonableness" is a relative term and the question of whether the time within
which an act has to be done is reasonable depends on attendant circumstances. 15 This Court finds
that under the circumstances obtaining in this case, a one-month period from the time the parties held
a conference on July 12, 1993 until private respondent SPI notified petitioner that it was invoking the
arbitration clause, is a reasonable time
In this connection, it bears stressing that the lower court has not lost its jurisdiction over the case.
Section 7 of Republic Act No. 876 provides that proceedings therein have only been stayed. After the
special proceeding of arbitration 16 has been pursued and completed, then the lower court may confirm
the award 17 made by the arbitrator
PHILROCK CASE
In sum, petitioner imputes reversible error to the CA (1) for upholding the jurisdiction of the CIAC after
the latter had dismissed the case and referred it to the regular court, (2) for ruling that respondent
spouses had a cause of action against petitioner, and (3) for sustaining the award of damages.
Petitioner avers that the CIAC lost jurisdiction over the arbitration case after both parties had withdrawn
their consent to arbitrate.
We disagree. Section 4 of Executive Order 1008 expressly vests in the CIAC original and exclusive
jurisdiction over disputes arising from or connected with construction contracts entered into by parties
that have agreed to submit their dispute to voluntary arbitration.8 It is undisputed that the parties
submitted themselves to the jurisdiction of the Commission by virtue of their Agreement to Arbitrate
private respondents removed the obstacle to the continuation of the arbitration, precisely by
withdrawing their objection to the exclusion of the seven engineers. Second, petitioner continued
participating in the arbitration even after the CIAC Order had been issued. It even concluded and signed
the Terms of Reference10 on August 21, 1995, in which the parties stipulated the circumstances
leading to the dispute; summarized their respective positions, issues, and claims; and identified the
composition of the tribunal of arbitrators. The document clearly confirms both parties’ intention and
agreement to submit the dispute to voluntary arbitration. In view of this fact, we fail to see how the CIAC
could have been divested of its jurisdiction
After submitting itself to arbitration proceedings and actively participating therein, petitioner is estopped
from assailing the jurisdiction of the CIAC, merely because the latter rendered an adverse decision
. As pointed out earlier, factual findings of quasi-judicial bodies that have acquired expertise are
generally accorded great respect and even finality, if they are supported by substantial evidence.15
The Court, however, has consistently held that despite statutory provisions making the decisions of
certain administrative agencies "final," it still takes cognizance of petitions showing want of jurisdiction,
grave abuse of discretion, violation of due process, denial of substantial justice or erroneous
interpretation of the law.16 Voluntary arbitrators, by the nature of their functions, act in a quasi-judicial
capacity, such that their decisions are within the scope of judicial review.
LM POWER
Alternative dispute resolution methods or ADRs -- like arbitration, mediation, negotiation and
conciliation -- are encouraged by the Supreme Court. By enabling parties to resolve their disputes
amicably, they provide solutions that are less time-consuming, less tedious, less confrontational, and
more productive of goodwill and lasting relationships
Petitioner claims that there is no conflict regarding the interpretation or the implementation of the
Agreement. Thus, without having to resort to prior arbitration, it is entitled to collect the value of the
services it rendered through an ordinary action for the collection of a sum of money from respondent.
On the other hand, the latter contends that there is a need for prior arbitration as provided in the
Agreement. This is because there are some disparities between the parties positions regarding the
extent of the work done, the amount of advances and billable accomplishments, and the set off of
expenses incurred by respondent in its take-over of petitioners work. We side with respondent.
Essentially, the dispute arose from the parties ncongruent positions on whether certain provisions of
their Agreement could be applied to the facts. The instant case involves technical discrepancies that
are better left to an arbitral body that has expertise in those areas. In any event, the inclusion of an
arbitration clause in a contract does not ipso facto divest the courts of jurisdiction to pass upon the
findings of arbitral bodies, because the awards are still judicially reviewable under certain conditions.
Clearly, the resolution of the dispute between the parties herein requires a referral to the provisions of
their Agreement. Within the scope of the arbitration clause are discrepancies as to the amount of
advances and billable accomplishments, the application of the provision on termination, and the
consequent set-off of expenses.
Consistent with the above-mentioned policy of encouraging alternative dispute resolution methods,
courts should liberally construe arbitration clauses. Provided such clause is susceptible of an
interpretation that covers the asserted dispute, an order to arbitrate should be granted.28 Any doubt
should be resolved in favor of arbitration
Section 1 of Article III of the new Rules of Procedure Governing Construction Arbitration has dispensed
with this requirement and recourse to the CIAC may now be availed of whenever a contract "contains
a clause for the submission of a future controversy to arbitration," in this wise: "SECTION 1. Submission
to CIAC Jurisdiction An arbitration clause in a construction contract or a submission to arbitration of a
construction dispute shall be deemed an agreement to submit an existing or future controversy to CIAC
jurisdiction, notwithstanding the reference to a different arbitration institution or arbitral body in such
contract or submission. When a contract contains a clause for the submission of a future controversy
to arbitration, it is not necessary for the parties to enter into a submission agreement before the claimant
may invoke the jurisdiction of CIAC."
the law as it now stands does not provide that the parties should agree to submit disputes arising from
their agreement specifically to the CIAC for the latter to acquire jurisdiction over the same. Rather, it is
plain and clear that as long as the parties agree to submit to voluntary arbitration, regardless of what
forum they may choose, their agreement will fall within the jurisdiction of the CIAC, such that, even if
they specifically choose another forum, the parties will not be precluded from electing to submit their
dispute before the CIAC because this right has been vested upon each party by law, i.e., E.O. No.
1008."34
Clearly, there is no more need to file a request with the CIAC in order to vest it with jurisdiction to decide
a construction dispute. The arbitral clause in the Agreement is a commitment on the part of the parties
to submit to arbitration the disputes covered therein. Because that clause is binding, they are expected
to abide by it in good faith.35 And because it covers the dispute between the parties in the present
case, either of them may compel the other to arbitrate.36
Since petitioner has already filed a Complaint with the RTC without prior recourse to arbitration, the
proper procedure to enable the CIAC to decide on the dispute is to request the stay or suspension of
such action, as provided under RA 876
RCBC
petitioner argued that the court a quo had no authority to compel the parties in Civil Case No. 99-518
to enter into an amicable settlement nor to deny the holding of a pre-trial conference on the ground that
no compromise agreement was turned over to the court a quo
Since there is nothing in the Rules that imposes the sanction of dismissal for failing to submit a
compromise agreement, then it is obvious that the dismissal of the complaint on the basis thereof
amounts no less to a gross procedural infirmity assailable by certiorari. For such submission could at
most be directory and could not result in throwing out the case for failure to effect a compromise. While
a compromise is encouraged, very strongly in fact, failure to consummate one does not warrant any
procedural sanction, much less an authority to jettison a civil complaint worth P4,000,000.00 x x x
Plainly, submission of a compromise agreement is never mandatory, nor is it required by any rule
the proper course of action that should have been taken by the court a quo, upon manifestation of the
parties of their willingness to discuss a settlement, was to suspend the proceedings and allow them
reasonable time to come to terms (a) If willingness to discuss a possible compromise is expressed by
one or both parties; or (b) If it appears that one of the parties, before the commencement of the action
or proceeding, offered to discuss a possible compromise but the other party refused the offer, pursuant
to Art. 2030 of the Civil Code. If despite efforts exerted by the trial court and the parties the negotiations
still fail, only then should the action continue as if no suspension had taken place
JORGE GONZALES CASE
Does the Panel of Arbitrators have jurisdiction over the complaint for declaration of nullity and/or
termination of the subject contracts on the ground of fraud, oppression and violation of the Constitution?
A judicial question is a question that is proper for determination by the courts, as opposed to a moot
question or one properly decided by the executive or legislative branch.18 A judicial question is raised
when the determination of the question involves the exercise of a judicial function; that is, the question
involves the determination of what the law is and what the legal rights of the parties are with respect to
the matter in controversy.
On the other hand, a mining dispute is a dispute involving (a) rights to mining areas, (b) mineral
agreements, FTAAs, or permits, and (c) surface owners, occupants and
claimholders/concessionaires.20 Under Republic Act No. 7942 (otherwise known as the Philippine
Mining Act of 1995), the Panel of Arbitrators has exclusive and original jurisdiction to hear and decide
these mining disputes.21 The Court of Appeals, in its questioned decision, correctly stated that the
Panel’s jurisdiction is limited only to those mining disputes which raise questions of fact or matters
requiring the application of technological knowledge and experience.
However, whether the case involves void or voidable contracts is still a judicial question. It may, in some
instances, involve questions of fact especially with regard to the determination of the circumstances of
the execution of the contracts. But the resolution of the validity or voidness of the contracts remains a
legal or judicial question as it requires the exercise of judicial function. It requires the ascertainment of
what laws are applicable to the dispute, the interpretation and application of those laws, and the
rendering of a judgment based thereon. Clearly, the dispute is not a mining conflict. It is essentially
judicial. The complaint was not merely for the determination of rights under the mining contracts since
the very validity of those contracts is put in issue. The Complaint is not about a dispute involving rights
to mining areas, nor is it a dispute involving claimholders or concessionaires. The main question raised
was the validity of the Addendum Contract, the FTAA and the subsequent contracts. The question as
to the rights of petitioner or respondents to the mining area pursuant to these contracts, as well as the
question of whether or not petitioner had ceded his mining claims in favor of respondents by way of
execution of the questioned contracts, is merely corollary to the main issue, and may not be resolved
without first determining the main issue.
The Complaint is also not what is contemplated by Rep. Act No. 7942 when it says the dispute should
involve FTAAs. The Complaint is not exclusively within the jurisdiction of the Panel of Arbitrators just
because, or for as long as, the dispute involves an FTAA. The Complaint raised the issue of the
constitutionality of the FTAA, which is definitely a judicial question. The question of constitutionality is
exclusively within the jurisdiction of the courts to resolve as this would clearly involve the exercise of
judicial power. The Panel of Arbitrators does not have jurisdiction over such an issue since it does not
involve the application of technical knowledge and expertise relating to mining
Arbitration before the Panel of Arbitrators is proper only when there is a disagreement between the
parties as to some provisions of the contract between them, which needs the interpretation and the
application of that particular knowledge and expertise possessed by members of that Panel. It is not
proper when one of the parties repudiates the existence or validity of such contract or agreement on
the ground of fraud or oppression as in this case. The validity of the contract cannot be subject of
arbitration proceedings. Allegations of fraud and duress in the execution of a contract are matters within
the jurisdiction of the ordinary courts of law. These questions are legal in nature and require the
application and interpretation of laws and jurisprudence which is necessarily a judicial function.
TRANSFIELD
The Court agrees with TPI that it would be ineffectual to ask the ICC to issue writs of preliminary
injunction against Security Bank and ANZ Bank since these banks are not parties to the arbitration
case, and that the ICC Arbitral tribunal would not even be able to compel LHC to obey any writ of
preliminary injunction issued from its end.16 Civil Case No. 04-322, on the other hand, logically involves
TPI and LHC only, they being the parties to the arbitration agreement whose partial award is sought to
be enforced.
As a fundamental point, the pendency of arbitral proceedings does not foreclose resort to the courts for
provisional reliefs. The Rules of the ICC, which governs the parties’ arbitral dispute, allows the
application of a party to a judicial authority for interim or conservatory measures.17 Likewise, Section
14 of Republic Act (R.A.) No. 876 (The Arbitration Law)18 recognizes the rights of any party to petition
the court to take measures to safeguard and/or conserve any matter which is the subject of the dispute
in arbitration. In addition, R.A. 9285, otherwise known as the "Alternative Dispute Resolution Act of
2004," allows the filing of provisional or interim measures with the regular courts whenever the arbitral
tribunal has no power to act or to act effectively
UNIWIDE
As a rule, findings of fact of administrative agencies and quasi-judicial bodies, which have acquired
expertise because their jurisdiction is confined to specific matters, are generally accorded not only
respect, but also finality, especially when affirmed by the Court of Appeals.16 In particular, factual
findings of construction arbitrators are final and conclusive and not reviewable by this Court on
appeal.17
This rule, however admits of certain exceptions. In David v. Construction Industry and Arbitration
Commission,18 we ruled that, as exceptions, factual findings of construction arbitrators may be
reviewed by this Court when the petitioner proves affirmatively that: (1) the award was procured by
corruption, fraud or other undue means; (2) there was evident partiality or corruption of the arbitrators
or of any of them; (3) the arbitrators were guilty of misconduct in refusing to hear evidence pertinent
and material to the controversy; (4) one or more of the arbitrators were disqualified to act as such under
Section nine of Republic Act No. 876 and willfully refrained from disclosing such disqualifications or of
any other misbehavior by which the rights of any party have been materially prejudiced; or (5) the
arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite
award upon the subject matter submitted to them was not made.19
Other recognized exceptions are as follows: (1) when there is a very clear showing of grave abuse of
discretion20 resulting in lack or loss of jurisdiction as when a party was deprived of a fair opportunity to
present its position before the Arbitral Tribunal or when an award is obtained through fraud or the
corruption of arbitrators,21 (2) when the findings of the Court of Appeals are contrary to those of the
CIAC,22 and (3) when a party is deprived of administrative due process
. Clearly, Art. 1724 denies, as a matter of right, payment to the contractor for additional works which
were not authorized in writing by the proprietor, and the additional price of which was not determined
in writing by the parties. Yet the distinction pointed out by the Court of Appeals is material. The issue
is no longer centered on the right of the contractor to demand payment for additional works undertaken
because payment, whether mistaken or not, was already made by Uniwide. Thus, it would not anymore
be incumbent on Titan to establish that it had the right to demand or receive such payment.
But, even if the Court accepts Art. 1724 as applicable in this case, such recognition does not ipso facto
accord Uniwide the right to be reimbursed for payments already made, since Art. 1724 does not effect
such right of reimbursement. It has to be understood that Art. 1724 does not preclude the payment to
the contractor who performs additional works without any prior written authorization or agreement as
to the price for such works if the owner decides anyway to make such payment. What the provision
does preclude is the right of the contractor to insist upon payment for unauthorized additional works.
Accordingly, Uniwide, as the owner who did pay the contractor for such additional works even if they
had not been authorized in writing, has to establish its own right to reimbursement not under Art. 1724,
but under a different provision of law. Uniwide's burden of establishing its legal right to reimbursement
becomes even more crucial in the light of the general presumption contained in Section 3(f), Rule 131
of the Rules of Court that "money paid by one to another was due to the latter." Uniwide undertakes
such a task before this Court, citing the provisions on solutio indebiti under Arts. 2154 and 2156 of the
Civil Code. However, it is not enough to prove that the payments made by Uniwide to Titan were "not
due" because there was no prior authorization or agreement with respect to additional works. There is
a further requirement that the payment by the debtor was made either through mistake or under a cloud
of doubt. In short, for the provisions on solutio indebiti to apply, there has to be evidence establishing
the frame of mind of the payor at the time the payment was made.32
The CIAC refused to acknowledge that the additional works on Project 1 were indeed unauthorized by
Uniwide. Neither did the Court of Appeals arrive at a contrary determination. There would thus be some
difficulty for this Court to agree with this most basic premise submitted by Uniwide that it did not
authorize the additional works on Project 1 undertaken by Titan. Still, Uniwide does cite testimonial
evidence from the record alluding to a concession by employees of Titan that these additional works
on Project 1 were either authorized or documented.33 Yet even conceding that the additional works on
Project 1 were not authorized or committed into writing, the undisputed fact remains that Uniwide paid
for these additional works.
Thus, to claim a refund of payments made under the principle of solutio indebiti, Uniwide must be able
to establish that these payments were made through mistake. Again, this is a factual matter that would
have acquired a mantle of invulnerability had it been determined by both the CIAC and the Court of
Appeals. However, both bodies failed to arrive at such a conclusion.
Moreover, Uniwide is unable to direct our attention to any pertinent part of the record that would indeed
establish that the payments were made by reason of mistake. We note that Uniwide alleged in its
petition that the CIAC award in favor of Titan in the amount P5,158,364.63 as the unpaid balance in
Project 3 included claims for additional works of P1,087,214.18 for which no written authorization was
presented. Unfortunately, this issue was not included in its memorandum as one of the issues submitted
for the resolution of the Court.
As an arbitration body, the CIAC can only resolve issues brought before it by the parties through the
TOR which functions similarly as a pre-trial brief. Thus, if Uniwide's claim for liquidated damages was
not raised as an issue in the TOR or in any modified or amended version of it, the CIAC cannot make
a ruling on it. The Rules of Court cannot be used to contravene the spirit of the CIAC rules, whose
policy and objective is to "provide a fair and expeditious settlement of construction disputes through a
non-judicial process which ensures harmonious and friendly relations between or among the parties
KOREA TECH
where the interlocutory order was issued without or in excess of jurisdiction or with grave abuse of
discretion, the remedy is certiorari.29 The alleged grave abuse of discretion of the respondent court
equivalent to lack of jurisdiction in the issuance of the two assailed orders coupled with the fact that
there is no plain, speedy, and adequate remedy in the ordinary course of law amply provides the basis
for allowing the resort to a petition for certiorari under Rule 65.
the core issue of the validity of Art. 15 of the Contract, the arbitration clause. It provides: Article 15.
Arbitration.—All disputes, controversies, or differences which may arise between the parties, out of or
in relation to or in connection with this Contract or for the breach thereof, shall finally be settled by
arbitration in Seoul, Korea in accordance with the Commercial Arbitration Rules of the Korean
Commercial Arbitration Board. The award rendered by the arbitration(s) shall be final and binding upon
both parties concerned
The arbitration clause which stipulates that the arbitration must be done in Seoul, Korea in accordance
with the Commercial Arbitration Rules of the KCAB, and that the arbitral award is final and binding, is
not contrary to public policy.
Foreign arbitral awards while mutually stipulated by the parties in the arbitration clause to be final and
binding are not immediately enforceable or cannot be implemented immediately. Sec. 3543 of the
UNCITRAL Model Law stipulates the requirement for the arbitral award to be recognized by a
competent court for enforcement, which court under Sec. 36 of the UNCITRAL Model Law may refuse
recognition or enforcement on the grounds provided for
A foreign arbitral award, when confirmed by the Regional Trial Court, shall be enforced in the same
manner as final and executory decisions of courts of law of the Philippines. It is now clear that foreign
arbitral awards when confirmed by the RTC are deemed not as a judgment of a foreign court but as a
foreign arbitral award, and when confirmed, are enforced as final and executory decisions of our courts
of law. Thus, it can be gleaned that the concept of a final and binding arbitral award is similar to
judgments or awards given by some of our quasi-judicial bodies, like the National Labor Relations
Commission and Mines Adjudication Board, whose final judgments are stipulated to be final and
binding, but not immediately executory in the sense that they may still be judicially reviewed, upon the
instance of any party. Therefore, the final foreign arbitral awards are similarly situated in that they need
first to be confirmed by the RTC.
Thus, while the RTC does not have jurisdiction over disputes governed by arbitration mutually agreed
upon by the parties, still the foreign arbitral award is subject to judicial review by the RTC which can
set aside, reject, or vacate it. In this sense, what this Court held in Chung Fu Industries (Phils.), Inc.
relied upon by KOGIES is applicable insofar as the foreign arbitral awards, while final and binding, do
not oust courts of jurisdiction since these arbitral awards are not absolute and without exceptions as
they are still judicially reviewable. Chapter 7 of RA 9285 has made it clear that all arbitral awards,
whether domestic or foreign, are subject to judicial review on specific grounds provided for.
Grounds for judicial review different in domestic and foreign arbitral awards
The differences between a final arbitral award from an international or foreign arbitral tribunal and an
award given by a local arbitral tribunal are the specific grounds or conditions that vest jurisdiction over
our courts to review the awards.
For foreign or international arbitral awards which must first be confirmed by the RTC, the grounds for
setting aside, rejecting or vacating the award by the RTC are provided under Art. 34(2) of the
UNCITRAL Model Law.
For final domestic arbitral awards, which also need confirmation by the RTC pursuant to Sec. 23 of RA
87644 and shall be recognized as final and executory decisions of the RTC,45 they may only be
assailed before the RTC and vacated on the grounds provided under Sec. 25 of RA 876.46
RTC decision of assailed foreign arbitral award appealable
Sec. 46 of RA 9285 provides for an appeal before the CA as the remedy of an aggrieved party in cases
where the RTC sets aside, rejects, vacates, modifies, or corrects an arbitral award, thus: SEC. 46.
Appeal from Court Decision or Arbitral Awards.—A decision of the Regional Trial Court confirming,
vacating, setting aside, modifying or correcting an arbitral award may be appealed to the Court of
Appeals in accordance with the rules and procedure to be promulgated by the Supreme Court.
The losing party who appeals from the judgment of the court confirming an arbitral award shall be
required by the appellate court to post a counterbond executed in favor of the prevailing party equal to
the amount of the award in accordance with the rules to be promulgated by the Supreme Court.
Thereafter, the CA decision may further be appealed or reviewed before this Court through a petition
for review under Rule 45 of the Rules of Court.
ABSCBN CASE
The issue before us is whether or not an aggrieved party in a voluntary arbitration dispute may avail of,
directly in the CA, a petition for review under Rule 43 or a petition for certiorari under Rule 65 of the
Rules of Court, instead of filing a petition to vacate the award in the RTC when the grounds invoked to
overturn the arbitrator’s decision are other than those for a petition to vacate an arbitral award
enumerated under RA 876
Section 24 of RA 876 provides for the specific grounds for a petition to vacate an award made by an
arbitrator:
Sec. 24. Grounds for vacating award. - In any one of the following cases, the court must make an order
vacating the award upon the petition of any party to the controversy when such party proves
affirmatively that in the arbitration proceedings: (a) The award was procured by corruption, fraud, or
other undue means; or (b) That there was evident partiality or corruption in the arbitrators or any of
them; or (c) That the arbitrators were guilty of misconduct in refusing to postpone the hearing upon
sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; that
one or more of the arbitrators was disqualified to act as such under section nine hereof, and willfully
refrained from disclosing such disqualifications or of any other misbehavior by which the rights of any
party have been materially prejudiced; or (d) That the arbitrators exceeded their powers, or so
imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted to
them was not made. Based on the foregoing provisions, the law itself clearly provides that the RTC
must issue an order vacating an arbitral award only "in any one of the . . . cases" enumerated therein.
. As RA 876 did not expressly provide for errors of fact and/or law and grave abuse of discretion (proper
grounds for a petition for review under Rule 43 and a petition for certiorari under Rule 65, respectively)
as grounds for maintaining a petition to vacate an arbitral award in the RTC, it necessarily follows that
a party may not avail of the latter remedy on the grounds of errors of fact and/or law or grave abuse of
discretion to overturn an arbitral award
Proper issues that may be raised in a petition for review under Rule 43 pertain to errors of fact, law or
mixed questions of fact and law.21 While a petition for certiorari under Rule 65 should only limit itself
to errors of jurisdiction, that is, grave abuse of discretion amounting to a lack or excess of jurisdiction.22
Moreover, it cannot be availed of where appeal is the proper remedy or as a substitute for a lapsed
appeal.
A careful reading of the assigned errors reveals that the real issues calling for the CA's resolution were
less the alleged grave abuse of discretion exercised by the arbitrator and more about the arbitrator’s
appreciation of the issues and evidence presented by the parties. Therefore, the issues clearly fall
under the classification of errors of fact and law — questions which may be passed upon by the CA via
a petition for review under Rule 43. Petitioner cleverly crafted its assignment of errors in such a way as
to straddle both judicial remedies, that is, by alleging serious errors of fact and law (in which case a
petition for review under Rule 43 would be proper) and grave abuse of discretion (because of which a
petition for certiorari under Rule 65 would be permissible). It must be emphasized that every lawyer
should be familiar with the distinctions between the two remedies for it is not the duty of the courts to
determine under which rule the petition should fall.24 Petitioner's ploy was fatal to its cause. An appeal
taken either to this Court or the CA by the wrong or inappropriate mode shall be dismissed.25 Thus,
the alternative petition filed in the CA, being an inappropriate mode of appeal, should have been
dismissed outright by the CA.
HEUNGHWA CASE
As a general rule, a petition for certiorari before a higher court will not prosper unless the inferior court
has been given, through a motion for reconsideration, a chance to correct the errors imputed to it. This
rule, though, has certain exceptions: (1) when the issue raised is purely of law, (2) when public interest
is involved, or (3) in case of urgency. As a fourth exception, it has been held that the filing of a motion
for reconsideration before availment of the remedy of certiorari is not a condition sine qua non when
the questions raised are the same as those that have already been squarely argued and exhaustively
passed upon by the lower court.39
The Court agrees with petitioner that the main issue of the petition for certiorari filed before the CA
undoubtedly involved a question of jurisdiction as to which between the RTC and the CIAC had authority
to hear the case. Whether the subject matter falls within the exclusive jurisdiction of a quasi-judicial
agency is a question of law.40 Thus, given the circumstances present in the case at bar, the non-filing
of a motion for reconsideration by petitioner to the CIAC Order should have been recognized as an
exception to the rule
As a general rule, an order denying a motion to dismiss cannot be the subject of a petition for certiorari.
However, this Court has provided exceptions thereto: Under certain situations, recourse to certiorari or
mandamus is considered appropriate, i.e., (a) when the trial court issued the order without or in excess
of jurisdiction; (b) where there is patent grave abuse of discretion by the trial court; or (c) appeal would
not prove to be a speedy and adequate remedy as when appeal would not promptly relieve a defendant
from the injurious effects of the patently mistaken order maintaining the plaintiff's baseless action and
compelling the defendant needlessly to go through a protracted trial and clogging the court dockets by
another futile case
Based on the foregoing, there are two acts which may vest the CIAC with jurisdiction over a construction
dispute. One is the presence of an arbitration clause in a construction contract, and the other is the
agreement by the parties to submit the dispute to the CIAC.
The first act is applicable to the case at bar. The bare fact that the parties incorporated an arbitration
clause in their contract is sufficient to vest the CIAC with jurisdiction over any construction controversy
or claim between the parties. The rule is explicit that the CIAC has jurisdiction notwithstanding any
reference made to another arbitral body. It is well-settled that jurisdiction is conferred by law and cannot
be waived by agreement or acts of the parties. Thus, the contention of petitioner that it never authorized
its lawyer to submit the case for arbitration must likewise fail. Petitioner argues that notwithstanding the
presence of an arbitration clause, there must be a subsequent consent by the parties to submit the
case for arbitration. To stress, the CIAC was already vested with jurisdiction the moment both parties
agreed to incorporate an arbitration clause in the sub-contract agreement. Thus, a subsequent consent
by the parties would be superfluous and unnecessary.
s, the CIAC did not commit any patent grave abuse of discretion, nor did it act without jurisdiction when
it issued the assailed Order denying petitioner's motion to dismiss. Accordingly, there is no compelling
reason for this Court to deviate from the rule that a denial of a motion to dismiss, absent a showing of
lack of jurisdiction or grave abuse of discretion amounting to lack of or excess jurisdiction, being an
interlocutory order, is not the proper subject of a petition for certiorari.
HUTAMA RSEA
Based on the foregoing provisions, the CIAC shall have jurisdiction over a dispute involving a
construction contract if said contract contains an arbitration clause (nothwithstanding any reference by
the same contract to another arbitration institution or arbitral body); or, even in the absence of such a
clause in the construction contract, the parties still agree to submit their dispute to arbitration.
It is undisputed that in the case at bar, the EPCC contains an arbitration clause in which the petitioner
and respondent explicitly agree to submit to arbitration any dispute between them arising from or
connected with the EPCC
It is true that Clause 20.4 of the EPCC states that a dispute between petitioner and respondent as
regards the EPCC shall be initially referred to the DAB for decision, and only when the parties are
dissatisfied with the decision of the DAB should arbitration commence. This does not mean, however,
that the CIAC is barred from assuming jurisdiction over the dispute if such clause was not complied
with. Under Section 1, Article III of the CIAC Rules, an arbitration clause in a construction contract shall
be deemed as an agreement to submit an existing or future controversy to CIAC jurisdiction,
"notwithstanding the reference to a different arbitration institution or arbitral body in such contract
Hence, the bare fact that the parties herein incorporated an arbitration clause in the EPCC is sufficient
to vest the CIAC with jurisdiction over any construction controversy or claim between the parties.23
The arbitration clause in the construction contract ipso facto vested the CIAC with jurisdiction.24 This
rule applies, regardless of whether the parties specifically choose another forum or make reference to
another arbitral body.25 Since the jurisdiction of CIAC is conferred by law, it cannot be subjected to
any condition; nor can it be waived or diminished by the stipulation, act or omission of the parties, as
long as the parties agreed to submit their construction contract dispute to arbitration, or if there is an
arbitration clause in the construction contract.26 The parties will not be precluded from electing to
submit their dispute to CIAC, because this right has been vested in each party by law
the mere existence of an arbitration clause in the construction contract is considered by law as an
agreement by the parties to submit existing or future controversies between them to CIAC jurisdiction,
without any qualification or condition precedent. To affirm a condition precedent in the construction
contract, which would effectively suspend the jurisdiction of the CIAC until compliance therewith, would
be in conflict with the recognized intention of the law and rules to automatically vest CIAC with
jurisdiction over a dispute should the construction contract contain an arbitration clause
A ruling requiring the parties to still appoint a DAB, to which they should first refer their dispute before
the same could be submitted to the CIAC, would merely be circuitous and dilatory at this point. It would
entail unnecessary delays and expenses on both parties, which Executive Order No. 1008 precisely
seeks to prevent. It would, indeed, defeat the purpose for which the CIAC was created
UY
But like his claim for additional cost of topsoil, such additional expenses were incurred without prior
written approval of PEA’s general manager. Thus, he cannot claim payment for such cost from PEA
Neither can we hold PEA liable based on solutio indebiti, the legal maxim that no one should enrich
itself at the expense of another. As we explained in Powton Conglomerate, Inc. v. Agcolicol,35 the
principle of unjust enrichment cannot be validly invoked by the respondent who, through his own act or
omission, took the risk of being denied payment for additional costs by not giving the petitioners prior
notice of such costs and/or by not securing their written consent thereto, as required by law and their
contract.1avvphi1 Uy cannot, therefore, claim from PEA the costs of the additional hauling distance of
topsoil, and of the mobilization of water trucks.
POSITOS
In all the above instances where the judgment or final order is not appealable, the aggrieved party may
file an appropriate special civil action under Rule 65. (italics in the original, emphasis and underscoring
supplied)
Since the present petition prays for the modification of the appellate court’s decision, this Court cannot
treat it as one for certiorari, petitioner’s allegations therein not being constitutive of grave abuse of
discretion amounting to lack or excess of jurisdiction.
Procedural faux pas aside, the petition just the same fails. As reflected above, respondent’s complaint
was dismissed for failure to comply with the conciliation process. Noncompliance affected the
sufficiency of his cause of action and rendered the complaint susceptible, as in fact it resulted to
dismissal on the ground of prematurity. A dismissal without prejudice does not operate as a judgment
on the merits, for there is no unequivocal determination of the rights and obligations of the parties with
respect to the cause of action and subject matter thereof.
En passant, petitioner’s claim of dispossession during the pendency of her appeal, which claim is
disputed by respondent, is a question of fact which is not a proper subject for this Court to decide, the
general rule being that only questions of law can be raised before it. Petitioner has not, however,
presented convincing circumstances to take her case out from the general rule
DFA AND BSP
To be very clear, the present decision touches only on the twin issues of (a) the jurisdiction of the trial
court to issue a writ of preliminary injunction as an interim relief under the factual milieu of this case;
and (b) the entitlement of BCA to injunctive relief. The merits of the DFA and BCA’s dispute regarding
the termination of the Amended BOT Agreement must be threshed out in the proper arbitration
proceedings.
The civil case pending before the trial court is purely for the grant of interim relief since the main case
is to be the subject of arbitration proceedings. BCA’s petition for interim relief before the trial court is
essentially a petition for a provisional remedy (i.e., preliminary injunction) ancillary to its Request for
Arbitration in PDRCI Case No. 30-2006/BGF.
BCA specifically prayed that the trial court grant it interim relief pending the constitution of the arbitral
tribunal in the said PDRCI case. Unfortunately, during the pendency of this case, PDRCI Case No. 30-
2006/BGF was dismissed by the PDRCI for lack of jurisdiction, in view of the lack of agreement between
the parties to arbitrate before the PDRCI.84 In Philippine National Bank v. Ritratto Group, Inc.,85 we
held: A writ of preliminary injunction is an ancillary or preventive remedy that may only be resorted to
by a litigant to protect or preserve his rights or interests and for no other purpose during the pendency
of the principal action. The dismissal of the principal action thus results in the denial of the prayer for
the issuance of the writ. x x x. (Emphasis supplied.)
In view of intervening circumstances, BCA can no longer be granted injunctive relief and the civil case
before the trial court should be accordingly dismissed. However, this is without prejudice to the parties
litigating the main controversy in arbitration proceedings, in accordance with the provisions of the
Amended BOT Agreement, which should proceed with dispatch. It does not escape the attention of the
Court that the delay in the submission of this controversy to arbitration was caused by the ambiguity in
Section 19.02 of the Amended BOT Agreement regarding the proper body to which a dispute between
the parties may be submitted and the failure of the parties to agree on such an arbitral tribunal.
However, this Court cannot allow this impasse to continue indefinitely. The parties involved must sit
down together in good faith and finally come to an understanding regarding the constitution of an arbitral
tribunal mutually acceptable to them.
REAL BANK INC
the basic issue is whether or not respondent’s Samsung non-appearance at the mediation proceedings
is justifiable from the records.
In this case, it is uncontroverted that the withdrawal of respondent Samsung’s original counsel, V.E.
Del Rosario and Partners on 19 October 2000, was with the client’s consent. Thus, no approval thereof
by the trial court was required because a court’s approval is indispensable only if the withdrawal is
without the client’s consent.30
It being daylight clear that the withdrawal of respondent Samsung’s original counsel was sufficient as
the same carried the stamp of approval of the client, the notice of mediation sent to respondent
Samsung’s original counsel was ineffectual as the same was sent at the time when such counsel had
already validly withdrawn its representation. Corollarily, the absence of respondent Samsung during
the scheduled mediation conference was excusable and justified. Therefore, the trial court erroneously
dismissed Civil Case No. 97-86265.
We cannot sustain petitioner Real Bank, Inc.’s argument that respondent Samsung was negligent in
the conduct of its case.
The calendar of hearings document the fact that respondent Samsung has been willing and able to
prosecute its case. Except for the lone instance, reasonable as already shown, of absence during the
scheduled mediation conference on 3 April 2001, respondent Samsung had, till then, promptly and
religiously attended the hearings set by the RTC. In fact, respondent Samsung exhibited diligence and
dispatch in prosecuting its case against petitioner Real Bank, Inc. by immediately moving to set the
case for pre-trial after it had filed its reply and momently filing a motion for reconsideration of the RTC
Order dismissing Civil Case No. 97-86265.
SHINRYO
It is settled that findings of fact of quasi-judicial bodies, which have acquired expertise because their
jurisdiction is confined to specific matters, are generally accorded not only respect, but also finality,
especially when affirmed by the Court of Appeals. In particular, factual findings of construction
arbitrators are final and conclusive and not reviewable by this Court on appeal.
This rule, however, admits of certain exceptions. factual findings of construction arbitrators may be
reviewed by this Court when the petitioner proves affirmatively that: (1) the award was procured by
corruption, fraud or other undue means; (2) there was evident partiality or corruption of the arbitrators
or any of them; (3) the arbitrators were guilty of misconduct in refusing to hear evidence pertinent and
material to the controversy; (4) one or more of the arbitrators were disqualified to act as such under
Section nine of Republic Act No. 876 and willfully refrained from disclosing such disqualifications or of
any other misbehavior by which the rights of any party have been materially prejudiced; or (5) the
arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite
award upon the subject matter submitted to them was not made.
Other recognized exceptions are as follows: (1) when there is a very clear showing of grave abuse of
discretion resulting in lack or loss of jurisdiction as when a party was deprived of a fair opportunity to
present its position before the Arbitral Tribunal or when an award is obtained through fraud or the
corruption of arbitrators, (2) when the findings of the Court of Appeals are contrary to those of the CIAC,
and (3) when a party is deprived of administrative due process.
A perusal of the records would reveal that none of the aforementioned circumstances, which would
justify exemption of this case from the general rule, are present here. Such being the case, the Court,
not being a trier of facts, is not duty-bound to examine, appraise and analyze anew the evidence
presented before the arbitration body.
CARGILL
the validity of the contract containing the agreement to submit to arbitration does not affect the
applicability of the arbitration clause itself. A contrary ruling would suggest that a party's mere
repudiation of the main contract is sufficient to avoid arbitration. That is exactly the situation that the
separability doctrine, as well as jurisprudence applying it, seeks to avoid
The doctrine of separability, or severability as other writers call it, enunciates that an arbitration
agreement is independent of the main contract. The arbitration agreement is to be treated as a separate
agreement and the arbitration agreement does not automatically terminate when the contract of which
it is a 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.
Arbitration before the Panel of Arbitrators is proper only when there is a disagreement between the
parties as to some provisions of the contract between them, which needs the interpretation and the
application of that particular knowledge and expertise possessed by members of that Panel. It is not
proper when one of the parties repudiates the existence or validity of such contract or agreement on
the ground of fraud or oppression as in this case. The validity of the contract cannot be subject of
arbitration proceedings. Allegations of fraud and duress in the execution of a contract are matters within
the jurisdiction of the ordinary courts of law. These questions are legal in nature and require the
application and interpretation of laws and jurisprudence which is necessarily a judicial function
TPI CASE
, does a foreign corporation not licensed to do business in the Philippines have legal capacity to sue
under the provisions of the Alternative Dispute Resolution Act of 2004? YES
There is no doubt, therefore, in the mind of this Court that TPI has been doing business in the
Philippines, but sans a license to do so issued by the concerned government agency of the Republic
of the Philippines, when it collected royalties from "five (5) Philippine tuna processors
This being the real situation, TPI cannot be permitted to maintain or intervene in any action, suit or
proceedings in any court or administrative agency of the Philippines." A priori, the "Petition, etc." extant
of the plaintiff TPI should be dismissed for it does not have the legal personality to sue in the Philippines
ADR Act of 2004 specifically provides exclusive grounds available to the party opposing an application
for recognition and enforcement of the arbitral award. not one of these exclusive grounds touched on
the capacity to sue of the party seeking the recognition and enforcement of the award.
Pertinent provisions of the Special Rules of Court on Alternative Dispute Resolution, 31 which was
promulgated by the Supreme Court, likewise support this position. Rule 13.1 of the Special Rules
provides that "[a]ny party to a foreign arbitration may petition the court to recognize and enforce a
foreign arbitral award." The contents of such petition are enumerated in Rule 13.5.32 Capacity to sue
is not included
When a party enters into a contract containing a foreign arbitration clause and, as in this case, in fact
submits itself to arbitration, it becomes bound by the contract, by the arbitration and by the result of
arbitration, conceding thereby the capacity of the other party to enter into the contract, participate in
the arbitration and cause the implementation of the result.
All considered, petitioner TPI, although a foreign corporation not licensed to do business in the
Philippines, is not, for that reason alone, precluded from filing the Petition for Confirmation, Recognition,
and Enforcement of Foreign Arbitral Award before a Philippine court.
FF CRUZ
Executive Order (E.O.) No. 100822 vests upon the CIAC original and exclusive jurisdiction over
disputes arising from, or connected with, contracts entered into by parties involved in construction in
the Philippines. Under Section 19 of E.O. No. 1008, the arbitral award of CIAC "shall be final and
inappealable except on questions of law which shall be appealable to the Supreme Court
FFCCI primarily seeks from this Court a determination of whether amount claimed by HRCC in its
progress billing may be enforced against it in the absence of a joint measurement of the former’s
completed works. Otherwise stated, the main question advanced by FFCCI is this: in the absence of
the joint measurement agreed upon in the Subcontract Agreement, how will the completed works of
HRCC be verified and the amount due thereon be computed?
The determination of the foregoing question entails an interpretation of the terms of the Subcontract
Agreement visà-vis the respective rights of the parties herein. On this point, it should be stressed that
where an interpretation of the true agreement between the parties is involved in an appeal, the appeal
is in effect an inquiry of the law between the parties, its interpretation necessarily involves a question
of law
ESTATE OF DULAY
with respect to disputes involving claims of Filipino seafarers wherein the parties are covered by a
collective bargaining agreement, the dispute or claim should be submitted to the jurisdiction of a
voluntary arbitrator or panel of arbitrators. It is only in the absence of a collective bargaining agreement
that parties may opt to submit the dispute to either the NLRC or to voluntary arbitration.
It is elementary that rules and regulations issued by administrative bodies to interpret the law which
they are entrusted to enforce, have the force of law, and are entitled to great respect.8 Such rules and
regulations partake of the nature of a statute and are just as binding as if they have been written in the
statute itself.9
AGBAYANI
Undeniably, both petitioner Agbayani and respondent Genabe are residents of Las Piñas City and both
work at the RTC, and the incident which is the subject matter of the case happened in their workplace.25
Agbayani’s complaint should have undergone the mandatory barangay conciliation for possible
amicable settlement with respondent Genabe, pursuant to Sections 408 and 409 of Republic Act No.
7160 or the Local Government Code of 1991
Administrative Circular No. 14-93,26 issued by the Supreme Court on July 15, 1993 states that: x x x
I. All disputes are subject to Barangay conciliation pursuant to the Revised Katarungang Pambarangay
Law [formerly P.D. 1508, repealed and now replaced by Secs. 399-422, Chapter VII, Title I, Book III,
and Sec. 515, Title I, Book IV, R.A. 7160, otherwise known as the Local Government Code of 1991],
and prior recourse thereto is a precondition before filing a complaint in court or any government offices,
except in the following disputes:
[1] Where one party is the government, or any subdivision or instrumentality thereof;
[2] Where one party is a public officer or employee and the dispute relates to the performance of his
official functions;
[3] Where the dispute involves real properties located in different cities and municipalities, unless the
parties thereto agree to submit their difference to amicable settlement by an appropriate Lupon;
[4] Any complaint by or against corporations, partnerships or juridical entities, since only individuals
shall be parties to Barangay conciliation proceedings either as complainants or respondents [Sec. 1,
Rule VI, Katarungang Pambarangay Rules];
[5] Disputes involving parties who actually reside in barangays of different cities or municipalities,
except where such barangay units adjoin each other and the parties thereto agree to submit their
differences to amicable settlement by an appropriate Lupon;
[6] Offenses for which the law prescribes a maximum penalty of imprisonment exceeding one [1] year
or a fine of over five thousand pesos ([₱]5,000.00);
[7] Offenses where there is no private offended party;
[8] Disputes where urgent legal action is necessary to prevent injustice from being committed or further
continued, specifically the following: [a] Criminal cases where accused is under police custody or
detention [See Sec. 412(b)(1), Revised Katarungang Pambarangay Law]; [b] Petitions for habeas
corpus by a person illegally deprived of his rightful custody over another or a person illegally deprived
of or on acting in his behalf; [c] Actions coupled with provisional remedies such as preliminary injunction,
attachment, delivery of personal property and support during the pendency of the action; and [d] Actions
which may be barred by the Statute of Limitations.
[9] Any class of disputes which the President may determine in the interest of justice or upon the
recommendation of the Secretary of Justice;
[10] Where the dispute arises from the Comprehensive Agrarian Reform Law (CARL) [Secs. 46 & 47,
R. A. 6657];
[11] Labor disputes or controversies arising from employer-employee relations [Montoya vs. Escayo,
171 SCRA 442; Art. 226, Labor Code, as amended, which grants original and exclusive jurisdiction
over conciliation and mediation of disputes, grievances or problems to certain offices of the Department
of Labor and Employment];
[12] Actions to annul judgment upon a compromise which may be filed directly in court [See Sanchez
vs. [Judge] Tupaz, 158 SCRA 459]." x x x
The compulsory process of arbitration is a pre-condition for the filing of the complaint in court. Where
the complaint (a) did not state that it is one of excepted cases, or (b) it did not allege prior availment of
said conciliation process, or (c) did not have a certification that no conciliation had been reached by the
parties, the case should be dismissed.27 Here, petitioner Agbayani failed to show that the instant case
is not one of the exceptions enumerated above. Neither has she shown that the oral defamation caused
on her was so grave as to merit a penalty of more than one year
MCWD
The jurisdiction of the CIAC as a quasi-judicial body is confined to construction disputes,32 that is,
those arising from, or connected to, contracts involving "all on-site works on buildings or altering
structures from land clearance through completion including excavation, erection and assembly and
installation of components and equipment."33 The CIAC has jurisdiction over all such disputes whether
the dispute arises before or after the completion of the contract
Also, the parties apparently characterized the Contract as one involving construction, as its arbitration
clause specifically refers disputes, controversies or claims arising out of or relating to the Contract or
the breach, termination or validity thereof, if the same cannot be settled amicably, to an arbitration
tribunal, in accordance with E.O. No. 1008, or the Construction Industry Arbitration Law
Had the parties been of the mutual understanding that the Contract was not of construction, they could
have instead referred the matter to arbitration citing Republic Act (R.A.) No. 876, or The Arbitration
Law.
The jurisdiction of courts and quasi-judicial bodies is determined by the Constitution and the law.50 It
cannot be fixed by the will of the parties to the dispute, nor can it be expanded or diminished by
stipulation or agreement. Thus, unless specifically excluded, all incidents and matters relating to
construction contracts are deemed to be within the jurisdiction of the CIAC
Though one party can refuse to participate in the arbitration proceedings, this cannot prevent the CIAC
from proceeding with the case and issuing an award in favor of one of the parties. Section 4.2 of the
Revised Rules of Procedure Governing Construction Arbitration (CIAC Rules) specifically provides that
where the jurisdiction of the CIAC is properly invoked by the filing of a Request for Arbitration in
accordance with CIAC Rules, the failure of a respondent to appear, which amounts to refusal to
arbitrate, will not stay the proceedings, notwithstanding the absence of the respondent or the lack of
participation of such party.
In such cases, the CIAC is mandated to appoint the arbitrator/s in accordance with the Rules, and the
arbitration proceedings shall continue. The award shall then be made after receiving the evidence of
the claimant. In such a case, all is not lost for the party who did not participate. Even after failing to
appear, a respondent is still given the opportunity, under the CIAC Rules, to have the proceedings
reopened and be allowed to present evidence, although with the qualification that this is done before
an award is issued
RCBC
The mere fact that the petitioner disagrees with the Court of Appeals’ determination of questions of fact,
of law or both questions of fact and law, shall not warrant the exercise of the Supreme Court’s
discretionary power. The error imputed to the Court of Appeals must be grounded upon any of the
above prescribed grounds for review or be closely analogous thereto. A mere general allegation that
the Court of Appeals has committed serious and substantial error or that it has acted with grave abuse
of discretion resulting in substantial prejudice to the petitioner without indicating with specificity the
nature of such error or abuse of discretion and the serious prejudice suffered by the petitioner on
account thereof, shall constitute sufficient ground for the Supreme Court to dismiss outright the petition
Evident partiality in its common definition thus implies "the existence of signs and indications that must
lead to an identification or inference" of partiality
"evident partiality" within the meaning of 9 U.S.C. § 10 will be found where a reasonable person would
have to conclude that an arbitrator was partial to one party to the arbitration
the Court adopts the reasonable impression of partiality standard, which requires a showing that a
reasonable person would have to conclude that an arbitrator was partial to the other party to the
arbitration. Such interest or bias, 3/22/21, 8:40 PM Page 15 of 22 moreover, "must be direct, definite
and capable of demonstration rather than remote, uncertain, or speculative."92 When a claim of
arbitrator’s evident partiality is made, "the court must ascertain from such record as is available whether
the arbitrators’ conduct was so biased and prejudiced as to destroy fundamental fairness
Indeed, fairness dictates that Chairman Barker refrainfrom suggesting to or directing RCBC towards a
course of action to advance the latter’s cause, by providing it with legal arguments contained in an
article written by a lawyer who serves at the ICC Secretariat and was involved or had participation --
insofar as the actions or recommendations of the ICC – in the case. Though done purportedly to assist
both parties, Chairman Barker’s act clearly violated Article 15 of the ICC Rules declaring that "[i]n all
cases, the Arbitral Tribunal shall act fairly and impartially and ensure that each party has a reasonable
opportunity to present its case." Having pre-judged the matter in dispute, Chairman Barker had lost his
objectivity in the issuance of the Second Partial Award.
J PLUS ASIA
A CIAC arbitral award need not be confirmed by the regional trial court to be executory as provided
under E.O. No. 1008. (Emphasis supplied.) Executive Order (EO) No. 1008 vests upon the CIAC
original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into
by parties involved in construction in the Philippines, whether the dispute arises before or after the
completion of the contract, or after the abandonment or breach thereof. By express provision of Section
19 thereof, the arbitral award of the CIAC is final and unappealable, except on questions of law, which
are appealable to the Supreme Court. With the amendments introduced by R.A. No. 7902 and
promulgation of the 1997 Rules of Civil Procedure, as amended, the CIAC was included in the
enumeration of quasijudicial agencies whose decisions or awards may be appealed to the CA in a
petition for review under Rule 43. Such review of the CIAC award may involve either questions of fact,
of law, or of fact and law
KOPPEL
FRUEHAUF
DFA
MABUHAY
FIESTA
MRT
DUPASQUIER