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Lanuza v. BF Corporation: G.R. No. 174938 October 1, 2014
Lanuza v. BF Corporation: G.R. No. 174938 October 1, 2014
BF Corporation
G.R. No. 174938 October 1, 2014
Jerahmeel u. Cuevas
Facts
A collection suit was filed by BF Corporation against Shangri-la Properties and the
members of its board of directors (Lanuza et. Al.) for the construction cost of the Shangrila
shopping mall and multi-level parking building.
Pursuant to the arbitration clause in the construction contract between the parties, the
dispute was eventually submitted to arbitration by the Construction Industry Arbitration
Commission (CIAC).
Lanuza argued that they cannot be compelled to submit to the arbitration proceedings as
they are not signatories to the construction contract as it was between BF Corp. and
Shangri-La. That the arbitration stipulations should bind only the parties.
BF Corporation argued that they should be included in the arbitration as there was
allegations of malice and bad faith against Lanuza.
Issue
However, there are allegations of bad faith or malice against corporate directors or
representatives, it becomes the duty of courts or tribunals to determine if these persons and the
corporation should be treated as one.
Hence, when the directors, as in this case, are impleaded in a case against a corporation,
alleging malice or bad faith on their part in directing the affairs of the corporation,
complainants are effectively alleging that the directors and the corporation are not acting as
separate entities.
Said directors became necessary parties that must be included in order to have complete
adjudication of the controversy.
Further, excluding petitioners in the arbitration proceedings would be contrary to the policy
against multiplicity of suits.
As such, Lanuza may be compelled to submit to arbitration.