G.R. No. 161957.

February 28, 2005

JORGE GONZALES and PANEL OF ARBITRATORS, petitioners,
vs. CLIMAX MINING LTD., CLIMAX-ARIMCO MINING CORP., and
AUSTRALASIAN PHILIPPINES MINING INC., respondents.


FACTS: Gonzales filed a complaint before the Panel of Arbitrators,
Region II, Mines and Geosciences Bureau, of the Department of
Environment and Natural Resources (DENR) against respondents
Climax- Mining Ltd, Climax-Arimco and Australasian Philippines
Mining Inc, seeking the declaration of nullity or termination of the
addendum contract and the other contracts emanating from it on the
grounds of fraud and oppression. The Panel dismissed the complaint
for lack of jurisdiction. However, the Panel, upon petitioner's motion
for reconsideration, ruled that it had jurisdiction over the dispute
maintaining that it was a mining dispute, since the subject complaint
arose from a contract between the parties which involved the
exploration and exploitation of minerals over the disputed area.
Respondents assailed the order of the Panel of Arbitrators via a
petition for certiorari before the CA. The CA granted the petition and
declared that the Panel of Arbitrators did not have jurisdiction over
the complaint, since its jurisdiction was limited to the resolution of
mining disputes, such as those which raised a question of fact or
matter requiring the technical knowledge and experience of mining
authorities and not when the complaint alleged fraud and oppression
which called for the interpretation and application of laws. The CA
further ruled that the petition should have been settled through
arbitration under R.A. No. 876 the Arbitration Law as provided
under the addendum contract.

ISSUE: Whether or not an agreement to arbitrate is a separate and
distinct contract from the main contract and whether POA has
exclusive and original jurisdiction to hear and decide mining disputes.

HELD: Panel of Arbitrators who, under R.A. No. 7942 of the
Philippine Mining Act of 1995, has exclusive and original jurisdiction
to hear and decide mining disputes, such as mining areas, mineral
agreements, FTAAs or permits and surface owners, occupants and
claimholders/concessionaires, is bereft of jurisdiction over the
complaint for declaration of nullity of the addendum contract; thus, the
Panels' jurisdiction is limited only to those mining disputes which
raised question of facts or matters requiring the technical knowledge
and experience of mining authorities.
An agreement to arbitrate is a separate and distinct contract
from the main contract. Further a submission to arbitration is a
contract. A clause in a contract providing that all matters in dispute
between the parties shall be referred to arbitration is a contract. The
provision to submit to arbitration any dispute arising therefrom and
the relationship of the parties is a part of that contract and is itself a
contract.
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 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.









[G.R. No. 159795. July 30, 2004] SPOUSES ROBERTO &
EVELYN DAVID and COORDINATED GROUP, INC., petitioners,
vs. CONSTRUCTION INDUSTRY AND ARBITRATION
COMMISSION and SPS. NARCISO & AIDA QUIAMBAO,
respondents.
FACTS: The records reveal that on October 7, 1997,
respondent-spouses NARCISO and AIDA QUIAMBAO engaged the
services of petitioner CGI to design and construct a five-storey
concrete office/residential building on their land in Tondo, Manila. The
completion of the construction was initially scheduled on or before
July 16, 1998 but was extended to November 15, 1998 upon
agreement of the parties. It appears, however, that petitioners failed
to follow the specifications and plans as previously agreed
upon. Respondents demanded the correction of the errors but
petitioners failed to act on their complaint. Consequently,
respondents rescinded the contract on October 31, 1998, after paying
74.84% of the cost of construction. Respondents then engaged the
services of another contractor, RRA and Associates, to inspect the
project and assess the actual accomplishment of petitioners in the
construction of the building. It was found that petitioners revised and
deviated from the structural plan of the building without notice to or
approval by the respondents. Respondents filed a case for breach of
contract against petitioners before the Regional Trial Court (RTC) of
Manila. At the pre-trial conference, the parties agreed to submit the
case for arbitration to the CONSTRUCTION INDUSTRY
ARBITRATION COMMISSION (CIAC). Respondents filed a request
for arbitration with the CIAC and nominated Atty. Custodio O. Parlade
as arbitrator. The RTC of Manila then dismissed the case and
transmitted its records to the CIAC. After conducting hearings and
two (2) ocular inspections of the construction site, the arbitrator
rendered judgment against petitioners.

ISSUE: Whether or not questions of fact brought before arbitration is
appealable.

HELD: Aware of the objective of voluntary arbitration in the labor
field, in the construction industry, and in 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 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 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.
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