Professional Documents
Culture Documents
SO ORDERED.
THIRD DIVISION
DECISION
CHICO-NAZARIO, J.:
Present:
Before this Court is a Petition for Review on Certiorari under
QUISUMBING, J.,*
- versus -
CARPIO,**
CHICO-NAZARIO,
Acting Chairperson,
NACHURA, and
MANUEL N. DOMINGO,
PERALTA, JJ.
Respondent.
Promulgated:
petitioner.
the said Contract, petitioner had the right to withhold the retention
portion of the contract price, set aside by the project owner, from
defect-liability period.
[4]
Trade Contract
[5]
money was not yet due and demandable and may be ascertained
new
[6]
contractor
on
the
condominium
Construction
Industry
Arbitration
Commission
(CIAC)
in
Money, both issued by the RTC of Makati, Branch 133, was served
164.
the petitioner.
respondents
claim
could
be
fully
addressed,
amount
of P5,990,227.77
belonging
to
LMM
Construction. In
Petitioner now comes to this Court via this instant Petition for
respondent.
Decision of the Court of Appeals and 6 June 2006 Order of the RTC
and, ultimately, for the dismissal of Civil Case No. 06-0200-CFM
pending before the RTC.
of
the
RTC
denying
the
Motion
to
Dismiss
of
assigns and heirs except when the rights and obligations arising
from the contract are not transmissible. Petitioner argues that the
appellate court, in recognizing the existence of the Deed of
Assignment executed by LMM Construction -- in favor of respondent
-- of its receivables under the Trade Contract, should have
considered the concomitant result thereof, i.e., that respondent
became a party to the Trade Contract and, therefore, bound by the
arbitral clause therein.
developer/owner.
0200-CFM. A
scrupulous
examination
of
the
aforementioned
averments therein and the character of the relief sought are the
ones to be consulted.[9] Accordingly, the issues in the instant case
can only be properly resolved by an examination and evaluation of
the rights of the other.[10] The right of the respondent that was
CFM.
separate
said
amount,
LMM Construction
assigned to
respondent
and
distinct
from
the
right
to
payment
of
LMM
its
from petitioner under the Trade Contract, merely stepped into the
under the Trade Contract is not even in dispute in Civil Case No. 06-
claim;
and
that,
uncertain
over
which
one
between
LMM
still had receivables due from petitioner, and respondent did not
knowledge of construction.
violation
of
the
terms
of
agreement;
interpretation
and/or
contract cost.
[12]
construction.
installation
of
components
and
equipment.
[13]
Petitioners
arbitration those cases, such as the one at bar, the extant facts of
CITRA METRO
CORPORATION,
SO ORDERED.
MANILA
TOLLWAYS
Respondent.
x-------------------------------------------------x
THIRD DIVISION
DECISION
HUTAMA-RSEA
INC.,
JOINT
OPERATIONS,
Petitioner,
CHICO-NAZARIO, J.:
Present:
YNARES-SANTIAGO,
45
Chairperson,
AUSTRIA-MARTINEZ,
- versus -
of
the
Rules
of
Court
seeking
to
set
PERALTA, JJ.
the
CHICO-NAZARIO,
NACHURA, and
aside
are
public use, and toll fees were accordingly collected. After informing
Philippine
(Skyway Project).
corporations
Citra
Metro
Manila
organized
and
Tollways
existing
Corporation
under
respondent
petitioners final billing; (3) early completion bonus; and (4) interest
under
the
EPCC
to
pay
the
former
total
amount
of
US$369,510,304.00.[4]
the
demanding
dispute. Despite
payment
several
of
the
following:
meetings
and
(1)
the
continuous
Petitioner
finally
filed
with
the
Construction
Industry
prompting
enforce
petitioner
to
demand
that
respondent
pay
the
its
money
claims
against
In
its
Answer ad
cautelam with
Motion
to
Dismiss,
said
case
was
premature
because
condition
dated 6
December
2005.
[14]
The
CIAC
issued,
on 12
WHEREFORE,
the
instant
petition
is GRANTED and the order of the Arbitration Tribunal
of the Construction Industry Arbitration Commission
dated
December
12,
2005
is
herebyANNULED and SET
ASIDE and,
instead,
[CIAC, members of the Arbitral Tribunal, [17] and herein
petitioner], their agents or anybody acting in their
behalf, are enjoined from further proceeding with
CIAC Case No. 17-2005, promulgating a decision
therein, executing the same if one has already been
promulgated or otherwise enforcing said order of
December 12, 2005 until the dispute has been
referred to and decided by the Dispute Adjudication
Board to be constituted by the parties in accordance
with Sub-Clause 20.4 of the Engineering Procurement
Construction Contract dated September 25, 1996.
Petitioner filed a Motion for Reconsideration of the aforementioned Decision but this was denied by the Court of Appeals in
a Resolution dated 16 November 2007.
EPCC. The appellate court, thus, found that the CIAC exceeded its
jurisdiction in taking cognizance of petitioners Request for
Arbitration in CIAC Case No. 17-2005 despite the latters failure to
initially refer its dispute with respondent to the DAB, as directed by
Clause 20.4 of the EPCC.
(a)
incorporate
the
model
terms
published
by
the
Fdration
Internationale des Ingnieurs-Conseils
(FIDIC),
(b)
(c)
(d)
xxxx
20.3
The
Dispute
Adjudication
Boards
appointment may be terminated only by
mutual agreement of the Employer and the
Contractor. The Dispute Adjudication Boards
appointment shall expire when the discharge
referred to in Sub-Clause 13.12 shall have
become effective, or at such other time as the
parties may mutually agree.
(a)
(b)
(c)
(d)
20.4
20.5
20.6
(a)
(b)
20.7
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.
20.8
reference
to
different
arbitration
Appeals, that the CIAC still cannot assume jurisdiction over CIAC
Case No. 17-2005 (petitioners Request for Arbitration) because
petitioner has not yet referred its dispute with respondent to the
requirement for the CIAC to acquire jurisdiction over CIAC Case No.
17-2005.[21]
facto vested
the
CIAC
with
rule
applies,
xxxx
the
construction
contract
contain
an
arbitration
clause.
or
condition
precedent. To
affirm
condition
- versus -
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
the
Petition
is
ASIDE. The
instant
case
is
Promulgated:
Respondent.
DECISION
SO ORDERED.
NACHURA, J.:
THIRD DIVISION
Before us is a Petition for Review on Certiorari under Rule 45
of
EMPIRE EAST LAND HOLDINGS, INC.,
Petitioner,
the
Decision
Rules
[1]
of
Court,
of
the
Court
of
Appeals
[2]
(CA)
dated May
YNARES-SANTIAGO,
Chairperson,
d)
OTHER CONCRETE WORKS trenches,
platform for transformers, ger sets and aircons
e)
METAL WORKS trench grating, Ibeam separator, manhole cover, ladder rungs of
tanks, stair railings and stair nosing
f)
2.1.
The CONTRACTOR shall complete the
civil/structural and masonry works of the building
based on the works (sic) items covered by the
CONTRACTORs Proposal of Complete Supply and
Installation of Building Shell Wet Construction Works
as indicated in the plans and specifications at the
Contract Price and within the Contract time herein
stipulated and in accordance with the plans and
specifications. The CONTRACTOR shall furnish and
supply all necessary labor, equipment and tools,
supervision and other facilities needed and shall
perform everything necessary for the complete and
successful masonry works of the building described
hereof, provided that it pertains to or is part of the
above mentioned work or items covered by the
Contract documents.
2.2.
The scope of works as
hereunder but not limited to the following:
FORMWORKS
stated
a)
CONCRETE WORKS foundation and
footings, tie beams, walls, columns, beams, girders,
MISCELLANEOUS WORK
installation of Doors and Jambs (metal
and wood)
Lintel Beams/Stiffener Columns
Installation
accessories
of
Hardwares
and
g)
MISCELLANEOUS ITEMS column
guard, wheel guard, waterstop, vapor barrier,
incidental embeds, floor hardener, dustproofer,
sealant, soil treatment, elevator block-outs for call
button, block-outs for electro-mechanical works and
concrete landing sills.
h)
ROOFING
WORKS
Steel
Trusses/Purlins, Rib Type pre-painted roofing sheets,
Insulation
i)
Garbage Chutes
2.3.
The work of the CONTRACTOR shall
include but not be limited to, preparing the bill of
materials, canvassing of prices, requisition of
materials for purchase by OWNER, following up of
orders, checking the quality and quantity of the
materials within the premises of the construction site
and returning defective materials.[6]
Third, petitioner
directed
respondent
to
reduce the monthly target accomplishment to P1
million worth of work and up to one (1) floor only.[11]
Managers
confirmation.
[7]
Petitioner
initially
to
the
on-going
bulk
excavation
by
another
25,
1997 was
proposed
as
Day
b.
PhP3,153,733.60
as
the
amount remaining unpaid for
additional works;
c.
PhP13,976,427.00
overhead expenses; and
d.
PhP1,198,385.16
as
additional costs due to wage
escalation;
and P1,805,225.90,
respectively. Instead
of
occasions,
respondents
accommodations.
requests
for
payroll
and
material
[19]
as
Request
for
Adjudication
[21]
with
the
1.
CIAC. Respondent
Unpaid Billings
Retention Money
Retention Money
P4,502,886
(P1,607,627.65)
(6,110,514.29)
2
.
1,805,225
3.
Overhead Expenses
1,397,642
4.
PhP4,442,430.90 as unpaid
amount from the contract price;
308,226
P8,013,981.81
that they were formally deleted from respondents scope of work,
which in turn caused the reduction of their total contract price.
[25]
inspection by the parties, CIAC found for the petitioner and thus
awarded a total amount of P248,350.00[27]
P248,350.00
claims
and
counterclaims
are
reducing its claim for the cost of the excavation of foundation, the
[30]
failure to comply with the conditions for its release as set forth in
the contract.
We find for the petitioner.
In the construction industry, the ten percent (10%) retention
I.
WHETHER OR NOT THE COURT OF APPEALS
COMMITTED REVERSIBLE ERROR WHEN IT ORDERED
THE RELEASE OF RETENTION MONEY IN FAVOR OF
CICG.
II.
WHETHER OR NOT THE COURT OF APPEALS
COMMITTED REVERSIBLE ERROR WHEN IT AWARDED
THE CLAIM OF CICG FOR THE EXCAVATION OF
FOUNDATION.
III
WHETHER OR NOT THE COURT OF APPEALS
COMMITTED REVERSIBLE ERROR WHEN IT AFFIRMED
CIACS AWARD FOR THE PAYMENT OF ALLEGED
OVERHEAD EXPENSES
works.[33] Undoubtedly,
will
be
discussed
hereunder,
of
work. However,
apart
from
the
completion
and
acceptance of all works, the following requisites were set as preconditions for the release of the retention money:
a)
b)
IV.
WHETHER OR NOT THE COURT OF APPEALS
COMMITTED REVERSIBLE ERROR WHEN IT DENIED
EMPIRE EASTS CLAIM FOR MASONRY AND OTHER
WORKS, LIQUIDATED DAMAGES, AND COST OF
MONEY FOR PAYROLL ASSISTANCE AND MATERIALS
ACCOMMODATION.[31]
as
c)
release the retention money had not, as yet, arisen. We would like
merely
of
focused
on
the
non-issuance
of
the
certificate
we cannot apply the rule to conditions (a) and (c), which remain as
issuance
thereof
was
just
ministerial
duty
of
petitioner
We beg to differ.
which the injured party is entitled to recover for the wrong done
degree of certainty.
[35]
of excavation of foundation.
the propriety of the award, both the CIAC and the CA were in a
its
factual
claim,
is
not
entitled
even
to
the
reduced
amount
in
nature. Significantly,
jurisprudence
teaches
that
Petitioners
Counterclaim
for
the
Cost
of
Unfinished Works
During the construction period, the parties mutually agreed
that some items of work be deleted from respondents scope of
work. Specifically, as claimed by respondent, the following were
deleted: a) masonry works and all related items from the 6 th floor
to the roof deck; b) all exterior masonry works from the 4 th floor to
the roof deck; and c) the garbage chute. This deletion was,
however, denied by petitioner. It, instead, claimed that the only
modification it approved was the reduction by three floors of the
total number of floors to be constructed by respondent.[40]
both parties, both the CIAC and the CA concluded that the
obligation.
price
was
to P62,828,826.53. The
reduced
deletion
was,
from P84
likewise,
million
confirmed
by
Still, petitioner contends that even at the start and for the
entire duration of the construction, respondent was guilty of delay
thus,
petitioner
cannot
now
be
permitted
to
raise
anew
Petitioners
Counterclaim
for
the
Cost
of
due
the
respondent
for
the
cost
of
SO ORDERED.
affirmed by the CA, petitioner is entitled to its claim for punch list
ABS-CBN BROADCASTING
CORPORATION,
Petitioner,
Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA and
LEONARDO-DE
CASTRO, JJ.
-versus-
WHEREFORE,
premises
WORLD INTERACTIVE
NETWORK SYSTEMS (WINS)
JAPAN CO., LTD.,
Respondent.
considered,
the
Present:
PUNO, C.J.,
Promulgated:
petition
x-------------------------------------------------x
DECISION
CORONA, J.:
respondent
aforesaid.
shall
have
complied
with
the
conditions
On September 27, 1999, petitioner ABS-CBN Broadcasting
Corporation entered into a licensing agreement with respondent
corporation
the
Corporation).[5]
licensed
under
the
laws
of
Japan. Under
2.
3.
4.
xxx
xxx
xxx
that the airing of WINS WEEKLY was made with petitioner's prior
parties. He also ruled that, had there really been a material breach
proceeding
the appellate court, the RTC of Quezon City issued an order holding
the terms thereof for higher fees. He further stated that even if
of
seasonably
cured.
He
then
allowed
respondent
to
recover
an
with
appeal
in
the
the
hearing
CA.
of
respondent's
Respondent
filed
petition
motion
for
for
court to date.[8]
On February 16, 2005, the CA rendered the assailed decision
be filed, then the petition for review must fail. It ruled that it is the
Respondent,
on
the
other
hand,
filed
petition
for
stated that a petition for certiorari under Rule 65 of the Rules of
WHEREFORE,
the
instant
petition
is
hereby DISMISSED for lack of jurisdiction. The
application for a writ of injunction and temporary
restraining order is likewise DENIED. The Regional
Trial Court of Quezon City Branch 93 is directed to
proceed with the trial for the Petition for Confirmation
of Arbitral Award.
SO ORDERED.
In that case, the trial court vacated the arbitral award seemingly
based on grounds included in Section 24 of RA 876 but a closer
reading thereof revealed otherwise. On appeal, the CA reversed the
decision of the trial court and affirmed the arbitral award. In
affirming the CA, we held:
xxx
xxx
xxx
xxx
Development
Bank
v.
Association
of
Luzon
xxx
xxx
Manila
Midtown
Hotel
v.
Paint
that:
SECTION 1. The judicial power shall be vested
in one Supreme Court and in such lower courts as
may be established by law.
Judicial power includes the duty of the
courts of justice to settle actual controversies
involving rights which are legally demandable and
enforceable, and to determine whether or not
there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the
Government. (Emphasis supplied)
(3)
As may be gleaned from the above stated provision, it is well
within the power and jurisdiction of the Court to inquire whether
the
courts
to
determine
under
which
rule
the
x------------------------------------------------x
UPSI PROPERTY HOLDINGS, INC., G.R. No. 154937
Petitioner,
Present:
QUISUMBING, J.,
Chairperson,
or
inappropriate
mode
shall
be
- versus -
CARPIO MORALES,
TINGA,
VELASCO, JR., and
CHICO-NAZARIO,* JJ.
DECISION
VELASCO, JR., J.:
The Case
UPSI
Decision
[1]
Property
dated
Holdings,
April
16,
Inc.
2002
(UPSI)
as
to
partly
set
aside
modified
in
the
a
SO ORDERED.
Decision
dated December
2001 of
14,
modified
the
Arbitral
the
Tribunal
Decision
of
the
commencement
The Facts
The facts, as found in the CA Decision under review, are as
follows:
date
to August
21,
1999,
development
one (1) percent of the total Project cost for each calendar day of
delay.[7]
[4]
UPSI.
[5]
slippage.
Agreement.[9]
Reyes Designs, Inc. for interior design and architecture, D.L. Varias
and Associates as Construction Manager, and Ryder Hunt Loacor,
Inc. as Quantity Surveyor.
[6]
the
counterclaim
[12]
same
decision,
the
CIAC
dismissed
UPSIs
of PhP 298,406.03.[13]
In time, UPSI went to the CA on a petition for review,
docketed as CA-G.R. SP No. 68340. Eventually, the appellate court
rendered its assailed Decision dated April 16, 2002, modifying that
of the CIAC, thus:
WHEREFORE,
premises
considered,
the
petition is GRANTED and the questioned Decision is
MODIFIED in this wise:
a.
The claim of [UPSI] for liquidated
damages is GRANTED to the extent of PESOS: ONE
MILLION THREE HUNDRED NINE THOUSAND AND FIVE
HUNDRED (P1,309,500.00) representing forty-five
(45) days of delay at P29,100 per diem;
b.
We hold that [Diesel] substantially
complied with the Construction Contract and is
therefore entitled to one hundred percent (100%)
payment of the contract price. Therefore, the claim
of [Diesel] for an unpaid balance of PESOS: TWO
MILLION FOUR HUNDRED FORTY-ONE THOUSAND
FOUR HUNDRED EIGHTY TWO and SIXTY FOUR
centavos (P2,441,482.64), which amount already
includes the retention on the additional works or
Change Orders, is GRANTED, minus liquidated
damages. In sum, [UPSI] is held liable to [Diesel] in
the amount of PESOS: ONE MILLION ONE HUNDRED
THIRTY ONE THOUSAND NINE HUNDRED EIGHTY TWO
and sixty four centavos (P1,131,982.64), with legal
interest until the same is fully paid;
c.
The parties are liable equally for the
payment of arbitration costs;
d.
All claims for attorneys fees are
DISMISSED; and
e.
Since there is still due and owing from
UPSI an amount of money in favor of Diesel,
respondent FGU is DISCHARGED as surety for Diesel.
Costs de officio.
SO ORDERED.[14]
Therefrom, Diesel and UPSI each sought reconsideration.
On August 21, 2002, the CA issued its equally assailed Resolution
denying reconsideration to UPSI, but partially granting Diesels
motion, disposing as follows:
WHEREFORE, the Motion for Reconsideration
of [Diesel] is partially GRANTED. The liquidated
damages are hereby reduced to P1,146,519.00 (45
days multiplied by P25,478.20 per diem). However,
2.
above
contention
is erroneous
and,
as couched,
misleading.
As is noted, the CA, in its assailed resolution, dismissed as
untenable Diesels position that the factual findings of the CIAC are
binding on and concludes the appellate court. The CA went to
panel. Surely,
persons
undergraduate
or
such
evidence
is
clearly,
manifestly
and
patently
insubstantial.[18]
There can be no serious dispute about the correctness of the
CAs above posture. However, what the appellate court stated later
to belabor its point strikes the Court as specious and uncalled for.
Wrote the CA:
Correlatively,
Diesel,
obviously
having
in
mind
the
issue. One need not introduce evidence to prove that the fact for a
[20]
and revert to the original CIAC figure. Unlike the CIAC which found
the CA struck out the CIAC award of PhP 366,169 to Diesel for
liable for the costs of arbitration was modified by the CA, which
evidence on record.
extension, and on the nature of the delay, that is, whether the
delay is excusable or not. The CA deemed the delay, and the
listed above, that is, the delaying event is unforeseeable and/or its
occurrence is beyond the control of Diesel as contractor. Here, the
lack of a location to establish Diesels own hoisting machine can
hardly be tagged as a foreseeable event. As the CA aptly observed:
[U]nder the terms of the contract, it is Diesel
that would formulate the schedule to be followed in
the completion of the works; therefore, it was
encumbent upon Diesel to take into account all
factors that would come into play in the course of the
project. From the records it appears that the General
Contractor x x x had been in the premises ahead of
Diesel; hence it would have been a simple matter for
Diesel to have conferred with the formers officer if
the use of its equipment would be viable. Likewise, it
would not have been too much trouble for Diesel to
have made a prior request from UPSI for the use of
its freight elevator in the face of the denial thereof,
it could have made the necessary remedial measures
x x x. In other words, those delays were foreseeable
on the part of Diesel, with the application of even
ordinary diligence. But Diesel did all of those when
construction was about to commence. Therefore, We
hold that the delays occasioned by Diesels inability
to install its hoisting machine x x x [were]
attributable solely to Diesel, and thus the resultant
delay cannot be charged against the ninety-day
period for the termination of the construction. [22]
There can be no quibbling that the delay caused by the
manual hauling of materials is not excusable and, hence, cannot
validly be set up as ground for an extension. Thus, the CA excluded
the delay caused thereby and only allowed Diesel a total extension
period of 85 days. Such extension, according to that court,
of
the
Agreement
on
the
subject Change
Orders reads:
WORK
WORK
obligee.
The fact that the laborers of Diesel were still at the work site
its part of the bargain and complete the Project. Thus, when Diesel
and CO No. 4 for 10 days after the receipt of the items from UPSI.
delay beyond the completion time shall accrue after the date of
substantial completion of the work.[29]
In all, Diesel cannot be considered as in delay and, hence, is
not amenable under the Agreement for liquidated damages.
to April 7, 2000.
of its (Diesels) alleged delay. And, this prompted Diesel to file its
petition for arbitration. Thus, the CIAC granted Diesel an award of
rule that the Court, not being a trier of facts, is under no obligation
balance
to
of
the
contract
price. Indeed,
the
retention
and
examine,
winnow,
and
weigh
anew
evidence
adduced
out of whim, thus forcing the hand of Diesel to sue to recover what
Fourth Issue
In the instant case, the factual findings of the CIAC and CA,
fall under any one of these exceptions. As things stand, the factual
during the hearing before the Arbitral Tribunal. Consider what the
CIAC wrote:
be
compensated,
by
way
of
damages,
in
the
amount
6.
Neither are We prepared to
sustain UPSIs argument that Diesel left the work
unfinished and pulled-out all of its workmen from the
project. This claim is belied by the assessment of its
own Construction Manager in Progress Report No. 19
for the period ending 22 March 2000, wherein it
was plaintly stated that as of that period, with
respect to Diesel, there were still twenty-three
laborers on site with the project 97.56% complete
x x x. This indicates that the contracted works of
Diesel were substantially completed with only minor
corrections x x x, thus contradicting the avowal of
UPSI that the work was abandoned in such a state
that necessitated the engagement of another
contractor for the project to be finished. It was
therefore not right for UPSI to have declined the turnover and refused the full payment of the contract
price, x x x.[32]
Diesels
UPSIs Petition
petition
is DENIED with
(2)
CARPIO,
CARPIO MORALES,
HON. ALBERTO A. LERMA, in
TINGA, and
his capacity as Presiding Judge of
VELASCO, JR., JJ.
Branch 256 of Regional Trial
Court of Muntinlupa City, and
PACIFIC GENERAL STEEL
Promulgated:
MANUFACTURING
CORPORATION,
Respondents.
January 7, 2008
x-----------------------------------------------------------------------------------------x
DECISION
of
resolving
disputes,
disputes. Arbitration
particularly
along
with
in
civil
mediation,
and
commercial
conciliation,
and
Chairperson,
- versus -
QUISUMBING, J.,
On March
5,
Contract[1] whereby
Manufacturing
1997,
PGSMC
KOGIES
would
Plant
in
and
set
KOGIES
up
an
executed
LPG
Cylinder
contract
was
checks: (1) BPI Check No. 0316412 dated January 30, 1998 for PhP
4,500,000; and (2) BPI Check No. 0316413 dated March 30, 1998
PGSMC would pay USD 1,224,000. KOGIES would install and initiate
the operation of the plant for which PGSMC bound itself to pay USD
samples. Thus,
the
total
contract
price
amounted
to
USD
1,530,000.
7,
1998to
KOGIES
President
who
was
then
staying
at
Lease[3] with Worth Properties, Inc. (Worth) for use of Worths 5,079-
a Makati City hotel. She complained that not only did KOGIES
but it had not delivered several equipment parts already paid for.
increment
clause. Subsequently,
the
machineries,
issued KOGIES were fully funded but the payments were stopped
[4]
executed by the
parties on January 22, 1998, after the installation of the plant, the
KOGIES had altered the quantity and lowered the quality of the
Complaint for Estafa docketed as I.S. No. 98-03813 against Mr. Dae
rescinding
the
contract
without
resorting
to
dismantling
and
transferring
the
machinery
and
equipment
1998.
arbitration clause, was null and void for being against public policy
controversy.
Commercial
Arbitration
Board
(KCAB)
completely install and make the plant operational; and that KOGIES
before the Muntinlupa City Regional Trial Court (RTC). The RTC
was liable for damages amounting to PhP 4,500,000 for altering the
quantity
KOGIES alleged that PGSMC had initially admitted that the checks
that were stopped were not funded but later on claimed that it
was not willing to further shoulder the cost of renting the premises
stopped payment of the checks for the reason that their value was
and
lowering
the
quality
of
the
machineries
and
1998, the RTC issued an Order denying the application for a writ of
over them. And finally, the RTC held that Art. 15 of the Contract as
August 4, 1998, filed its Motion for Reconsideration [14] of the July
other court jurisdiction over any dispute that may arise between
claiming that the contract was not merely for machinery and
facilities worth USD 1,224,000 but was for the sale of an LPG
[10]
KOGIES
motion
to
dismiss
PGSMCs
compulsory
compulsory counterclaims.
[17]
inspection of the
plant and
denying
dismissal
of PGSMCs
compulsory counterclaims.
[21]
Ten days after, on October 12, 1998, without waiting for the
resolution of its October 2, 1998 urgent motion for reconsideration,
KOGIES filed before the Court of Appeals (CA) a petition for
certiorari[18] docketed as CA-G.R. SP No. 49249, seeking annulment
of the July 23, 1998 and September 21, 1998 RTC Orders and
praying for the issuance of writs of prohibition, mandamus, and
preliminary
injunction
to
enjoin
the
RTC
and
PGSMC
from
On May
Decision
[22]
30,
2000,
the
CA
rendered
the
assailed
certiorari filed by KOGIES. The CA found that the RTC did not
gravely abuse its discretion in issuing the assailed July 23,
1998 and September 21, 1998 Orders. Moreover, the CA reasoned
that KOGIES contention that the total contract price for USD
1,530,000 was for the whole plant and had not been fully paid was
contrary to the finding of the RTC that PGSMC fully paid the price of
USD
1,224,000,
which
was
for
all
the
machineries
and
and payment of docket fees was not required since the Answer with
counterclaim was not an initiatory pleading. For the same reason,
the CA said a certificate of non-forum shopping was also not
required.
Furthermore, the CA held that the petition for certiorari had
been filed prematurely since KOGIES did not wait for the resolution
of its urgent motion for reconsideration of the September 21, 1998
RTC Order which was the plain, speedy, and adequate remedy
available. According to the CA, the RTC must be given the
opportunity to correct any alleged error it has committed, and that
since the assailed orders were interlocutory, these cannot be the
subject of a petition for certiorari.
Hence, we have this Petition for Review on Certiorari under
Rule 45.
The Issues
THE
THE
strongly
argues
that
when
PGSMC
filed
the
Rules of Civil Procedure, the rule that was effective at the time the
Answer
on existing
the accused to plead and to continue with the trial, and whatever
objections the accused had in his motion to quash can then be used
his appeal if the judgment of the trial court is adverse to him. The
with
Counterclaim
was
filed. Sec.
to
the
failure
to
submit
certificate
of
forum
KOGIES
counterclaims.
motion
to
dismiss
PGSMCs
compulsory
appeal.[27] Thus,
in Yamaoka
v.
Pescarich
Manufacturing
Corporation, we held:
The proper remedy in such cases is an
ordinary
appeal
from
an
adverse
judgment on the merits, incorporating in said appeal
the
grounds for assailing
the
interlocutory
orders. Allowing appeals from interlocutory orders
would result in the sorry spectacle of a case being
subject of a counterproductive ping-pong to and from
the appellate court as often as a trial court is
perceived to have made an error in any of its
interlocutory rulings. However, where the assailed
interlocutory order was issued with grave abuse of
discretion or patently erroneous and the remedy of
appeal would not afford adequate and expeditious
relief, the Court allows certiorari as a mode of
redress.[28]
court, in the first instance, to pass upon and correct its mistakes
without the intervention of the higher court.[30]
[29]
assailed orders coupled with the fact that there is no plain, speedy,
and
the basis for allowing the resort to a petition for certiorari under
Rule 65.
any
further
delay
would
prejudice
the
interests
of
abusive orders of the trial court sans the ruling on the October 2,
Prematurity of the petition before the CA
Neither do we think that KOGIES was guilty of forum
Petitioner claims the RTC and the CA erred in ruling that the
arbitration clause is null and void.
where
the
contract
is
made
governs. Lex
loci
Art. 2044 of the Civil Code sanctions the validity of mutually agreed
Arbitration Rules of the KCAB, and that the arbitral award is final
award. Art.
the
2044
provides,
Any
stipulation
that
and Co., Inc.,[38] this Court had occasion to rule that an arbitration
Arts.
2040[33] abovecited
refer
to
we held that [i]n this jurisdiction, arbitration has been held valid
annulled, but these would not denigrate the finality of the arbitral
award.
Republic Act No. 876, this Court has countenanced the settlement
of disputes through arbitration. Republic Act No. 876 was adopted
The arbitration clause was mutually and voluntarily agreed
to
supplement
[39]
the
New
Civil
Codes
provisions
arbitration.
policy. There has been no showing that the parties have not dealt
with each other on equal footing. We find no reason why the
arbitration clause should not be respected and complied with by
both parties. In Gonzales v. Climax Mining Ltd.,[35] we held that
submission to arbitration is a contract and that a clause in a
contract providing that all matters in dispute between the parties
shall be referred to arbitration is a contract. [36] Again in Del Monte
Corporation-USA v. Court of Appeals, we likewise ruled that [t]he
on
Commercial
Arbitration[41] of
the United
Nations
retroactive
Law
as
in
Republic
Act
No.
(RA)
9285,
otherwise
known
effect. Likewise,
KOGIES
filed
its
application
for
immediately
enforceable
or
cannot
be
implemented
personal rights because no vested right has yet attached nor arisen
from them.[42]
SEC.
42. Application
of
the New
York Convention.The New York Convention shall
govern the recognition and enforcement of arbitral
awards covered by said Convention.
The recognition and enforcement of such
arbitral awards shall be filed with the Regional Trial
Court in accordance with the rules of procedure to
be promulgated by the Supreme Court. Said
procedural rules shall provide that the party relying
on the award or applying for its enforcement shall file
with the court the original or authenticated copy of
the award and the arbitration agreement. If the
award or agreement is not made in any of the official
languages, the party shall supply a duly certified
translation thereof into any of such languages.
The applicant shall establish that the country
in which foreign arbitration award was made in party
to the New York Convention.
xxxx
(2)
awards
Sec. 42 in relation to Sec. 45 of RA 9285 designated and
vested the RTC with specific authority and jurisdiction to set aside,
reject, or vacate a foreign arbitral award on grounds provided under
Art. 34(2) of the UNCITRAL Model Law. Secs. 42 and 45 provide:
SEC.
42. Application
of
the New
York Convention.The New York Convention shall
govern the recognition and enforcement of arbitral
awards covered by said Convention.
The recognition and enforcement of such
arbitral awards shall be filed with the Regional Trial
Court in accordance with the rules of procedure to
be promulgated by the Supreme Court. Said
procedural rules shall provide that the party relying
on the award or applying for its enforcement shall file
with the court the original or authenticated copy of
the award and the arbitration agreement. If the
award or agreement is not made in any of the official
languages, the party shall supply a duly certified
translation thereof into any of such languages.
domestic
arbitral
awards,
which
also
need
Thus, while the RTC does not have jurisdiction over disputes
final
RTC
decision
of
assailed
foreign
arbitral
award
appealable
which can set aside, reject, or vacate it. In this sense, what this
sample
LPG
cylinders,
are
matters
proper
for
Application
for
Arbitration
to
Art.
15
before
of
the
the
KCAB
Contract
as
ownership of the plant when it is the arbitral body (KCAB) and not
the RTC which has jurisdiction and authority over the said
in Korea.
parties
For these reasons, the September 21, 1998 and October 19,
Anent the July 23, 1998 Order denying the issuance of the
injunctive writ paving the way for PGSMC to dismantle and transfer
jurisdiction of the arbitral body to decide, yet the RTC under Sec. 28
for the whole plant and its installation is beyond the ambit of a
interim
or
injury;
to
prevent
irreparable
noncompliance,
including
all
expenses,
and
reasonable attorney's fees, paid in obtaining the
orders judicial enforcement. (Emphasis ours.)
loss
or
(ii)
to
provide
security
for
the
performance of any obligation;
(iii)
to produce or preserve any evidence;
or
(iv)
to compel any other appropriate act or
omission.
(c) The order granting provisional relief may
be conditioned upon the provision of security or any
act or omission specified in the order.
(d) Interim or provisional relief is requested
by written application transmitted by reasonable
means to the Court or arbitral tribunal as the case
may be and the party against whom the relief is
sought, describing in appropriate detail the precise
relief, the party against whom the relief is requested,
the grounds for the relief, and the evidence
supporting the request.
(e) The order shall be binding upon the
parties.
xxx
xxx
best interest of PGSMC due to the prohibitive rent while the LPG
been
paid a substantial
amount
based
on
the
SO ORDERED.
FG.R. No. 55159 December 22, 1989
the
pending
arbitral
proceedings
to
settle
the
CORTES, J.:
Orders in Civil Case No. 98-117 are REVERSED and SET ASIDE;
(3)
The
parties
are
hereby ORDERED to
submit
equipment
and
machineries,
if
it
had
not
done
so,
By virtue of the above decision, PAL removed Dolina from its payroll
effective 1 April 1979. Dolina then appealed the Labor Arbiter's
decision to the public respondent NLRC on 29 April 1979 and there
filed a motion praying that PAL be ordered to return him to PAL's
payroll, contending that the Labor Arbiter's decision was not yet
final because of his timely appeal. PAL opposed the motion claiming
that it was no longer obliged to return Dolina to its payroll since the
decision of the Labor Arbiter dated 23 March 1979 in its favor was a
final resolution of the case by arbitration [Annex "N" to the Petition,
p. 1; Rollo, p. 137].
On 8 February 1980, public respondent NLRC rendered its decision
containing the assailed portion to wit:
xxx xxx xxx
In fine it is our considered view that the respondent's
application for clearance to dismiss the complainant
has sufficiently surmounted the test of validity.
Be that as it may, we are not in accord with the
discontinuation of the payment of complainant's
salaries. The agreement of the parties stipulated in
no uncertain terms that the complainant [Dolina] is
to be carried in respondent's payroll until this case is
finally resolved. As things stand, the main issue is