Topic of the Case : Interim Measures in Arbitration
Title of the Case : Transfield Philippines Inc. vs. Luzon Hydro Corporation (LHC) Citation of the Case: G.R 146717
Facts:
The controversy arises when Transfield Philippines (Petitioner) failed to comply
to its contracted obligation from Luzon Hydro Corporation (Respondent). Petitioner and respondent entered into a contract from which Transfield Philippines agreed to construct, on a turnkey basis, a 70-Megawatt hydro-electric power station. Transfield was given the sole responsibility for the design, construction, commissioning, testing and completion of the project. Under the agreements of the turnkey contract it provides the period for which the project is to be completed and allows for the petitioner to claim extensions of time (EOT) and furthermore in case of dispute, the parties are bound to settle their differences through mediation, conciliation. In order to guarantee the performance of the petitioner, two standby-letters of credit were required to be opened as a Securities. During the construction of the plant. Transfield requested for extension of time due to typhoon, however respondent didnt give due course to the requested EOT but it was referred to the arbitration committee. Pending the resolution in the Arbitration Committee as to whether or not petitioner is entitled to extension of time, LHC demanded on the standby letters of credit because petitioner failed to comply its obligation. However, such demand was object by the Petitioner on the ground that there is still pending arbitration on their request for extension of time, hence petitioner went to the court to sought for injunctive relief.
Issue:
Whether or not the pendency of arbitral proceedings forecloses resort to
provisional reliefs.
Ruling:
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 judicial authority for interim or conservatory measures. Likewise, Section 14 of RA 879 recognizes the rights of any party to petition to the court to take measures to safeguard and/or conserve any matter which is the subject of the dispute in arbitration. In addition, RA 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.