DEL MONTE CORPORATION-USA vs.

COURT OF APPEALS (February 7, 2001)

FACTS: In a Distributorship Agreement, Del Monte Corporation-USA (DMC-USA) appointed Montebueno Marketing, Inc. (MMI) as the sole and
exclusive distributor of its products in the Philippines for a period of five years. MMI then appointed SFI as its marketing arm in the country.
On 3 October 1996 respondents MMI, SFI and MMI’s Managing Director Liong Liong C. Sy (LILY SY) filed a Complaint
against petitioners DMC-USA, Paul E. Derby, Jr., Daniel Collins and Luis Hidalgo, and Dewey Ltd. before the RTC of Malabon. They
alleged that DMC-USA continued to be bring its products into the country by parallel importers despite the appointment of MMI as its
sole and exclusive distributor, causing them great embarrassment and substantial damage.
DMC-USA filed a Motion to Suspend Proceedings invoking the arbitration clause in their Agreement, which states that the agreement is
governed by California/USA laws and any dispute arising therein will be resolved by arbitration in the City of San Francisco, State of California,
under the Rules of the American Arbitration Association.
RTC = denied the motion to suspend proceedings as it is inimical to the ends of justice
C.A. = affirmed RTC Decision
ISSUE: WON the dispute between the parties warrants an order compelling them to submit to arbitration?
HELD: No. The arbitration arbitration clause in the Distributorship Agreement between DMC-USA and MMI is valid and the dispute between the
parties is arbitrable. However, this Court must deny the petition.
The Agreement between DMC-USA and MMI is a contract. The provision to submit to arbitration any dispute arising therefrom and the
relationship of the parties is part of that contract and is itself a contract. As a rule, contracts are respected as the law between the contracting
parties and produce effect as between them, their assigns and heirs. Clearly, only parties to the Agreement, i.e., DMC-USA and its Managing
Director for Export Sales Derby and MMI and its Managing Director LILY SY are bound by the Agreement and its arbitration clause as they are the
only signatories thereto.
Petitioners Collins and Hidalgo, and respondent SFI, not parties to the Agreement and cannot even be considered assigns or heirs of the
parties, are not bound by the Agreement and the arbitration clause therein. Consequently, referral to arbitration in the State of California pursuant to
the arbitration clause and the suspension of the proceedings in the civil case pending the return of the arbitral award could be called for but only as
to petitioners DMC-USA and Paul E. Derby, Jr., and private respondents MMI and LILY SY.
The object of arbitration is to allow the expeditious determination of a dispute. Clearly, this issue us could not be speedily and efficiently
resolved in its entirety if simultaneous arbitration proceedings and trial, or suspension of trial pending arbitration will be allowed. Accordingly, the
interest of justice would only be served if the trial court hears and adjudicates the case in a single and complete proceeding.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals affirming the Order of the Regional Trial Court of Malabon, Metro
Manila which denied petitioners Motion to Suspend Proceedings, is AFFIRMED. The RTC concerned is directed to proceed with the hearing of Civil
Case No. 2637-MN with dispatch. No costs.
TEODORO I. CHAVEZ vs. HON. COURT OF APPEALS and JACINTO S. TRILLANA (March 18, 2005)
FACTS: Chaves and Trillana entered into a contract of lease the fishpond of Chavez. The contract provided that Trillana will undertake all
construction and preservation of improvements in the fishpond that may be destroyed during the period of the lease. In 1996, typhoon damaged the
fishpond, but Trillana did not immediately undertake the necessary repairs as the water level was still high. Three weeks later, Chavez grew
impatient and commenced the repairs himself.
Trillana filed a complaint before the Office of the Barangay Captain of Taliptip, Bulacan for such unauthorized repairs and unlawful taking of the
property. After conciliation proceedings, an agreement was reached regarding their monetary obligations.
Alleging non-compliance by Chavez with their lease contract and the foregoing Kasunduan, Trillana filed a complaint against him before the
Valenzuela city RTC.
RTC = in favor of Trillana
C.A. = modified RTC decision. (deleted award of P500,000 for unrealized profits for lack of basis, and by reducing the award for attorneys fees
to P50,000)
Chavez now contends that the C.A. erred in ruling that the Valenzuela City RTC had jurisdiction over the action considering that the subject
matter thereof, his alleged violation of the lease contract with respondent, was already amicably settled before the Office of the Barangay Captain of
Taliptip, Bulacan. He argued that Trillana should have followed the procedure for enforcement of the amicable settlement as provided for in
the Revised Katarungang Pambarangay Law.
ISSUE: WON Trillana may either enforce the compromise as provided by the Revised Katarungang Pambarangay Law or consider it as
rescimded and insist upon his original demand?
HELD: Yes
In the case at bar, the Revised Katarungang Pambarangay Law provides for a two-tiered mode of enforcement of an amicable settlement, to
wit: (a) by execution by the Punong Barangay which is quasi-judicial and summary in nature on mere motion of the party entitled thereto; and (b) an
action in regular form, which remedy is judicial. However, the mode of enforcement does not rule out the right of rescission under Art. 2041 of
the Civil Code. The availability of the right of rescission is apparent from the wording of Sec. 417 itself which provides that the amicable settlement
may be enforced by execution by the lupon within six (6) months from its date or by action in the appropriate city or municipal court, if beyond that
period. The use of the word may clearly makes the procedure provided in the Revised Katarungang Pambarangay Law directory or merely optional
in nature.
Thus, although the Kasunduan executed by the parties before the Office of the Barangay Captain had the force and effect of a final judgment of
a court, petitioners non-compliance paved the way for the application of Art. 2041 under which respondent may either enforce the compromise,
following the procedure laid out in the Revised Katarungang Pambarangay Law, or regard it as rescinded and insist upon his original demand.
Respondent chose the latter option when he instituted the case for recovery of unrealized profits and reimbursement of advance rentals, moral and
exemplary damages, and attorneys fees.
Note: Indeed, the Revised Katarungang Pambarangay Law provides that an amicable settlement reached after barangay conciliation
proceedings has the force and effect of a final judgment of a court if not repudiated or a petition to nullify the same is filed before the proper city or
municipal court within ten (10) days from its date. It further provides that the settlement may be enforced by execution by the lupong tagapamayapa
within six (6) months from its date, or by action in the appropriate city or municipal court, if beyond the six-month period. This special provision
follows the general precept enunciated in Article 2037 of the Civil Code, viz.:
A compromise has upon the parties the effect and authority of res judicata; but there shall be no execution except in compliance with a judicial
compromise.
However, it is qualified by Art. 2041 of the same Code, which provides:

If one of the parties fails or refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and
insist upon his original demand.

In exercising the second option under Art. 2041, the aggrieved party may, if he chooses, bring the suit contemplated or involved in his original
demand, as if there had never been any compromise agreement, without bringing an action for rescission. This is because he may regard the
compromise as already rescinded by the breach thereof of the other party.
WILLIAM GOLANGCO CONSTRUCTION CORPORATION vs RAY BURTON DEVELOPMENT CORPORATION (August 9, 2010)

FACTS: Ray Burton Development Corporation] (RBDC) and William Golangco Construction Corporation (WGCC) entered into a
Contract for the construction of the Elizabeth Place (Office/Residential Condominium).

WGCC filed a complaint with a request for arbitration with the Construction Industry Arbitration Commission (CIAC) and prayed
that CIAC render judgment ordering RBDC to pay a total of P53,667,219.45 and interest charges.

RBDC filed a Motion to Dismiss on the ground of lack of jurisdiction alleging that CIAC acquires jurisdiction over disputes
connected with construction contracts only when the parties to the contract agree to submit the same to voluntary arbitration. In
the contract between the parties, RBDC claimed that only disputes by reason of differences in interpretation of the contract
documents shall be deemed subject to arbitration.

CIAC = Denied RBDC’s motion to dismiss

Ground: their agreement provides that any dispute arising under the construction contract shall be submitted to the Construction
Arbitration Authority created by the Government. Even without this provision, the bare agreement to submit a construction dispute to
arbitration vests in the Commission original and exclusive jurisdiction by virtue of Sec. 4 of Executive Order No. 1008.

C.A. = CIAC had no jurisdiction over the subject matter of the case because the parties agreed that only disputes regarding
differences in interpretation of the contract documents shall be submitted for arbitration, while the allegations in the complaint make
out a case for collection of sum of money.
ISSUE: WON CIAC has jurisdiction over the case?
HELD: Yes.
Under the Construction Industry Arbitration Law, the CIAC has original and exclusive jurisdiction over disputes arising from, or
connected with, contracts entered into by parties involved in construction in the Philippines and all that is needed for the CIAC to
acquire jurisdiction is for the parties to agree to submit the same to voluntary arbitration. The contract between herein parties contained
an arbitration clause which provided that the parties agreed to submit disputes arising by reason of differences in interpretation of the
contract to a Board of Arbitrators the composition of which is mutually agreed upon by the parties, and, as a last resort, any other
dispute which had not been resolved by the Board of Arbitrators shall be submitted to the Construction Arbitration Authority created by
the government, which is no other than the CIAC. Moreover, other matters not dealt with by provisions of the contract or by special
agreements shall be governed by provisions of the Construction Industry Arbitration Law, or Executive Order No. 1008.
Furthermore, Section 1, Article III of the CIAC Rules of Procedure Governing Construction Arbitration (CIAC Rules) further
provide that [a]n 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. Thus, even if there is no showing that petitioner previously brought its claims
before a Board of Arbitrators constituted under the terms of the contract, this circumstance would not divest the CIAC of jurisdiction.

DFA and BSP v. Judge Falcon

 Facts: Philippines being a member of International Civil Aviation Organization (ICAO) as to comply with the commitments
and standards set forth in ICAO Document No. 9303 which requires the ICAO member states to issue machine readable
travel documents (MRTDs) by April 2010.
Department of Foreign Affairs and BCA incorporated entered into an agreement for the implementation of machine readable
passport and visa project. Dispute arose between DFA and BCA/PPC (BCA’s assignee) due to alleged breaches by both parties.
DFA and BCA impute breach of the Amended BOT Agreement against each other.
DFA: Delay of project is due to the submission of deficient documents as well as intervening issues regarding BCA’s financial
incapacity.
BCA: DFA failed to perform its reciprocal obligation to issue to BCA a certificate of acceptance of Phase 1 within 14 days
which was required by the Amended BOT. Furthermore, it alleged that every new appointee to the position of DFA secretary
wanted to review the award to BCA that’s why it took 3 years for DFA to issue said Certificate.

DFA terminated its contract with BCA. BCA sent a notice of default against DFA. BCA filed for arbitration with Philippine
Dispute Resolution Center (PDRCI) pursuant to Section 19.02 of the Amended BOT Agreement. During the pendency of the
Request for Arbitration, DFA and BSP entered into an agreement for the latter to provide passports compliant with
international standards (E-Passports). BCA thereafter filed for a Petition for Interim Relief with the RTC of Pasig. TRO and
thereafter a writ of preliminary injunction were issued by RTC directed against DFA. DFA filed the instant case alleging that
Trial Court committed Grave Abuse of Discretion.

Issue: WON the trial court’s issuance of writ of injunction was proper?

Held: No. Section 3 of RA 8975 states that only the Supreme Court can grant Temporary Restraining Orders,
Preliminary Mandatory Injunctions on government infrastructure projects.

The rationale for this provision is easy to understand. For if a project proponent that the government believes to be in default
is allowed to enjoin the termination of its contract on the ground that it is contesting the validity of said termination, then the
government will be unable to enter into a new contract with any other party while the controversy is pending litigation.
Obviously, a courts grant of injunctive relief in such an instance is prejudicial to public interest since government would be
indefinitely hampered in its duty to provide vital public goods and services in order to preserve the private proprietary rights
of the project proponent. On the other hand, should it turn out that the project proponent was not at fault, the BOT Law itself
presupposes that the project proponent can be adequately compensated for the termination of the contract. Although BCA
did not specifically pray for the trial court to enjoin the termination of the Amended BOT Agreement and thus, there is no
direct violation of Republic Act No. 8795, a grant of injunctive relief as prayed for by BCA will indirectly contravene the same
statute.

Public Estates Authority v. Uy

 Facts: Public Estates Authority is the government agency tasked by the Bases Conversion Development Authority to develop the first-class memorial park
known as the Heritage Park, located in Fort Bonifacio, Taguig, Metro Manila. On November 20, 1996, petitioner executed with respondent Elpidio S. Uy,
doing business under the name and style Edison Development & Construction, a Landscaping and Construction Agreement, whereby respondent undertook to
perform all landscaping works on the 105-hectare Heritage Park. The Agreement stipulated that the completion date for the landscaping job was within 450
days, commencing within 14 days after receipt by respondent from petitioner of a written notice to proceed. Due to delays, the contracted period was extended
to 693 days. Among the causes of the delay was petitioners inability to deliver to respondent 45 hectares of the property for landscaping, because of the
existence of squatters and a public cemetery.
Respondent instituted with the Construction Industry Arbitration Commission an action, docketed as CIAC Case No. 02-2000, seeking to collect from
petitioner damages arising from its delay in the delivery of the entire property for landscaping. Specifically, respondent alleged that he incurred additional
rental costs for the equipment which were kept on stand-by and labor costs for the idle manpower .Likewise, the delay incurred by petitioner caused the
topsoil at the original supplier to be depleted, which compelled respondent to obtain the topsoil from a farther source, thereby incurring added costs. He also
claims that he had to mobilize water trucks for the plants and trees which have already been delivered at the site. Furthermore, it became necessary to
construct a nursery shade to protect and preserve the young plants and trees prior to actual transplanting at the landscaped area.

CIAC: Ruled in favour of Uy and awards damages for P19,604,132.06 --- for the cost of idle time of equipment. 2,275,721.00 --- for the cost of idled
manpower. 6,050,165.05 --- for the construction of the nursery shade net area. 605,016.50 --- for attorneys fees.

CA: Dismissed the petition

Issue: WON CIAC’s ruling should be uphold.
WON liability to respondent has been extinguished by novation when it assigned and turned over all its contracted works at the Heritage Park to the Heritage
Park Management Corporation.
Held: 1) Yes, we find that the CIAC correctly deferred determination of the counterclaim for unrecouped balance on the advance payment. It explained that
the amount of this claim is determined by deducting from respondents progress billing a proportionate amount equal to the percentage of work
accomplished. However, this could not be done since petitioner terminated the construction contract. At the time the CIAC rendered its decision, the issue of
the validity of the termination was still pending determination by the Regional Trial Court of Paraaque. Thus, in view of the non-fulfilment of that
precondition to the grant of petitioners counterclaim, the CIAC deferred resolution of the same. [16] In the case at bar, petitioner still failed to show that its
termination of the construction contract was upheld by the court as valid.
2) No, the assignment cannot bind respondent, who was not a party to the assignment. Moreover, it has not been shown that respondent gave his consent to
the turn-over. Article 1293 of the Civil Code expressly provides:

Novation which consists in substituting a new debtor in the place of the original one, may be made even without the knowledge or against the will of the
latter, but not without the consent of the creditor.Payment by the new debtor gives him the rights mentioned in articles 1236 and 1237. (emphasis ours)

G.R. No. 172525 October 20, 2010

SHINRYO (PHILIPPINES) COMPANY, INC. vs RRN INCORPORATED

FACTS

Petitioner and respondent executed an Agreement and Conditions of Sub-contract (hereafter Agreement signed on June 11, 1996 and June 14, 1996,

respectively. Respondent was not able to finish the entire works with petitioner due to financial difficulties. Petitioner claimed material back charges in the

amount of ₱4,063,633.43. On September 26, 2003, respondent only acknowledged ₱2,371,895.33 as material back charges. Thereafter, on October 16,

2003, respondent sent another letter to petitioner for them to meet and settle their dispute. On January 8, 2004, respondent sent another letter to petitioner

regarding the cost of equipment rental and the use of scaffolding. Thereafter, on August 12, 2004, petitioner sent a letter to respondent denying any unpaid

account and the failure in their negotiations for amicable settlement. On September 3, 2004, respondent, through its new counsel, advised petitioner of

their intention to submit the matter to arbitration. Thereafter, their dispute was submitted to arbitration. The CIAC rendered the assailed decision after the

presentation of the parties' evidence in favor of the respondent. On February 22, 2006, the CA promulgated the assailed Decision affirming the decision of

the CIAC. The CA upheld the CIAC ruling that petitioner failed to adduce sufficient proof that the parties had an agreement regarding charges for

respondent's use of the manlift. As to the other charges for materials, the CA held that the evidence on record amply supports the CIAC findings.

ISSUE

W/N there is error in denying the petitioner’s claim for manlift equipment rental against the respondent

HELD

No. Despite petitioner's attempts to make it appear that it is advancing questions of law, it is quite clear that what petitioner seeks is for this Court to

recalibrate the evidence it has presented before the CIAC. It insists that its evidence sufficiently proves that it is entitled to payment for respondent's use of

its manlift equipment, and even absent proof of the supposed agreement on the charges petitioner may impose on respondent for the use of said

equipment, respondent should be made to pay based on the principle of unjust enrichment. Petitioner also questions the amounts awarded by the CIAC for

inventoried materials, and costs incurred by petitioner for completing the work left unfinished by respondent.
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.

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.

G.R. No. 177556 December 8, 2010

TRANSCEPT CONSTRUCTION AND MANAGEMENT PROFESSIONALS, INC vs TERESA C. AGUILAR

FACTS

Transcept and Aguilar entered into a contract for the construction of a vacation house located in Batangas. The estimation of the project would cost

₱3,486,878.64 and was to be completed within 2103 working days from the date of the First Contract or on 7 June 2005. Aguilar paid a downpayment of

₱1 million on 27 August 2004.

Thereafter, Aguilar hired ASTEC, a duly accredited testing laboratory, to test Transcept’s quality of work. The test showed substandard works done by

Transcept. The results are the following: the work of Transcept were substandard. ASTEC, through Engr. Jaime E. Rioflorido (Engr. Rioflorido), sent

Aguilar an Evaluation of Contractor’s Performance which showed that aside from the substandard workmanship and use of substandard materials,

Transcept was unreasonably and fraudulently billing Aguilar. Of the downpayment amounting to ₱1,632,436.29, Engr. Rioflorido’s reasonable assessment

of Transcept’s accomplishment amounted only to ₱527,875.94. Engr. Rioflorido recommended the partial demolition of Transcept’s work.

Transcept and Aguilar entered into another contract to extend the completion from 7 June 2005 to 29 July 2005 and to use up the ₱1.6 million

downpayment paid by Aguilar. Aguilar hired the services of Engr. Edgardo Anonuevo (Engr. Anonuevo) to ensure that the works would comply with the

plans in the Second Contract.

Transcept failed to finish the Project on 29 July 2005, alleging that the delay was due to additional works ordered by Aguilar. Transcept also asked for

payment of the additional amount of ₱290,824.96. Aguilar countered that the Second Contract did not provide for additional works.

On 2 September 2005, Aguilar sent a demand letter to Transcept asking for payment of ₱581,844.54 for refund and damages. Transcept ignored the

demand letter. On 6 September 2005, Aguilar filed a complaint against Transcept before CIAC.

ISSUE

1. Whether the Court of Appeals erred in awarding Aguilar liquidated damages;

2. Whether the Court of Appeals erred in deleting the CIAC’s award of ₱189,909.91 to Transcept representing additional works done under the Second

Contract; and

3. Whether the Court of Appeals erred in awarding Aguilar the amount of ₱135,000 for consultancy services.

HELD

Partly meritorious.

1. Section 20.11(A)(a) of the Construction Industry Authority of the Philippines (CIAP) Document No. 102 provides that "[t]here is substantial completion

when the Contractor completes 95% of the Work, provided that the remaining work and the performance of the work necessary to complete the Work shall

not prevent the normal use of the completed portion."

According to CIAC’s computation, Transcept’s accomplishment amounted to 98.16% of the contract price. It is beyond the 95% required under CIAP

Document No. 102 and is considered a substantial completion of the Project. We thus agree with CIAC’s application of Article 1234 of the Civil Code,

which provides that "[i]f the obligation had been substantially performed in good faith, the obligor may recover as though there had been a strict and

complete fulfillment, less damages suffered by the obligee."

There being a substantial completion of the Project, Aguilar is not entitled to liquidated damages but only to actual damages of ₱30,076.72, representing

the unaccomplished works in the Second Contract as found by the CIAC, which is the difference between the contract price of ₱1,632,436.29 and the

accomplishment of ₱1,602,359.97

2. The Court notes that the Second Contract was entered into by the parties precisely to correct the substandard works discovered by ASTEC. Hence,

Aguilar should not be made to pay for works done to correct these substandard works.

3. The Court of Appeals correctly awarded Aguilar the cost of consultancy services amounting to ₱135,000. While Engr. Rioflorido was not presented as a

witness, it was established that Aguilar hired ASTEC, a duly accredited testing laboratory, to test Transcept’s quality of work, and that Engr. Rioflorido
represented ASTEC. As found by the Court of Appeals, Aguilar paid Engr. Rioflorido the amount of ₱65,000 for the services, which should be added to the

₱75,000 consultancy services awarded to Aguilar.

Tuna Processing v. Philippine Kingford

Facts:

On 14 January 2003, Kanemitsu Yamaoka (hereinafter referred to as the licensor), co-patentee of U.S. Patent, Philippine Letters Patent, and

Indonesian Patent (collectively referred to as the Yamaoka Patent), and five (5) Philippine tuna processors, namely, Angel Seafood Corporation, East

Asia Fish Co., Inc., Mommy Gina Tuna Resources, Santa Cruz Seafoods, Inc., and respondent Kingford (collectively referred to as the

sponsors/licensees) entered into a Memorandum of Agreement (MOA) to form an alliance for purposes of enforcing the three aforementioned

patents, granting licenses under those patents, and collecting royalties.

The Sponsors wish to be licensed under the aforementioned patents in order to practice the processes claimed in those patents in the United States,

the Philippines, and Indonesia, enforce those patents and collect royalties in conjunction with Licensor.

The parties likewise executed a Supplemental Memorandum of Agreement dated 15 January 2003 and an Agreement to Amend Memorandum of

Agreement dated 14 July 2003.

Due to a series of events not mentioned in the petition, the licensees, including respondent Kingford, withdrew from petitioner TPI and

correspondingly reneged on their obligations. Petitioner submitted the dispute for arbitration before the International Centre for Dispute Resolution in

the State of California, United States and won the case against respondent.
To enforce the award, petitioner TPI filed on 10 October 2007 a Petition for Confirmation, Recognition, and Enforcement of Foreign Arbitral

Award before the RTC of Makati City.

The RTC dismissed the petition on the ground that the petitioner lacked legal capacity to sue in the Philippines.

Petitioner TPI now seeks to nullify, in this instant Petition for Review on Certiorari under Rule 45, the order of the trial court dismissing its Petition

for Confirmation, Recognition, and Enforcement of Foreign Arbitral Award.

Issue:

Can a foreign corporation not licensed to do business in the Philippines, but which collects royalties from entities in the Philippines, sue here to

enforce a foreign arbitral award? YES

Held:

The Corporation Code of the Philippines expressly provides:

Sec. 133. Doing business without a license. - No foreign corporation transacting business in the Philippines without a license, or its successors or

assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines; but such

corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized under
Philippine laws.

The petitioner counters, however, that it is entitled to seek for the recognition and enforcement of the subject foreign arbitral award in accordance

with Republic Act No. 9285 (Alternative Dispute Resolution Act of 2004), the Convention on the Recognition and Enforcement of Foreign Arbitral

Awards drafted during the United Nations Conference on International Commercial Arbitration in 1958 (New York Convention), and the

UNCITRAL Model Law on International Commercial Arbitration (Model Law), as none of these specifically requires that the party seeking for the

enforcement should have legal capacity to sue.

The Alternative Dispute Resolution Act of 2004 shall apply in this case as the Act, as its title - An Act to Institutionalize the Use of an Alternative

Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution, and for Other Purposes - would suggest,

is a law especially enacted to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own

arrangements to resolve their disputes. It specifically provides exclusive grounds available to the party opposing an application for recognition and

enforcement of the arbitral award. The Corporation Code is the general law providing for the formation, organization and regulation of private

corporations. As between a general and special law, the latter shall prevail generalia specialibus non derogant.

The Special Rules of Court on Alternative Dispute Resolution provides that any party to a foreign arbitration may petition the court to recognize and

enforce a foreign arbitral award. Indeed, it is in the best interest of justice that in the enforcement of a foreign arbitral award, the losing party can not

avail of the rule that bars foreign corporations not licensed to do business in the Philippines from maintaining a suit in our courts. 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.

Premises considered, petitioner TPI, although not licensed to do business in the Philippines, may seek recognition and enforcement of the foreign

arbitral award in accordance with the provisions of the Alternative Dispute Resolution Act of 2004.
THE MANILA INSURANCE COMPANY, INC., Petitioner,

vs.

SPOUSES ROBERTO and AIDA AMURAO, Respondents.

Facts:

On March 7, 2000, respondent-spouses Roberto and Aida Amurao entered into a Construction Contract Agreement (CCA) with Aegean Construction

and Development Corporation (Aegean) for the construction of a six-storey commercial building in Tomas Morato corner E. Rodriguez Avenue,

Quezon City. To guarantee its full and faithful compliance with the terms and conditions of the CCA, Aegean posted performance bonds secured by

petitioner The Manila Insurance Company, Inc. (petitioner) and Intra Strata Assurance Corporation (Intra Strata).

On November 15, 2001, due to the failure of Aegean to complete the project, respondent spouses filed with the Regional Trial Court (RTC) of

Quezon City a Complaint against petitioner and Intra Strata to collect on the performance bonds they issued in the amounts of ₱2,760,000.00 and

₱4,440,000.00, respectively.

During the pre-trial, petitioner and Intra Strata discovered that the CCA entered into by respondent-spouses and Aegean contained an arbitration

clause.
Hence, they filed separate Motions to Dismiss on the grounds of lack of cause of action and lack of jurisdiction.

The RTC denied both motions. Petitioner and Intra Strata separately moved for reconsideration but their motions were denied by the RTC.

Aggrieved, petitioner elevated the case to the CA by way of special civil action for certiorari.

The CA rendered a Decision dismissing the petition. The CA ruled that the presence of an arbitration clause in the CCA does not merit a dismissal of

the case because under the CCA, it is only when there are differences in the interpretation of Article I of the construction agreement that the parties

can resort to arbitration.

Issue:

Whether or not the RTC has jurisdiction over the dispute? NO

Held:

The CIAC has jurisdiction over the case

Section 4 of E.O. No. 1008 provides that:

SEC. 4. Jurisdiction. – The CIAC shall have 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. These disputes may involve government or private contracts. For the Board to acquire jurisdiction, the parties to a

dispute must agree to submit the same to voluntary arbitration.

Based on the foregoing, in order for the CIAC to acquire jurisdiction two requisites must concur: "first, the dispute must be somehow connected to a

construction contract; and second, the parties must have agreed to submit the dispute to arbitration proceedings."

In this case, both requisites are present.

The parties agreed to submit to arbitration proceedings "any dispute arising in the course of the execution and performance of the CCA by reason of

difference in interpretation of the Contract Documents x x x which the parties are unable to resolve amicably between themselves."

In view of the foregoing, we agree with the petitioner that jurisdiction over the instant case lies with the CIAC, and not with the RTC. Thus, the

Complaint filed by respondent-spouses with the RTC must be dismissed.

J PLUS ASIA DEVELOPMENT CORPORATION, Petitioner,

vs.

UTILITY ASSURANCE CORPORATION, Respondent.

Facts:

On December 24, 2007, petitioner J Plus Asia Development Corporation represented by its Chairman, Joo Han Lee, and Martin E. Mabunay, doing

business under the name and style of Seven Shades of Blue Trading and Services, entered into a Construction Agreement whereby the latter

undertook to build the former's 72-room condominium/hotel (Condotel Building 25) located at the Fairways & Bluewaters Golf & Resort in Boracay

Island, Malay, Aklan. The project, costing ₱42,000,000.00, was to be completed within one year or 365 days reckoned from the first calendar day

after signing of the Notice of Award and Notice to Proceed and receipt of down payment (20% of contract price). The ₱8,400,000.00 down payment

was fully paid on January 14, 2008. Mabuhay also submitted the required Performance Bond issued by respondent Utility Assurance Corporation

(UTASSCO) in the amount equivalent to 20% down payment

Mabunay commenced work at the project site on January 7, 2008. As of September 16, 2008, Mabunay had accomplished only 27.5% of the project.
In the Joint Construction Evaluation Result and Status Report, it was concluded and agreed that as of 14 November 2008, the project is only Thirty

One point Thirty Nine Percent (31.39%) complete.

Petitioner terminated the contract and sent demand letters to Mabunay and respondent surety. As its demands went unheeded, petitioner filed a

Request for Arbitration before the Construction Industry Arbitration Commission (CIAC). Petitioner prayed that Mabunay and respondent be ordered

to pay the sums of ₱8,980,575.89 as liquidated damages and ₱2,379,441.53 corresponding to the unrecouped down payment or overpayment

petitioner made to Mabunay.

The CIAC Arbitral Tribunal rendered a decision in favor of the petitioner.

Dissatisfied, respondent surety filed in the CA a petition for review under Rule 43 of the 1997 Rules of Civil Procedure.

The CA granted the petition of the respondent and reversed and set aside the decision of the CIAC Arbitral Tribunal.

The petitioner alleged that the Alternative Dispute Resolution Act and the Special Rules on Alternative Dispute Resolution have stripped the Court of

Appeals of jurisdiction to review arbitral awards.

Issue:
Whether or not the CA has jurisdiction to review arbitral awards. YES

Held:

Petitioner erroneously relied on the provision in Republic Act (R.A.) No. 9285, otherwise known as the Alternative Dispute Resolution Act of 2004,

allowing any party to a domestic arbitration to file in the Regional Trial Court (RTC) a petition either to confirm, correct or vacate a domestic arbitral

award.

A CIAC arbitral award need not be confirmed by the regional trial court to be executory as provided under E.O. No. 1008.

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.

Petitioner misread the provisions of A.M. No. 07-11-08-SC (Special ADR Rules) promulgated by this Court and which took effect on October 30,

2009. Since R.A. No. 9285 explicitly excluded CIAC awards from domestic arbitration awards that need to be confirmed to be executory, said
awards are therefore not covered by Rule 11 of the Special ADR Rules, as they continue to be governed by EO No. 1008, as amended and the rules

of procedure of the CIAC. The CIAC Revised Rules of Procedure Governing Construction Arbitration provide for the manner and mode of appeal

from CIAC decisions or awards in Section 18 thereof, which reads:

SECTION 18.2 Petition for review. – A petition for review from a final award may be taken by any of the parties within fifteen (15) days from

receipt thereof in accordance with the provisions of Rule 43 of the Rules of Court.