32.

Cargill PH vs San Fernando

Facts: San Fernando Regala Trading filed before the trial court a complaint for rescission of contract
with damages against Cargill Philippines, Inc. In its complaint, San Fernando Regala Trading alleged
that it was engaged in buying and selling molasses and that Cargill was one of its suppliers. San
Fernando Regala Trading alleged that it purchased from Cargill, and the latter had agreed to sell,
12,000 tons of cane blackstrap molasses originating from Thailand at the price of $192 per metric ton,
and that delivery would be made in April or May 1997. After San Fernando Regala Trading delivered
the letter of credit, it claimed that Cargill failed to comply with its obligations under the contract,
which included an arbitration clause as follows:
"Any dispute which the Buyer and Seller may not be able to settle by mutual agreement shall be settled
by arbitration in the City of New York before the American Arbitration Association. The Arbitration
Award shall be final and binding on both parties."
Cargill moved to dismiss and/or suspend the court proceedings citing the arbitration clause. San
Fernando Regala Trading argued that since it was seeking rescission of the contract, it was in effect
repudiating the contract which included the arbitration clause.
Issue: Whether or not the validity and enforceability of the contract containing the arbitration
agreement violate any provision of the Arbitration Law.

Ruling: No.

Applying the Gonzales ruling, an arbitration agreement which forms part of the main contract
shall not be regarded as invalid or non-existent just because the main contract is invalid or did not
come into existence, since the arbitration agreement shall be treated as a separate agreement
independent of the main contract. A contrary ruling would suggest that a party's mere repudiation of
the main contract is sufficient to avoid arbitration and that is exactly the situation that the separability
doctrine sought to avoid. Thus, we find that even the party who has repudiated the main contract is
not prevented from enforcing its arbitration clause.

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.
33. PHILROCK V. CONSTRUCTION INDUSTRY ARBITRATION COMMISSION (G.R. NO. 132848-49)
Facts: The Cid spouses, herein private respondents, were purchasers of ready-mix concrete from
petitioner herein, PhilRock, Inc. The concrete delivered by the latter turned out to be of substandard
quality, and as a result the structures built using such cement developed cracks and honey combs.
Respondents, thus, filed a Complaint for Damages against petitioner with the RTC of Quezon City,
which then issued an order dismissing the case and referring the same to CIAC because the spouses
and petitioner had filed an Agreement to Arbitrate. Since no common ground can be reached by the
parties, they requested the case be remanded back again to court, to which it had declared it no longer
had jurisdiction over the case and ordered the records of the case to be remanded back again to CIAC.
Petitioner while contending the supposed jurisdiction of CIAC, the latter rendered a decision in favor
of the spouses. Thus, petitioner filed a Petition for Review before the CA, to which the latter dismissed.
Hence this petition.

Issue: Whether or not the CIAC could take jurisdiction over the case of respondent spouses and
petitioner after it had been dismissed by both the RTC and CIAC.

Ruling: The petition has no merit. Section 4 of EO 1008 expressly vests in the CIAC original and
exclusive jurisdiction over disputes arising from or connected with construction contracts entered into
by parties that have agreed to submit their disputes to voluntary arbitration. Further, petitioner
continued participating in the arbitration even after the CIAC order has been issued as evidenced by
their concluding and signing of the Terms of Reference. The Court will not countenance any effort of
any party to subvert or defeat the objective of voluntary arbitration for its own private motives.
Petitioner is stopped from assailing the jurisdiction of the CIAC, merely because the latter rendered
an adverse decision.
34. Metro Construction vs. Construction Industry Arbitration

Respondent Chatham Properties, Inc. (CHATHAM) and petitioner Metro Construction, Inc. (MCI)
entered into a contract for the construction of a multi-storey building known as the Chatham House.
MCI sought to collect from CHATHAM a sum of money for unpaid progress billings and other charges
and instituted a request for adjudication of its claims with the CIAC. CIAC ruled in favor of MCI.

Impugning the decision of the CIAC, CHATHAM instituted a petition for review with the Court of
Appeals. Ruled in favor of CHATHAM.

MCI filed the instant petition for review to challenge the decision of the Court of Appeals. MCI alleges
that the Court of Appeals erred in reviewing and reversing the CIAC's factual findings, that there was
an implied takeover by CHATHAM of the project, and that MCI was not in delay in the overall schedule.
In so doing, the Court of Appeals contravened Section 19 of Executive Order (E.O.) No. 1008,18 which
limits the review of an Arbitral Award to only questions of law.

Issue: W/N under existing law and rules the Court of Appeals can also review findings of facts of the
Construction Industry Arbitration Commission

Ruling: Yes.
Under Circular No. 1-91, appeals from the arbitral awards of the CIAC may be brought to the Court of
Appeals, and not to the Supreme Court alone. The grounds for the appeal are likewise broadened to
include appeals on questions of facts and appeals involving mixed questions of fact and law.

The jurisdiction of the Court of Appeals over appeals from final orders or decisions of the CIAC is
further fortified by the amendments to B.P. Blg. 129, as introduced by RA. No. 7902.

Any remaining doubt on the procedural mutation of the provisions on appeal in E.O. No. 1008, vis-a-
vis Circular No. 1-91 and R A. No. 7902, was completely removed with the issuance by the Supreme
Court of Revised Administrative Circular No. 1-95 and the 1997 Rules of Civil Procedure. Both
categorically include the CIAC in the enumeration of quasi-judicial agencies comprehended therein.
Section 3 of the former and Section 3, Rule 43 of the latter, explicitly expand the issues that may be
raised in an appeal from quasi judicial agencies or instrumentalities to the Court of Appeals within the
period and in the manner therein provided. Indisputably, the review of the CIAC award may involve
either questions of fact, of law, or of fact and law.
35.Equitable PCI Banking v. RCBC Capital Corporation
Facts:
Petitioners Equitable PCI Bank, Inc. (EPCIB) and the individual shareholders of Bankard, Inc.,
as sellers, and respondent RCBC Capital Corporation (RCBC), as buyer, executed a Share Purchase
Agreement[5] (SPA) for the purchase of petitioners interests in Bankard, representing 226,460,000
shares, for the price of PhP 1,786,769,400. To expedite the purchase, RCBC agreed to dispense with
the conduct of a due diligence audit on the financial status of Bankard.
RCBC deposited the stipulated downpayment amount in an escrow account after which it was
given full management and operational control of Bankard. June 2, 2000 is also considered by the
parties as the closing date referred to in the SPA.
Sometime in September 2000, RCBC had bankard account’s audited,creating for the purpose
an audit team and the conclusion was that the warranty,as contained in Section 5(h) and the SPA
hereinafter, was correct.
RCBC paid the balance of the contract price. The corresponding deeds of sale for the shares in
question were executed in January 2001.
Thereafter, in a letter of May 5, 2003, RCBC informed petitioners of its having overpaid the
purchase price of the subject shares, claiming that there was an overstatement of valuation of
accounts amounting to PhP 478 million, resulting in the overpayment of over PhP 616 million. Thus,
RCBC claimed that petitioners violated their warranty, as sellers, embodied in Sec. 5(g) of the SPA (Sec.
5[g] hereinafter).
Following unsuccessful attempts at settlement, RCBC, in accordance with Sec. 10 of the SPA,
filed a Request for Arbitration dated May 12, 2004[8] with the ICC-ICA. In the request, RCBC charged
Bankard with deviating from, contravening and not following generally accepted accounting principles
and practices in maintaining their books. Due to these improper accounting practices, RCBC alleged
that both the audited and unaudited financial statements of Bankard prior to the stock purchase were
far from fair and accurate and, hence, violated the representations and warranties of petitioners in
the SPA. Per RCBC, its overpayment amounted to PhP 556 million. It thus prayed for the rescission of
the SPA, restitution of the purchase price, payment of actual damages in the amount of PhP
573,132,110, legal interest on the purchase price until actual restitution, moral damages, and litigation
and attorneys fees. As alternative to rescission and restitution, RCBC prayed for damages in the
amount of at least PhP 809,796,092 plus legal interest.

To the Request for Arbitration, petitioners filed an Answer dated July 28, 2004,[9] denying
RCBCs inculpatory averments and setting up the following affirmative allegations: the period for filing
of the asserted claim had already lapsed by force of Sec. 7 of the SPA; RCBC is not entitled to rescission
having had ample opportunity and reasonable time to file a claim against petitioners; RCBC is not
entitled to its alternative prayer of damages, being guilty of laches and failing to set out the details of
the breach as required under Sec. 7.
Arbitration in the ICC-ICA proceeded after the formation of the arbitration tribunal consisting
of retired Justice Santiago M. Kapunan, nominated by petitioners; Neil Kaplan, RCBCs nominee; and
Sir Ian Barker, appointed by the ICC-ICA.

Issue: Whether or not there is manifest disregard of the law by the ICC-ICA
Held: The petition must be denied.
This is a procedural miscue for petitioners who erroneously bypassed the Court of Appeals
(CA) in pursuit of its appeal. While this procedural gaffe has not been raised by RCBC, still we would
be remiss in not pointing out the proper mode of appeal from a decision of the RTC confirming,
vacating, setting aside, modifying, or correcting an arbitral award.
 Rule 45 is not the remedy available to petitioners as the proper mode of appeal assailing the
decision of the RTC confirming as arbitral award is an appeal before the CA pursuant to Sec. 46 of
Republic Act No. (RA) 9285, otherwise known as the Alternative Dispute Resolution Act of 2004, or
completely, 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,
promulgated on April 2, 2004 and became effective on April 28, 2004 after its publication on April 13,
2004.

In Korea Technologies Co., Ltd v. Lerma, we explained, inter alia, that the RTC decision of an
assailed arbitral award is appealable to the CA and may further be appealed to this Court.

36. ABS-CBN V. WORLD INTERACTIVE NETWORK SYSTEMS (G.R. NO. 169332)

Facts:
Petitioner ABS-CBN Broadcasting Corporation entered into a licensing agreement with respondent
World Interactive Network Systems (WINS) Japan Co., Ltd., a foreign corporation licensed under the
laws of Japan, in that the former granted respondent the exclusive license to distribute and sublicense
the distribution of the television service known as “The Filipino Channel” (TFC) in Japan.

By virtue thereof, petitioner undertook to transmit the TFC programming signals to respondent which
the latter received through its decoders and distributed to its subscribers. A dispute arose between
the parties when petitioner accused respondent of inserting nine episodes of WINS WEEKLY, a weekly
35-minute community news program for Filipinos in Japan, into the TFC programming. Petitioner
claimed that these were “unauthorized insertions” constituting a material breach of their agreement.
Consequently, petitioner notified respondent of its intention to terminate the agreement.

Thereafter, respondent filed an arbitration suit pursuant to the arbitration clause of its agreement
with petitioner. The parties appointed Professor Alfredo F. Tadiar to act as sole arbitrator who then
rendered a decision in favor of respondent holding that petitioner gave its approval for the airing of
WINS WEEKLY as shown by a series of written exchanges between the parties and that petitioner
threatened to terminate the agreement due to its desire to compel respondent to re-negotiate the
terms thereof for higher fees.

He then allowed respondent to recover temperate damages, attorney’s fees and one-half of the
amount it paid as arbitrator’s fee. Petitioner filed in the CA a petition for review under Rule 43 of the
Rules of Court or, in the alternative, a petition for certiorari under Rule 65 of the same Rules, with
application for temporary restraining order and writ of preliminary injunction. Respondent, on the
other hand, filed a petition for confirmation of arbitral award. The CA rendered the assailed decision
dismissing ABS-CBN’s petition for lack of jurisdiction. Petitioner moved for reconsideration but the
same was denied.
Issue:
Whether or not an aggrieved party in a voluntary arbitration dispute may avail of, directly in the CA, a
petition for review under Rule 43 or a petition for certiorari under Rule 65 of the Rules of Court

Ruling:
No. RA 876 itself mandates that it is the Court of First Instance, now the RTC, which has jurisdiction
over questions relating to arbitration, such as a petition to vacate an arbitral award. As RA 876 did not
expressly provide for errors of fact and/or law and grave abuse of discretion (proper grounds for a
petition for review under Rule 43 and a petition for certiorari under Rule 65, respectively) as grounds
for maintaining a petition to vacate an arbitral award in the RTC, it necessarily follows that a party
may not avail of the latter remedy on the grounds of errors of fact and/or law or grave abuse of
discretion to overturn an arbitral award. Adamson v. Court of Appeals gave ample warning that a
petition to vacate filed in the RTC which is not based on the grounds enumerated in Section 24 of RA
876 should be dismissed.

In cases not falling under any of the aforementioned grounds to vacate an award, the Court has
already made several pronouncements that a petition for review under Rule 43 or a petition for
certiorari under Rule 65 may be availed of in the CA. Which one would depend on the grounds relied
upon by petitioner.

Nevertheless, although petitioner’s position on the judicial remedies available to it was correct, we
sustain the dismissal of its petition by the CA. The remedy petitioner availed of, entitled “alternative
petition for review under Rule 43 or petition for certiorari under Rule 65,” was wrong. Time and again,
we have ruled that the remedies of appeal and certiorari are mutually exclusive and not alternative or
successive.

A careful reading of the assigned errors reveals that the real issues calling for the CA’s resolution were
less the alleged grave abuse of discretion exercised by the arbitrator and more about the arbitrator’s
appreciation of the issues and evidence presented by the parties. Therefore, the issues clearly fall
under the classification of errors of fact and law — questions which may be passed upon by the CA via
a petition for review under Rule 43. Petitioner cleverly crafted its assignment of errors in such a way
as to straddle both judicial remedies, that is, by alleging serious errors of fact and law (in which case
a petition for review under Rule 43 would be proper) and grave abuse of discretion (because of which
a petition for certiorari under Rule 65 would be permissible).
Wherefore, the petition is hereby denied. The decision and resolution of the CA directing the RTC to
proceed with the trial of the petition for confirmation of arbitral award is affirmed.
37. LM power v. Capitol Industrial

LM Power Engineering Corporation (Petitioner) and Capitol Industrial Construction Groups (Respondent)
entered into a Subcontract Agreement involving electrical work at the Port of Zamboanga. Respondent
then took over some of the work contracted to Petitioner, It was alleged that the petitioner failed to
finish it because of its inability to procure materials. Upon completion of the task, Petitioner billed the
respondent the amount of 6,711,813.90 pesos. Respondent refused to pay and contested the accuracy
of the amount of advances and billable accomplishments listed by the petitioner. Respondent also took
refuge in the termination clause agreement which allowed it to set off the cost of the work that
petitioner had failed to undertake (due to termination of take over).Because of the dispute, the
Petitioner filed a complaint foe collection of the balance due under the subcontract agreement.
However, instead of filing an answer, the respondent filed a Motion to Dismiss, alleging that the
complaint was premature because there was no prior recourse to arbitration. RTC denied the motion on
the ground that the dispute did not involve the interpretation or implementation of the agreement and
was, therefore, not covered by the arbitral clause. Also, the RTC ruled that the take over of some work
items by the respondent was not equivalent to termination but a mere modification of the subcontract.
ISSUE: Whether or not there exists a dispute between petitioner and respondent regarding the
interpretation and implementation of the Sub-Contract Agreement that requires prior recourse to
voluntary arbitration.
RULING: Yes. The instant case involves technical discrepancies that are better left to an arbitral body that
has expertise on those areas. The Subcontract has the Arbitral clause stating that the parties agree that
“Any dispute or conflict as regards to interpretation and implementation of this agreement which cannot
be settled between the parties amicably shall be settled by means of arbitration.” Within the scope of
the Arbitration clause are discrepancies as to the amount of advances and billable accomplishments, the
application of the provision on termination, and the consequent set-off expenses. Also, there is no need
for prior request for arbitration. As long as the parties agre to submit to voluntary arbitration, regardless
of what forum they may choose, their agreement will fall within the jurisdiction of the CIAC, such that,
even if they specifically choose another forum, the parties will not be precluded form electing to
submit their dispute before the CIAC because this right has been vested upon each party by the law.
38. Uniwide Sales Realty vs. Titan-Ikeda Construction 511 SCRA 335

Facts: This case involved Titan-Ikeda who entered into 3 construction agreement/ contract /project
with Uniwide. Later Titan-Ikeda filed an action for sum of money against Uniwide with the RTC
because Uniwide allegedly failed to pay certain claims billed by Titan after the completion of the 3
projects. Uniwide moved for the dismissal/suspension of the proceeding for them to first undergo
arbitration. The Arbitrators issued terms of reference which was signed by the parties, (Uniwide did
not attempt to modify the TOR to accommodate its belated counterclaim on deadlines for liquidated
damages.)Titan then refiled the case with CIAC.
CIAC Decision: Project 1: Uniwide is absolved of any liability.Project 2: Uniwide is absolved of
any liability for VAT payment and for the account of Titan, and Titan is absolved from liability for
defective construction.Project 3: Uniwide id held liable for unpaid balance (5,158,364.63) plus 12%
interest/annum and to pay the full VAT for the additional work where no written authorization was
presented.
CIAC likewise rejected the claim on liquidated damages.
After Uniwide’s motion for reconsideration was denied by CIAC, it filed a petition for review
with CA but same was denied, thus, Uniwide filed a petition for review under rule 45 to seek partial
reversal of the decision of CA which modified the decision of CIAC. Uniwide claims that CIAC should
have applied procedural rules such as section 5, Rule 10 with more liberality because it was an
administrative tribubal free from all rigid technicalities of regular courts because CA held that the issue
on liquidated damages should be left for determination in future proceedings.
Issue: Whether or not the award given by CIAC is final

Ruling: Yes. As a rule, findings of fact of administrative agencies and 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. This rule, however admits of certain exceptions.

In David v. Construction Industry and Arbitration Commission, we ruled that, as exceptions, factual
findings of construction arbitrators may be reviewed by this Court when the petitioner proves
affirmatively that:
(1) the award was procured by corruption, fraud or other undue means;
(2) there was evident partiality or corruption of the arbitrators or of any of them;
(3) the arbitrators were guilty of misconduct in refusing to hear evidence pertinent and material to
the controversy;
(4) one or more of the arbitrators were disqualified to act as such under Section nine of Republic Act
No. 876 and willfully refrained from disclosing such disqualifications or of any other misbehavior by
which the rights of any party have been materially prejudiced; or
(5) the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and
definite award upon the subject matter submitted to them was not made.

Other recognized exceptions are as follows:

(1) when there is a very clear showing of grave abuse of discretion resulting in lack or loss of
jurisdiction as when a party was deprived of a fair opportunity to present its position before the
Arbitral Tribunal or when an award is obtained through fraud or the corruption of arbitrators,
(2) when the findings of the Court of Appeals are contrary to those of the CIAC, and
(3) when a party is deprived of administrative due process.
39.Benguet Corporation vs. DENR-MAB, 545 SCRA 196, G.R. No. 163101 February 13, 2008
FACTS: On June 1, 1987, Benguet and J.G. Realty entered into a Royalty Agreement with Option to
Purchase (RAWOP), wherein J.G. Realty was acknowledged as the owner of four mining claims situated
in Camarines Norte.
On August 9, 1989, the Executive Vice-President of Benguet, Antonio N. Tachuling, issued a letter
informing J.G. Realty of its intention to develop the mining claims. However, J.G. Realty, through its
President, Johnny L. Tan, then sent a letter to the President of Benguet informing the latter that it was
terminating the RAWOP on the following grounds:
a) The fact that your company has failed to perform the obligations set forth in the RAWOP, i.e.,
to undertake development works within 2 years from the execution of the Agreement;
b) Violation of the Contract by allowing high graders to operate on our claim.
c) No stipulation was provided with respect to the term limit of the RAWOP.
d) Non-payment of the royalties thereon as provided in the RAWOP.

J.G. Realty filed a Petition for Declaration of Nullity/Cancellation of the RAWOP with the Legaspi City
POA, Region V, docketed as a DENR Case.
DECISION OF LOWER COURTS: POA: declared the RAWOP cancelled. MAB: affirmed POA’s decision.
The RAWOP expressly provided that “any disputes, differences or disagreements between BENGUET
and the OWNER shall, upon notice of one party to the other, first be referred to a Board of Arbitrators
consisting of three (3) members, one to be selected by BENGUET, another to be selected by the OWNER
and the third to be selected by the aforementioned two arbitrators so appointed” ; and that “no action
shall be instituted in court as to any matter in dispute as hereinabove stated, except to enforce the
decision of the majority of the Arbitrators.”
Benguet contended that the issue raised by the J.G. Realty should have been raised first with the
arbitration before POA took cognizance of the case.
ISSUE: W/N availment of voluntary arbitration before resort is made to the courts or quasi-judicial
agencies of the government is a valid contractual stipulation that must be adhered to by the parties
RULING: YES. As stated in Secs. 6 and 7 of RA 876:
“Section 6. Hearing by court.—A party aggrieved by the failure, neglect or refusal of another to
perform under an agreement in writing providing for arbitration may petition the court for an order
directing that such arbitration proceed in the manner provided for in such agreement. Five days
notice in writing of the hearing of such application shall be served either personally or by registered
mail upon the party in default. The court shall hear the parties, and upon being satisfied that the
making of the agreement or such failure to comply therewith is not in issue, shall make an order
directing the parties to proceed to arbitration in accordance with the terms of the agreement. If the
making of the agreement or default be in issue the court shall proceed to summarily hear such issue.
If the finding be that no agreement in writing providing for arbitration was made, or that there is
no default in the proceeding thereunder, the proceeding shall be dismissed. If the finding be that a
written provision for arbitration was made and there is a default in proceeding thereunder, an order
shall be made summarily directing the parties to proceed with the arbitration in accordance with
the terms thereof.
Section 7. Stay of civil action.—If any suit or proceeding be brought upon an issue arising out of an
agreement providing for the arbitration thereof, the court in which such suit or proceeding is pending,
upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration, shall
stay the action or proceeding until an arbitration has been had in accordance with the terms of the
agreement: Provided, That the applicant, for the stay is not in default in proceeding with such
arbitration.”
Besides, in BF Corporation v. Court of Appeals, we already ruled:
“In this connection, it bears stressing that the lower court has not lost its jurisdiction over the
case. Section 7 of Republic Act No. 876 provides that proceedings therein have only been
stayed. After the special proceeding of arbitration has been pursued and completed, then the
lower court may confirm the award made by the arbitrator.”
ADDITIONAL:
The last paragraph of Section 79 of Republic Act No. (RA) 7942 or the “Philippine Mining Act of 1995”
states, “A petition for review by certiorari and question of law may be filed by the aggrieved party
with the Supreme Court within thirty (30) days from receipt of the order or decision of the [MAB].”
40.AGAN VS PIATCO

FACTS:

In 1989, The DOTC conducted studies on NAIA’s capability to cope with the traffic development up to
2010. In 1993, business tycoons Gokongwei, Gotianun, Sy, Tan, Ty, and Yuchengco formed the Asia’s
Emerging Dragon Group (AEDC) and submitted an unsolicited proposal to the Government through
the DOTC/MIAA for the development of NAIA Terminal III under a Build-Operate-Transfer Agreement
(BOT) under BOT Law (RA6957, amended by RA 7718).

DOTC began the bidding process for the NAIA Terminal III project by forming the PBAC
(Prequalification Bids and Awards Committee). AEDC’s primary competitor was the PAIRCARGO
consortium (composed of Pair Cargo, PAGS, and Security Bank) filed their bid, which AEDC questioned
since the former allegedly lacked financial capability.

PAIRCARGO Consortium was awarded the Contract because it offered a higher guaranteed payment
to the government. Later on, PAIRCARGO changed its name to PIATCO (Phil. Int’l Airport Terminals Co.
Inc. Post- bidding, the government and PIATCO signed the 1997 Concession Agreement for the NAIA
Terminal III project, and a subsequent Amended & Revised Concession Agreement + supplements of
the said 1997 Concession Agreement were entered into.

The Government, through then DOTC Secretary Arturo T. Enrile, and PIATCO, through its President,
Henry T. Go, signed the “Concession Agreement for the Build-Operate-and-Transfer Arrangement of
the Ninoy Aquino International Airport Passenger Terminal III” (1997 Concession Agreement).

The Government and PIATCO signed an Amended and Restated Concession Agreement (ARCA).

Subsequently, the Government and PIATCO signed three Supplements to the ARCA. The First
Supplement was signed on August 27, 1999; the Second Supplement on September 4, 2000; and the
Third Supplement on June 22, 2001.

Meanwhile, the MIAA which is charged with the maintenance and operation of the NAIA Terminals I
and II, had existing concession contracts with various service providers to offer international airline
airport services, such as in-flight catering, passenger handling, ramp and ground support, aircraft
maintenance and provisions, cargo handling and warehousing, and other services, to several
international airlines at the NAIA.

Consequently, the workers of the international airline service providers, claiming that they stand to
lose their employment upon the implementation of the questioned agreements, filed before this
Court a petition for prohibition to

During the pendency of the case before this Court, President Gloria Macapagal Arroyo, on November
29, 2002, in her speech at the 2002 Golden Shell Export Awards at Malacañang Palace, stated that she
will not “honor (PIATCO) contracts which the Executive Branch’s legal offices have concluded (as) null
and void.”

Respondent PIATCO filed its Comments to the present petitions.

Several petitions of prohibition filed by NAIA Terminal I & II’s int’l service providers, their employees,
and congressmen alleging that the 1997 Concession Agreement, the ARCA, & its supplements are
contrary to the Constitution, BOT Law, & its IRR.

ISSUE: W/N the arbitration step taken by PIATCO will not oust this Court of its jurisdiction over the
cases.

RULING:
In Del Monte Corporation-USA v. Court of Appeals, even after finding that the arbitration clause in the
Distributorship Agreement in question is valid and the dispute between the parties is arbitrable, this
Court affirmed the trial courts decision denying petitioners Motion to Suspend Proceedings pursuant
to the arbitration clause under the contract. In so ruling, this Court held that as contracts produce
legal effect between the parties, their assigns and heirs, only the parties to the Distributorship
Agreement are bound by its terms, including the arbitration clause stipulated therein. This Court ruled
that arbitration proceedings could be called for but only with respect to the parties to the contract in
question. Considering that there are parties to the case who are neither parties to the Distributorship
Agreement nor heirs or assigns of the parties thereto, this Court, citing its previous ruling in Salas, Jr.
v. Laperal Realty Corporation held that to tolerate the splitting of proceedings by allowing arbitration
as to some of the parties on the one hand and trial for the others on the other hand would, in effect,
result in multiplicity of suits, duplicitous procedure and unnecessary delay. Thus, we ruled that
the interest of justice would best be served if the trial court hears and adjudicates the case in a single
and complete proceeding.
It is established that petitioners in the present cases who have presented legitimate interests in the
resolution of the controversy are not parties to the PIATCO Contracts. Accordingly, they cannot be
bound by the arbitration clause provided for in the ARCA and hence, cannot be compelled to submit
to arbitration proceedings. A speedy and decisive resolution of all the critical issues in the present
controversy, including those raised by petitioners, cannot be made before an arbitral tribunal. The
object of arbitration is precisely to allow an expeditious determination of a dispute. This objective
would not be met if this Court were to allow the parties to settle the cases by arbitration as there are
certain issues involving non-parties to the PIATCO Contracts which the arbitral tribunal will not be
equipped to resolve.
41. ABS-CBN Broadcasting Corporation vs. World Interactive Network Systems (WINS) Japan Cp.,
Ltd.
Facts: Petitioner ABS-CBN Broadcasting Corporation entered into a licensing agreement with
respondent World Interactive Network Systems (WINS) Japan Co., Ltd., a foreign corporation licensed
under the laws of Japan, in that the former granted respondent the exclusive license to distribute and
sublicense the distribution of the television service known as “The Filipino Channel” (TFC) in Japan. By
virtue thereof, petitioner undertook to transmit the TFC programming signals to respondent which
the latter received through its decoders and distributed to its subscribers. A dispute arose between
the parties when petitioner accused respondent of inserting nine episodes of WINS WEEKLY, a weekly
35-minute community news program for Filipinos in Japan, into the TFC programming. Petitioner
claimed that these were “unauthorized insertions” constituting a material breach of their agreement.
Consequently, petitioner notified respondent of its intention to terminate the agreement.
Thereafter, respondent filed an arbitration suit pursuant to the arbitration clause of its agreement
with petitioner. The parties appointed Professor Alfredo F. Tadiar to act as sole arbitrator who then
rendered a decision in favor of respondent holding that petitioner gave its approval for the airing of
WINS WEEKLY as shown by a series of written exchanges between the parties and that petitioner
threatened to terminate the agreement due to its desire to compel respondent to re-negotiate the
terms thereof for higher fees. He then allowed respondent to recover temperate damages, attorney’s
fees and one-half of the amount it paid as arbitrator’s fee. Petitioner filed in the CA a petition for
review under Rule 43 of the Rules of Court or, in the alternative, a petition for certiorari under Rule
65 of the same Rules, with application for temporary restraining order and writ of preliminary
injunction. Respondent, on the other hand, filed a petition for confirmation of arbitral award in the
RTC. The CA rendered the assailed decision dismissing ABS-CBN’s petition for lack of jurisdiction.
Petitioner moved for reconsideration but the same was denied.
Issue: WON an aggrieved party in a voluntary arbitration dispute may avail of, directly in the CA, a
petition for review under Rule 43 or a petition for certiorari under Rule 65 of the Rules of Court,
instead of filing a petition to vacate the award in the RTC when the grounds invoked to overturn the
arbitrator’s decision are other than those for a petition to vacate an arbitral award enumerated under
RA 876.
Ruling: Yes. RA 876 mandates that it is the CFI, now the RTC, which has jurisdiction over questions
relating to arbitration, such as a petition to vacate an arbitral award. As RA 876 did not expressly
provide for errors of fact and/or law and grave abuse of discretion (proper grounds for a petition for
review under Rule 43 and a petition for certiorari under Rule 65, respectively) as grounds for
maintaining a petition to vacate an arbitral award in the RTC, it necessarily follows that a party may
not avail of the latter remedy on the grounds of errors of fact and/or law or grave abuse of discretion
to overturn an arbitral award.
In cases not falling under any of the grounds under RA 876 to vacate an award, a petition for review
under Rule 43 or a petition for certiorari under Rule 65 may be availed of in the CA. Which one would
depend on the grounds relied upon by petitioner. Nevertheless, although petitioner’s position on the
judicial remedies available to it was correct, we sustain the dismissal of its petition by the CA. The
remedy petitioner availed of, entitled “alternative petition for review under Rule 43 or petition for
certiorari under Rule 65,” was wrong. Time and again, we have ruled that the remedies of appeal and
certiorari are mutually exclusive and not alternative or successive. Petitioner’s attempt to avail of two
remedies---that under Rule 43 and Rule 65--- is impermissible. It is not the duty of the Court to identify
which rule the petition should fall.
42. TRANSFIELD PHILIPPINES, INC. vs LUZON HYDRO CORPORATION
490 SCRA 14 (2006)

FACTS:
This case involved two segregate but equally important issues. The first stage relating to the
merits of the case, specifically the question of the propriety of calling on the securities during the
pendency of the arbitral proceedings, was resolved in favor of Luzon Hydro Corporation (LHC). The
second stage involving the issue of forum-shopping on which the Court required the parties to submit
their respective memoranda is disposed of in this Resolution.

Transfield Philippines entered into a turn-key contract with Luzon Hydro Corp (LHC) wherein the
former were to construct a hydro-electric plants in Benguet and Ilocos and given the sole responsibility
for the design, construction, commissioning, testing and completion of the Project.

The contract provides for a period for which the project is to be completed and allows extension
of period based on justifiable grounds. Transfield requested for extension of time due to typhoon and
various disputes delaying the construction. However, LHC did not give due course to the extension,
instead it referred the matter to arbitration committee.

LHC called on the stand-by letters of credit because of default. Transfiled objected on the ground
that there is still pending arbitration on their request for extension of time. The disposal of the forum-
shopping charge is crucial to the parties on account of its profound effect on the final outcome of the
international arbitral proceedings which they have chosen as their principal dispute resolution
mechanism.

The petition, was filed to enjoin LHC from calling on the securities and respondent banks from
transferring or paying the securities in case LHC calls on them. However, in view of the fact that LHC
collected the proceeds, TPI, in its appeal and Petition for Review asked that the same be returned and
placed in escrow pending the resolution of the disputes before the ICC arbitral tribunal. The present
petition puts in issue the propriety of drawing on the letters of credit during the pendency of the
arbitral case, and of course, absent a final determination by the ICC Arbitral tribunal. Moreover, TPI
asked that the said moneys be placed in escrow until the final resolution of the arbitral case.

The ICC case only involves TPI and LHC. The banks sought to be enjoined from releasing the
funds of the letters of credit. The Court agrees with TPI that it would be ineffectual to ask the ICC to
issue writs of preliminary injunction against Security Bank and ANZ Bank since these banks are not
parties to the arbitration case, and that the ICC Arbitral tribunal would not even be able to compel
LHC to obey any writ of preliminary injunction issued from its end

ISSUE:
Whether or not the pendency of arbitral proceedings foreclose resort to the courts for provisional reliefs.

RULING:
No. 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 a judicial authority for interim or conservatory measures. Likewise,
Section14 of Republic Act (R.A.) No. 876 (The Arbitration Law) recognizes the rights of any party to
petition the court to take measures to safeguard and/or conserve any matter which is the subject of
the dispute in arbitration. In addition, R.A. 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.
43.BF Corporation vs. Manila International Airport Authority, 556 SCRA 684
Facts:
Mitsubishi Corporation (Mitsubishi), Tokyu Construction Co., Ltd. (Tokyu), A.M. Oreta & Co., Inc.
(Oreta), and BF formed themselves into the MTOB Consortium (Consortium) to participate in the
bidding for the construction of the Ninoy Aquino International Airport Terminal II (NAIA II) Project.
MIAA awarded the contract to the Consortium, recognizing that the Consortium was a distinct and
separate entity from the four member corporations.
Unfortunately, the four members had serious business differences, including the division of the
contract price, forcing BF to file with the Regional Trial Court (RTC) in Pasig City, an action for Specific
Performance, Rescission, and Damages with application for a Temporary Restraining Order (TRO). The
RTC served a TRO on Tokyu, the lead partner of the Consortium. During the hearing on the preliminary
injunction, MIAA stressed its position that it should not be dragged into the dispute since it was a
consortium internal matter. Thereafter, in an amended complaint, BF dropped MIAA as a party-
defendant.
When the project was nearing completion, BF filed a second amended complaint. In it, BF pleaded
causes of action against Tokyu, Mitsubushi, and Oreta which have all submitted themselves to the
jurisdiction of the court, and also MIAA who had possession of money to be paid to Tokyu. BF claimed
it was entitled to a proportionate share of the money based on the Consortium agreement. Thus, BF
asked that MIAA be re-impleaded as a party-defendant so it could obtain complete relief.4
In an Order dated May 24, 2001, the RTC directed that MIAA be re-impleaded as a party-defendant. It
said that BF’s earlier move to drop MIAA as a party-defendant should not preclude it from re-
impleading MIAA which still has the obligation to pay the remainder of the contract price.
Issue:
Whether or not the MIAA can still be re-impleaded as a party-defendant.
Ruling:
No. As to the issue of estoppel, we agree with the CA that BF is now estopped from re-impleading
MIAA. While the Rules allow amendments to pleadings by leave of court, in our view, in this case, it
would be an affront to the judicial process to first include a party as defendant, then voluntarily drop
the party off from the complaint, only to ask that it be re-impleaded. When BF dropped MIAA as
defendant in its first amended complaint, it had performed an affirmative act upon which MIAA based
its subsequent actions, e.g. payments to Tokyu, on the faith that there was no cause of action against
it, and so on. BF cannot now deny that it led MIAA to believe BF had no cause of action against it only
to make a complete turn-about and renege on the effects of dropping MIAA as a party-defendant
months after, to the prejudice of MIAA. MIAA had all reasons to rely on the CA’s decision that it was
no longer a party to the suit. Under the doctrine of estoppel, an admission or representation is
conclusive on the person making it and cannot be denied or disproved as against the person relying
on it. A person, who by deed or conduct has induced another to act in a particular manner, is barred
from adopting an inconsistent position, attitude, or course of conduct that thereby causes loss or
injury to another.
MISSING CASE #44

45.DEVELOPMENT BANK OF THE PHILIPPINES v. ROMEO TESTON

 By virtue of a Deed of Conditional Sale, Romeo Teston purchased, on installmentbasis, two (2)
parcels of land situated in Masbate, Teston from Development Bank of the Philippines (DBP).
Teston defaulted in the payment of his amortizations. Consequently, DBP rescinded their contract
of conditional sale. DBP thereafter transferred the two (2) parcels of land to the government. It was
subsequently found out that Teston had also voluntarily offered the two parcels of land for inclusion
in the Comprehensive Agrarian Reform Program (CARP) under the Voluntary Offer to Sell. Teston filed
before the Department of Agrarian Reform Adjudication Board (DARAB) a Petition against DBP alleging
that under the Comprehensive Agrarian Reform Law, Republic Act No. 6657, DBP‘s right to rescind the
sale was extinguished by operation of law. The DARAB Regional Adjudicator dismissed Teston‘s
petition on the ground that Teston has never been the owner of the land, hence could not have validly
offered the property under the Voluntary Offer to Sell scheme. On appeal, the DARAB affirmed the
Regional Adjudicators decision. The Court of Appeals modified the Trial Court‘s decision by ordering
DBP to return to Teston the P1,000,000 downpayment paid by Teston without requiring the latter to
present evidence. Hence, this petition.

ISSUE:

Whether or not the Court of Appeals erred in modifying DARAB‘s decision ordering DBP to return to
Teston the P1,000,000 downpayment allegedly paid by Teston

HELD:

YES.

It is elementary that a judgment must conform to, and be supported by, both the pleadings
and the evidence, and must be in accordance with the theory of the action on which the pleadings
are framed and the case was tried. The judgment must be secudum allegata et probata. Due process
considerations justify this requirement. It is improper to enter an order which exceeds the scope of
relief sought by the pleadings, absent notice which affords the opposing party an opportunity to be
heard with respect to the proposed relief. The fundamental purpose of the requirement that
allegations of a complaint must provide the measure of recovery is to prevent surprise to
the defendant. To require DBP to return the alleged P1,000,000 without first giving it an opportunity
to present evidence would violate the Constitutional provision that no person shall be deprived of
life, liberty,or property without due process of law. The essence of due process is to be found in the
reasonable opportunity to be heard and submit any evidence one may have in support of ones
defense.
46. Equitable PCI Banking Corporation v RCBC Capital Corporation
Facts

On May 24, 2000, petitioners Equitable PCI Bank, Inc. (EPCIB) and the individual shareholders
of Bankard, Inc., as sellers, and respondent RCBC Capital Corporation (RCBC), as buyer, executed
a Share Purchase Agreement (SPA) for the purchase of petitioners interests in Bankard, representing
226,460,000 shares, for the price of PhP 1,786,769,400. Thereafter, in a letter of May 5, 2003, RCBC
informed petitioners of its having overpaid the purchase price of the subject shares, claiming that
there was an overstatement of valuation of accounts amounting to PhP 478 million, resulting in the
overpayment of over PhP 616 million. Thus, RCBC, in accordance with Sec. 10 of the SPA, filed
a Request for Arbitration dated May 12, 2004 with the International Chamber of Commerce-
International Court of Arbitration (ICC-ICA). In the request, RCBC charged Bankard with deviating
from, contravening and not following generally accepted accounting principles and practices in
maintaining their books, hence, violated the representations and warranties of petitioners in the SPA.
Per RCBC, its overpayment amounted to PhP 556 million. It thus prayed for the rescission of the SPA,
restitution of the purchase price.

To the Request for Arbitration, petitioners filed an Answer dated July 28, 2004 denying RCBCs
inculpatory averments stating also that the period for filing of the asserted claim had already lapsed.
Arbitration in the ICC-ICA proceeded after the formation of the arbitration tribunal with Justice
Kapunan dissenting, rendered a Partial Award On the matter of prescription, the tribunal held that
RCBC’s claim is not time barred. As such, the tribunal concluded, RCBC’s claim was filed within the
three (3)-year period. The tribunal also exonerated RCBC from laches, the latter having sought relief
within the three (3)-year period prescribed in the SPA. Petitioners came directly to this Court on a
petition for review under Rule 45 of the Rules of Court.
Issue:
Whether or not the Court can Overturn an Arbitral Award rendered by the ICA
Ruling :

No. As a rule, the award of an arbitrator cannot be set aside for mere errors of judgment either as to
the law or as to the facts. Courts are without power to amend or overrule merely because of
disagreement with matters of law or facts determined by the arbitrators. They will not review the
findings of law and fact contained in an award, and will not undertake to substitute their judgment for
that of the arbitrators, since any other rule would make an award the commencement, not the end,
of litigation. Errors of law and fact, or an erroneous decision of matters submitted to the judgment of
the arbitrators, are insufficient to invalidate an award fairly and honestly made. Judicial review of an
arbitration is, thus, more limited than judicial review of a trial. Nonetheless, the arbitrators’ awards is
not absolute and without exceptions. The arbitrators cannot resolve issues beyond the scope of the
submission agreement. The parties to such an agreement are bound by the arbitrators’ award only to
the extent and in the manner prescribed by the contract and only if the award is rendered in
conformity thereto. Thus, Sections 24 and 25 of the Arbitration Law provide grounds for vacating,
rescinding or modifying an arbitration award. Where the conditions described in Articles 2038, 2039
and 2040 of the Civil Code applicable to compromises and arbitration are attendant, the arbitration
award may also be annulled. x x x x Finally, it should be stressed that while a court is precluded from
overturning an award for errors in determination of factual issues, nevertheless, if an examination of
the record reveals no support whatever for the arbitrators’ determinations, their award must be
vacated. In the same manner, an award must be vacated if it was made in “manifest disregard of the
law."
A party asking for the vacation of an arbitral award must show that any of the grounds for vacating,
rescinding, or modifying an award are present or that the arbitral award was made in manifest
disregard of the law. Otherwise, the Court is duty-bound to uphold an arbitral award. To justify the
vacation of an arbitral award on account of “manifest disregard of the law,” the arbiter’s findings must
clearly and unequivocally violate an established legal precedent. Anything less would not suffice.
Section 15. Hearing by arbitrators The arbitrators shall be the sole judge of the relevancy and
materiality of the evidence offered or produced, and shall not be bound to conform to the Rules of
Court pertaining to evidence. Arbitrators shall receive as exhibits in evidence any document which
the parties may wish to submit and the exhibits shall be properly identified at the time of
submission.
As to the Appeal to this COURT
This is a procedural miscue for petitioners who erroneously bypassed the Court of Appeals (CA) in
pursuit of its appeal. While this procedural gaffe has not been raised by RCBC, still we would be remiss
in not pointing out the proper mode of appeal from a decision of the RTC confirming, vacating, setting
aside, modifying, or correcting an arbitral award.

Rule 45 is not the remedy available to petitioners as the proper mode of appeal assailing the decision
of the RTC confirming as arbitral award is an appeal before the CA pursuant to Sec. 46 of Republic Act
No. (RA) 9285, otherwise known as the Alternative Dispute Resolution Act of 2004, or completely, 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, promulgated on April
2, 2004 and became effective on April 28, 2004 after its publication on April 13, 2004. Even if we
entertain the petition, the outcome will be the same.

47. Gomez vs Montalban

Facts: Lita Montalban obtained a loan from Elmer Gomez in the amount of P40,000 with a voluntary
proposal on her part to pay 15% interest per month. Montalban failed to comply with her obligation
so Gomez filed a complaint in the RTC for sum of money. Summons was served but despite her receipt,
she still failed to file an Answer. She was declared in default and upon motion, Gomez was allowed to
present evidence ex parte. The RTC rendered a decision ordering Montalban to pay Gomez.
Thereafter, respondent filed a Petition for Relief from Judgment alleging that there was no proper
service of summons since there was no personal service. She alleged that one Mrs. Alicia Dela Torre
was not authorized to receive summons and that her failure to file an Answer was due to fraud,
accident, mistake, excusable negligence (FAME). The Petition was set for hearing but counsel for
respondent failed to appear before the court hence the dismissal of the Petition.
Montalban filed for a Motion for Reconsideration of the dismissal of the Petition stating that counsel’s
failure to appeal was unintentional to which the RTC granted. To this instance, Gomez filed a Petition
for Reconsideration.

Issue: WON the RTC has jurisdiction

Held: Yes. it is irrelevant that during the course of the trial, it was proven that
respondent is only liable to petitioner for the amount of P40,000.00 representing the principal amount
of the loan; P57,000.00 as interest thereon at the rate of 24% per annum reckoned from 26 August
1998 until the present; and P15,000.00 as attorney's fees.
Contrary to respondent's contention, jurisdiction can neither be made to depend on the amount
ultimately substantiated in the course of the trial or proceedings nor be affected by proof showing
that the claimant is entitled to recover a sum in excess of the jurisdictional amount fixed by law.
Jurisdiction is determined by the cause of action as alleged in the complaint and not by the amount
ultimately substantiated and awarded.
Basic as a hornbook principle is that jurisdiction over the subject matter of a case is
conferred by law and determined by the allegations in the complaint which comprise a concise
statement of the ultimate facts constituting the plaintiff's cause of action. The nature of an action, as
well as which court or body has jurisdiction over it, is determined based on the allegations contained
in the complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon
all or some of the claims asserted therein. The averments in the complaint and the character of the
relief sought are the ones to be consulted. Once vested by the allegations in the complaint, jurisdiction
also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or some
of the claims asserted therein.

48. Jurisdiction of Arbitral Tribunal in ICA

GR. 161957 Feb. 28, 2005
Jorge Gonzales v. Climax Mining Ltd., et al.
FACTS: As claimowner of mineral deposits located w/in the Addendum Area of Influence in Didipio, in
the provinces of Quirino and Nueva Vizcaya, Gonzales entered into a co-production, joint venture
and/or product-sharing agreement w/ Geophilippines, Inc, and Inmex Ltd. Under the agreement,
Gonzales granted Geophilippines exclusive right to explore and survey the mining claims for a period
of 36 months within which the latter could decide to take an operating agreement on the mining
claims and/or develop, operate, mine and otherwise exploit the mining claims and market any and all
minerals that may be derived therefrom. The period was extended for 3 more years. Gonzales and
respondent mining companies applied for a Financial and Technical Assistance Agreement (FTAA).
Respondents executed the Operating and Financial Accommodation Contract (OFAC)[Climax-Arimco
and Climax Mining Ltd. As first parties and Australasian Philippine Mining as 2nd party.] Climax Mining
and Australasian entered into a memorandum of agreement—Climax transferred the FTAA to
Australasian.
Gonzales filed before the Panel of Arbitrators, Region II of the MGB of DENR, seeking the
nullity/termination of the Addendum Contract, the FTAA, and the OFAC on the ground of fraud and
oppression and/or VIOLATION of Section 2, Article XII of the CONSTITUTION perpetrated by these
foreign RESPONDENTS, conspiring and confederating with one another and with each other. The Panel
of Arbitrators dismissed the complaint for lack of jurisdiction. Gonzales filed MR, it was granted
because the Panel believed that the case involved a dispute involving rights to mining areas and a
dispute involving surface owners, occupants and claim owners/concessionaires. Although the Panel
opined that the issues raised were civil in nature, and should be w/in the jurisdiction of regular courts.
Thus, while the Panel granted the MR, it held that it had no jurisdiction regarding the constitutionality
of the Addendum Agreement and the FTAA.
Respondent filed MR. Denied. Appealed to CA. CA granted appeal, declaring that the Panel of
Arbitrators did not have jurisdiction over the petitioner’s complaint. The jurisdiction of the Panel of
Arbitrators, said the Court of Appeals, is limited only to the resolution of mining disputes, defined as
those which raise a question of fact or matter requiring the technical knowledge and experience of
mining authorities.
It was found that the complaint alleged fraud, oppression and violation of the Constitution, which
called for the interpretation and application of laws, and did not involve any mining dispute. The CA
also observed that there were no averments relating to particular acts constituting fraud and
oppression. It added that since the Addendum Contract was executed in 1991, the action to annul it
should have been brought not later than 1995, as the prescriptive period for an action for annulment
is four years from the time of the discovery of the fraud. When petitioner filed his complaint before
the Panel in 1999, his action had already prescribed. Also, the CA noted that fraud and duress only
make a contract voidable, not inexistent, hence the contract remains valid until annulled. The CA was
of the opinion that the petition should have been settled through arbitration under Republic Act No.
876 (The Arbitration Law) as stated in Clause 19.1 of the Addendum Contract. The CAs declared the
Panel of Arbitrators’ decision invalid. CA denied Gonzales’ MR.
ISSUE: WON the dispute between the parties should be brought for arbitration under Rep. Act No.
876.
HELD: No. Arbitration before the Panel of Arbitrators is proper only when there is a disagreement
between the parties as to some provisions of the contract between them, which needs the
interpretation and the application of that particular knowledge and expertise possessed by members
of that Panel. It is not proper when one of the parties repudiates the existence or validity of such
contract or agreement on the ground of fraud or oppression as in this case. The validity of the contract
cannot be subject of arbitration proceedings. Allegations of fraud and duress in the execution of a
contract are matters within the jurisdiction of the ordinary courts of law. These questions are legal in
nature and require the application and interpretation of laws and jurisprudence which is necessarily a
judicial function.
Petitioner also disagrees with the CA ruling that the case should be brought for arbitration under Rep.
Act 876, pursuant to the arbitration clause in the Addendum Contract which states that all disputes
arising out of or in connection with the Contract, which cannot be settled amicably among the Parties,
shall finally be settled under R.A. 876. He points out that respondents Climax and APMI are not parties
to the Addendum Contract and are thus not bound by the arbitration clause in said contract.
We agree that the case should not be brought under the ambit of the Arbitration Law, but for a
different reason. The question of validity of the contract containing the agreement to submit to
arbitration will affect the applicability of the arbitration clause itself. A party cannot rely on the
contract and claim rights or obligations under it and at the same time impugn its existence or
validity. Indeed, litigants are enjoined from taking inconsistent positions. As previously discussed, the
complaint should have been filed before the regular courts as it involved issues which are judicial in
nature. Whether the case involves void or voidable contracts is still a judicial question.
“It is only in the event that the arbitration agreement or clause is itself void, inexistent, or inoperative
that the arbitral tribunal’s jurisdiction may be questioned.”
Fraud and duress = only makes the contract voidable
49. Sales v Barro (2008)

Facts: This case originated from the ejectment complaint filed by the petitioners against the
respondent, before Br. 28 of the MeTC of Manila. Petitioners alleged that (1) they are owners of the
lot described in TCT No. 262237 of the Registry of Deeds of the City of Manila; (2) the respondent
constructed a shanty thereon without their consent; (3) the respondent and his co-defendants have
not been paying any rent to the petitioners for their occupation thereof; (4) the respondent and his
co-defendants refused the formal demand made by the petitioners for them to vacate the subject lot;
and (5) the Office of the Barangay Captain of Barangay 464, Zone 46, 4th District, Manila issued the
necessary Certification to File Action.

In his answer, the respondent denied the allegations of the complaint, and claimed that (1) his
construction was tolerated by the petitioners, and (2) he does not remember receiving any demand
letter and summons from the barangay

MeTC found in favor of the petitioners. The respondent appealed to the RTC which affirmed in toto
the assailed MeTC decision.

The Court of Appeals reversed the RTC decision and accordingly dismissed the petitioners complaint.
First of all, not all elements of Unlawful Detainer were present to grant MeTC jurisdiction over the
case. The complaint, if any, was really one of forcible entry, but even so, it was still defective because
there was no showing of any prior physical possession by petitioners. (As required by law)

Petitioner claims that respondent is, nevertheless estopped from questioning the jurisdiction of the
MeTC.

Issue: Can respondent still question the jurisdiction?

Ruling: Yes. The petitioners argue that the respondent is already estopped because the
respondent failed to assail the jurisdiction of the MeTC at the earliest opportunity and actively
participated in the proceedings before it. The respondent counters that he could not be held guilty of
estoppel because he questioned in his answer and pleadings petitioner’s allegation that he was served
a demand letter.

By questioning the veracity of the allegation of the existence of a jurisdictional requirement, he, in
effect, questioned the jurisdiction of the MeTC in trying the case.

It is well-settled that a courts jurisdiction may be raised at any stage of the proceedings, even on
appeal. The reason is that jurisdiction is conferred by law, and lack of it affects the very authority of
the court to take cognizance of and to render judgment on the action.The rule remains that estoppel
does not confer jurisdiction on a tribunal that has none over the cause of action or subject matter of
the case.In any event, even if respondent did not raise the issue of jurisdiction, the reviewing court is
not precluded from ruling that it has no jurisdiction over the case. In this sense, dismissal for lack of
jurisdiction may even be ordered by the court motu proprio.
50. Tijam vs Sibonghanoy
GR. No. L-21450, April 15, 1968

Facts: The action at bar, which is a suit for collection of a sum of money in the sum of exactly P
1,908.00, exclusive of interest filed by Serafin Tijam and Felicitas Tagalog against Spouses Magdaleno
Sibonghanoy and Lucia Baguio, was originally instituted in the Court of First Instance of Cebu on July
19, 1948. A month prior to the filing of the complaint, the Judiciary Act of 1948 (R.A. 296) took effect
depriving the Court of First Instance of original jurisdiction over cases in which the demand, exclusive
of interest, is not more than P 2,000.00 (Secs. 44[c] and 86[b], R.A. 296.). As prayed for in the
complaint, a writ of attachment was issued by the court against defendants’ properties, but the same
was soon dissolved upon the filing of a counter-bond by defendants and the Manila Surety and Fidelity
Co., Inc. hereinafter referred to as the Surety, on the 31st of the same month.
After trial upon the issues thus joined, the Court rendered judgment in favor of the plaintiffs and, after
the same had become final and executory, upon motion of the latter, the Court issued a writ of
execution against the defendants. The writ having been returned unsatisfied, the plaintiffs moved for
the issuance of a writ of execution against the Surety’s bond (Rec. on Appeal, pp. 46–49), against which
the Surety filed a written opposition (Id. pp. 49) upon two grounds, namely, (1) Failure to prosecute
and (2) Absence of a demand upon the Surety for the payment of the amount due under the judgment.
Upon these grounds the Surety prayed the Court not only to deny the motion for execution against its
counter-bond but also the following affirmative relief: “to relieve the herein bonding company of its
liability, if any, under the bond in question”
Not one of the assignment of errors raises the question of lack of jurisdiction. neither directly nor
indirectly on the lower courts.
The case has already been pending now for almost 15 years, and throughout the entire proceeding
the appellant never raised the question of jurisdiction until the receipt of the Court of Appeals' adverse
decision.
Issues: Whether or not the surety is estopped from questioning the jurisdiction of the coutrt
Held: Yes. The rule is that jurisdiction over the subject matter is conferred upon the courts exclusively
by law, and as the lack of it affects the very authority of the court to take cognizance of the case, the
objection may be raised at any stage of the proceedings. However, considering the facts and
circumstances of the present case, a party may be barred by laches from invoking this plea for the first
time on appeal for the purpose of annulling everything done in the case with the active participation
of said party invoking the plea. Laches, in a general sense, is failure or neglect, for an unreasonable
and unexplained length of time, to do that which, by exercising due diligence, could or should have
been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned it or declined to assert it. The
doctrine of laches or of “stale demands” is based upon grounds of public policy which requires, for the
peace of society, the discouragement of stale claims and, unlike the statute of limitations, is not a
mere question of time but is principally a question of the inequity or unfairness of permitting a right
or claim to be enforced or asserted. It is not right for a party who has affirmed and invoked the
jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny that
same jurisdiction to escape penalty. Upon this same principle is what we said in the three cases
mentioned in the resolution of the Court of Appeals of May 20, 1963, supra, to the effect that we
frown upon the “undesirable practice” of a party submitting his case for decision and then accepting
the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse.
51. ORMOC SUGARCANE PLANTERS ASSOCIATION, INC. vs. CA
Facts: Petitioners Ormoc Sugarcane Planters’ Association, Inc. (OSPA), Occidental Leyte Farmers
Multi-Purpose Cooperative, Inc. (OLFAMCA), Unifarm Multi-Purpose Cooperative, Inc. (UNIFARM) And
Ormoc North District Irrigation Multi-Purpose Cooperative, Inc. (ONDIMCO) are associations
organized by andwhose members are individual sugar planters (Planters) while respondents Hideco
Sugar Milling Co., Inc. (Hideco) and Ormoc Sugar Milling Co, Inc.(OSCO) are sugar centrals engaged in
grinding and milling sugarcane delivered to them by numerous individual sugar planters, who may or
may not be members of an association such as petitioners.

According to petitioners, the relationship between the respondents and individual planters is
governed by milling contract. In their contract specifically Article XX provides that all differences and
controversies which may arise between the parties concerning the agreement shall be submitted for
discussion to a Board of Arbitration, consisting of five (5) members; two (2) of which shall be appointed
by the centrals, two (2) by the Planter and the fifth to be appointed by the four appointed by the
parties. Petitioners filed 2 petitions with the RTC for Arbitration under R.A. 876 for Recovery of Equal
Additional Benefits, Attorney’s Fees and Damages, against respondents HIDECO and OSCO without
impleading any of their individual members. They argued that respondents unduly accorded the
independent Planters more benefits and thus prayed that an order be issued directing the parties to
enter upon with arbitration in accordance with the terms of the milling contracts. Respondents argued
that there was no milling contract entered into. It was only the individual Planters, and not petitioners,
who had legal standing to invoke the arbitration clause in the milling contracts.

Petitioners had no legal standing whatsoever to demand or sue for

arbitration. The RTC held that there was an existing milling contract and that the petitioners have the
right to sue in behalf of the planters. However, upon appeal of the respondents, the CA reversed the
decision of the trial court. Hence, this petition.

Issue: Whether or not petitioners sugar planters’ association demand arbitration from respondents in
their own name without impleading the individual Planters.

Held: There are two modes of arbitration: (a) an agreement to submit to arbitration some future
dispute, usually stipulated upon in a civil contract between the parties, and known as an agreement
to submit to arbitration, and (b) an agreement submitting an existing matter of difference to
arbitrators, termed the submission agreement. Article XX of the milling contract is an agreement to
submit to arbitration because it was made in anticipation of a dispute that might arise between the
parties after the contract’s execution. In an agreement for arbitration, the ordinary elements of a valid
contract must appear, including an agreement to arbitrate some specific thing, and an agreement to
abide by the award, either in express language or by implication. In the case at bar, there were more
than two thousand (2,000) Planters in the district at the time the case was commenced at the RTC in
1999. Only eighty (80) Planters who were all members of OSPA were shown to have such an
agreement to arbitrate, included as a stipulation in their individual milling contracts. Petitioners do
not have any agreement to arbitrate with respondents. The other petitioners failed to prove that any
of their members had milling contracts with respondents, much less, that respondents had an
agreement to arbitrate with the petitioner associations themselves. Assuming arguendo that all the
petitioners were able to present milling contracts in favor of their members, it is nonetheless
undeniable that under the arbitration clause in these contracts it is the parties thereto who have the
right to submit a controversy or dispute to arbitration. Moreover, even assuming that petitioners are
indeed representatives of the member Planters who have milling contracts with the respondents and
assuming further that petitioners signed the milling contracts as representatives of their members,
petitioners could not initiate arbitration proceedings in their own name as they had done in the
present case. As mere agents, they should have brought the suit in the name of the principals that
they purportedly represent. Even if Section 4 of R.A. No. 876 allows the agreement to arbitrate to
be signed by a representative, the principal is still the one who has the right to demand arbitration.

52.Keppel Shipyard vs. Pioneer Insurance and Surety Corporation

Facts:
KCSI and WG&A Jebsens Shipmanagement, Inc. (WG&A) executed a Shiprepair Agreement5 wherein
KCSI would renovate and reconstruct WG&A’s M/V "Superferry 3" using its dry docking facilities
pursuant to its restrictive safety and security rules and regulations. Prior to the execution of the
Shiprepair Agreement, "Superferry 3" was already insured by WG&A with Pioneer
In the course of its repair, M/V "Superferry 3" was gutted by fire. Claiming that the extent of the
damage was pervasive, WG&A declared the vessel’s damage as a "total constructive loss" and, hence,
filed an insurance claim with Pioneer.
On June 16, 2000, Pioneer paid the insurance claim of WG&A and WG&A, in turn, executed a Loss
and Subrogation Receipt in favor of Pioneer.
Armed with the subrogation receipt, Pioneer tried to collect from KCSI, but the latter denied any
responsibility for the loss of the subject vessel. As KCSI continuously refused to pay despite repeated
demands, Pioneer, on August 7, 2000, filed a Request for Arbitration before the Construction Industry
Arbitration Commission.
The Yard and The WG&A are hereby ordered to pay the arbitration costs pro-rata.

Issue: Whether or not both parties must shoulder the cost of arbitration?
Ruling:
Yes. It is only fitting that both parties should share in the burden of the cost of arbitration, on a pro
rata basis. We find that Pioneer had a valid reason to institute a suit against KCSI, as it believed that it
was entitled to claim reimbursement of the amount it paid to WG&A. However, we disagree with
Pioneer that only KCSI should shoulder the arbitration costs. KCSI cannot be faulted for defending
itself for perceived wrongful acts and conditions. Otherwise, we would be putting a price on the right
to litigate on the part of Pioneer.

53.SOLEDAD CHANLIONGCO RAMOS VS TERESITA D. RAMOS G.R 144294. March 11, 2003
FACTS:
The late Paulino V. Chanliongco Jr was co-owner of a parcel of land in Tondo, Manila with his
siblings. By virtue of a Special Power of Attorney executed by the co-owners in favor of Narcisa, her
daughter Adoracion C. Mendoza had sold the lot to herein respondents. Because of conflict among
the heirs of the co-owners as to the validity of the sale, respondents filed with the RTC a Complaint
for interpleader to resolve the various ownership claims. The RTC upheld the sale insofar as the share
of Narcisa was concerned. It ruled that Adoracion had no authority to sell the shares of the other co-
owners, because the Special Power of Attorney had been executed in favor only of her mother,
Narcisa.

On appeal, the CA modified the ruling of the RTC. It held that while there was no Special Power
of Attorney in favor of Adoracion, the sale was nonetheless valid, because she had been authorized
by her mother to be the latters sub-agent. This was not appealed hence became final and executory.
On April 10, 1999, petitioners filed with the CA a Motion to Set Aside the Decision. They contended
that they had not been served a copy of either the Complaint or the summons. Neither had they been
impleaded as parties to the case in the RTC. As it was, they argued, the CA Decision should be set aside
because it adversely affected their respective shares in the property without due process; this was
denied.

ISSUE: WON CA erred in denying petitioners Motion and allowing its Decision dated September 25,
1995 to take its course, inspite of its knowledge that the lower court did not acquire jurisdiction over
the person of petitioners and passing petitioners property in favor of respondents, hence without due
process of law?

HELD:
No. It is well settled that a decision that has acquired finality becomes immutable and
unalterable. A final judgment may no longer be modified in any respect, even if the modification is
meant to correct erroneous conclusions of fact or law; The only exceptions to this rule are the
correction of (1) clerical errors, (2) the so-called nunc pro tunc entries which cause no prejudice to any
party, and (3) void judgments. To determine whether the CA Decision of September 28, 1995 is void,
the failure to implead and to serve summons upon petitioners will now be addressed.

The Complaint filed by respondents with the RTC was therefore a real action, because it
affected title to or possession of real property. As such, the Complaint was brought against the
deceased registered co-owners: Narcisa, Mario, Paulino and Antonio Chanliongco, as represented by
their respective estates. Clearly, petitioners were not the registered owners of the land, but
represented merely an inchoate interest thereto as heirs of Paulino. They had no standing in court
with respect to actions over a property of the estate, because the latter was represented by an
executor or administrator.[19] Thus, there was no need to implead them as defendants in the case,
inasmuch as the estates of the deceased co-owners had already been made parties.

Clearly, petitioners were not the registered owners of the land, but represented merely an
inchoate interest thereto as heirs of Paulino. They had no standing in court with respect to actions
over a property of the estate, because the latter was represented by an executor or
administrator.[19] Thus, there was no need to implead them as defendants in the case, inasmuch as
the estates of the deceased co-owners had already been made parties. As it was, there was no need
to include petitioners as defendants. Not being parties, they were not entitled to be served summons.

54. Korea Technologies Co., Ltd. v. Hon. Alberto A. Lerma and Pacific General
Steel Manufacturing Corporation,
G.R. No. 143581, Jan. 7, 2008.

FACTS: Korea Technologies Co., Ltd. [Korea Tech], a Korean corporation, entered
into a contract with Pacific General Steel Manufacturing Corporation [Pacific General],
a domestic corporation, whereby Korea Tech undertook to ship and install in Pacific
General’s site in Carmona, Cavite the machinery and facilities necessary for
manufacturing LPG cylinders, and to initially operate the plant after it is installed.

The plant, after completion of installation, could not be operated by Pacific General
due to its financial difficulties affecting the supply of materials. The last payments
made by Pacific General to Korea Tech consisted of postdated checks which were
dishonored upon presentment. According to Pacific General, it stopped payment
because Korea Tech had delivered a hydraulic press which was different in kind and
of lower quality than that agreed upon. Korea Tech also failed to deliver equipment
parts already paid for by it. It threatened to cancel the contract with Korea Tech and
dismantle the Carmona plant.

Finally, Pacific General filed before the Office of the Prosecutor a Complaint-Affidavit
for estafa against Mr. Dae Hyun Kang, President of Korea Tech. Korea Tech informed
PGSMC that it could not unilaterally rescind the contract. Of greater importance to the
present article, KOGIES also insisted that their dispute be settled by arbitration as
provided by Article 15 of their contract — the arbitration clause.

Korea Tech initiated arbitration before the Korea Commercial Arbitration Board [KCAB]
in Seoul, Korea and, at the same time, commenced a civil action before the Regional
Trial Court [the “trial court”] where it prayed that Pacific General be restrained from
dismantling the plant and equipment. Pacific General opposed the application and
argued that the arbitration clause was null and void, being contrary to public policy as
it ousts the local court of jurisdiction.

The trial court denied the application for preliminary injunction and declared the
arbitration agreement null and void. Korea Tech moved to dismiss the counterclaims
for damages. Korea Tech filed a petition for certiorari before the Court of Appeals
[CA]. The court dismissed the petition and held that an arbitration clause, which
provided for a final determination of the legal rights of the parties to the contract by
arbitration was against public policy. Further appeal was made to the Supreme Court
by way of a petition for review.

ISSUE: Whether or not the arbitration clause is valid.

HELD: YES. “The arbitration clause is valid. It has not been shown to be contrary to
any law, or against morals, good customs, public order or public policy. The arbitration
clause stipulates that the arbitration must be done in Seoul, Korea in accordance with
the Commercial Arbitration Rules of the KCAB, and that the award is final and binding.
This is not contrary to public policy. We find no reason why the arbitration clause
should not be respected and complied with by both parties.”

This ruling, the Court said, is consonant with the declared policy in Section 2 of the
ADR Act that “the State (shall) actively promote party autonomy in the resolution of
disputes or the freedom of the parties to make their own arrangements to resolve their
disputes.” Citing Section 24 of the ADR Act, the Court said the trial court does not
have jurisdiction over disputes that are properly the subject of arbitration pursuant to
an arbitration clause. In the earlier case of BF Corporation v. Court of Appeals and
Shangri-la Properties, Inc., where the trial court refused to refer the parties to
arbitration notwithstanding the existence of an arbitration agreement between them,
the Supreme Court said the trial court had prematurely exercised its jurisdiction over
the case.

The Court further emphasized that a submission to arbitration is a contract. As a rule,

contracts are respected as the law between the contracting parties and produce effect
between them, their assigns and heirs.8 Courts should liberally review arbitration
clauses. Any doubt should be resolved in favor of arbitration.
ADDITIONAL INFO:

Re: Enforcement of award in a domestic or international arbitration

An arbitral award in a domestic or international arbitration is subject to enforcement by
a court upon application of the prevailing party for the confirmation or recognition and
enforcement of an award. Under Section 42 of the ADR Act, “The recognition and
enforcement of such (foreign) arbitral awards shall be filed with the Regional Trial
Court in accordance with the rules of procedure to be promulgated by the Supreme
Court.” An arbitral award is immediately executory upon the lapse of the period
provided by law.

For an award rendered in domestic or non-international arbitration, unless a petition

to vacate the award is filed within thirty (30) days from the date of serve upon the latter,
the award is subject to confirmation by the court.

For an award rendered in a domestic, international arbitration, the period for filing an
application to set it aside is not later than three (3) months from the date the applicant
received the award, otherwise the court shall recognize and enforce it.

3. Re: Enforcement of foreign arbitral award

In an attempt to allay the fear by Pacific General of submitting its dispute to arbitration
in Seoul, South Korea under the rules of the Korea Commercial Arbitration Board, the

Supreme Court said in obiter dictum:

In case a foreign arbitral body is chosen by the parties, the arbitral rules of our
domestic arbitration bodies would not be applied. As signatory to the Arbitration Rules
of the UNCITRAL Model Law on International Commercial Arbitration of the United
Nations Commission on International Trade Law [UNCITRAL] in the New York
Convention on June 21, 1985, the Philippine committed itself to be bound by the Model
Law. We have even incorporated the Model Law in Republic Act No. 9285, otherwise
known as the Alternative Dispute Resolution Act of 2004.”
xxxxxx
“Thus, while the RTC does not have jurisdiction over disputes governed by arbitration
mutually agreed upon by the parties, still the foreign arbitral award is subject to judicial
review by the RTC which can set aside, reject or vacate it.”…. Chapter 7 of RA 9285
has made it clear that all arbitral awards, whether domestic or foreign, are subject to
judicial review on specific grounds provided for.”
The Supreme Court finally held:
“While it (Pacific General) may have misgivings on the foreign arbitration done in
Korea by the KCAB, it has available remedies under RA 9285. Its interests are duly
protected by the law which requires that the arbitral award that may be rendered by
KCAB must be confirmed here by the RTC before it can be enforced.”
55. Rockland Construction Co., Inc. vs. Mid-Pasig Land Development Corporation
543 SCRA 596 (2008) – Domestic Arbitration: Extent of Court Intervention

Rockland offered to lease from Mid-Pasig 3.1-hectare property in Pasig City. This property is covered
by TCTs 469702 and 337158 under the control of the PCGG. Rockland sent letter to PCGG, included in
the letter is the proposed terms and conditions of the lease. This letter was also received by Mid-Pasig,
but Mid-Pasig made no response. In another letter, Rockland sent MBTC check for Php1million as a
sign of its good faith and readiness to enter into the lease agreement under the certain terms and
conditions stipulated in the letter.
In a subsequent follow-up letter, Rockland then said that it presumed that Mid-Pasig had accepted its
offer because the P1 million check it issued had been credited to Mid-Pasigs account. Mid-Pasig,
however, denied it accepted Rocklands offer and claimed that no check was attached to the said letter.
It also vehemently denied receiving the P1 million check, much less depositing it in its account.
Mid-Pasig replied to Rockland that it was only upon receipt of the latters letter that the former came
to know where the check came from and what it was for. Nevertheless, it categorically informed
Rockland that it could not entertain the latters lease application.
Rockland then filed an action for specific performance seeking to compel Mid-Pasig to execute in
Rocklands favor, a contract of lease over the land. RTC dismissed petitioners complaint; and held that
there was no perfected contract of lease between the parties.
On appeal, the CA reversed and set aside RTC decision on the following grounds: (1) there was no
meeting of the minds as to the offer and acceptance between the parties; (2) there was no implied
acceptance of the P1 million check as Mid-Pasig was not aware of its source at the time Mid-Pasig
discovered the existence of the P1 million in its account; and (3) Rocklands subsequent acts and/or
omissions contradicted its claim that there was already a contract of lease, as it neither took
possession of the property, nor did it pay for the corresponding monthly rentals.
Issue: Was there a perfected contract of lease? Had estoppel in pais set in?

Ruling: No contract of lease. Mid-Pasig is also not in estoppel in pais. Rockland’s Petition is Denied.

A contract has three distinct stages: preparation, perfection and consummation.—A contract has three
distinct stages: preparation, perfection, and consummation. Preparation or negotiation begins when
the prospective contracting parties manifest their interest in the contract and ends at the moment of
their agreement. Perfection or birth of the contract occurs when they agree upon the essential
elements thereof. Consummation, the last stage, occurs when the parties “fulfill or perform the terms
agreed upon in the contract, culminating in the extinguishment thereof.”

The doctrine of estoppel is based on the grounds of public policy, fair dealing, good faith and justice
and its purpose is to forbid one to speak against his own act, representations or commitments to the
injury of one to whom they were directed and who reasonably relied thereon.—Mid-Pasig is also not
in estoppel in pais. The doctrine of estoppel is based on the grounds of public policy, fair dealing, good
faith and justice, and its purpose is to forbid one to speak against his own act, representations, or
commitments to the injury of one to whom they were directed and who reasonably relied thereon.
Since estoppel is based on equity and justice, it is essential that before a person can be barred from
asserting a fact contrary to his act or conduct, it must be shown that such act or conduct has been
intended and would unjustly cause harm to those who are misled if the principle were not applied
against him.
For estoppel to apply, the action giving rise thereto must be unequivocal and intentional because, if
misapplied, estoppel may become a tool of injustice.—From the start, Mid-Pasig never falsely
represented its intention that could lead Rockland to believe that Mid-Pasig had accepted Rockland’s
offer. Mid-Pasig consistently rejected Rockland’s offer. Further, Rockland never secured the approval
of Mid-Pasig’s Board of Directors and the PCGG to lease the subject property to Rockland. As noted
by the Court of Appeals, if indeed Rockland believed that Mid-Pasig impliedly accepted the offer, then
it should have taken possession of the property and paid the monthly rentals. But it did not. For
estoppel to apply, the action giving rise thereto must be unequivocal and intentional because, if
misapplied, estoppel may become a tool of injustice.

56. Transfield Philippines Inc. (TPI) vs Luzon Hydro Corporation (LHC)

Facts:
Transfield Philippines (Transfield) entered into a turn-key contract with Luzon Hydro Corp.
(LHC). Under the contract, Transfield were to construct a hydro-electric plants in Benguet and Ilocos.
Transfield was given the sole responsibility for the design, construction, commissioning, testing and
completion of the Project. The contract provides for a period for which the project is to be completed
and also allows for the extension of the period provided that the extension is based on justifiable
grounds such as fortuitous event. In order to guarantee performance by Transfield, two stand-by
letters of credit were required to be opened. During the construction of the plant, Transfield
requested for extension of time citing typhoon and various disputes delaying the construction. LHC
did not give due course to the extension of the period prayed for but referred the matter to arbitration
committee. Because of the delay in the construction of the plant, LHC called on the stand-by letters
of credit because of default. However, the demand was objected by Transfield on the ground that
there is still pending arbitration on their request for extension of time.
Both Transfield and Luzon filed before separate arbitration tribunals, ICC and CIAC
respectively, to determine whether force majeure would justify the delay. Pending the arbitration
proceeding, Transfield filed a complaint for preliminary injunction against the respondent banks to
restrain them from paying on the securities and also against Luzon to prevent it from calling on the
securities. RTC issued a TRO but denied the application for writ of preliminary injunction. CA affirmed
RTC. N.B. When the TRO expired, Luzon was able to withdraw from ANZ.
Issue:
Whether or not the pendency of arbitral proceedings foreclose resort to the courts for
provisional reliefs.
Held:
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 a judicial authority for interim or conservatory measures. Likewise,
Section 14 of Republic Act (R.A.) No. 876 (The Arbitration Law) recognizes the rights of any party to
petition the court to take measures to safeguard and/or conserve any matter which is the subject of
the dispute in arbitration. In addition, R.A. 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.
Additional Info:
Neither is there an identity of parties between and among the three (3) cases. The ICC case
only involves TPI and LHC logically since they are the parties to the Turnkey Contract. In comparison,
the instant petition includes Security Bank and ANZ Bank, the banks sought to be enjoined from
releasing the funds of the letters of credit. The Court agrees with TPI that it would be ineffectual to
ask the ICC to issue writs of preliminary injunction against Security Bank and ANZ Bank since these
banks are not parties to the arbitration case, and that the ICC Arbitral tribunal would not even be able
to compel LHC to obey any writ of preliminary injunction issued from its end
57.ABS-CBN vs. WORLD INTERACTIVE NETWORK SYSTEMS (WINS) JAPAN CO., LTD.
FACTS: Petitioner ABS-CBN entered into an agreement with respondent World Interactive Network
Systems (WINS). Under the agreement, respondent was granted the exclusive license to distribute and
sublicense the distribution of the television service known as "The Filipino Channel" (TFC) in Japan.
A dispute arose when petitioner accused respondent of inserting nine episodes of WINS WEEKLY, into
the TFC programming from March to May 2002, claiming that such insertions were unauthorized thus
constituting a material breach of their agreement. As a result, petitioner notified respondent of its
intention to terminate their licensing agreement.
Thereafter, respondent filed an arbitration suit pursuant to the arbitration clause of its agreement
with petitioner and contended that the airing of WINS WEEKLY was made with petitioner's prior
approval. It also alleged that petitioner only threatened to terminate their agreement because it
wanted to renegotiate the terms thereof to allow it to demand higher fees. Respondent also prayed
for damages for petitioner's alleged grant of an exclusive distribution license to another entity, NHK
(Japan Broadcasting Corporation).
The parties appointed a sole arbitrator in the person of Professor Alfredo F. Tadiar and the latter
reached a decision in favor of respondent.
Petitioner filed in the CA a petition for review under Rule 43 of the Rules of Court or, in the alternative,
a petition for certiorari under Rule 65 of the same Rules, with application for temporary restraining
order and writ of preliminary injunction.
The CA rendered the assailed decision dismissing ABS-CBN’s petition for lack of jurisdiction. It stated
that as the TOR itself provided that the arbitrator's decision shall be final and unappealable and that
no motion for reconsideration shall be filed, then the petition for review must fail. It ruled that it is
the RTC which has jurisdiction over questions relating to arbitration. It held that the only instance it
can exercise jurisdiction over an arbitral award is an appeal from the trial court's decision confirming,
vacating or modifying the arbitral award.
ISSUE: W/N the Court can intervene with the decision of the Arbitrator (as regards the arbitral award)
RULING: Yes.
It is well within the power and jurisdiction of the Court to inquire whether any instrumentality
of the Government, such as a voluntary arbitrator, has gravely abused its discretion in the exercise of
its functions and prerogatives. Any agreement stipulating that the “decision of the arbitrator shall be
final and unappealable and that no further judicial recourse if either party disagrees with the whole or
any part of the arbitrator's award may be availed of” cannot be held to preclude in proper cases the
power of judicial review which is inherent in courts. Said the Court, we will not hesitate to review a
voluntary arbitrator's award where there is a showing of grave abuse of authority or discretion and
such is properly raised in a petition for certiorari and there is no appeal, nor any plain, speedy remedy
in the course of law.
58. CARGILL PHILIPPINES, INC, vs. SAN FERNANDO REGALA

FACTS: Respondent San Fernando Regala Trading filed with the RTC of Makati City a Complaint for
Rescission of Contract with Damages against petitioner Cargill. It alleged that it agreed that it would
purchase from Cargill 12,000 metric tons of Thailand origin cane blackstrap molasses and that the
payment would be by an Irrevocable Letter of Credit payable at sight. The parties agreed that the
delivery would be made in April/May. Cargill failed to comply with its obligations despite demands
from respondent. The respondent then filed for rescission. The petitioner filed a Motion to
Dismiss/Suspend proceeding, arguing that they must first resort to arbitration as stated in their
agreement before going to court. However, the RTC ruled in favor of the respondent. The CA
affirmed the RTC decision, adding that the case cannot be brought under the Arbitration Law for the
purpose of suspending the proceedings before the RTC, since in its Motion to Dismiss/Suspend
proceedings, petitioner alleged, as one of the grounds thereof, that the subject contract between
the parties did not exist or it was invalid; that the said contract bearing the arbitration clause was
never consummated by the parties, thus, it was proper that such issue be first resolved by the court
through an appropriate trial; that the issue involved a question of fact that the RTC should first
resolve.

ISSUE: W/N the validity of the contract containing the agreement to submit to arbitration affects the
applicability of the arbitration clause.

HELD: NO. Arbitration, as an alternative mode of settling disputes, has long been recognized and
accepted in our jurisdiction. R.A. No. 876 authorizes arbitration of domestic disputes. Foreign
arbitration, as a system of settling commercial disputes of an international character, is likewise
recognized. The enactment of R.A. No. 9285 on April 2, 2004 further institutionalized the use of
alternative dispute resolution systems, including arbitration, in the settlement of disputes. A
contract is required for arbitration to take place and to be binding.

Submission to arbitration is a contract and 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 part of the contract
and is itself a contract. The validity of the contract containing the agreement to submit to
arbitration does not affect the applicability of the arbitration clause itself. A contrary ruling would
suggest that a party's mere repudiation of the main contract is sufficient to avoid arbitration. That is
exactly the situation that the separability doctrine, as well as jurisprudence applying it, seeks to
avoid. Petition is GRANTED.
59. Ormoc Sugarcane vs CA
Petitioners are associations organized by and whose members are individual sugar planters (Planters)
while respondents are sugar centrals engaged in grinding and milling sugarcane delivered to them by
numerous individual sugar planters, who may or may not be members of an association such as
petitioners. According to petitioners, the relationship between the respondents and individual
planters is governed by milling contract. In their contract specifically Article XX provides that all
differences and controversies which may arise between the parties concerning the agreement shall
be submitted for discussion to a Board of Arbitration.

Petitioners filed 2 petitions for Arbitration under R.A. 876 for Recovery of Equal Additional Benefits,
Attorney’s Fees and Damages against respondents HIDECO and OSCO without impleading any of their
individual members. They argued that respondents unduly accorded the independent Planters more
benefits and thus prayed that an order be issued directing the parties to enter upon with arbitration
in accordance with the terms of the milling contracts. Respondents argued that there was no milling
contract entered into. It was only the individual Planters, and not petitioners, who had legal standing
to invoke the arbitration clause in the milling contracts.

Issue: W/N Petitioners have legal standing to invoke the arbitration clause.
Held: No.

In an agreement for arbitration, the ordinary elements of a valid contract must appear, including an
agreement to arbitrate some specific thing, and an agreement to abide by the award, either in express
language or by implication.

In the case at bar, there were more than 2,000 Planters in the district at the time the case was
commenced. Only 80 Planters who were all members of OSPA were shown to have such an agreement
to arbitrate, included as a stipulation in their individual milling contracts. Petitioners do not have any
agreement to arbitrate with respondents. The other petitioners failed to prove that any of their
members had milling contracts with respondents, much less, that respondents had an agreement to
arbitrate with the petitioner associations themselves. Assuming arguendo that all the petitioners were
able to present milling contracts in favor of their members, it is nonetheless undeniable that under
the arbitration clause in these contracts it is the parties thereto who have the right to submit a
controversy or dispute to arbitration. Moreover, even assuming that petitioners are indeed
representatives of the member Planters who have milling contracts with the respondents and
assuming further that petitioners signed the milling contracts as representatives of their members,
petitioners could not initiate arbitration proceedings in their own name as they had done in the
present case. As mere agents, they should have brought the suit in the name of the principals that
they purportedly represent.
60.BENGUET CORPORATION v DENR-MAB
February 13, 2008

FACTS:

On June 1, 1987, Benguet and J.G. Realty entered into a RAWOP, wherein J.G. Realty was
acknowledged as the owner of four mining claims respectively named as Bonito-I, Bonito-II, Bonito-III,
and Bonito-IV, with a total area of 288.8656 hectares, situated in Barangay Luklukam, Sitio Bagong
Bayan, Municipality of Jose Panganiban, Camarines Norte.

Thus, on August 9, 1989, the Executive Vice-President of Benguet, Antonio N. Tachuling, issued
a letter informing J.G. Realty of its intention to develop the mining claims. However, on February 9,
1999, J.G. Realty, through its President, Johnny L. Tan, then sent a letter to the President of Benguet
informing the latter that it was terminating the RAWOP on the following grounds:

a. The fact that your company has failed to perform the obligations set forth in the RAWOP, i.e., to
undertake development works within 2 years from the execution of the Agreement;
b. Violation of the Contract by allowing high graders to operate on our claim.
c. No stipulation was provided with respect to the term limit of the RAWOP.
d. Non-payment of the royalties thereon as provided in the RAWOP.

On June 7, 2000, J.G. Realty filed a Petition for Declaration of Nullity/Cancellation of the
RAWOP with the Legaspi City POA, Region V, docketed as DENR Case No. 2000-01 and entitled J.G.
Realty v. Benguet.

DECISION OF LOWER COURTS: *POA: declared the RAWOP cancelled. *MAB: affirmed POA.

ISSUE: Should the controversy have first been submitted to arbitration before the POA took
cognizance of the case

HELD: YES.
On correctness of appeal: Petitioner having failed to properly appeal to the CA under Rule 43,
the decision of the MAB has become final and executory. On this ground alone, the instant petition
must be denied.

Secs. 11.01 and 11.02 of the RAWOP pertinently provide:

11.01 Arbitration

Any disputes, differences or disagreements between BENGUET and the OWNER with reference to
anything whatsoever pertaining to this Agreement that cannot be amicably settled by them shall not
be cause of any action of any kind whatsoever in any court or administrative agency but shall, upon
notice of one party to the other, be referred to a Board of Arbitrators consisting of three (3) members,
one to be selected by BENGUET, another to be selected by the OWNER and the third to be selected
by the aforementioned two arbitrators so appointed.

xxxx

11.02 Court Action

No action shall be instituted in court as to any matter in dispute as hereinabove stated, except to
enforce the decision of the majority of the Arbitrators .

61. Heirs of the Late Sps. Luciano P. Lim and Salud Nakpil Bautista vs. The Presiding Judge of the
Regional Trial Court of Quezon City

FACTS: This is a case for the reconstitution of the TCT of a subject parcel of land in Quezon City,
whereas the private-respondent won because of the non-appearance of the representatives from the
OSG. Petitioners filed a verified petition for the annulment of the trial court’s decision. According to
petitioners, their parents, spouses Lim. The lot contained an area of 795 square meters more or less
and was covered by TCT No. 27997. Furthermore, they alleged that their parents had been in actual
physical possession of the property, which they continued after the death of their parents. When a
fire allegedly razed the Quezon City Hall in June 1988, among the records destroyed was the original
copy of TCT and thus, one of the petitioners applied for and was issued a reconstituted title in
September 1994.

Petitioners claimed that when private-respondent filed for reconstitution, a portion thereof was
already covered by another TCT. And petitioners insisted that the Priv. Respondent did not comply
with RA 26, as it failed the boundaries of the land. They also considered committed with extrinsic
fraud.

But private respondent Canosa said otherwise. The RTC ruled in favor for Canosa and CA did too.

Now, petitioners, on the one hand, posit that the Court of Appeals erred when it made a finding of
fact through a mere physical comparison of the technical descriptions in the TCTs without first allowing
the parties to vindicate their respective claims, at least during the pre-trial or more properly, in a trial
held for the purpose. They also question the Court of Appeals’ refusal to resolve the issue of ownership
of the subject lot, arguing that in a petition under Rule 47, Section 6 of the Rules of Court, the appellate
court is allowed to be a trier of facts.

Issue: Whether or not the Court of Appeals should have taken cognizance of the questions of fact
which the petitioners raised in the petition for annulment of judgment?

Ruling: No. Petitioners utterly miss the point. To repeat, with the finding that the property described
in their title is different from that of respondent Cañosa, the petition for annulment of judgment must
necessarily fail. And that should put a stop on the matter. However, the Court of Appeals noted that
both parties raised issues of ownership and spuriousness of their respective titles—with petitioners
claiming that no records exist in the Quezon City Assessor’s Office nor in the Taxation (Real Estate
Division) of the ownership of respondent Cañosa’s predecessor-in-interest over a 33,914 sq. m. land
in Quezon City, and with respondent Cañosa asserting that the title issued to petitioners’
predecessors-in-interest is a spurious, having emanated from a spurious private subdivision survey
(Psd) plan. Obviously, the validity of the parties’ respective titles is being attacked, in a proceeding
which was brought merely to seek the nullification of an order of reconstitution.

(p.s. wala sa full text and sa scra about arbitration D: )

62.Cornes vs. Leal

Facts:
The instant Petition traces its origins from four separate Complaints filed with the Provincial
Adjudication Board, Region III in Tarlac,. filed by petitioners and their predecessors-in interest against
respondents Leal Realty Centrum Co., Inc. (LEAL REALTY), Leal Haven, Inc. (LEAL HAVEN), their
Managing Director Ernesto M. Legaspi, and all persons claiming rights under them for maintenance of
peaceful possession and for issuance of a writ of preliminary injunction. Petitioners contended that
they had been farmers and full-fledged tenants for more than 30 years of an agricultural landholding
which was previously owned and registered in the name of Josefina Roxas Omaña (JOSEFINA) under
TCT No. 103275 of the Registry of Deeds of Tarlac.

The Provincial Adjudicator Benjamin M. Yambao in this four complaints rendered a decision in favor
of respondents and against petitioners. The Provincial Adjudicator found that there was no tenancy
relationship which existed between the parties.

However despite siding with the Provincial Adjudicator, the Court of Appeals held that
notwithstanding the lack of tenancy relationship, the compensation agreement executed amongst the
parties must be respected and the respondent cannot ignore such agreement on the ground that that
petitioners have long been tilling the land for their sole benefit . Respondents and petitioner filed their
respective appeals to this Court .

Issue: Whether or not the compensation agreement must be respected

Ruling:

Yes. Therefore, LEAL REALTY may not be allowed to ignore the terms of the compensation agreement
on the premise that petitioners have long been tilling the land for their sole benefit. The terms of the
compensation agreement must be respected. Due to LEAL REALTY’s failure to pay the full amount as
contained in the compensation agreement, petitioners were allowed to continue tilling the land for
their sole benefit until such time that it is able to pay the balance thereof.

The Court of Appeals, in affirming the Decision of the Provincial Adjudicator, merely reinstated the
latter’s Decision, which was silent on the manner in which the compensation agreement may be
settled.

(which means the Court could grant judicial relief in enforcing the agreement even if the previous
tribunal was silent on it’s execution)

The records show that out of the amount of ₱160,000.00 stated in the compensation package, LEAL
REALTY has already paid ₱114,000.00 thereof, leaving a balance of ₱46,000.00. This amount should,
thus, be paid to JACINTO, PABLO, JUANITO and FRANCISCO (or their heirs, where applicable) by LEAL
REALTY in accordance with the compensation agreement. In the same vein, LEAL REALTY is enjoined
to respect the terms of the compensation agreement by turning over the 2,500 square-meter lot58 to
JACINTO, PABLO, JUANITO, and FRANCISCO as described therein.

63. Santos V Heirs of Lustre G.R. No. 151016, August 6, 2008

Facts: In the Civil Case No. 1330, both Heirs of Dominga Lustre, filed with the RTC a complaint for
Declaration of the Inexistence of Contract, Annulment of Title, Conveyance and Damages against
Froilan Santos, son of the appellant spouses. In another Civil Case, filed by Lustre's other heirs against
the parties of this case, the averred that the sale of the property to Natividad Santos was simulated,
spurious or fake, and that they discovered that the spouses Santos transferred the property to Froilan
Santos when ejectment suit was filed against them.

Issue: Whether or not the action for reconveyance on the ground that the certificate of title was
obtained by means of a fictitious deed of sale is virtually an action for the declaration of its nullity.

Ruling: Yes. Any adverse ruling in the earlier case will not, in any way, prejudice the heirs who did not
join, even if such case was actually filed in behalf of all the co-owners. In fact, if an action for recovery
of property is dismissed, a subsequent action by a co-heir who did not join the earlier case should not
be barred by prior judgment. When an action for reconveyance is filed, it would be in the nature of a
suit for quieting of title, an action that is imprescriptible. It follows then that the respondents' present
action is not barred by laches.

64. Autocorp Group vs. Intra Strata Assurance Corporation, 556 SCRA 250, G.R. No. 166662 June 27,
2008
FACTS: Autocorp Group, represented by its President, Rodriguez, secured an ordinary re-export bond
from private respondent Intra Strata Assurance Corporation (ISAC) in favor of public Bureau of
Customs (BOC), to guarantee the re-export of 2 units of car (at 2 different dates) and/or to pay the
taxes and duties thereon. Petitioners executed and signed two Indemnity Agreements with identical
stipulations in favor of ISAC, agreeing to act as surety of the subject bonds
In sum, ISAC issued the subject bonds to guarantee compliance by petitioners with their undertaking
with the BOC to re-export the imported vehicles within the given period and pay the taxes and/or
duties due thereon. In turn, petitioners agreed, as surety, to indemnify ISAC for the liability the latter
may incur on the said bonds
Autocorp failed to re-export the items guaranteed by the bonds and/or liquidate the entries or cancel
the bonds, and pay the taxes and duties pertaining to the said items, despite repeated demands made
by the BOC, as well as by ISAC. By reason thereof, the BOC considered the two bonds forfeited.
Failing to secure from petitioners the payment of the face value of the two bonds, ISAC filed with the
RTC an action against petitioners to recover a sum of money plus AF. ISAC impleaded the BOC “as a
necessary party plaintiff in order that the reward of money or judgment shall be adjudged unto the
said necessary plaintiff.” The case was docketed as Civil Case No. 95-1584.
Petitioners filed a Motion to Dismiss on the grounds that (1) the Complaint states no cause of action;
and (2) the BOC is an improper party.
The RTC denied petitioners’ Motion to Dismiss. Petitioners thus filed their Answer to the Complaint,
claiming that they sought permission from the BOC for an extension of time to re-export the items
covered by the bonds; that the BOC has yet to issue an assessment for petitioners’ alleged default;
and that the claim of ISAC for payment is premature as the subject bonds are not yet due and
demandable.
ISSUE: W/N the inclusion of the BOC “as a necessary party plaintiff in order that the reward of money
or judgment shall be adjudged unto the said necessary plaintiff” is proper
RULING: YES. A necessary party is one who is not indispensable but who ought to be joined as a party
if complete relief is to be accorded as to those already parties, or for a complete determination or
settlement of the claim subject of the action. The subject matter of Civil Case No. 95-1584 is the
liability of Autocorp Group to the BOC, which ISAC is also bound to pay as the guarantor who issued
the bonds therefor. Clearly, there would be no complete settlement of the subject matter of the case
at bar—the liability of Autocorp Group to the BOC—should Autocorp Group be merely ordered to pay
its obligations with the BOC to ISAC. BOC is, therefore, a necessary party in the case at bar, and should
not be dropped as a party to the present case.

65. ABS-CBN BROADCASTING CORP vs. WORLD INTERACTIVE NETWORK SYSTEMS JAPAN CO., LTD.

FACTS:

Petitioner entered into a licensing agreement with respondent, a foreign corporation licensed under
the laws of Japan, to which respondent was granted the exclusive license to distribute and sublicense
the distribution of the television service known as "The Filipino Channel" (TFC) in Japan. By virtue
thereof, petitioner undertook to transmit the TFC programming signals to respondent which the latter
received through its decoders and distributed to its subscribers.

A dispute arose between the parties when petitioner accused respondent of inserting nine episodes
of WINS WEEKLY, a weekly 35-minute community news program for Filipinos in Japan, into the TFC
programming. Petitioner claimed that these were "unauthorized insertions" constituting a material
breach of their agreement. Consequently, petitioner notified respondent of its intention to terminate
the agreement.

Thereafter, respondent filed an arbitration suit pursuant to the arbitration clause of its agreement
with petitioner. It contended that the airing of WINS WEEKLY was made with petitioner's prior
approval. It also alleged that petitioner only threatened to terminate their agreement because it
wanted to renegotiate the terms thereof to allow it to demand higher fees. Respondent also prayed
for damages for petitioner's alleged grant of an exclusive distribution license to another entity, NHK
(Japan Broadcasting Corporation).

The arbitrator found in favor of respondent. Petitioner filed in the CA a petition for review under Rule
43 of the Rules of Court or, in the alternative, a petition for certiorari under Rule 65 of the same Rules,
with application for temporary restraining order and writ of preliminary injunction.alleging serious
errors of fact and law and/or grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of the arbitrator. Dismissed for lack of jurisdiction.

ISSUE: W/N petitioner may avail of, directly in the CA, a petition for review under Rule 43 or a petition
for certiorari under Rule 65 of the Rules of Court, instead of filing a petition to vacate the award in the
RTC when the grounds invoked to overturn the arbitrator’s decision are other than those for a petition
to vacate an arbitral award enumerated under RA 876.

RULING: NO
Insular Savings Bank v. Far East Bank and Trust Company definitively outlined several judicial remedies
an aggrieved party to an arbitral award may undertake:
(1) a petition in the proper RTC to issue an order to vacate the award on the grounds provided for in
Section 24 of RA 876;
(2) (2) a petition for review in the CA under Rule 43 of the Rules of Court on questions of fact, of law,
or mixed questions of fact and law; and
(3) (3) a petition for certiorari under Rule 65 of the Rules of Court should the arbitrator have acted
without or in excess of his jurisdiction or with grave abuse of discretion amounting to lack or excess
of jurisdiction.

Nevertheless, although petitioner’s position on the judicial remedies available to it was correct, we
sustain the dismissal of its petition by the CA. The remedy petitioner availed of, entitled
"alternative petition for review under Rule 43 or petition for certiorari under Rule 65," was wrong. Time
and again, we have ruled that the remedies of appeal and certiorari are mutually exclusive and not
alternative or successive.

Proper issues that may be raised in a petition for review under Rule 43 pertain to errors of fact, law or
mixed questions of fact and law. While a petition for certiorari under Rule 65 should only limit itself
to errors of jurisdiction, that is, grave abuse of discretion amounting to a lack or excess of
jurisdiction. Moreover, it cannot be availed of where appeal is the proper remedy or as a substitute
for a lapsed appeal

66. FORT BONIFACIO DEVELOPMENT CORPORATION vs. HON. EDWIN D. SORONGON and
VALENTIN FONG
Facts: Petitioner Fort Bonifacio Development Corp is a corporation registered under Philippine laws
and is engaged in the business of real estate development. Respondent, Valentin Fong doing business
under the name VF Industrial Sales is the assignee of L & M Maxco Specialist Construction’s (Maxco)
retention money from the Bonifacio Ridge Condominium Phase 1 (BRCP 1). Petitioner entered into a
trade contract with Maxco wherein Maxco would undertake the structural and partial architectural
package of the BRCP 1. Later petitioner accused Maxco of delay in completion of its work and sent the
latter a notice of termination. Petitioner also instructed Maxco to perform remedial measures prior
to the contract expiration pursuant to Clause 23.1 of the contract. Subsequently, Maxco was sued by
its creditors including respondent for debts unrelated to BRCP 1.
In order to settle the collection suit Maxco assigned its receivables representing its retention money
from the BRCP 1 in the amount of P1,577,115.90. Respondent (a CREDITOR of MAXCO) wrote to
petitioner, informing the latter of Maxco’s assignment in his favor and asking the latter to confirm the
validity of Maxco’s receivables. Petitioner replied, informing the respondent that Maxco did have
receivables, however these were not due and demandable until January of next year, moreover the
amount had to be ascertained and liquidated. Respondent filed a complaint for a sum of money
against petitioner and Maxco RTC Mandaluyong City. Petitioner filed a Motion to Dismiss on the
ground of lack of jurisdiction over the subject matter. Petitioner argued that since respondent merely
stepped into the shoes of Maxco as its assignee, it was the CIAC and not the regular courts that had
jurisdiction over the dispute as provided in the Trade Contract.

Issue: WON RTC has jurisdiction over the case.

Ruling: Yes. The adjudication of Civil Case necessarily involves the application of pertinent statutes
and jurisprudence to matters of assignment and preference of credits. As this Court held in Fort
Bonifacio Development Corporation v. Domingo, this task more suited for a trial court to carry out
after a full-blown trial, than an arbitration body specifically devoted to construction contracts. An
examination of the allegations in Fong’s complaint reveals that his cause of action springs NOT from a
violation of the provisions of the Trade Contract, but from the assignment of Maxco’s retention money
to him and failure of petitioner to turn over the retention money. While it is true that respondent, as
the assignee of the receivables of Maxco from petitioner under the Trade Contract, merely stepped
into the shoes of Maxco. However, the right of Maxco to the retention money from petitioner under
the trade contract is not even in dispute. Respondent raises as an issue before the RTC is the
petitioner’s alleged unjustified preference to the claims of the other creditors of Maxco over the
retention money.
Although the jurisdiction of the CIAC is not limited to the instances enumerated in Section 4 of E.O.
No. 1008, Fong’s claim is not even construction-related at all. This court has held that: “Construction
is defined as referring to all on-site works on buildings or altering structures, from land clearance
through completion including excavation, erection and assembly and installation of components and
equipment.” Thus, petitioner’s insistence on the application of the arbitration clause of the Trade
Contract to Fong is clearly anchored on an erroneous premise that the latter is seeking to enforce a
right under the trade contract. This premise cannot stand since the right to the retention money of
Maxco under the Trade Contract is not being impugned herein. It bears mentioning that petitioner
readily conceded the existence of the retention money. Fong’s demand that the portion of retention
money should have been paid to him before the other creditors of Maxco clearly, does not require
the CIAC’s expertise and technical knowledge of construction.
67.Gammon Philippines, Inc. v. Metro Rail Transit Development Corporation
481 SCRA 209 (2006)

FACTS:
Metro Rail Transit Development Corporation (MRTDC) was awarded a government contract
by way of a Build Lease and Transfer Agreement to undertake the MRT 3 North Triangle Development
Project. Among the major components of the Project was the construction of a four level podium
superstructure.

MRTDC through its Project Manager, Parsons Inter Pro Joint Venture give notice to the
Gammon of the award to it of the contract for the construction of the podium superstructure. Shortly
thereafter, MRTDC sent a letter to Gammon notifying the latter of the suspension of all the
undertakings because of the currency crisis at that time & according to Gammon, however, it
proceeded to de-water and clean up the project site. On the other hand,
MRTDC claims that before any construction activity could proceed it formally served Gammon a
notice confirming the temporary suspension of all re1uirements under the terms of the contract until
such time as clarification of score has been received from the owners. The only exception to this
suspension is the re-design of the projects floor slabs and the site de-watering and clean
up. As a result of its analysis of the impact of the currency crisis, MRTDC decided to downsize the
podium structure to two level and Gammon the submitted reducing the contract price

This proposal was accepted by MRTDC, Gammon qualifiedly accepted the offer but
manifested its willingness to consider revisions to the terms and conditions of the Notice of
Award/Notice to Proceed. MRTDC notified Gammon that it was awarding the contract to Filipinas
Systems Inc since Gammon did not accept the terms and conditions of the NOA/NTP. Consequently,
Gammon sought reimbursement of the direct and indirect costs it incurred in relation to the project.

MRTDC signified its willingness to reimburse Gammon but rejected the latter’s computation
and instead offered a fixed cap of 5% of Gammon’s total claims.

Dissatisfied with this figure Gammon filed its claim with the CIAC invoking the arbitration
clause of the General Conditions of Contract (GCC) which provides that the arbitration of all disputes
claims or questions under the contract shall be in accordance with CIAC rules.

ISSUE:
Whether or not CIAC has original and exclusive jurisdiction over disputes arising from the construction
contracts.

RULING:
Yes. EO 1008 expressly vests in the CIAC original and exclusive jurisdiction over disputes arising
from or connected with construction contracts entered into by parties that have agreed to submit
their dispute to voluntary arbitration. 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. The jurisdiction of the CIAC may include but is not limited to violation of
specifications for materials and workmanship; violation of terms of agreement; interpretation and/or
application of contractual provisions; amount of damages and penalties; commencement time and
delays; payment default of employer or contractor and changes in contract cost. Excluded from the
coverage of this law are disputes arising from employer-employee relationships which shall continue
to be covered by the Labor Code of the Philippines.

68.Uniwide Sales Realty and Resources Corporation vs. Titan-Ikeda Construction and Development
Corporation, 511 SCRA 335
Facts:
This Petition for Review on Certiorari under Rule 45 seeks the partial reversal of the 21 February 1996
Decision1 of the Court of Appeals Fifteenth Division which modified the Decision2 of the Construction
Industry Arbitration Commission (CIAC).
The case originated from an action for a sum of money filed by Titan-Ikeda Construction and
Development Corporation (Titan) against Uniwide Sales Realty and Resources Corporation (Uniwide)
with the Regional Trial Court (RTC), Branch 119,3 Pasay City arising from Uniwide’s non-payment of
certain claims billed by Titan after completion of three projects covered by agreements they entered
into with each other. Upon Uniwide’s motion to dismiss/suspend proceedings and Titan’s open court
manifestation agreeing to the suspension, Civil Case No. 98-0814 was suspended for it to undergo
arbitration.4 Titan’s complaint was thus re-filed with the CIAC.5 Before the CIAC, Uniwide filed an
answer which was later amended and re-amended, denying the material allegations of the complaint,
with counterclaims for refund of overpayments, actual and exemplary damages, and attorney’s fees.
The Arbitral Tribunal promulgated a Decision holding [Uniwide]liable for the unpaid balance and the
VAT on this project. Uniwide filed a motion for reconsideration of the decision which was denied by
the CIAC in its Resolution. Uniwide accordingly filed a petition for review with the Court of Appeals,13
which rendered the assailed decision. Uniwide’s motion for reconsideration was likewise denied by
the Court of Appeals in its assailed Resolution.
Issue:
Whether or not the Decision of the Construction Industry Arbitration Commission (CIAC) is final and
conclusive and not reviewable by this Court on appeal.
Ruling:
Yes. Factual findings of construction arbitrators are final and conclusive and not reviewable by the
Supreme Court on appeal.
As a rule, findings of fact of administrative agencies and 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.
This rule, however admits of certain exceptions. In David v. Construction Industry and Arbitration
Commission, 435 SCRA 654 (2004), we ruled that, as exceptions, factual findings of construction
arbitrators may be reviewed by this Court when the petitioner proves affirmatively that: (1) the award
was procured by corruption, fraud or other undue means; (2) there was evident partiality or
corruption of the arbitrators or of any of them; (3) the arbitrators were guilty of misconduct in refusing
to hear evidence pertinent and material to the controversy; (4) one or more of the arbitrators were
disqualified to act as such under Section nine of Republic Act No. 876 and willfully refrained from
disclosing such disqualifications or of any other misbehavior by which the rights of any party have
been materially prejudiced; or (5) the arbitrators exceeded their powers, or so imperfectly executed
them, that a mutual, final and definite award upon the subject matter submitted to them was not
made. Other recognized exceptions are as follows: (1) when there is a very clear showing of grave
abuse of discretion resulting in lack or loss of jurisdiction as when a party was deprived of a fair
opportunity to present its position before the Arbitral Tribunal or when an award is obtained through
fraud or the corruption of arbitrators, (2) when the findings of the Court of Appeals are contrary to
those of the CIAC, and (3) when a party is deprived of administrative due process.

69.Construction Industry Arbitration Commission (CIAC); Jurisdiction•

Gammon Philippines, Inc. v. Metro Rail Transit Development Corporation

FACTS:

MRTDC was awarded a government contract by way of a Build Lease and Transfer Agreement to
undertake the MRT 3 North Triangle Development Project. Among the major components of the
Project was the construction of a four level podium superstructure.

MRTDC through its Project Manager, Parsons Inter Pro Joint Venture give notice to the Gammon of
the award to it of the contract for the construction of the podium superstructure. Shortly thereafter)
MRTDC sent a letter to Gammon notifying the latter of the suspension of all the undertakings because
of the currency crisis at that time& According to Gammon, however, it proceeded to de-water and
clean up the project site, On the other hand, MRTDC claims that before any construction activity
could proceed it formally served Gammon a notice confirming the temporary suspension of all
re1uirements under the terms of the contract until such time as clarification of score has been
received from the owners. The only exception to this suspension is the re-design of the projects floor
slabs and the site de-watering and clean
up. As a result of its analysis of the impact of the currency crisis, MRTDC decided to downsize the
podium structure to two level and Gammon the submitted reducing the contract price

This proposal was accepted by MRTDC, Gammon qualifiedly accepted the offer but manifested its
willingness to consider revisions to the terms and conditions of the NOA/NTP. MRTDC notified
Gammon that it was awarding the contract to Filipinas Systems Inc since Gammon did not accept the
terms and conditions of the NOA/NTP. Consequently, Gammon sought reimbursement of the direct
and indirect costs it incurred in relation to the project.

MRTDC signified its willingness to reimburse Gammon but rejected the latter’s computation and
instead offered a fixed cap of 5% of Gammon’s total claims.

Dissatisfied with this figure Gammon filed its claim with the CIAC invoking the arbitration clause of the
General Conditions of Contract (GCC) which provides that the arbitration of all disputs claims or
1uestions under the contract shall be in accordance with CIAC rules

ISSUE:
whether or not CIAC has jurisdiction over the case

RULING:
Yes, CIAC has jurisdiction over the case. 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
contracts or after the abandonment or breach thereof. These disputes may involve government or
private contracts. For the Board to acquire jurisdiction, parties to a dispute must agree to submit the
same to voluntary arbitration. The jurisdiction of the CIAC may include but is not limited to violation
of specifications for materials and workmanship, violation of the terms of agreement, interpretation
and/or application of contractual provisions.

70. LICOMCEN v. FOUNDATION SPECIALIST

Facts:
The ruling was rendered in the consolidated case of Licomcen, Inc. vs. Foundation Specialists,
Inc., G.R. Nos. 167022 and 169678. The dispute arose between mall developer Licomcen, Inc. and
contractor Foundation Specialists, Inc. (FSI) over the suspension of certain works and the payment of
billings and other amounts. Licomcen and FSI had a Construction Agreement, with General Conditions
of Contract (GCC), whereby FSI undertook to construct and install bored piles foundation for the LCC
Citimall project in Legazpi City.
Immediately after signing the agreement, FSI began work on the project but in January 1998,
Licomcen ordered it to halt construction due to an administrative case filed against officials of the City
Government of Legazpi and Licomcen before the Ombudsman. The suspension was formalized
through a letter of Licomcen’s engineering consultant, E.S. de Castro & Associates (ESCA), to FSI on
January 19, 1998. In its reply letters, FSI claimed payment for work and materials. ESCA rejected FSI’s
claims in a letter dated March 24, 1998.
Three years later, FSI sent a final demand letter to Licomcen for payment of its claims. As this
letter was ignored, FSI filed a request for arbitration with the CIAC in October 2002, claiming unpaid
billings, costs, unrealized profit, attorney’s fees and interest. Licomcen contested the request, arguing,
among others, that (a) the claims were non-arbitrable because the arbitration clause provides for the
arbitration of disputes “in connection with, or arising out of the execution of the Works,” but FSI’s
money claims do not involve a dispute as to the execution of the Works since they do not involve an
issue as to physical construction activities; and (b) FSI failed to comply with the condition precedent
that a dispute must first be referred to Licomcen for resolution, and such resolution may only be
assailed within 30 days from receipt thereof through a notice to contest through arbitration.
The CIAC ruled in favor of FSI, which decision was upheld with some modification by the Court
of Appeals. On appeal, the Supreme Court upheld the Court of Appeals’ decision with modification
and affirmed that the CIAC properly acquired jurisdiction over the parties’ dispute.
Issue:
WON the CIAC’s jurisdiction is limited only to disputes in connection with or arising out of the
execution of the Works.
Ruling:
NO.
CIAC’s jurisdiction cannot be limited by the parties’ stipulation that only disputes in connection with
or arising out of the execution of the Works are arbitrable before the said agency. The mere fact that
the parties incorporated an arbitration clause in their contract ipso facto vested the CIAC with
jurisdiction over any construction controversy or claim between the parties. The parties did not intend
to limit resort to arbitration only to disputes relating to physical construction activities, holding that
“an arbitration clause pursuant to E.O 1008 [Construction Industry Arbitration Law] should be
interpreted at its widest signification.” The Tribunal liberally applied the parties’ arbitration clause so
that FSI’s money claims were considered connected with or arising out of construction activities,
thereby making such claims arbitrable.
On the principle that the CIAC’s jurisdiction can neither be enlarged nor diminished by the parties, the
Supreme Court also held that such jurisdiction cannot be subject to a condition precedent. Hence,
even if FSI failed to timely contest Licomcen’s denial of its money claims by filing a proper notice of
arbitration within 30 days from the denial, the Supreme Court ruled that the CIAC acquired jurisdiction
of the parties’ dispute due to the mere presence of an arbitration clause in their construction contract.
An arbitration clause in a construction contract should be interpreted in its “widest signification” to
enable the CIAC to acquire jurisdiction over a construction claim

71. Metro Construction Inc v Chatham Properties

FACTS :

On 21 April 1994, the parties formally entered into a contract for the construction of the
"Chatham House" . . . for the contract price of price of P50,000,000.00. On 12 July 1994, a
Supplemental Contract was executed by and between the parties whereby CHATHAM authorized MCI
to procure in behalf of the former materials, equipment, etc. Under Section I.04 of the Supplemental
Contract, the total amount of procurement and transportation cost[s] and expenses which may be
reimbursed by MCI from CHATHAM shall not exceed the amount of P75, 000,000.00. In the course of
the construction, Change Orders No. 1, 4, 8A, 11, 12 and 13 were implemented, CHATHAM reimbursed
MCI the amount of P60,000.00 corresponding to bonuses advanced to its workers by the latter for the
14th, 16th, and 17th floors. CHATHAM's payments to MCI totaled P104,875,792.37, representing
payments for portions of MCI's progress billings and x x x additional charges..
In April 1998, MCI sought to collect from CHATHAM a sum of money for unpaid
progress billings and other charges and instituted a request for adjudication of its claims with the
Construction Industry Arbitration Commission CIAC. The CIAC disposed of the specific money claims
by either granting or reducing them. On Issue No. 9, i.e., whether CHATHAM failed to complete and/or
deliver the project within the approved completion period and, if so, whether CHATHAM is liable for
liquidated damages and how much. CIAC rendered Judgement in favor of the Claimant [MCI] directing
Respondent [CHATHAM] to pay Claimant [MCI] the net sum of SIXTEEN MILLION ONE HUNDRED
TWENTY SIX THOUSAND NINE HUNDRED TWENTY TWO & 91/100 (16,126,922.91) PESOS. Impugning
the decision of the CIAC, CHATHAM instituted a petition for review with the Court of Appeals

In upholding the decision of the CIAC, the Court of Appeals confirmed the jurisprudential
principle that absent any showing of arbitrariness, the CIAC's findings as an administrative agency and
quasi judicial body should not only be accorded great respect but also given the stamp of finality.

Issue:
Whether or not the Court of Appeals can also review findings of facts of the Construction
Industry Arbitration Commission (CIAC)
Ruling:
Yes. Through Circular No. 1-91, the Supreme Court intended to establish a uniform procedure for
the review of the final orders or decisions of the Court of Tax Appeals and other quasi-judicial agencies
provided that an appeal therefrom is then allowed under existing statutes to either the Court of
Appeals or the Supreme Court. The Circular designated the Court of Appeals as the reviewing body to
resolve questions of fact or of law or mixed questions of fact and law.
It is clear that Circular No. 1-91 covers the CIAC. In the first place, it is a quasi-judicial agency. A
quasi-judicial agency or body has been defined as an organ of government other than a court and
other than a legislature, which affects the rights of private parties through either adjudication or rule-
making The very definition of an administrative agency includes its being vested with quasi-judicial
powers. The ever increasing variety of powers and functions given to administrative agencies
recognizes the need for the active intervention of administrative agencies in matters calling for
technical knowledge and speed in countless controversies which cannot possibly be handled by
regular courts. The CIACs primary function is that of a quasi-judicial agency, which is to adjudicate
claims and/or determine rights in accordance with procedures set forth in E.O. No. 1008.
In the second place, the language of Section 1 of Circular No. 1-91 emphasizes the obvious
inclusion of the CIAC even if it is not named in the enumeration of quasi-judicial agencies. The
introductory words [a]mong these agencies are preceding the enumeration of specific quasi-judicial
agencies only highlight the fact that the list is not exclusive or conclusive. Further, the overture
stresses and acknowledges the existence of other quasi-judicial agencies not included in the
enumeration but should be deemed included. In addition, the CIAC is obviously excluded in the
catalogue of cases not covered by the Circular and mentioned in Section 2 thereof for the reason that
at the time the Circular took effect, E.O. No. 1008 allows appeals to the Supreme Court on questions
of law.
In sum, under Circular No. 1-91, appeals from the arbitral awards of the CIAC may be brought to
the Court of Appeals, and not to the Supreme Court alone. The grounds for the appeal are likewise
broadened to include appeals on questions of facts and appeals involving mixed questions of fact and
law.
The jurisdiction of the Court of Appeals over appeals from final orders or decisions of the CIAC is
further fortified by the amendments to B.P. Blg.129, as introduced by R.A. No. 7902. With the
amendments, the Court of Appeals is vested with appellate jurisdiction over all final judgments,
decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, except those within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the
third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of
1948.

71. Heunghwa Industry Co., Ltd. v. DJ Builders Corporation

Facts:
Heunghwa Industry Co., Ltd. (petitioner) was able to secure a contract with the Department of Public
Works and Highways (DPWH) to construct the Roxas-Langogan Road in Palawan.
Petitioner entered into a subcontract agreement with respondent DJ Builders Corporation to do
earthwork, sub base course and box culvert of said project. The agreement contained an arbitration
clause. The agreed price was not fully paid, hence, respondent filed before the Regional Trial Court
(RTC) for "Breach of Contract, Collection of Sum of Money with Application for Preliminary Injunction,
Preliminary Attachment, and Prayer for Temporary Restraining Order and Damages”.
Petitioner averred that it was not obliged to pay respondent because the latter caused the stoppage
of work. Petitioner further claimed that it failed to collect from the DPWH due to respondent's poor
equipment performance. Parties submit specific issues, such as manpower and equipment standby
time, unrecouped mobilization expenses, retention, discrepancy of billings, and price escalation for
fuel and oil usage. The said motion was granted by the RTC.
Petitioner, filed with the RTC a motion to withdraw the Order which referred the case to the CIAC,
claiming it never authorized the referral. Respondent opposed the motion contending that petitioner
was already estopped from asking for the recall of the Order.
Issue: whether or not the CIAC has the jurisdiction over the case.

Held:
Yes. CIAC has jurisdiction over the case. The CIAC original and exclusive jurisdiction over the
construction dispute was the agreement of the parties and not the Court's referral order. The CIAC
aptly ruled that the recall of the referral order by the RTC did not deprive the CIAC of the jurisdiction
it had already acquired.
The position of CIAC is anchored on Executive Order No. 1008 (1985) which created CIAC and
vested in it "original and exclusive jurisdiction" over construction disputes in construction projects in
the Philippines provided the parties agreed to submit such disputes to arbitration. The basis of the
Court referral is precisely the agreement of the parties in court, and that, by this agreement as well as
by the court referral of the specified issues to arbitration, under Executive Order No. 1008 (1985), the
CIAC had in fact acquired original and exclusive jurisdiction over these issues.
In section 4.2 of the CIAC Rules, the failure despite due notice which amounts to a refusal of
the Respondent to arbitrate, shall not stay the proceedings notwithstanding the absence or lack of
participation of the Respondent. In such case, CIAC shall appoint the arbitrator/s in accordance with
these Rules. Arbitration proceedings shall continue, and the award shall be made after receiving the
evidence of the Claimant. Therefore, the proceedings cannot then be voided merely because of the
non-participation of petitioner. Section 4.2 of the CIAC Rules is clear and it leaves no room for
interpretation. Therefore, petitioner's prayer that the case be remanded to CIAC in order that it may
be given an opportunity to present evidence is untenable. Petitioner had its chance and lost it, more
importantly so, by its own choice. This Court will not afford a relief that is apparently inconsistent with
the law.

73. Jurisdiction of CIAC

GR. 171624 Dec. 6, 2010
BF Homes Inc. v. Manila Electric Company
Review on Certiorari petition.
FACTS: BF Homes and Phil.Waterworks and Construction Corporation[PWCC] are owners and
operators of waterworks systems delivering water to over 12,000 households and commercial
buildings in BF Homes subdivisions in Parañaque City, Las Piñas City, Caloocan City, and Quezon City.
They invoked their right to refund against Meralco. BF Homes and PWCC. The water distributed in the
waterworks systems owned and operated by BF Homes and PWCC is drawn from deep wells using
pumps run by electricity supplied by Meralco.
Before the RTC, petition to refund by petitioners were granted and Meralco was mandated to refund
P11.8m. Meralco’s MR denied. Petitioners then alleged that Meralco disconnected electric supply to
16 water pumps without notice. Later Meralco demanded P4.7m from petitioners as payment and
requested the 4.7m be deducted from the P11.8 amount to be refunded. While serving its reply letter,
Meralco cut off power supply to 5 other water pumps without notice. Then Meralco threatened to cut
off supply to all pumps if petitioners fail to pay the 4.7m. Meralco sought the dismissal of the RTC
decision on the ground that petitioners filed the instant petition in order to avoid paying the bills.
Meralco then alleged that the SC has no jurisdiction over the matter due to the fact that Meralco is a
utility company whose business is wholly regulated by the Energy Regulatory Commission [ERC] and
that the SC decision clearly stated that respondent is directed to make the refund to its customers in
accordance with the ERC decision dated February 16, 1998. Hence, [MERALCO] has to wait for the
schedule and details of the refund to be approved by the ERC before it can comply with the SC
decision.
ISSUE: WON CIAC has jurisdiction over the case.
HELD: No. The case does not involve the construction of an establishment/building. What is involved
is the issue with regard to Meralco’s act of cutting off the power supply of petitioners’ water pumps.
The jurisdiction lies with the ERC because the right to refund[it is a right granted to Meralco
consumers] invoked by the petitioners was based on an ERC decision. The petition is dismissed
because it should have passed through the ERC first before going to the regular courts.
Notes: ERC has quasi-judicial function.
74. HUTAMA-RSEA v Citra Metro Manila 586 SCRA 746

Facts: Petitioner is a sub-contractor engaged in engineering and construction works. Respondent,

on the other hand, is the general contractor and operator of the South Metro Manila Skyway Project
(Skyway Project). On 25 September 1996, petitioner and respondent entered into an Engineering
Procurement Construction Contract (EPCC) whereby petitioner would undertake the construction of
Stage 1 of the Skyway Project, which stretched from the junction of Buendia Avenue, Makati City, up
to Bicutan Interchange, Taguig City. As consideration for petitioner’s undertaking, respondent obliged
itself under the EPCC to pay the former a total amount of US$369,510,304.00.
In several instances over the course of the project, petitioner made repeated demands fto
respondent for payment. The latter however, made only partial payments. Even after the construction
concluded and the skyway opened for public use, respondent still failed to make good its balance. On
24 May 2004, petitioner, through counsel, sent a letter to respondent demanding payment of the
following: (1) the outstanding balance on the interim billings; (2) the amount of petitioner’s final
billing; (3) early completion bonus; and (4) interest charges on the delayed payment. Several meetings
were held to discuss a possible amicable settlement between the parties, but a year has oassed and
there was no agreement.
Petitioner finally filed with the Construction Industry Arbitration Commission (CIAC) a Request
for Arbitration. Respondent moved to dismiss, saying that the action was premature since there was
no prior filing to the Dispute Adjudication Board as required under their EPCC. CIAC held that it has
jurisdiction, and that prior recourse to DAB is not a condition precedent. The CA reversed and enjoined
CIAC from exercising jurisdiction.
Issues:
1. WON recourse to the CIAC is premature
2. WON CIAC has jurisdiction over the dispute
Rulings:
1. No. It is true that Clause 20.4 of the EPCC states that a dispute between petitioner and
respondent as regards the EPCC shall be 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. Under Section 1, Article III of the CIAC Rules, an arbitration clause in a construction
contract shall be deemed as 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 x x x.” Elementary is the rule that when laws or rules are clear, it is incumbent on the
court to apply them. When the law (or rule) is unambiguous and unequivocal, application, not
interpretation thereof, is imperative.

The bare fact that the parties herein incorporated an arbitration clause in the EPCC is sufficient to
vest the CIAC with jurisdiction over any construction controversy or claim between the parties. The
arbitration clause in the construction contract ipso facto vested the CIAC with jurisdiction. This rule
applies, regardless of whether the parties specifically choose another forum or make reference to
another arbitral body. Since the jurisdiction of CIAC is conferred by law, it cannot be subjected to any
condition; nor can it be waived or diminished by the stipulation, act or omission of the parties, as long
as the parties agreed to submit their construction contract dispute to arbitration, or if there is an
arbitration clause in the construction contract. The parties will not be precluded from electing to
submit their dispute to CIAC, because this right has been vested in each party by law.
 We note that this is not a case wherein the arbitration clause in the construction contract named
another forum, not the CIAC, which shall have jurisdiction over the dispute between the parties;
rather, the said clause requires prior referral of the dispute to the DAB. Nonetheless, we still hold that
this condition precedent, or more appropriately, non-compliance therewith, should not deprive CIAC
of its jurisdiction over the dispute between the parties. It bears to emphasize that the mere existence
of an arbitration clause in the construction contract is considered by law as an agreement by the
parties to submit existing or future controversies between them to CIAC jurisdiction, without any
qualification or condition precedent. To affirm a condition precedent in the construction contract,
which would effectively suspend the jurisdiction of the CIAC until compliance therewith, would be in
conflict with the recognized intention of the law and rules to automatically vest CIAC with jurisdiction
over a dispute should the construction contract contain an arbitration clause.

The CIAC was created in recognition of the contribution of the construction industry to national
development goals. Realizing that delays in the resolution of construction industry disputes would also
hold up the development of the country, Executive Order No. 1008 expressly mandates the CIAC to
expeditiously settle construction industry disputes and, for this purpose, vests in the CIAC original and
exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by the
parties involved in construction in the Philippines. The dispute between petitioner and respondent
has been lingering for almost five years now. Despite numerous meetings and negotiations between
the parties, which took place prior to petitioner’s filing with the CIAC of its Request for Arbitration, no
amicable settlement was reached. A ruling requiring the parties to still appoint a DAB, to which they
should first refer their dispute before the same could be submitted to the CIAC, would merely be
circuitous and dilatory at this point. It would entail unnecessary delays and expenses on both parties,
which Executive Order No. 1008 precisely seeks to prevent. It would, indeed, defeat the purpose for
which the CIAC was created.
75. Romago Inc vs Siemens Building Technologies Inc.
GR. No. 181969, October 2, 2009

Facts: Petitioner was awarded the sub-contract for the Building Services-Electrical Package for the
Insular Life Corporate Center. Under the consortium agreement equipment supply sub-contract
agreement with respondents, it undertook to deliver the needed electrical equipment for the project
for Romago. Respondents made deliveries but Petitioner failed to pay in full. The former made
demands, but they were not paid. Romago refused to pay its obligation which amounted to Php 16,
937, 612.68, unless respondents compensate petitioner for the total expenses it allegedly incurred in
taking over respondent’s contractual obligations when the earlier demands to pay were unheeded.
Respondent filed a Request for Arbitration with the Philippine Dispute Resolution Center, Inc. (PDRCI)
which was agreed to by petitioner. After due proceedings, the arbitrator awarded to respondent its
claim of the amount mentioned plus legal interest, attorney’s fees and costs.
Respondent filed a petition for Confirmation of the Arbitrator’s Decision and instead of filing a motion
to Vacate the Award. The RTC granted the petition, confirmed the award and issued a writ of
execution. This had becaome final and executory. Despite receipt of the Order, Romago did not
interpose an appeal. It was only on a later date when Atty Barrios withdrew his appearance and the
law office of Mutia Vendas entered appearance that Romago sought for a petition for relief from
judgment. Claiming that Atty. Barrios was sick for 3 weeks and only later were they aware of the orders
of the court.
Petitioner opposed and the RTC denied it. Motion for Reconsideration was denied. And upon petition
for certiorai to the CA, Romago raised the issue that the PDRCI had no jurisdiction over the dispute
since the contract with SBTI was a construction contract and was within the jurisdiction of the
Construction Industry Arbitration Commission (CIAC)

Issue: Whether or not CIAC has jurisdiction.

Held:No. It was a supply contract, thus, not within the jurisdiction of the CIAC. The word construction
is defined as referring to all on-site works on buildings or altering structures, from land clearance
through completion, including excavation, erection, and assembly and installation of components and
equipment. By no stretch of the imagination can the ESSA be characterized as a construction contract.
Crystal clear from the provisions of the ESSA is that SBTI’s role was merely to supply the needed
equipment for the Insular Life Corporate Center project. The ESSA is, therefore, a mere supply contract
that does not fall within the original and exclusive jurisdiction of CIAC.
We also note that the Consortium Agreement between ROMAGO and SBTI contained an arbitration
clause, wherein the parties agreed to submit any dispute between them for arbitration under the
Philippine Chamber of Commerce and Industry (PCCI), such as the PDRCI. It is well-settled that the
arbitral clause in the agreement is a commitment by the parties to submit to arbitration the disputes
covered therein. Because that clause is binding, they are expected to abide by it in good faith. The CA,
therefore, correctly rejected ROMAGO’s assertion that the PDRCI had no jurisdiction over the suit in
the first instance.
We are not unmindful of the settled doctrine that the issue of jurisdiction may be raised by any of the
parties or may be reckoned by the court at any stage of the proceedings, even on appeal, and is not
lost by waiver or by estoppel. However, this case falls within the exception. To repeat, ROMAGO
actively participated in the proceedings before the PDRCI; even after an adverse judgment had been
rendered by the Arbitrator, it did not assail the PDRCI’s jurisdiction over the dispute. In fact, during
the proceedings for the confirmation of the Arbitrator’s award, ROMAGO’s opposition zeroed in on
the alleged bias and partiality of the Arbitrator in rendering the decision. Even in its petition for relief
from judgment filed with the RTC, the PDRCI’s alleged lack of jurisdiction was never raised as an issue.
It was only in its petition for certiorari with the CA, and after a writ of execution had been issued, that
ROMAGO raised the issue of lack of jurisdiction.