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Uniwide Sales Realty and Resources Corporation vs.
T i t a n - I ke d a C o n s t r u c t i o n a n d D e v e l o p m e n t
Corporation, G.R. No. 126619. December 20, 2006.
Construction Industry Arbitration Commission (CIAC);
Administrative Law; Factual findings of construction
arbitrators are final and conclusive and not reviewable by
the Supreme Court on appeal; Exceptions.
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.
As an arbitration body, the Construction Industry
Arbitration Commission (CIAC) can only resolve issues
brought before it by the parties through the Terms of
Reference (TOR) which functions similarly as a pre-trial
brief
Arbitration has been defined as “an arrangement for taking and
abiding by the judgment of selected persons in some disputed matter,
instead of carrying it to established tribunals of justice, and is intended
to avoid the formalities, the delay, the expense and vexation of
ordinary litigation.” Voluntary arbitration, on the other hand, involves
the reference of a dispute to an impartial body, the members of which
are chosen by the parties themselves, which parties freely consent in
advance to abide by the arbitral award issued after proceedings where
both parties had the opportunity to be heard. The basic objective is to
provide a speedy and inexpensive method of settling disputes by
allowing the parties to avoid the formalities, delay, expense and
aggravation which commonly accompany ordinary litigation, especially
litigation which goes through the entire hierarchy of courts. As an
arbitration body, the CIAC can only resolve issues brought before it
by the parties through the TOR which functions similarly as a pre-trial
brief. Thus, if Uniwide’s claim for liquidated damages was not raised as
an issue in the TOR or in any modified or amended version of it, the
CIAC cannot make a ruling on it. The Rules of Court cannot be used
to contravene the spirit of the CIAC rules, whose policy and objective
is to “provide a fair and expeditious settlement of construction
disputes through a non-judicial process which ensures harmonious
and friendly relations between or among the parties.”
1
The Court will not permit the parties to relitigate before it
the issues of facts previously presented and argued before
the Arbitral Tribunal, save only where a clear showing is
made that, in reaching its factual conclusions, the Arbitral
Tribunal committed an error so egregious and hurtful to
one party as to constitute a grave abuse of discretion
resulting in lack or loss of jurisdiction.
It is worthy to stress our ruling in Hi- Precision Steel Center, Inc. v.
Lim Kim Steel Builders, Inc., 228 SCRA 397 (1993), which was
reiterated in David v. Construction Industry and Arbitration
Commission, 435 SCRA 654 (2004), that: x x x Executive Order No.
1008 created an arbitration facility to which the construction industry
in the Philippines can have recourse. The Executive Order was
enacted to encourage the early and expeditious settlement of
disputes in the construction industry, a public policy the
implementation of which is necessary and important for the
realization of national development goals. Aware of the objective of
voluntary arbitration in the labor field, in the construction industry,
and in any other area for that matter, the Court will not assist one or
the other or even both parties in any effort to subvert or defeat that
objective for their private purposes. The Court will not review the
factual findings of an arbitral tribunal upon the artful allegation that
such body had “misapprehended facts” and will not pass upon issues
which are, at bottom, issues of fact, no matter how cleverly disguised
they might be as “legal questions.” The parties here had recourse to
arbitration and chose the arbitrators themselves; they must have had
confidence in such arbitrators. The Court will not, therefore, permit
the parties to relitigate before it the issues of facts previously
presented and argued before the Arbitral Tribunal, save only where a
clear showing is made that, in reaching its factual conclusions, the
Arbitral Tribunal committed an error so egregious and hurtful to one
party as to constitute a grave abuse of discretion resulting in lack or
loss of jurisdiction. Prototypical examples would be factual
conclusions of the Tribunal which resulted in deprivation of one or
the other party of a fair opportunity to present its position before the
Arbitral Tribunal, and an award obtained through fraud or the
corruption of arbitrators. Any other, more relaxed rule would result in
setting at naught the basic objective of a voluntary arbitration and
would reduce arbitration to a largely inutile institution.
Benguet Corporation vs. Department of Environment
and Natural Resources-Mines Adjudication Board, G.R.
No. 163101. February 13, 2008
A decision of the Mines Adjudication Board (MAB) must
first be appealed to the Court of Appeals (CA) under Rule
43 of the Rules of Court before recourse to the Court may
be had.
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].” However, this Court has already
invalidated such provision in Carpio v. Sulu Resources Development
Corp., 387 SCRA 128 (2002) ruling that a decision of the MAB must
first be appealed to the Court of Appeals (CA) under Rule 43 of the
Rules of Court, before recourse to this Court may be had.
A contractual stipulation that requires prior resort to
voluntary arbitration before the parties can go directly to
court is not illegal and is in fact promoted by the State.
In RA 9285 or the “Alternative Dispute Resolution Act of 2004,” the
Congress reiterated the efficacy of arbitration as an alternative mode
of dispute resolution by stating in Sec. 32 thereof that domestic
arbitration shall still be governed by RA 876. Clearly, a contractual
stipulation that requires prior resort to voluntary arbitration before
the parties can go directly to court is not illegal and is in fact
promoted by the State. Thus, petitioner correctly cites several cases
whereby arbitration clauses have been upheld by this Court.
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Distinction between Voluntary and Compulsory Arbitration.·J.G.
Realty’s contention, that prior resort to arbitration is unavailing in the
instant case because the POA’s mandate is to arbitrate disputes
involving mineral agreements, is misplaced. A distinction must be made
between voluntary and compulsory arbitration. In Ludo and Luym
Corporation v. Saordino, 395 SCRA 451 (2003), the Court had the
occasion to distinguish between the two types of arbitrations:
Comparatively, in Reformist Union of R.B. Liner, Inc. vs. NLRC, 266
SCRA 713 (1997), compulsory arbitration has been defined both as
“the process of settlement of labor disputes by a government agency
which has the authority to investigate and to make an award which is
binding on all the parties, and as a mode of arbitration where the
parties are compelled to accept the resolution of their dispute
through arbitration by a third party.” While a voluntary arbitrator is
not part of the governmental unit or labor department’s personnel,
said arbitrator renders arbitration services provided for under labor
laws.
Ludo & Luym Corporation vs. Saornido, G.R. No.
140960. January 20, 2003
Compulsory arbitration has been defined both as “the
process of settlement of labor disputes by a government
agency which has the authority to investigate and to make
an award which is binding on all the parties, and as a mode
of arbitration where the parties are compelled to accept
the resolution of their dispute through arbitration by a
third party.”
In construing the above provisions, we held in San Jose vs. NLRC, that
the jurisdiction of the Labor Arbiter and the Voluntary Arbitrator or
Panel of Voluntary Arbitrators over the cases enumerated in the Labor
Code, Articles 217, 261 and 262, can possibly include money claims in
one form or another. Comparatively, in Reformist Union of R.B. Liner,
Inc. vs. NLRC, compulsory arbitration has been defined both as “the
process of settlement of labor disputes by a government agency which
has the authority to investigate and to make an award which is binding
on all the parties, and as a mode of arbitration where the parties are
compelled to accept the resolution of their dispute through
arbitration by a third party (emphasis supplied).” While a voluntary
arbitrator is not part of the governmental unit or labor departmentÊs
personnel, said arbitrator renders arbitration services provided for
under labor laws.
While the arbitrator is expected to decide only those
questions expressly delineated by the submission
agreement, he can assume that he has the necessary power
to make a final settlement since arbitration is the final
resort for the adjudication of disputes; Even if the
submission agreement mentioned only the determination
of the date of regularization, law and jurisprudence give
the voluntary arbitrator enough leeway of authority as
well as adequate prerogative to accomplish the reason for
which the law on voluntary arbitration was created-speedy
labor justice-and to settle, once and for all, the ultimate
question of whether the employees are entitled to higher
benefits.
Generally, the arbitrator is expected to decide only those questions
expressly delineated by the submission agreement. Nevertheless, the
arbitrator can assume that he has the necessary power to make a final
settlement since arbitration is the final resort for the adjudication of
disputes. The succinct reasoning enunciated by the CA in support of
its holding, that the Voluntary Arbitrator in a labor controversy has
jurisdiction to render the questioned arbitral awards, deserves our
concurrence, thus: In general, the arbitrator is expected to decide
those questions expressly stated and limited in the submission
agreement. However, since arbitration is the final resort for the
adjudication of disputes, the arbitrator can assume that he has the
power to make a final settlement. Thus, assuming that the submission
empowers the arbitrator to decide whether an employee was
discharged for just cause, the arbitrator in this instance can reasonably
2
assume that his powers extended beyond giving a yes-or-no answer
and included the power to reinstate him with or without back pay. x x
x By the same token, the issue of regularization should be viewed as
two-tiered issue. While the submission agreement mentioned only the
determination of the date or regularization, law and jurisprudence give
the voluntary arbitrator enough leeway of authority as well as
adequate prerogative to accomplish the reason for which the law on
voluntary arbitration was created-speedy labor justice. It bears
stressing that the underlying reason why this case arose is to settle,
once and for all, the ultimate question of whether respondent
employees are entitled to higher benefits. To require them to file
another action for payment of such benefits would certainly
undermine labor proceedings and contravene the constitutional
mandate providing full protection to labor.
Administrative Law; basic is the rule that findings of fact
of administrative and quasi-judicial bodies, which have
acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only great
respect but even finality.
As regards petitioner’s contention that the money claim in this case is
barred by prescription, we hold that this contention is without merit.
So is petitioner’s stance that the benefits claimed by the respondents,
i.e., sick leave, vacation leave and 13th month pay, had already
prescribed, considering the three- year period for the institution of
monetary claims. Such determination is a question of fact which must
be ascertained based on the evidence, both oral and documentary,
presented by the parties before the Voluntary Arbitrator. In this case,
the Voluntary Arbitrator found that prescription has not as yet set in
to bar the respondentsÊ claims for the monetary benefits awarded to
them. Basic is the rule that findings of fact of administrative and quasi-
judicial bodies, which have acquired expertise because their
jurisdiction is confined to specific matters, are generally accorded not
only great respect but even finality. Here, the Voluntary Arbitrator
received the evidence of the parties first-hand. No compelling reason
has been shown for us to diverge from the findings of the Voluntary
Arbitrator, especially since the appellate court affirmed his findings,
that it took some time for respondent employees to ventilate their
claims because of the repeated assurances made by the petitioner that
it would review the company records and determine therefrom the
validity of the claims, without expressing a categorical denial of their
claims.
Maria Luisa Park Association, Inc. vs. Almendras, G.R.
No. 171763. June 5, 2009
Under the provision of the by-laws, any dispute or claim or
against the Association or any of its officers and governors
shall first be settled amicably; If amicable settlement fails,
such dispute shall be brought by the members to an
arbitration panel for final settlement.
We also note that the parties failed to abide by the arbitration
agreement in the MLPAI by-laws. Under the said provision of the by-
laws, any dispute or claim against the Association or any of its officers
and governors shall first be settled amicably. If amicable settlement
fails, such dispute shall be brought by the member to an arbitration
panel for final settlement. The arbitral award shall be valid and binding
between the parties unless repudiated on grounds that the same was
procured through fraud or violence, or that there are patent or gross
errors in the tribunal’s findings of facts upon which the decision was
based.
The agreement to submit all disputes to arbitration is a
contract.
The terms of Article XII of the MLPAI by- laws clearly express the
intention of the parties to bring first to the arbitration process all
disputes between them before a party can file the appropriate action.
The agreement to submit all disputes to arbitration is a contract. As
such, the arbitration agreement binds the parties thereto, as well as
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their assigns and heirs. Respondents, being members of MLPAI, are
bound by its by-laws, and are expected to abide by it in good faith.
Mere exchange of correspondence will not suffice much
less satisfy the requirement of arbitration.
In the instant case, we observed that while both parties exchanged
correspondence pertaining to the alleged violation of the Deed of
Restriction, they, however, made no earnest effort to resolve their
differences in accordance with the arbitration clause provided for in
their by-laws. Mere exchange of correspondence will not suffice much
less satisfy the requirement of arbitration. Arbitration being the mode
of settlement between the parties expressly provided for in their by-
laws, the same should be respected. Unless an arbitration agreement
is such as absolutely to close the doors of the courts against the
parties, the courts should look with favor upon such amicable
arrangements.
Frabelle Fishing Corporation vs. Philippine American
Life Insurance Company, G.R. No. 158560. August 17,
2007
An arbitration agreement is the law between the parties
and they are expected to abide by it in good faith.
Paragraph 4.2 of the 1998 MOA mandates that any dispute between
or among the parties “shall finally be settled by arbitration conducted
in accordance with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce.” Petitioner referred the dispute
to the PDRCI but respondents refused to submit to its jurisdiction. It
bears stressing that such arbitration agreement is the law between the
parties. They are, therefore, expected to abide by it in good faith. This
Court has previously held that arbitration is one of the alternative
methods of dispute resolution that is now rightfully vaunted as “the
wave of the future” in international relations, and is recognized
worldwide. To brush aside a contractual agreement calling for
arbitration in case of disagreement between the parties would
therefore be a step backward.
Philrock, Inc. vs. Construction Industry Arbitration
Commission, G.R. Nos. 132848-49. June 26, 2001
Section 4 of Executive Order (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.
Petitioner avers that the CIAC lost jurisdiction over the arbitration
case after both parties had withdrawn their consent to arbitrate. The
June 13, 1995 RTC Order remanding the case to the CIAC for
arbitration was allegedly an invalid mode of referring a case for
arbitration. We disagree. Section 4 of Executive Order 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 Supreme Court will not countenance the effort of any
party to subvert or defeat the objective of voluntary
arbitration for its own private motives.
As pointed out by the solicitor general, petitioner maneuvered to
avoid the RTC’s final resolution of the dispute by arguing that the
regular court also lost jurisdiction after the arbitral tribunalÊs April
13, 1994 Order referring the case back to the RTC. In so doing,
petitioner conceded and estopped itself from further questioning the
jurisdiction of the CIAC. The Court will not countenance the effort of
any party to subvert or defeat the objective of voluntary arbitration
for its own private motives. After submitting itself to arbitration
proceedings and actively participating therein, petitioner is estopped
from assailing the jurisdiction of the CIAC, merely because the latter
rendered an adverse decision.
3
Voluntary arbitrators, by the nature of their functions, act
in quasi-judicial capacity, such that their decisions are
within the scope of judicial review.
We disagree with the solicitor general. As pointed out earlier, factual
findings of quasi-judicial bodies that have acquired expertise are
generally accorded great respect and even finality, if they are
supported by substantial evidence. The Court, however, has
consistently held that despite statutory provisions making the
decisions of certain administrative agencies “final,” it still takes
cognizance of petitions showing want of jurisdiction, grave abuse of
discretion, violation of due process, denial of substantial justice or
erroneous interpretation of the law. Voluntary arbitrators, by the
nature of their functions, act in a quasi-judicial capacity, such that their
decisions are within the scope of judicial review.
Metro Construction, Inc. vs. Chatham Properties, Inc.,
G.R. No. 141897. September 24, 2001.

Executive Order (EO) No. 1008 vests upon the CIAC original
and exclusive jurisdiction over disputes arising from, or
connected with, contracts entered into by parties involved
in construction in the Philippines, whether the dispute
arises before or after the completion of the contract, or
after the abandonment or breach thereof.
E.O. No. 1008 vests upon the CIAC original and exclusive jurisdiction
over disputes arising from, or connected with, contracts entered into
by parties involved in construction in the Philippines, whether the
dispute arises before or after the completion of the contract, or after
the abandonment or breach thereof. By express provision of Section
19 thereof, the arbitral award of the CIAC is final and unappealable,
except on questions of law, which are appealable to the Supreme
Court.
Circular No. 1-91 covers the CIAC; 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.
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 CIAC’s 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.
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.
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.
ADR | FINALS
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, and the grounds for
appeal are likewise broadened to include appeals on
questions of facts and appeals involving mixed questions
of fact and 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.
Any remaining doubt on the procedural mutation of the
provisions on appeal in E.O. No. 1008, vis-à-vis Circular
No. 1-91 and R.A. No. 7902, was completely removed with
the issuance by the Supreme Cour t 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.
Any remaining doubt on the procedural mutation of the provisions on
appeal in E.O. No. 1008, vis-à-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.
No litigant has a vested right in a particular remedy, which
may be changed by substitution without impairing vested
rights - he can have none in rules of procedure which
relate to remedy.
The right to appeal from judgments, awards, or final orders of the
CIAC is granted in E.O. No. 1008. The procedure for the exercise or
application of this right was initially outlined in E.O. No. 1008. While
RA. No. 7902 circulars subsequently issued by the Supreme Court and
its ammendments to the 1997 Rules on Procedure effectively
modified the manner by which the right to appeal ought to be
exercised, nothing in these changes impaired vested rights. The new
rules do not take away the right to appeal allowed in E.O. No. 1008.
They only prescribe a new procedure to enforce the right. No litigant
has a vested right in a particular remedy, which may be changed by
substitution without impairing vested rights; hence, he can have none
in rules of procedure which relate to remedy.”
Ormoc Sugarcane Planters' Association, Inc. (OSPA) vs.
Court of Appeals, G.R. No. 156660. August 24, 2009
Except where a compulsory arbitration is provided by
statute, the first step toward the settlement of a
difference by arbitration is the entry by the parties into a
valid agreement to arbitrate.
Except where a compulsory arbitration is provided by statute, the
first step toward the settlement of a difference by arbitration is the
entry by the parties into a valid agreement to arbitrate. An agreement
to arbitrate is a contract, the relation of the parties is contractual, and
the rights and liabilities of the parties are controlled by the law of
contracts. 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. The requirements that an
arbitration agreement must be written and subscribed by the parties
thereto were enunciated by the Court in B.F. Corporation v. CA, 288
SCRA 267 (1998).
4
There is no legal basis for petitioners’ purported right to
demand arbitration when they are not parties to the
milling contracts, especially when the language of the
arbitration clause expressly grants the right to demand
arbitration only to the parties to the contract.
By their own allegation, petitioners are associations duly existing and
organized under Philippine law, i.e. they have juridical personalities
separate and distinct from that of their member Planters. It is likewise
undisputed that the eighty (80) milling contracts that were presented
were signed only by the member Planter concerned and one of the
Centrals as parties. In other words, none of the petitioners were
parties or signatories to the milling contracts. This circumstance is
fatal to petitionersÊ cause since they anchor their right to demand
arbitration from the respondent sugar centrals upon the arbitration
clause found in the milling contracts. There is no legal basis for
petitionersÊ purported right to demand arbitration when they are not
parties to the milling contracts, especially when the language of the
arbitration clause expressly grants the right to demand arbitration
only to the parties to the contract.
The formal requirements of an agreement to arbitrate are
therefore the following: a) it must be in writing and b) it
must be subscribed by the parties or their representatives.
The formal requirements of an agreement to arbitrate are therefore
the following: (a) it must be in writing and (b) it must be subscribed by
the parties or their representatives. To subscribe means to write
underneath, as oneÊs name; to sign at the end of a document. That
word may sometimes be construed to mean to give consent to or to
attest.
Even if Section 4 of Republic Act 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.
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.
The mere fact that petitioners were organized for the
purpose of advancing the interests and welfare of their
members does not necessarily mean that petitioners have
the authority to represent their members in legal
proceedings, including the present arbitration proceedings.
Assuming petitioners had properly brought the case in the name of
their members who had existing milling contracts with respondents,
petitioners must still prove that they were indeed authorized by the
said members to institute an action for and on the membersÊ behalf.
In the same manner that an officer of the corporation cannot bring
action in behalf of a corporation unless it is clothed with a board
resolution authorizing an officer to do so, an authorization from the
individual member planter is a sine qua non for the association or any
of its officers to bring an action before the court of law. The mere fact
that petitioners were organized for the purpose of advancing the
interests and welfare of their members does not necessarily mean
that petitioners have the authority to represent their members in
legal proceedings, including the present arbitration proceedings.
ADR | FINALS
Cargill Philippines, Inc. vs. San Fernando Regala
Trading, Inc., G.R. No. 175404. January 31, 2011
 knowledge and expertise relating to mining.
Arbitration, as an alternative mode of settling disputes,
has long been recognized and accepted in our jurisdiction.
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.
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.
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.
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.
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. To reiterate 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.
Gonzales vs. Climax Mining Ltd., G.R. No. 161957.
February 28, 2005.
There is no forum shopping where one is a petition for
certiorari which raises the issue of whether or not there
was grave abuse of discretion while the other is a Petition
to Compel for Arbitration seeking the implementation of
the arbitration clause in the agreement between the
parties.
Petitioner claims that respondents are guilty of forum-shopping for
failing to disclose before this Court that they had filed a Petition to
Compel for Arbitration before the RTC of Makati City. However, it
cannot be determined from petitioner’s mere allegations in the
Petition that the Petition to Compel for Arbitration instituted by
respondent Climax-Arimco, involves related causes of action and the
grant of the same or substantially the same reliefs as those involved in
the instant case. Petitioner did not attach copies of the Petition to
Compel for Arbitration or any order or resolution of the RTC of
Makati City related to that case. Furthermore, it can be gleaned from
the nature of the two actions that the issues in the case before the
RTC of Makati City and in the petition for certiorari before the Court
of Appeals are different. A petition for certiorari raises the issue of
whether or not there was grave abuse of discretion, while the Petition
to Compel for Arbitration seeks the implementation of the arbitration
clause in the agreement between the parties.
The question of constitutionality is exclusively within the
jurisdiction of the courts to resolve as this would clearly
involve the exercise of judicial power and a Panel of
Arbitrators does not have jurisdiction over such an issue
5
since it does not involve the application of technical
The Complaint is also not what is contemplated by Rep. Act No. 7942
when it says the dispute should involve FTAAs. The Complaint is not
exclusively within the jurisdiction of the Panel of Arbitrators just
because, or for as long as, the dispute involves an FTAA. The
Complaint raised the issue of the constitutionality of the FTAA, which
is definitely a judicial question. The question of constitutionality is
exclusively within the jurisdiction of the courts to resolve as this
would clearly involve the exercise of judicial power. The Panel of
Arbitrators does not have jurisdiction over such an issue since it does
not involve the application of technical knowledge and expertise
relating to mining. This the Panel of Arbitrators has even conceded in
its Orders dated 18 October 2001 and 25 June 2002. At this juncture,
it is worthy of note that in a case, which was resolved only on 1
December 2004, this Court upheld the validity of the FTAA entered
into by the Republic of the Philippines and WMC (Philippines), Inc. and
constitutionality of Rep. Act No. 7942 and DENR Administrative
Order 96-40. In fact, the Court took the case on an original petition,
recognizing “the exceptional character of the situation and the
paramount public interest involved, as well as the necessity for a ruling
to put an end to the uncertainties plaguing the mining industry and
the affected communities as a result of doubts case upon the
constitutionality and validity of the Mining Act, the subject FTAA and
future FTAAs, and the need to avert a multiplicity of suits.”
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.
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.
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.
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.
Gonzales vs. Climax Mining Ltd.,G.R. No. 161957.
January 22, 2007
It is elementary in remedial law that the use of an
erroneous mode of appeal is cause for dismissal of the
petition for certiorari and it has been repeatedly stressed
that a petition for certiorari is not a substitute for a lost
ADR | FINALS
appeal; The Arbitration Law specifically provides for an
appeal by certiorari, i.e., a petition for review on
certiorari under Rule 45 of the Rules of Court that raises
pure questions of law; Proper interpretation of Sec. 29 of
R.A. No. 876 shows that the term “may” refers only to the
filing of an appeal, not to the mode of review to be
employed·the use of “may” merely reiterates the principle
that the right to appeal is not part of due process of law
but is a mere statutory privilege to be exercised only in the
manner and in accordance with law.
We address the Rule 65 petition in G.R. No. 167994 first from the
remedial law perspective. It deserves to be dismissed on procedural
grounds, as it was filed in lieu of appeal which is the prescribed
remedy and at that far beyond the reglementary period. It is
elementary in remedial law that the use of an erroneous mode of
appeal is cause for dismissal of the petition for certiorari and it has
been repeatedly stressed that a petition for certiorari is not a
substitute for a lost appeal. As its nature, a petition for certiorari lies
only where there is “no appeal,” and “no plain, speedy and adequate
remedy in the ordinary course of law.” The Arbitration Law specifically
provides for an appeal by certiorari, i.e., a petition for review under
certiorari under Rule 45 of the Rules of Court that raises pure
questions of law. There is no merit to GonzalesÊs argument that the
use of the permissive term “may” in Sec. 29, R.A. No. 876 in the filing
of appeals does not prohibit nor discount the filing of a petition for
certiorari under Rule 65. Proper interpretation of the aforesaid
provision of law shows that the term “may” refers only to the filing of
an appeal, not to the mode of review to be employed. Indeed, the use
of “may” merely reiterates the principle that the right to appeal is not
part of due process of law but is a mere statutory privilege to be
exercised only in the manner and in accordance with law.
Foreign arbitration, as a system of settling commercial
disputes of an international character, was recognized
when the Philippines adhered to the United Nations
“Convention on the Recognition and the Enforcement of
Foreign Arbitral Awards of 1958.”
Arbitration, as an alternative mode of settling disputes, has long been
recognized and accepted in our jurisdiction. The Civil Code is explicit
on the matter. R.A. No. 876 also expressly authorizes arbitration of
domestic disputes. Foreign arbitration, as a system of settling
commercial disputes of an international character, was likewise
recognized when the Philippines adhered to the United Nations
“Convention on the Recognition and the Enforcement of Foreign
Arbitral Awards of 1958” under the 10 May 1965 Resolution No. 71
of the Philippine Senate, giving reciprocal recognition and allowing
enforcement of international arbitration agreements between parties
of different nationalities within a contracting state. The enactment of
R.A. No. 9285 on 2 April 2004 further institutionalized the use of
alternative dispute resolution systems, including arbitration, in the
settlement of disputes.
Disputes do not go to arbitration unless and until the
parties have agreed to abide by the arbitrator’s decision·
necessarily, a contract is required for arbitration to take
place and to be binding.
Disputes do not go to arbitration unless and until the parties have
agreed to abide by the arbitrator’s decision. Necessarily, a contract is
required for arbitration to take place and to be binding. R.A. No. 876
recognizes the contractual nature of the arbitration agreement, thus:
Sec.2.Persons and matters subject to arbitration. - Two or more
persons or parties may submit to the arbitration of one or more
arbitrators any controversy existing, between them at the time of the
submission and which may be the subject of an action, or the parties
to any contract may in such contract agree to settle by arbitration a
controversy thereafter arising between them. Such submission or
contract shall be valid, enforceable and irrevocable, save upon such
grounds as exist at law for the revocation of any contract. Such
submission or contract may include question arising out of valuations,
6
appraisals or other controversies which may be collateral, incidental,
precedent or subsequent to any issue between the parties. A
controversy cannot be arbitrated where one of the parties to the
controversy is an infant, or a person judicially declared to be
incompetent, unless the appropriate court having jurisdiction approve
a petition for permission to submit such controversy to arbitration
made by the general guardian or guardian ad litem of the infant or of
the incompetent.
The doctrine of separability, or severability as other
writers call it, enunciates that an arbitration agreement is
independent of the main contract·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 which still remains valid and
enforceable.
Implicit in the summary nature of the judicial proceedings is the
separable or independent character of the arbitration clause or
agreement. This was highlighted in the cases of Manila Electric Co. v.
Pasay Trans. Co., 57 Phil. 600 (1932) and Del Monte Corporation-USA
v. Court of Appeals, 351 SCRA 373 (2001). The doctrine of
separability, or severability as other writers call it, enunciates that an
arbitration agreement is independent of the main contract. The
arbitration agreement is to be treated as a separate agreement and
the arbitration agreement does not automatically terminate when the
contract of which it is part comes to an end. The separability of the
arbitration agreement is especially significant to the determination of
whether the invalidity of the main contract also nullifies the
arbitration clause. Indeed, the doctrine denotes that the invalidity of
the main contract, also referred to as the “container” contract, does
not affect the validity of the arbitration agreement. Irrespective of the
fact that the main contract is invalid, the arbitration clause/agreement
still remains valid and enforceable.
The proceeding in a petition for arbitration under R.A. No.
876 is limited only to the resolution of the question of
whether the arbitration agreement exists.
There is reason, therefore, to rule against Gonzales when he alleges
that Judge Pimentel acted with grave abuse of discretion in ordering
the parties to proceed with arbitration. Gonzales’s argument that the
Addendum Contract is null and void and, therefore the arbitration
clause therein is void as well, is not tenable. First, the proceeding in a
petition for arbitration under R.A. No. 876 is limited only to the
resolution of the question of whether the arbitration agreement
exists. Second, the separability of the arbitration clause from the
Addendum Contract means that validity or invalidity of the Addendum
Contract will not affect the enforceability of the agreement to
arbitrate. Thus, Gonzales’s petition for certiorari should be dismissed.
The Court now holds that the validity of the contract
containing the agreement to submit to arbitration does not
affect the applicability of the arbitration clause itself.
This brings us back to G.R. No. 161957. The adjudication of the
petition in G.R. No. 167994 effectively modifies part of the Decision
dated 28 February 2005 in G.R. No. 161957. Hence, we now hold that
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. We add that when it was declared in G.R.
No. 161957 that the case should not be brought for arbitration, it
should be clarified that the case referred to is the case actually filed
by Gonzales before the DENR Panel of Arbitrators, which was for the
nullification of the main contract on the ground of fraud, as it had
already been determined that the case should have been brought
before the regular courts involving as it did judicial issues.
ADR | FINALS
National Power Corporation vs. Alonzo-Legasto, G.R.
No. 148318. November 22, 2004.
Errors of law and fact, or an erroneous decision on
matters submitted to the judgment of the arbitrators, are
insufficient to invalidate an award fairly and honestly
made - judicial review of an arbitration award is more
limited than judicial review of a trial.
A stipulation submitting an ongoing dispute to arbitration is valid. As a
rule, the arbitrator’s award cannot be set aside for mere errors of
judgment either as to the law or as to the facts. Courts are generally
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.
A contrary rule would make an arbitration award the commencement,
not the end, of litigation. Errors of law and fact, or an erroneous
decision on matters submitted to the judgment of the arbitrators, are
insufficient to invalidate an award fairly and honestly made. Judicial
review of an arbitration award is, thus, more limited than judicial
review of a trial.
An arbitration award is not absolute and without
exceptions - where the conditions described in Arts. 2038,
2039 and 2040 of the Civil Code applicable to both
compromises and arbitrations are obtaining , the
arbitrators’ award may be annulled or rescinded.
An arbitration award is not absolute and without exceptions. Where
the conditions described in Articles 2038, 2039 and 2040 of the Civil
Code applicable to both compromises and arbitrations are obtaining,
the arbitrators’ award may be annulled or rescinded. Additionally,
judicial review of an arbitration award is warranted when the
complaining party has presented proof of the existence of any of the
grounds for vacating, modifying or correcting an award outlined under
Sections 24 and 25 of R.A. 876.
The fact that a party was disadvantaged by the decision of
the arbitration committee does not prove evident
partiality.
In this case, petitioner does not specify which of the foregoing
grounds it relies upon for judicial review. Petitioner avers that “if and
when the factual circumstances referred to in the provisions
aforementioned are present, judicial review of the award is
warranted.” From its presentation of issues, however, it appears that
the alleged evident partiality of Mr. Sison is singled out as a ground to
vacate the board’s decision. We note, however, that the Court of
Appeals found that petitioner did not present any proof to back up its
claim of evident partiality on the part of Mr. Sison. Its averments to
the effect that Mr. Sison was biased and had prejudged the case do not
suffice to establish evident partiality. Neither does the fact that a party
was disadvantaged by the decision of the arbitration committee prove
evident partiality.
Findings of the Arbitration Board, affirmed by the trial
court and the Court of Appeals and supported by
substantial evidence, should be accorded not only respect
but finality.
At this point, we hearken to the rule that the findings of the
Arbitration Board, affirmed by the trial court and the Court of
Appeals and supported as they are by substantial evidence, should be
accorded not only respect but finality. Accordingly, the amount of
P763.00 per cubic meter fixed by the Arbitration Board and affirmed
by the appellate court as just compensation should stand.
Agan, Jr. vs. Philippine International Air Terminals Co.,
Inc., G.R. No. 155001. May 5, 2003
Where petitioners are not parties to a contract with an
arbitration clause, they cannot be compelled to submit to
arbitration proceedings; A speedy and decisive resolution
of all the critical issues in the present controversy,
7
including those raised by petitioners, cannot be made
before an arbitral tribunal.
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.
Tr a n s fi e l d P h i l i p p i n e s , I n c . v s . L u z o n H y d ro
Corporation, G.R. No. 146717. May 19, 2006
The pendency of arbitral proceedings does not foreclose
resort to the courts for provisional reliefs.
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.
Estate of Nelson R. Dulay vs. Aboitiz Jebsen Maritime,
Inc., G.R. No. 172642. June 13, 2012

It is settled that when the parties have validly agreed on a
procedure for resolving grievances and to submit a dispute
to voluntary arbitration then that procedure should be
strictly observed.
In any case, the Court agrees with petitioner’s contention that the
CBA is the law or contract between the parties. Article 13.1 of the
CBA entered into by and between respondent GCI and AMOSUP, the
union to which petitioner belongs, provides as follows: The Company
and the Union agree that in case of dispute or conflict in the
interpretation or application of any of the provisions of this
Agreement, or enforcement of Company policies, the same shall be
settled through negotiation, conciliation or voluntary arbitration. The
Company and the Union further agree that they will use their best
endeavor to ensure that any dispute will be discussed, resolved and
settled amicably by the parties hereof within ninety (90) days from the
date of filing of the dispute or conflict and in case of failure to settle
thereof any of the parties retain their freedom to take appropriate
action. (Emphasis supplied) From the foregoing, it is clear that the
parties, in the first place, really intended to bring to conciliation or
voluntary arbitration any dispute or conflict in the interpretation or
application of the provisions of their CBA. It is settled that when the
parties have validly agreed on a procedure for resolving grievances
and to submit a dispute to voluntary arbitration then that procedure
should be strictly observed.
Collective Bargaining Agreements; It is only in the absence
of a collective bargaining agreement that parties may opt
to submit the dispute to either the National Labor
Relations Commission (NLRC) or to voluntary arbitration.
It is only in the absence of a collective bargaining agreement that
parties may opt to submit the dispute to either the NLRC or to
voluntary arbitration. It is elementary that rules and regulations issued
by administrative bodies to interpret the law which they are entrusted
to enforce, have the force of law, and are entitled to great respect.
ADR | FINALS
Such rules and regulations partake of the nature of a statute and are
just as binding as if they have been written in the statute itself. In the
instant case, the Court finds no cogent reason to depart from this
rule.
Korea Technologies Co., Ltd. vs. Lerma, G.R. No.
143581. January 7, 2008
While it is established in this jurisdiction is the rule that
the law of the place where the contract is made governs -
lex loci contractus - Art. 2044 of the Civil Code sanctions
the validity of mutually agreed arbitral clause or the
finality and binding effect of an arbitral award.
Established in this jurisdiction is the rule that the law of the place
where the contract is made governs. Lex loci contractus. The contract
in this case was perfected here in the Philippines. Therefore, our laws
ought to govern. Nonetheless, Art. 2044 of the Civil Code sanctions
the validity of mutually agreed arbitral clause or the finality and
binding effect of an arbitral award. Art. 2044 provides, “Any stipulation
that the arbitrators’ award or decision shall be final, is valid, without
prejudice to Articles 2038, 2039 and 2040.” Arts. 2038, 2039, and 2040
above cited refer to instances where a compromise or an arbitral
award, as applied to Art. 2044 pursuant to Art. 2043, may be voided,
rescinded, or annulled, but these would not denigrate the finality of
the arbitral award.
The Philippines has incorporated the Model Law in
Alternative Dispute Resolution Act of 2004.
For domestic arbitration proceedings, we have particular agencies to
arbitrate disputes arising from contractual relations. In case a foreign
arbitral body is chosen by the parties, the arbitration 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 Philippines committed itself to be bound by the
Model Law. We have even incorporated the Model Law in Republic Act
No. (RA) 9285, otherwise known as the Alternative Dispute
Resolution Act of 2004 entitled 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. Secs. 19 and 20 of Chapter 4
of the Model Law are the pertinent provisions.
Under Sec. 24 of R.A. 9285, the Regional Trial Court does
not have jurisdiction over disputes that are properly the
subject of arbitration pursuant to an arbitration clause,
and mandates the referral to arbitration in such cases.
Under Sec. 24, the RTC does not have jurisdiction over disputes that
are properly the subject of arbitration pursuant to an arbitration
clause, and mandates the referral to arbitration in such cases, thus:
SEC. 24. Referral to Arbitration. - A court before which an action is
brought in a matter which is the subject matter of an arbitration
agreement shall, if at least one party so requests not later than the
pre-trial conference, or upon the request of both parties thereafter,
refer the parties to arbitration unless it finds that the arbitration
agreement is null and void, inoperative or incapable of being
performed.
Even if foreign arbitral awards are mutually stipulated by
the parties in the arbitration clause to be final and
binding, the same are not immediately enforceable or
cannot be implemented immediately they must still be
confirmed by the Regional Trial Court.
Foreign arbitral awards while mutually stipulated by the parties in the
arbitration clause to be final and binding are not immediately
enforceable or cannot be implemented immediately. Sec. 35 of the
UNCITRAL Model Law stipulates the requirement for the arbitral
award to be recognized by a competent court for enforcement, which
court under Sec. 36 of the UNCITRAL Model Law may refuse
8
recognition or enforcement on the grounds provided for. RA 9285
incorporated these provisos to Secs. 42, 43, and 44 relative to Secs.
It is now clear that foreign arbitral awards when confirmed
by the Regional Trial Court are deemed not as a judgment
of a foreign court but as a foreign arbitral award, and
when confirmed, are enforced as final and executory
decisions of our courts of law - the concept of a final and
binding arbitral award is similar to judgments or awards
given by some quasi-judicial bodies, like the National
Labor Relations Commission and the Mines Adjudication
Board.
It is now clear that foreign arbitral awards when confirmed by the
RTC are deemed not as a judgment of a foreign court but as a foreign
arbitral award, and when confirmed, are enforced as final and
executory decisions of our courts of law. Thus, it can be gleaned that
the concept of a final and binding arbitral award is similar to
judgments or awards given by some of our quasi-judicial bodies, like
the National Labor Relations Commission and Mines Adjudication
Board, whose final judgments are stipulated to be final and binding, but
not immediately executory in the sense that they may still be judicially
reviewed, upon the instance of any party. Therefore, the final foreign
arbitral awards are similarly situated in that they need first to be
confirmed by the RTC.
While the Regional Trial Court (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.
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. In this sense, what this Court held in Chung
Fu Industries (Phils.), Inc., 206 SCRA 545 (1992), relied upon by
KOGIES is applicable insofar as the foreign arbitral awards, while final
and binding, do not oust courts of jurisdiction since these arbitral
awards are not absolute and without exceptions as they are still
judicially reviewable. 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.
Grounds for judicial review different in domestic and
foreign arbitral awards·for foreign or international
arbitral awards, the grounds for setting aside, rejecting or
vacating the award by the Regional Trial Court (RTC) are
provided under Art. 34(2) of the United Nations
Commission on International Trade Law (UNCITRAL)
Model Law, while for final domestic arbitral awards, they
may only be assailed before the RTC and vacated on the
grounds provided under Sec. 25 of RA 876.
The differences between a final arbitral award from an international
or foreign arbitral tribunal and an award given by a local arbitral
tribunal are the specific grounds or conditions that vest jurisdiction
over our courts to review the awards. For foreign or international
arbitral awards which must first be confirmed by the RTC, the
grounds for setting aside, rejecting or vacating the award by the RTC
are provided under Art. 34(2) of the UNCITRAL Model Law. For final
domestic arbitral awards, which also need confirmation by the RTC
pursuant to Sec. 23 of RA 876 and shall be recognized as final and
executory decisions of the RTC, they may only be assailed before the
RTC and vacated on the grounds provided under Sec. 25 of RA 876.
An arbitration clause, stipulating that the arbitral award is
final and binding, does not oust our courts of jurisdiction
as the international arbitral award is still judicially
reviewable under certain conditions provided for by the
United Nations Commission on International Trade Law
ADR | FINALS
(UNCITRAL) Model Law on International Commercial
Arbitration (ICA) as applied and incorporated in RA 9285.
Petitioner is correct in its contention that an arbitration clause,
stipulating that the arbitral award is final and binding, does not oust
our courts of jurisdiction as the international arbitral award, the
award of which is not absolute and without exceptions, is still
judicially reviewable under certain conditions provided for by the
UNCITRAL Model Law on ICA as applied and incorporated in RA
9285.
Where an arbitration clause in a contract is availing,
neither of the parties can unilaterally treat the contract as
rescinded since whatever infractions or breaches by a
party or differences arising from the contract must be
brought first and resolved by arbitration, and not through
an extrajudicial rescission or judicial action.
What this Court held in University of the Philippines v. De Los
Angeles, 35 SCRA 102 (1970) and reiterated in succeeding cases, that
the act of treating a contract as rescinded on account of infractions by
the other contracting party is valid albeit provisional as it can be
judicially assailed, is not applicable to the instant case on account of a
valid stipulation on arbitration. Where an arbitration clause in a
contract is availing, neither of the parties can unilaterally treat the
contract as rescinded since whatever infractions or breaches by a
party or differences arising from the contract must be brought first
and resolved by arbitration, and not through an extrajudicial rescission
or judicial action.
The pendency of an arbitral proceeding does not foreclose
resort to the courts for provisional reliefs - the RTC has
authority and jurisdiction to grant interim measures of
protection.
In the recent 2006 case of Transfield Philippines, Inc. v. Luzon Hydro
Corporation, 490 SCRA 14 (2006), we were explicit that even “the
pendency of an arbitral proceeding does not foreclose resort to the
courts for provisional reliefs.” We explicated this way: 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 partiesÊ 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. It is thus beyond cavil that the RTC has authority
and jurisdiction to grant interim measures of protection.
Nagarmull vs. Binalbagan-Isabela Sugar Co., Inc., No.
L-22470, May 28, 1970
To the extent, therefore, that the decisions of the Tribunal of
Arbitration of the Bengal Chamber of Commerce and of the High
Court of Judicature of Calcutta fail to apply to the facts of this case
fundamental principles of contract, the same may be impeached, as
they have been sufficiently impeached by appellant, on the ground of
"clear mistake of law", We agree in this regard with the majority
opinion in Ingenohl vs. Walter E. Olsen & Co. (47 Phil. 189), although
its view was reversed. by the "Supreme Court of the United States
(273 U.S. 541, 71 L, ed. 762) which at that time had jurisdiction to
review by certiorari decisions of this Court We can not sanction a
clear mistake mistake of law that would work an obvious injustice
upon appellant.
Foreign judgments are recognized in the Philippines in the absence of
want of jurisdiction, want of notice to party, collusion, fraud, or clear
mistake of law or fact and If not contrary to our 'laws, customs, and
public policy.
9
Metropolitan Cebu Water District vs. Mactan Rock
Industries, Inc., G.R. No. 172438. July 4, 2012.
The Construction Industry Arbitration Commission (CIAC)
was created in 1985 under Executive Order (E.O.) No. 1008
(Creating an Arbitration Machinery for the Philippine
Construction Industry), in recognition of the need to
establish an arbitral machinery that would expeditiously
settle construction industry disputes.
The Construction Industry Arbitration Commission (CIAC) was
created in 1985 under Executive Order (E.O.) No. 1008 (Creating an
Arbitration Machinery for the Philippine Construction Industry), in
recognition of the need to establish an arbitral machinery that would
expeditiously settle construction industry disputes. The prompt
resolution of problems arising from, or connected to, the construction
industry was considered necessary and vital for the fulfillment of
national development goals, as the construction industry provided
employment to a large segment of the national labor force, and was a
leading contributor to the gross national product.
The jurisdiction of the Construction Industry Arbitration
Commission (CIAC) as a quasi-judicial body is confined to
construction disputes, that is, those arising from, or
connected to, contracts involving “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.”
The jurisdiction of the CIAC as a quasi-judicial body is confined to
construction disputes, that is, those arising from, or connected to,
contracts involving “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.” The CIAC has jurisdiction over all such disputes whether
the dispute arises before or after the completion of the contract.
The Court held that the Construction Industry Arbitration
Commission (CIAC) retained jurisdiction even if both
parties had withdrawn their consent to arbitrate.
This Court has held that the CIAC has jurisdiction over a dispute
arising from a construction contract even though only one of the
parties requested for arbitration. In fact, in Philrock, Inc. v.
Construction Industry Arbitration Commission, 359 SCRA 632
(2001), the Court held that the CIAC retained jurisdiction even if
both parties had withdrawn their consent to arbitrate.
National Union Fire Insurance Company of Pittsburg vs.
Stolt-Nielsen Philippines, Inc., G.R. No. 87958. April 26,
1990
Foreign arbitration recognized in the Philippines.
Arbitration, as an alternative mode of settling disputes, has long been
recognized and accepted in our jurisdiction (Chapter 2, Title XIV,
Book IV, Civil Code). Republic Act No. 876 (The Arbitration Law) also
expressly authorizes arbitration of domestic disputes. Foreign
arbitration as a system of settling commercial disputes of an
international character was likewise recognized when the Philippines
adhered to the United Nations “Convention on the Recognition and
the Enforcement of Foreign Arbitral Awards of 1958,” under the 10
May 1965 Resolution No. 71 of the Philippine Senate, giving reciprocal
recognition and allowing enforcement of international arbitration
agreements between parties of different nationalities within a
contracting state.
Oil and Natural Gas Commission vs. Court of Appeals,
G.R. No. 114323. July 23, 1998
The non-delivery of the oil well cement is definitely not in
the nature of a dispute arising from the failure to execute
the supply order/contract design, drawing, instructions,
specifications or quality of the materials.
But in accordance with the doctrine of noscitur a sociis, this reference
to the supply order/contract must be construed in the light of the
ADR | FINALS 10
preceding words with which it is associated, meaning to say, as being adopted this modern view when it reproduced in the new Civil Code
limited only to the design, drawing, instructions, specifications or the provisions of the old Code on arbitration. And only recently it
quality of the materials of the supply order/contract. The non-delivery approved Republic Act No. 876 expressly authorizing arbitration of
of the oil well cement is definitely not in the nature of a dispute future disputes.
arising from the failure to execute the supply order/contract design,
drawing, instructions, specifications or quality of the materials. That 

Clause 16 should pertain only to matters involving the technical
aspects of the contract is but a logical inference considering that the
underlying purpose of a referral to arbitration is for such technical
matters to be deliberated upon by a person possessed with the
required skill and expertise which may be otherwise absent in the
regular courts.

The Court has held that matters of remedy and procedure

are governed by the lex fori or the internal law of the
forum.
The recognition to be accorded a foreign judgment is not necessarily
affected by the fact that the procedure in the courts of the country in
which such judgment was rendered differs from that of the courts of
the country in which the judgment is relied on. This Court has held
that matters of remedy and procedure are governed by the lex fori or
the internal law of the forum. Thus, if under the procedural rules of
the Civil Court of Dehra Dun, India, a valid judgment may be rendered
by adopting the arbitratorÊs findings, then the same must be accorded
respect. In the same vein, if the procedure in the foreign court
mandates that an Order of the Court becomes final and executory
upon failure to pay the necessary docket fees, then the courts in this
jurisdiction cannot invalidate the order of the foreign court simply
because our rules provide otherwise.

Eastboard Navigation, Ltd. vs. Juan Ysmael and Co.,

Inc., No. L-9090. September 10, 1957
CHARTER PARTY; COMPULSORY ARBITRATION, WHEN
BINDING UPON THE PARTIES; CASE AT BAR.
The defendant corporation, through its president and general manager,
chartered plaintiff's vessel to load a cargo of scrap iron in the
Philippines for Buenos Aires. The charter party agreement contained,
besides the regular charter party printed form, a typewritten clause
providing for a foreign compulsory arbitration in case of any dispute
that may arise out of said agreement. It appears that the defendant
corporation, through its said president and general manager, signed
not only the printed portion of the charter party but the typewritten
portion as well, which contains the arbitration clause. Moreover, after
a dispute as to the liability of the defendant corporation arose, said
president and general manager appointed lawyers in New York to
represent defendant corporation in the arbitration proceedings to be
held in that state. Held: If defendant corporation did not really intend
to submit its dispute with the plaintiff to arbitration, .the logical step it
should have taken would be to repudiate the act of its president and
general manager, but far from doing so, it approved and ratified it by
subsequent acts which clearly indicate that it was agreeable to said
arbitration. Consequently, said arbitration agreement is binding on the
def endant corporation, and the arbitration proceedings as well as the
arbitration decision rendered pursuant thereof, as confirmed by the
District Court of New York, are valid; hence enforceable in this
jurisdiction.

ARBITRATION AGREEMENT VALID; ARBITRATION LAW

IN THIS JURISDICTION STATED.
While there are authorities which hold that "a clause in a contract
providing that all matters in dispute between the parties shall be
referred to arbitrators and to them alone, is contrary to public policy
and cannot oust the courts of jurisdiction" (Manila Electric Co. vs.
Pasay Transportation Co., 57 Phil., 600, 603), however, there are
authorities which favor "the more intelligent view that arbitration, as
an inexpensive, speedy and amicable method of settling disputes, and
as a means of avoiding litigation, should receive every encouragement
from the courts which may be extended without contravening sound
public policy or settled law" (3 Am. Jur., p. 835). Congress has officially