JUDICIAL REVIEW OF ARBITRAL AWARDS

CHUNG FU INDUSTRIES PHILS VS CA (GR NO. 96283, FEBRUARY 3,1992)

- Awards in International Arbitration are subject to Judicial review

JUDICIAL REVIEW

- As applied to the determination of a body or person performing what is known as QUASI-

JUDICIAL FUNCTION, is the power to pass upon which determination, although appellate courts
have left to interpretation and application the precise nature of the review to be made.

SAN MIGUEL CORPORATION VS SECRETARY OF LABOR (GR NO L-39195, MAY 16, 1975)

- The acts or decisions of administrative agencies exercising quasi-judicial or legislative powers

are within the power of the courts to scrutinize even though no right of review is given by the
statute, in order to keep these administrative agencies within its jurisdiction and to protect the
substantial rights of the parties affected by its decision.
- Consequently, JUDICIAL REVIEW is proper in case of:
• Lack of jurisdiction
• Grave abuse of discretion
• Error of law
• Fraud or collusion
- And may declare an action or resolution of an administrative authority to be illegal because:
• It violates or fails to comply with some mandatory provision of law, or
• It is corrupt, arbitrary, or capricious.
- There is an underlying power of the courts to scrutinize the acts of such (quasi-judicial) agencies
on questions of law and jurisdiction even though no right of review is given by the statute.
- The purpose of JUDUCIAL REVIEW is to keep the administrative agency within its jurisdiction
and protect the substantive rights of the parties.
- It is part of the CHECKS AND BALANCES of the parties which restricts the separation of powers
and forestalls arbitrary and unjust adjudications.

OCEANIC BIC DIVISION VS ROMERO (GR NO L-43890 JULY 16,1984)

- Arbitrators perform quasi-judicial functions (Labor Case)

KOREA TECHNOLOGIES CO,LTD., VS HON. ALBERTO A. LERMA ET AL (GR NO. 143581 JANUARY 7, 2008)

- FOREIGN ARBITRAL AWARDS

- Foreign arbitral awards when confirmed by the RTC are deemed not as judgment of a foreign
court but as foreign arbitral award, and when confirmed, are enforced as final and executory
decisions of our court of law
- The concept of a final and binding arbitral award is similar to judgments or awards given by
some of our quasi-judicial bodies, 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.

INSULAR SAVINGS BANK VS FAR EAST BANK & TRUST COMPANY (GR NO 141818, JUNE 22, 2006)
- The manner by which the power of judicial review may be exercised may NOT be modified by
the parties.
- Where the parties stipulated that the decision of an arbitration committee shall be subject to
appeal to the RTC only questions of law, and the appeal shall be in the form of a Petition for
Review, the Supreme Court held that the parties cannot by their stipulation, confer jurisdiction
on the RTC to review the award on question of law, The appropriate recourse of the aggrieved
party being to file with the RTC a petition to vacate the award pursuant to RA 876 (Arbitration
Law)
- JUDICIAL REMEDIES:
• PETITION TO VACATE THE AWARD filed as a special proceeding with the RTC (Section 24 of
the Arbitration Law)
• PETITION FOR REVIEW UNDER RULE 43 OF THE RULES OF COURT with the Court of Appeals
on questions of fact, of law, or mixed questions of fact and law.
• PETITION FOR CERTIORARI under rule 65 of the Rules of Court on the ground that the
Arbitrator Committee acted:
1. Without or in excess of its jurisdiction or
2. With grave abuse of discretion amounting to lack or excess of jurisdiction

METRO BOTTLED WATER CORP. VS ANDRADA CONSTRUCTION & DEVELOPMENT CORP, INC. (GR NO.
202430, MARCH 6, 2019)

- Arbitral Awards will not be vacated “merely on the ground that the arbitral tribunal committed
errors of fact, or law, or of fact and law, as the court cannot substitute its judgment for that of
the arbitral tribunal”
- File a PETITION FOR REVIEW UNDER RULE 43 OF THE RULES OF COURT WITH TH ECOURT OF
APPEALS on questions of fact, of law, or mixed questions of fact and law.

***FRUEHAF ELECTRONICS PHILIPPINES CORP. VS TECHNOLOGY ELECTRONICS ASSEMBLY ND

MANAGEMENT PACIFIC CORP (GR NO. 204197 NOVEMBER 23, 2016)

- PARIES CANNOT IMPLEAD A THRID-PARTY IN THE PROCEEDINGS EVEN IF THE LATTER’S

PARTICIPATION IS NECESSARY FOR A COMPLETE SETTLEMENT OF THE DISPUTE.
(CONTRACTUAL AND CONSENSUAL CHARACTER)
- The Arbitral Tribunal acquires jurisdiction over the parties and the subject matter through
stipulation.

NOTE: (PARLADE OPINION)

- An award in International Arbitration in the Philippines, which is henceforth, referred to as a

Model Law award, is an AWARD IN A DOMESTIC ARBITRATION as opposed to an award in an
INTERNATIONAL FOREIGN ARBITRATION
- An Arbitration is INTERNATIONAL if it satisfies one of the elements of INTERNATIONALITY as
defined in Model Law, Article 1(3)
 - An INTERNATIONAL Award may either be DOMESTIC or FOREIGN depending on where the place
of arbitration is
- Of priority consideration: venue of proceedings (emphasis provided)

ARBITRATION PROCEEDINGS TERMINATE IN EITHER OF TWO WAYS:

1. FINAL AWARD OF THE ARBITRAL TRIBUNAL:

a. Life of an Arbitral Tribunal is dependent on the contract/document that gave them life
b. They shall continue to exist until their:
i. Mandate expires
ii. Purpose is impossible to accomplish
iii. Purpose is accomplished &/or agreement is terminated
2. ORDER OF THE ARBITRAL TRIBUNAL TERMINATING THE ARBITRATION PROCEEDINGS

TYPES OF ARBITRAL AWARDS:

1. Final
2. Interim
3. Interlocutory or Partial

OTHER ARBITRAL TRIBUNAL RESULTS:

1. Withdrawal of the Claim

-does not ipso facto terminate the mandate of the Arbitral Tribunal
-Respondent is entitled to object to such withdrawal of claim if he has a legitimate
interest in obtaining a final settlement of the dispute
2. Correction of Award
3. Additional Award

CHUNG FU INDUSTRIES (PHILIPPINES) INC. VS COURT OF APPEALS (GR NO. 96283, FEBRUARY 25, 1992)

FACTS: Respondent CA affirmed the ruling of the trial court that herein petitioners, after submitting
themselves for arbitration and agreeing to the terms and conditions thereof, providing that the
arbitration award shall be final and unappealable, are precluded from seeking judicial review of subject
arbitration award.

Q: What if courts refuse or neglect to inquire into the factual milieu of an arbitrator’s award to
determine whether it is in accordance with law or within the scope of his authority? How may the
power of judicial review be invoked?

A: this is where the proper remedy is certiorari under Rule 65 of the Revised Rules of Court. It is to be
borne in mind, however, that this action will lie only where a grave abuse of discretion or act without
or in excess of jurisdiction on the part of the voluntary arbitrator is clearly shown.
SHANGRI-LA PROPERTIES, INC. VS BF CORP. (GR NOS. 187552-53 &187608-09, OCTOBER 15,2019)

Rule 45, Section 1 is not a proper remedy; questions of law

The Court cannot delve into factual questions in this appeal by certiorari because Section 1 of
Rule 45 of the Rules of Court categorically ordains that the petition for review on certiorari “shall only
raise questions of law which must be distinctly set forth”

COURT INTERVENTION: ALLOWED

DEPARTMENT OF FOREIGN AFFAIRS VS BCA INTERNATIONAL CORP. (GR NO 225051 JULY 19, 2017)

COURT INTERVENTION is allowed under RA 9285 in the following instances:

1. When a party in the arbitration proceedings requests for an interim measure of protection
2. Judicial review of arbitral awards by the RTC, and
3. Appeal from the RTC decision on arbitral awards to the Court of Appeals

The extent of COURT INTERVENTION IN DOMESTIC ARBITRATION is specified in the IRR of RA

9285, thus:

Art. 5.4. Extent of Court Intervention. In matters governed by this Chapter, no Court shall
intervene except in accordance with the Special ADR Ruled.

COURT INTERVENTION IN THE SPECIAL ADR RULES is allowed through these remedies all to be filed
with the RTC:

1. Specific Court Relief, which includes judicial relief involving the issue of:
a. Existence, validity, and enforceability of the Arbitral Agreement
b. Interim Measures of Protection
c. Challenge to the Appointment of Arbitrator
d. Termination of mandate of arbitrator
e. Assistance in taking evidence
f. Confidentiality/ Protective Orders
g. Confirmation, Correction, or Vacation of Award in Domestic Arbitration
2. MOTION FOR RECONSIDERATION may be filed by a party with the RTC on the grounds specified
in Rule 19.1
3. An appeal to the Court of Appeals through PETITION FOR REVIEW under Rule 19.2 or through a
SPECIAL CIVIL ACTION FOR CERTIORARI under Rule 19.26, and
4. A petition for certiorari with the Supreme Court from a judgment or final order or resolution of
the Court of appeals, raising only QUESTIONS OF LAW

Under the Special ADR Rules, REVIEW BY THE SUPREME COURT OF AN APPEAL BY CERTIORARI
IS NOT A MATTER OF RIGHT, thus:

Rule 19.36. Review Discretionary- A review by the Supreme Court is not a matter of right, but of
sound judicial discretion, which will be granted only for serious and compelling reasons resulting
in grave prejudice to the aggrieved party…
GROUNDS FOR SETTING ASIDE A MODEL LAW AWARD

-EXCLUSIVE

1. ARBITRATOR’S

a. qualifications

b. exercise of discretion

c. arbitrary action/ without basis

d. procedural lapses

2. CAPACITY OF PARTIES

3. PUBLIC POLICY

Rule 12.4 Grounds to Set Aside or Resist Enforcement. — The court may set aside or
refuse the enforcement of the arbitral award only if:

a. The party making the application furnishes proof that:

(i). A party to the arbitration agreement was under some incapacity, or the said
agreement is not valid under the law to which the parties have subjected it or,
failing any indication thereof, under Philippine law; or

(ii). The party making the application to set aside or resist enforcement was not
given proper notice of the appointment of an arbitrator or of the arbitral
proceedings or was otherwise unable to present his case; or

(iii). The award deals with a dispute not contemplated by or not falling within the
terms of the submission to arbitration, or contains decisions on matters beyond
the scope of the submission to arbitration; provided that, if the decisions on
matters submitted to arbitration can be separated from those not so submitted,
only that part of the award which contains decisions on matters not submitted
to arbitration may be set aside or only that part of the award which contains
decisions on matters submitted to arbitration may be enforced; or

(iv). The composition of the arbitral tribunal or the arbitral procedure was not in
accordance with the agreement of the parties, unless such agreement was in
conflict with a provision of Philippine law from which the parties cannot
derogate, or, failing such agreement, was not in accordance with Philippine law;

b. The court finds that:

(i). The subject-matter of the dispute is not capable of settlement by arbitration

under the law of the Philippines; or

(ii). The recognition or enforcement of the award would be contrary to public

policy.
 In deciding the petition, the Court shall disregard any other ground to set aside or
enforce the arbitral award other than those enumerated above.

The petition to set-aside or a pleading resisting the enforcement of an arbitral

award on the ground that a party was a minor or an incompetent shall be filed only on
behalf of the minor or incompetent and shall allege that (a) the other party to
arbitration had knowingly entered into a submission or agreement with such minor or
incompetent, or (b) the submission to arbitration was made by a guardian or guardian
ad litem who was not authorized to do so by a competent court.