What is the equivalent of the Principle of Competence-Competence of

ADR in litigation? – The equivalent of this principle in litigation is the court’s

dismissal of case based on the grounds of lack of jurisdiction. Special ADR
rules provides that the meaning of Principle of Competence-Competence is
that the arbitral tribunal may initially rule on its own jurisdiction, including any
objections with respect to the existence or validity of the arbitration
agreement or any condition precedent to the filing of a request for arbitration.

In brief, the Principle of Competence-Competence recognizes the power

of the arbitrator to determine its own jurisdiction under the agreement. Thus,
the equivalent of this principle in conventional litigation is the court’s dismissal
of case on the grounds of lack of jurisdiction.
BF Corp. vs. CA and Shangri-La Properties, et. al.

Facts: BF Corp (Petitioner) entered into an agreement with Shangri-La

Properties (SPI) whereby the former undertook to construct the main
structure of the EDSA Shangri-La Mall in favor of the latter. They entered into
a total of 3 agreements.

Petitioner filed, before the RTC, a complaint for the collection of the
balance due under their agreement against SPI. SPI, in return, filed a motion
to suspend the proceedings anchoring on the allegation that the formal
contract of construction provided for a clause requiring prior resort to
arbitration before judicial intervention. On the other hand, Petitioner opposed
the said motion alleging that there was no formal contract between the parties
although, they entered into an agreement. Petitioner averred that the
agreement did not provide for an arbitration, thus, cannot deprive the court
of its jurisdiction.

In its Order, the RTC ruled that there was indeed an arbitration clause
in the contract but it denied the motion to suspend the proceedings and ruled
in favor of the petitioner holding that despite the fact that there was an
arbitration agreement, the Conditions of the Contract only contained the
initials of Petitioner’s President while no signature on the part of SPI.

The CA, however, set the trial court’s Order aside and held that although
it was only the initials of Petitioner’s President was present and none from SPI,
it does not affect its effectivity since Petitioner admitted that the document is
the agreement between them.

Issue: w/n the contract contained an Arbitration Clause – Yes

Ruling: The formal requirements of an agreement to arbitrate are the

following: (a) it must be in writing and (b) it must be subscribed by the
parties or their representatives.

Here, these requisites were complied with in the contract in question.

The Articles of Agreement, which incorporates all the other contracts and
agreements between the parties, was signed by representatives of both
parties and duly notarized. The failure of the private respondent's
representative to initial the "Conditions of Contract" would therefore not affect
compliance with the formal requirements for arbitration agreements because
that particular portion of the covenants between the parties was included by
reference in the Articles of Agreement.

A contract need not be contained in a single writing. It may be collected

from several different writings which do not conflict with each other and which,
when connected, show the parties, subject matter, terms and consideration,
as in contracts entered into by correspondence. A contract may be
encompassed in several instruments even though every instrument is not
signed by the parties, since it is sufficient if the unsigned instruments are
clearly identified or referred to and made part of the signed instrument or
instruments. Similarly, a written agreement of which there are two copies,
one signed by each of the parties, is binding on both to the same extent as
though there had been only one copy of the agreement and both had signed
it.