BUMALAY, JOANN CHRISTA R.

ADR – Saturday; 1:00-3:00

G.R. No. 115412 November 19, 1999

HOME BANKERS SAVINGS AND TRUST COMPANY, petitioner, 
vs.
COURT OF APPEALS and FAR EAST BANK & TRUST CO., INC. respondents.

FACTS:
This involved a dispute between Far Eastern Bank and Home Bankers Savings which was
submitted to arbitration before the Philippine Clearing House Corporation (PCHC). Pending the
arbitration proceeding, Far East Bank filed an action for sum of money with preliminary
attachment, which was granted by the court despite opposition from Home Bankers Savings. The
Court of Appeals affirmed the decision of the court a quo.

ISSUES:

1. WON the private respondent which commenced an arbitration proceeding under PCHC may
subsequently file a separate case in court over the same subject matter of arbitration despite the
pendency of that arbitration, simply to obtain the provisional remedy of attachment against the
bank the adverse party in the arbitration proceeding.

2. WON the participants in the regional clearing operations of the PCHC may bypass the arbitration
process.

HELD:

1. No. Section 14 of Republic Act 876, otherwise known as the Arbitration Law, allows any
party to the arbitration proceeding to petition the court to take measures to safeguard
and/or conserve any matter which is the subject of the dispute in arbitration.

Petitioner's exposition of the foregoing provision deserves scant consideration. Section 14

simply grants an arbitrator the power to issue subpoena and subpoena duces tecum  at any
time before rendering the award. The exercise of such power is without prejudice to the
right of a party to file a petition in court to safeguard any matter which is the subject of the
dispute in arbitration. In the case at bar, private respondent filed an action for a sum of
money with prayer for a writ of preliminary attachment. Undoubtedly, such action involved
the same subject matter as that in arbitration, which was allegedly deprived from private
respondent in what is known in banking as a "kiting scheme." However, the civil action was
not a simple case of a money claim since private respondent has included a prayer for a writ
of preliminary attachment, which is sanctioned by section 14 of the Arbitration Law.

2. No. Participants in the regional clearing operations of the Philippine Clearing House
Corporation cannot bypass the arbitration process laid out by the body and seek relief
directly from the courts. In the case at bar, undeniably, private respondent has initiated
arbitration proceedings as required by the PCHC rules and regulations, and pending
arbitration has sought relief from the trial court for measures to safeguard and/or conserve
the subject of the dispute under arbitration, as sanctioned by section 14 of the Arbitration
Law, and otherwise not shown to be contrary to the PCHC rules and regulations.
BUMALAY, JOANN CHRISTA R.
ADR – Saturday; 1:00-3:00

G.R. No. 141818             June 22, 2006

INSULAR SAVINGS BANK, Petitioner, 
vs.
FAR EAST BANK AND TRUST COMPANY, Respondent.

FACTS:
Far East Bank and Trust Company (Respondent) filed a complaint against Home
Bankers Trust and Company (now Insular Savings Bank) with the Philippine Clearing
House Corporation’s (PCHC) Arbitration Committee. Respondent sought to recover from
petitioner, sum of money representing the total amount of the three checks drawn and
debited against its clearing account. Before the termination of the arbitration proceedings,
respondent filed another complaint but this time with the RTC for Sum of Money and
Damages with Preliminary Attachment. The RTC suspended the proceedings pending the
decision of the Arbitration Committee.
The PCHC Arbitration Committee rendered its decision in favour of respondent and
petitioner’s motion for reconsideration was also denied. Petitioner then filed a petition for
review in the earlier case filed by the respondent in the RTC. However, the RTC denied the
petitioner’s motion for reconsideration and dismissed the petition for review for lack of
jurisdiction.
ISSUE: WON the RTC erred in dismissing the petition for lack of jurisdiction on the ground
that it should have been docketed as a separate case.
HELD:

No. The Philippine Clearing House Corporation was created to facilitate the clearing
of checks of member banks. Among these member banks exists a compromissoire, or an
arbitration agreement embedded in their contract wherein they consent that any future
dispute or controversy between its PCHC participants involving any check would be
submitted to the Arbitration Committee for arbitration. Petitioner and respondent are
members of PCHC, thus they underwent arbitration proceedings.
The PCHC has its own Rules of Procedure for Arbitration (PCHC Rules). However,
this is governed by Republic Act No. 876, also known as The Arbitration Law and
supplemented by the Rules of Court. As provided in the PCHC Rules, the findings of facts of
the decision or award rendered by the Arbitration Committee shall be final and conclusive
upon all the parties in said arbitration dispute.