Federal Express Corp. v. Airfreight 2100, Inc., (G.R. No.

216600; November 21, 2016)

FACTS:

The Philippine Supreme Court categorically rejected the argument that the confidentiality of witnesses’
statements made during an arbitration may not be used as a shield in the commission of a crime. It was
ruled that the statements in an arbitration of a witness who relied upon the confidentiality of the
proceedings (and any communication made towards that end) should be regarded as confidential,
privileged and thus inadmissible in evidence (even in a preliminary investigation of a crime allegedly
committed by that witness through his or her statement during the arbitration).

ISSUE:
whether the testimony of Jennings given during the arbitration proceedings falls within
the ambit of confidential information and, therefore, covered by the mantle of a
confidentiality/protection order.

HELD:

Section 3 (h) of Republic Act (R.A.) No. 9285 or the Alternative Dispute Resolution of
2004 (ADR Act) defines confidential information as any information, relative to the
subject of mediation or arbitration, expressly intended by the source not to be disclosed,
or obtained under circumstances that would create a reasonable expectation on behalf
of the source that the information shall not be disclosed. It shall include, among others,
communication, oral or written, made in a dispute resolution proceedings. Rule 10.1 of
A.M. No. 07-11-08-SC or the Special Rules of Court on Alternative Dispute Resolution
(Special ADR Rules) allows "[a] party, counsel or witness who disclosed or who was
compelled to disclose information relative to the subject of ADR under circumstances
that would create a reasonable expectation, on behalf of the source, that the information
shall be kept confidential. Thus,

the statements of the witnesses are considered as confidential within the law. Also, both
parties agreed that the arbitration shall be kept confidential as provided for in Sec. 23 of
the ADR Act. Thus, the claimed slanderous statements by Jennings during the
arbitration hearing are deemed confidential information and the veil of confidentiality
over them must remain. Case No. 40 DENR vs. United Planners Consultants, Inc. G.R.
No. 212081; February 23, 2015 Facts: DENR and United Planners entered into a
consultancy agreement which contained an arbitration clause. When DENR paid only
47% of the contract price, respondent filed a complaint before the RTC then later on
referred the case to arbitration which was not objected to by petitioner. The parties have
agreed to adopt the CIAC Rules before the Arbitral Tribunal in accordance with Rule 2.3
of the Special ADR Rules. When the arbitral tribunal ruled in favor of united planners,
DENR moved for reconsideration but it was merely noted by the tribunal without any
action claiming that it had already lost jurisdiction over the case after submitting the
report to the RTC. Then the DENR filed a motion for reconsideration before the RTC
which likewise merely noted the motion. The RTC then confirmed the arbitral award.
When united planners moved for the execution of the award, DENR moved to quash the
same, but it was denied. DENR later on filed before the CA a petition for certiorari which
was dismissed on the ground, among others, that under rule 19.7 of the special ADR
rules, it is prohibited to assail the merits of the arbitral award. Issue: Whether or not the
arbitral award may be assailed of based on its merits. Held: No. Under Section 17.2,
Rule 17 of the CIAC Rules, no motion for reconsideration or new trial may be sought,
but any of the parties may file a motion for correction of the final award, which shall
interrupt the running of the period for appeal, based on any of the following grounds, to
wit: a. an evident miscalculation of figures, a typographical or arithmetical error; b. an
evident mistake in the description of any party, person, date, amount, thing or property
referred to in the award; c. where the arbitrators have awarded upon a matter not
submitted to them, not affecting the merits of the decision upon the matter submitted; d.
where the arbitrators have failed or omitted to resolve certain issue/s formulated by the
parties in the Terms of Reference (TOR) and submitted to them for resolution, and e.
where the award is imperfect in a matter of form not affecting the merits of the
controversy. The motion shall be acted upon by the Arbitral Tribunal or the
surviving/remaining members. The parties may appeal the final award to the CA through
a petition for review under Rule43 of the Rules of Court. However, records do not show
that any of the foregoing remedies were availed of by the DENR. Instead, it filed a
Motion for Reconsideration of the Arbitral Award, which was a prohibited pleading under
the Section 17.2, Rule 17 of the CIAC Rules, thus rendering the same final and
executory. Moreover, a CIAC arbitral award need not be confirmed by the regional trial
court to be executory as provided under E.O. No. 1008.

Further, Rule 19.7 of the Special ADR Rules precludes a party to an arbitration from
filing a petition for certiorari questioning the merits of an arbitral award.