CASES

Dupasquier vs. Ascendas (Philippines) Corporation Remedial Law; Civil Procedure; Judgments; Summary Judgments; A summary judgment may be used to expedite the proceedings and to avoid useless delays, when the pleadings, depositions, affidavits or admissions on file show that there exists no genuine question or issue of fact in the case, and the moving party is entitled to a judgment as a matter of law.

A summary judgment may be used to expedite the proceedings and to avoid useless delays, when the pleadings, depositions, affidavits or admissions on file show that there exists no genuine question or issue of fact in the case, and the moving party is entitled to a judgment as a matter of law. Here, the parties merely presented issues as to the interpretation of the MOU. There was therefore no genuine question or issue of fact that must be resolved using the presentation of evidence. At most, the Court may rule on the interpretation of the contract by simply reviewing its terms.

Dupasquier vs. Ascendas (Philippines) Corporation Civil Law; Contracts; Interpretation of Contracts; The various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly. —

Also settled in this jurisdiction is the contract interpretation rule that "[the contract's] provisions should not be read in isolation but in relation to each other and in their entirety so as to render them effective, having in mind the intention of the parties and the purpose to be achieved. The various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly." Instead of resorting to extrinsic factors to determine the intent of the parties, the court should first examine the contract in its entirety.

Gonzales vs. Climax Mining Ltd. Arbitration; Conflict of Laws; 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 theEnforcement 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 ofR.A. No. 9285 on 2 April 2004 further institutionalized the use of alternative dispute resolution systems, including arbitration, in the settlement of disputes.

Dupasquier vs. Ascendas (Philippines) Corporation Civil Law; Contracts; Interpretation of Contracts; Article 1370 of the Civil Code on the interpretation of contracts mandates that the literal meaning of the stipulations shall prevail if the contract's terms are clear and leave no doubt as to the intention of the contracting parties. If, however, the words of the contract are contrary to the evident intention of the parties, the intention of the parties shall be controlling.

Article 1370 of the Civil Code on the interpretation of contracts mandates that the literal meaning of the stipulations shall prevail if the contract's terms are clear and leave no doubt as to the intention of the contracting parties. If, however, the words of the contract are contrary to the evident intention of the parties, the intention of the parties shall be controlling. Thus: Art. 1370. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former.

Gonzales vs. Climax Mining Ltd. Voidable Contracts; Prescription; Under Article 1391 of the Civil Code, an action for annulment shall be brought within four years, in the case of fraud, beginning from the time of the discovery of the same. —

As to the issue of prescription, Gonzales's claims of fraud and misrepresentation attending the execution of the Addendum Contract are grounds for the annulment of a voidable contract under the Civil Code. Under Art. 1391 of the Code, an action for annulment shall be brought within four years, in the case of fraud, beginning from the time of the discovery of the same. However, the time of the discovery of the alleged fraud is not clear from the allegations of Gonzales's complaint. That being the situation coupled with the fact that this Court is not a trier of facts, any ruling on the issue of prescription would be uncalled for or even unnecessary.

LM Power Engineering Corporation vs. Capitol Industrial Construction Groups, Inc. Being an inexpensive, speedy and amicable method of settling disputes, arbitration—along with mediation, conciliation and negotiation—is encouraged by the Supreme Court; Arbitration is regarded as the "wave of the future" in international civil and commercial disputes; Consistent with the policy of encouraging alternative dispute resolution methods, courts should liberally construe arbitration clauses. —

Being an inexpensive, speedy and amicable method of settling disputes, arbitration—along with mediation, conciliation and negotiation—is encouraged by the Supreme Court. Aside from unclogging judicial dockets, arbitration also hastens the resolution of disputes, especially of the commercial kind. It is thus regarded as the "wave of the future" in international civil and commercial disputes. Brushing aside a contractual agreement calling for arbitration between the parties would be a step backward. Consistent with the above-mentioned policy of encouraging alternative dispute resolution methods, courts should liberally construe arbitration clauses. Provided such clause is susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should be granted. Any doubt should be resolved in favor of arbitration.

Department of Foreign Affairs (DFA) vs. BCA International Corporation Remedies Through Which Court Intervention is the Special Alternative Dispute Resolution (ADR) Rules is Allowed.

Court intervention in the Special ADR Rules is allowed through these remedies: (1) Specific Court Relief, which includes Judicial Relief Involving the Issue of Existence, Validity and Enforceability of the Arbitral Agreement, Interim Measures of Protection, Challenge to the Appointment of Arbitrator, Termination of Mandate of Arbitrator, Assistance in Taking Evidence, Confidentiality/Protective Orders, Confirmation, Correction or Vacation of Award in Domestic Arbitration, all to be fi led with the RTC; (2) a 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 a 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.

Department of Foreign Affairs (DFA) vs. BCA International Corporation Alternative Dispute Resolution Act of 2004; Court intervention is allowed under Republic Act (RA) No. 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 Regional Trial Court (RTC); and (3) appeal from the RTC decisions on arbitral awards to the Court of Appeals (CA).

Court intervention is allowed under RA No. 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 Regional Trial Court (RTC); and (3) appeal from the RTC decisions on arbitral awards to the Court of Appeals.

Department of Foreign Affairs (DFA) vs. BCA International Corporation (2017) FACTS

DFA entered into an Amended-Built-Operate-Transfer (BOT) Agreement with BCA International Corp. and awarded to the latter the Machine Readable Passport and Visa Project (MRP/V Project). In the course of implementing the MRP/V Project, conflict arose and DFA seek to terminate the agreement. BCA Int'l Corp. opposed the termination and requested for arbitration, hence an Arbitral Tribunal was constituted. The Arbitral issued Procedural Order No. 11, allowing BCA International Corp. to submit its Amended Statement of Claims of actual damages amounting to 390,000,000 plus an additional 10,000,000 for exemplary, temperate or nominal damages in order for the claim to conform to the evidence presented by the respondent. Thereafter it issued Procedural No. 12 which disallows the presentation of additional evidence by BCA International Corp. to prove the increase in the amount of claim, and disallowed the taking of testimonial evidence from any witness by any party. Procedural No. 12 denied DFA's motion for reconsideration of Procedural No. 11. Aggrieved, DFA filed a petition for Certiorari under Rule 65 of the Rules of Court before the SC with application of a TRO and/or preliminary injunction for the annulment of Procedural Nos. 11 and 12. DFA avers that the amendment caused undue delay and prejudice to it; that the amendment relied falls outside the scope of the arbitration clause and hence outside the jurisdiction of the Ad Hoc Tribunal. Also, it contends that the parties in this case has agreed to refer any dispute to arbitration under the 1976 UNCITRAL Arbitration Rules and not by Alternative Dispute Resolution (ADR) Act of 2004 (R.A. 9285) for to do so would amount to transgression of vested rights and vitiation of consent to arbitration proceedings. On the other hand, respondent contends that SC has no jurisdiction to intervene in private arbitration, which is a special proceeding governed by the ADR Act of 2004 (R.A. 9285), its IRR and Special ADR Rules; that the tribunal derives their authority to hear and resolve cases from the contractual consent of the parties expressed in Sec. 19.02 of the Agreement.

Dupasquier vs. Ascendas (Philippines) Corporation Remedial Law; Special Civil Actions; Declaratory Relief; Words and Phrases; Declaratory relief is defined as an action by a person interested under a deed, will, contract, or other written instrument whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court (RTC) to determine any question or construction or validity arising, and for a declaration of his rights or duties, thereunder.

Declaratory relief is defined as an action by a person interested under a deed, will, contract, or other written instrument whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question or construction or validity arising, and for a declaration of his rights or duties, thereunder. The requisites of an action for declaratory relief are: (i) the subject matter of the controversy must be a deed, will, contract or other written instrument, statute, executive order or regulation, or ordinance; (ii) the terms of said documents and the validity thereof are doubtful and require judicial construction; (iii) there must have been no breach or the "ripening seeds" of one between persons whose interests are adverse; (iv) there must be an actual controversy or the"ripening seeds" of one between persons whose interests are adverse; (v) the issue must be ripe for judicial determination; and (vi) adequate relief is not available through other means or other forms of action or proceeding.

Gonzales vs. Climax Mining Ltd. 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, 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.

Chung Fu Industries (Phils.), Inc. vs. CA Even decisions of administrative agencies which are declared "final" by law are not exempt from judicial review when so warranted. —

Even decisions of administrative agencies which are declared "final" by law are not exempt from judicial review when so warranted. Thus, in the case of Oceanic Bic Division (FFW), et al. v. Flerida Ruth P. Romero, et al., this Court had occasion to rule that: "x x x x Inspite of statutory provisions making 'final' the decisions of certain administrative agencies, we have taken cognizance of petitions questioning these decisions where want of jurisdiction, grave abuse of discretion, violation of due process, denial of substantial justice or erroneous interpretation of the law were brought to our attention.

Department of Environment and Natural Resources (DENR) vs. United Planners Consultants, Inc. (UPCI) Civil Procedure; Judgments; Execution of Judgments; Execution is fittingly called the fruit and end of suit and the life of the law.

Execution is fittingly called the fruit and end of suit and the life of the law . A judgment, if left unexecuted, would be nothing but an empty victory for the prevailing party. While it appears that the Special ADR Rules remain silent on the procedure for the execution of a confirmed arbitral award, it is the Court's considered view that the Rules' procedural mechanisms cover not only aspects of confirmation but necessarily extend to a confirmed award's execution in light of the doctrine of necessary implication which states that every statutory grant of power, right or privilege is deemed to include all incidental power, right or privilege.

Federal Express Corp (FedEx) vs. Airfreight 2100 Inc (AF2100) et al. FACTS

FedEx is a foreign corporation licensed to do business in the Philippines, and primarily engaged in international air carriage, logistics, and freight forwarding. AF2100 is a domestic corporation which is also involved in the freight forwarding business. Because of several disputes arising from the Global Service Program contracts between the two corporations, FedEx initiated on June 24, 2011 an international commercial arbitration case (Arbitration Case), docketed as Case No. 51-2011, before the Philippine Dispute Resolution Center, Inc. (PDRCI) against AF2100. An Arbitral Tribunal was accordingly constituted. Among the issues raised in the Arbitration Case was whether or not AF2100 is entitled to withhold amounts due to FedEx on the ground that AF2100 paid Value Added Tax (VAT) to the Bureau of Internal Revenue (BIR) on behalf of FedEx. In relation to this issue, FedEx filed with PDRCI a pleading denominated as Request for Production of Documents,3 praying that an order be issued by the Arbitral Tribunal directing AF2100 to produce the following documents: (1) the monthly and quarterly VAT returns of AF2100 for the period of November 2000 to February 2008; and (2) copies of receipts and other relevant documents showing the creditable input VAT of AF2100 from its other operations which it supposedly used to apply to its VAT liabilities for the period of November 2000 to February 2008 (Requested Documents). AF2100 opposed the request of FedEx contending that: (a) the Request was premature as the parties had not yet agreed on specific procedural rules, including rules on interim reliefs and discovery, to govern the arbitration proceedings; (b) the Request was unreasonable and oppressive as the Requested Documents were too broad and voluminous, spanning a period of eight years; and (c) due deference and courtesy should be given to whatever action the Regional Trial Court of Pasig City, Branch 271 (RTC Pasig City-Br. 271), might take in SCA No. 3694-TG, a Petition for Certiorari filed by AF2100 to challenge the appointment of the FedEx's appointed arbitrator4 (Appointment Case). After hearing, the Arbitral Tribunal issued Procedural Order (PO) No. 55 dated June 25, 20116 requiring AF2100 to produce the Requested Documents within 10 days from receipt of said order. AF2100 filed a motion for reconsideration of PO No. 5 but the same was denied by the Arbitral Tribunal in its PO No. 67 dated July 13, 2012. AF2100 persistently refused to produce the Requested Documents and, through a Manifestation and Motion8 dated July 17, 2012, it requested once more from the Arbitral Tribunal to reconsider its PO Nos. 5 and 6. In its PO No. 109 dated October 1, 2012, the Arbitral Tribunal reiterated its directive on AF2100 to produce the Requested Documents immediately. Eventually, the Arbitral Tribunal rendered a Final Award10 dated February 3, 2014 in the Arbitration Case which was favorable to FedEx. The Arbitral Tribunal did not give credence to the claim of AF2100 that it paid VAT to the BIR in the total amount of P618,791,708.00 on FedEx's behalf, noting the failure of AF2100 to present the VAT returns to prove such payment despite the explicit directives of the tribunal and the trial court. It held that the "dogged refusal" of AF2100 to produce the VAT returns gave rise to the inference that had they been so produced, they would have been adverse to AF2100. AF2100 filed a Petition to Set Aside the Award (PSAA Case) before Pasig City RTC-Branch 266 (RTC Pasig City-Br. 266), docketed as Special Proceedings No. 12649 (TG). However, before FedEx received notice of AF2100's Petition in the PSAA Case, it had already filed a Petition for Recognition and Enforcement of Final Arbitral Award (PREFAA Case) before RTC Pasig City-Br. 271, docketed as Special Proceedings No. 12650 (TG).

Fruehauf Electronics Philippines Corporation vs. Technology Electronics Assembly and Management Pacific Corporation FACTS

Fruehauf Electronics Philippine Corporation (Fruehauf) owned several parcels of property in Pasig City leased to Signetics Filipinas Corporation (Signetics). When Signetics' funding was cut-off it, ceased operations and was bought by Team Holdings Ltd who later changed its name to Technology Electronics Assembly and Management Pacific Corp. (TEAM). In 1987, Fruehauf filed an unlawfaul detainer case against TEAM which led to an amicable settlement, where both parties executed a Memorandum of Agreement with an arbitration clause and a contract of lease for 15 years, expiring on June 2003, with option to sub-lease. TEAM sub-leased the property to Capitol Publishing House (Capitol). In 2003, TEAM opted not to renew the lease contract. However, Capitol did not vacate the premises until 2005. Thus, it instituted in the RTC a "Submission of an Existing Controversy for Arbitration", which the RTC granted. The issues to be resolved were whether TEAM complied with its obligation to return the premises, if it is liable for rent, and if it is liable for damages. The arbitral tribunal rendered an award in favor of Fruehauf. It held that TEAM did not return the premises. Citing Arturo Tolentino's commentaries, it is not enough that the lessor vacates the premises but it is necessary that he places it at the disposal of the lessee, so that the lessee can receive it without obstacles. Since Capitol, TEAM's sub-lessor, failed to vacate upon the expiration of the lease contract, TEAM did not return the premises to Fruehauf. Because of such, TEAM is also liable for rent for the time Capitol remained in the premises. As to the damages, it was TEAM's obligation to vacate the leased property and to deliver to Fruehauf the buildings, improvements, improvements, and installations (including the machineries and equipment existing thereon) in the same condition as when the lease commenced. The arbitral tribunal found TEAM to be negligent in the maintenance of the premises, machineries, and equipment for failing to make necessary repairs or to notify Fruehauf of the necessary repairs of the equipment. TEAM moved for a reconsideration but the RTC found insufficient grounds to vacate the award and thus confirmed it. TEAM then submitted a notice of appeal under Rule 41 of the Rules of Court to the Court of Appeals. At first the CA dismissed the appeal, citing as the RTC did, Section 29 of the Arbitration Law stating "Section 29. Appeals. - An appeal may be taken from an order made in a proceeding under this Act, or from a judgment entered upon an award through certiorari proceedings, but such appeals shall be limited to questions of law. The proceedings upon such appeal, including the judgment thereon shall be governed by the Rules of Court in so far as they are applicable." But in a motion for reconsideration, reversed the dismissal, noting that Section 29 did not preclude an aggrieved party to take other court actions to appeal as the wording of section 29 merely allows appeal to be conducted as such. It also cited Section 49 of the ADR Law, which also allowed RTC confirmations to be appealed to the CA in accordance with the rules of procedure to be promulgated by the Supreme Court. However, it made no reference to A.M. No. 07-11-08-SC, the Special Rules of Court on Alternative Dispute Resolution. The CA also delved into the merits of the case, stating that TEAM is not liable for rent as it was not in possession of the property at the time, and it was not entitled to compensation as it did not own the buildings and equipment until the expiration of the contract.

Lanuza, Jr. vs. BF Corporation FACTS

Gerardo Lanuza, Jr and Antonio Olbes are members of the Board of Directors of Shangri-La. This is an Appeal on Certiorari, assailing the CA's decision and resolution that affirmed the trial court's decision holding that petitioners, as directors, should submit themselves as parties to the arbitration proceedings between BF Corporation and Shangri-La Properties, Inc. (Shangri-La). BF Corporation alleged that it entered into agreements with Shangri-La wherein it undertook to construct for Shangri-La a mall and a multilevel parking structure along EDSA. Shangri-La had been consistent in paying BF Corp in accordance with its progress billing statements. However, Shangri-La started defaulting in payment. BF Corp filed a complaint against Shangri-La and its board of directors. BF Corp alleged that Shangri-La misrepresented it had funds to pay and that it was simply a matter of delayed processing of BF's progress billing statements. Construction eventually was completed but despite demands, Shangri-La refused to pay the balance. BF also alleged that Shangri-La's directors were in bad faith so they should be held jointly and severally liable with Shangri-La. Shangri-La and respondent board members filed a motion to suspend the proceedings in view of BF's failure to submit its dispute to arbitration. RTC denied the motion, however. Petitioners filed an answer saying they are resigned members of the board since July 15, 1991. Shangri-La and respondents then filed certiorari with CA which granted their petition and ordered submission to arbitration.

Gonzales vs. Climax Mining Ltd. Doctrine of Separability or Severability; Words and Phrases; 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.

Department of Foreign Affairs vs. BCA International Corporation (2016) FACTS

In an Amended Build-Operate-Transfer Agreement dated 5 April 2002, Department of Foreign Affairs (DFA) awarded the Machine Readable Passport and Visa Project (MRPV Project) to BCA International Corporation (BCA). Such Agreement contained an arbitration clause as to wit: Section 19.02. Failure to Settle Amicably - If the Dispute cannot be settled amicably within ninety (90) days by mutual discussion as contemplated xxx herein, the Dispute shall be settled with finality by an arbitrage tribunal operating under International Law xxx under the UNCITRAL Arbitration Rules contained in Resolution 31/98 adopted by the United Nations General Assembly on December 15, 1976 xxx. The DFA and the BCA undertake to abide by and implement the arbitration award. The place of arbitration shall be Pasay City, Philippines, or such other place as may be mutually agreed upon by both parties. The arbitration proceeding shall be conducted in the English language. However, during the implementation of the MRPV Project, DFA sought to terminate the Agreement. This was opposed by BCA and filed a Request for Arbitration according to the above provision. On 29 June 2009, an ad hoc arbitral tribunal was constituted. On 16 May 2013, BCA filed before the RTC a Petition for Assistance in Taking Evidence pursuant to the Implementing Rules and Regulations (IRR) of "The Alternative Dispute Resolution Act of 2004" or RA 9285, seeking the issuance of subpoena ad testificandum and subpoena duces tecum against DFA. On 1 July 2013, DFA filed its comment alleging that the subpoena ad testificandum and subpoena duces tecum being sought by BCA is prohibited by law as it runs afoul from the 1976 UNCITRAL Arbitration Rules that they have agreed in the foregoing Agreement.

Dupasquier vs. Ascendas (Philippines) Corporation In interpreting a contract, the primary function of the court is to determine whether its wordings are clear and unambiguous. If so, the court is bound to apply the literal meaning of the contract because the manifest intention of the parties is apparent. If the wordings, however, are ambiguous and may lead to different interpretations, the court should determine the actual intention of the contracting parties.

In interpreting a contract, the primary function of the court is to determine whether its wordings are clear and unambiguous. If so, the court is bound to apply the literal meaning of the contract because the manifest intention of the parties is apparent. If the wordings, however, are ambiguous and may lead to different interpretations, the court should determine the actual intention of the contracting parties. In the present case, while there is no doubt that the parties intended that disputes be referred to arbitration, the parties, nonetheless, are in conflict as to whether the Arbitration Clause is time-limited.

Federal Express Corp (FedEx) vs. Airfreight 2100 Inc (AF2100) et al. RULING

Indeed, the Arbitration Case between FedEx and AF2100 has resulted in numerous other cases instituted by both parties which are now simultaneously pending in various stages before different trial and appellate courts. While these cases are all seemingly related and/or interconnected, it should be kept in mind that the Petition at bar solely arises from the PATE Case. In this Petition, FedEx is essentially contesting the following findings of the CA in its Decision dated June 1, 2016: (a) that the RTC QC committed grave abuse of discretion in denying the Motion for Intervention of AF2100; (b) that the RTC QC committed grave abuse of discretion in refusing to dismiss the Petition in the PATE Case for being moot and academic; and (c) that FedEx committed forum shopping. After a judicious review of the records of the instant Petition, the Court finds reversible error on the part of the CA only as regards its ruling on the issue of forum shopping and partially grants the Petition of FedEx. The PATE Case becoming moot and academic because of the Final/Award dated February 3, 2014 of the Arbitral Tribunal In Garcillano v. House of Representatives Committee on Public Information,47 the Court elucidated on when a case should be dismissed for being moot and academic: The Court, however, dismisses G.R. No. 170338 for being moot and academic. Repeatedly stressed in our prior decisions is the principle that the exercise by this Court of judicial power is limited to the determination and resolution of actual cases and controversies. By actual cases, we mean existing conflicts appropriate or ripe for judicial determination, not conjectural or anticipatory, for otherwise the decision of the Court will amount to an advisory opinion. The power of judicial inquiry does not extend to hypothetical questions because any attempt at abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities. Neither will the Court determine a moot question in a case in which no practical relief can be granted. A case becomes moot when its purpose has become stale. It is unnecessary to indulge in academic discussion of a case presenting a moot question as a judgment thereon cannot have any practical legal effect or, in the nature of things, cannot be enforced. On February 3, 2014, the Arbitral Tribunal rendered its Final Award in the Arbitration Case. In its Final Award, the Arbitral Tribunal disallowed the amounts withheld by AF2100 from FedEx as purported payment for the latter's VAT liabilities. According to the Arbitral Tribunal, it could be presumed from the obstinate refusal of AF2100 to present the Requested Documents, that said documents would have been adverse to AF2100 if produced. The Final Award is now the subject of the PSAA Case before RTC Pasig City-Br. 266 and the PREFAA Case before RTC Pasig City-Br. 271. The Court quotes with approval the following pronouncements of the CA on this matter: Under Rule 9.2 of the Special ADR Rules provides that the assistance in taking evidence may be sought in the course of the arbitration proceedings. It follows that a petition for assistance is merely auxiliary to and dependent upon the pendency of the ongoing arbitration proceeding since said petition was filed to compel the production of documents intended to be used as evidence in said arbitration proceedings before the PDRCI. Considering that PDRCI already rendered the Final Award, it is clear that the arbitration proceedings had already been terminated. Thus, the relief sought through a Petition for Assistance would be of not practical use or value anymore. Accordingly, the Petition for Assistance in Taking Evidence before the RTC had been rendered moot and academic by the foregoing supervening event.49 The rendition of the Final Award on February 3, 2014 by the Arbitral Tribunal marked the termination of the Arbitration Case. There are no more arbitration proceedings in which FedEx could present the Requested Documents. To still order, at this point, the examination and reproduction of the Requested Documents in the possession of the BIR would no longer serve any practical purpose. Irrefragably, the PATE Case had become moot and academic. Notably, in its Final Award, the Arbitral Tribunal had already resolved the issue, in which the Requested Documents would have been relevant, favorable to FedEx and adverse to AF2100. Nevertheless, FedEx still maintains that the PATE Case has not become moot and academic because with the pendency of the PSAA Case, there is still the remote possibility that the Final Award will be set aside and/or the arbitration proceedings resumed. First, FedEx itself recognizes that the possibility of the Final Award being set aside is "remote." This is because the Final Award enjoys the presumption in favor of its confirmation. Rule 12.2 of the Special ADR Rules lays down the presumption "that an arbitral award was made and released in due course and is subject to enforcement by the court, unless the adverse party is able to establish a ground for setting aside or not enforcing an arbitral award." And second, there are various possible outcomes for a petition to set aside an international commercial arbitration award, as identified under Rules 12.11 and 12.3 of the Special ADR Rules: Rule 12.11. Suspension of proceedings to set aside. - The court when asked to set aside an arbitral award may, where appropriate and upon request by a party, suspend the proceedings for a period of time determined by it to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal's opinion will eliminate the grounds for setting aside. The court, in referring the case back to the arbitral tribunal may not direct it to revise its award in a particular way, or to revise its findings of fact or conclusions of law or otherwise encroach upon the independence of an arbitral tribunal in the making of a final award. The court when asked to set aside an arbitral award may also, when the preliminary ruling of an arbitral tribunal affirming its jurisdiction to act on the matter before it had been appealed by the party aggrieved by such preliminary ruling to the court, suspend the proceedings to set aside to await the ruling of the court on such pending appeal or, in the alternative, consolidate the proceedings to set aside with the earlier appeal. Rule 12.13. Judgment of the court. - Unless a ground to set aside an arbitral award under Rule 12.4 above is fully established, the court shall dismiss the petition. If, in the same proceedings, there is a petition to recognize and enforce the arbitral award filed in opposition to the petition to set aside, the court shall recognize and enforce the award. In resolving the petition or petition in opposition thereto in accordance with the Special ADR Rules, the court shall either set aside or enforce the arbitral award. The court shall not disturb the arbitral tribunal's determination of facts and/or interpretation of law. (emphases supplied) The resumption of the arbitration proceedings is only one of the possible outcomes. Even then, it does not necessarily mean that the Arbitral Tribunal will take on the very same issues as before and revive its previous processes and issuances, such as its PO Nos. 5, 6, and 10 (which directed AF2100 to produce the Requested Documents), or that the Requested Documents would even be relevant. As stated in Rule 12.11 of the Special ADR Rules, the resumption of arbitration proceedings before the Arbitral Tribunal will only be for the purpose of eliminating the grounds for setting aside the arbitral award. Basically, what FedEx seeks from the Court is a form of "safety net" - a directive for the BIR to still allow the examination and reproduction of the Requested Documents - in case of the resumption of the arbitration proceedings or the setting aside of the Final Award in the future, something which the Court is not inclined to grant. The resumption of arbitration proceedings or the setting aside of the Final Award is only conjectural or anticipatory at this point. Indeed, the Court may pass upon issues which supervening events had rendered the petition moot and academic, but it does so only when there is grave violation of the Constitution; when paramount public interest is involved; when the constitutional issue raised requires formulation of controlling principles to guide the bench, the bar and the public; or when the case is capable of repetition yet evading review.50 FedEx though fails to convince the Court that any of these exceptional circumstances exist in the instant case to compel it to still resolve a moot and academic petition for the purpose of formulating guiding and controlling constitutional principles, precepts, doctrines or rules for future guidance of both bench and bar. The issues concerning the examination and reproduction of the Requested Documents in the PATE Case call for an appraisal of factual considerations which are peculiar only to the transactions and parties involved in the controversy, namely, FedEx, AF2100, and the BIR. Said issues do not call for a clarification of any constitutional principle or are of paramount public interest. Perforce, the Court dispenses with the need to adjudicate the same when the PATE Case had become moot and academic. WHEREFORE, the Petition is PARTIALLY GRANTED. Portions of the Decision dated June 1, 2016 of the Court of Appeals, in CA-G.R. SP No. 136370, on petitioner Federal Express Corporation being guilty of forum shopping are DELETED, while the rest of said Decision stands.

Hygienic Packaging Corporation vs. Nutri-Asia, Inc., doing business under the name and style of UFC Philippines (formerly Nutri-Asia, Inc.) Actions; Personal Action; Collection of Sum of Money; It has been consistently held that an action for collection of sum of money is a personal action.

It has been consistently held that an action for collection of sum of money is a personal action. Taking into account that no exception can be applied in this case, the venue, then, is "where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, . . . at the election of the plaintiff." For a corporation, its residence is considered "the place where its principal office is located as stated in its Articles of Incorporation."

Department of Foreign Affairs (DFA) vs. BCA International Corporation Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; An appeal by certiorari to the Supreme Court (SC) is from a judgment or final order or resolution of the Court of Appeals (CA) and only questions of law may be raised.

It is clear that an appeal by certiorari to the Supreme Court is from a judgment or final order or resolution of theCourt of Appeals and only questions of law may be raised. There have been instances when we overlooked the rule on hierarchy of courts and took cognizance of a petition for certiorari alleging grave abuse of discretion by the Regional Trial Court when it granted interim relief to a party and issued an Order assailed by the petitioner, considering the transcendental importance of the issue involved therein or to better serve the ends of justice when the case is determined on the merits rather on technicality. However, in this case, the appeal by certiorari is not from a final Order of the Court of Appeals or the Regional Trial Court, but from an interlocutory order of the Arbitral Tribunal; hence, the petition must be dismissed.

Chung Fu Industries (Phils.), Inc. vs. CA Civil Law; Arbitration; The finality of the arbitrator's award is not absolute and without exceptions.—

It is stated explicitly under Art. 2044 of the Civil Code that the finality of the arbitrators' award is not absolute and without exceptions. Where the conditions described in Articles 2038, 2039 and 2040 applicable to both compromises and arbitrations are obtaining, the arbitrators' award may be annulled or rescinded. Additionally, under Sections 24 and 25 of the Arbitration Law, there are grounds for vacating, modifying or rescinding an arbitrator' award. Thus, if and when the factual circumstances referred to in the above-cited provisions are present, judicial review of the award is properly warranted.

Dupasquier vs. Ascendas (Philippines) Corporation Arbitration; Arbitration is a matter of contract and the parties cannot be obliged to submit any dispute to arbitration, in the absence of their consent to submit thereto.

It must be remembered that arbitration is a matter of contract and the parties cannot be obliged to submit any dispute to arbitration, in the absence of their consent to submit thereto. The parties may lay their rights and liabilities in relation to the parties' resort to arbitration in the contract. As any other agreements, the parties have freedom to establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order and public policy. The parties may, therefore, agree as to the submission of the disputes to arbitration, the forum of arbitration, the subject of arbitration and the termination of their arbitration agreement.

Chung Fu Industries (Phils.), Inc. vs. CA Voluntary arbitrators by the nature of their functions act in a quasi-judicial capacity.

It should be stressed too, that voluntary arbitrators, by the nature of their functions, act in a quasi-judicial capacity. It stands to reason, therefore, that their decisions should not be beyond the scope of the power of judicial review of this Court.

Dupasquier vs. Ascendas (Philippines) Corporation Regional Trial Courts; Jurisdiction; Rule 63 vests with the Regional Trial Court (RTC) the jurisdiction to hear petitions for declaratory relief.

Jurisdiction over the subject matter is conferred by the Constitution or by law, and is determined by the allegations of the complaint and the relief prayed for, regardless of whether the plaintiff is entitled to recover all or some of the claims. Jurisdiction is not dependent on defendant's answer or motion to dismiss. Certainly, Rule 63 vests with the RTC the jurisdiction to hear petitions for declaratory relief. The question now for our determination is whether the allegations in the initiatory pleading and the character of the reliefs prayed for contemplate an action for declaratory relief. It also requires us to resolve whether the initiatory pleading connotes a breach of contract which removed the subject matter from the jurisdiction of the RTC over declaratory relief.

Korea Technologies Co., Ltd. vs. Lerma FACTS

Korea Technologies Co., Ltd. (KOGIES), herein petitioner, is a Korean corporation which is engaged in the supply and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation. On March 5, 1997, PGSMC and KOGIES executed a Contract whereby KOGIES would set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite. The contract was executed in the Philippines. However, PGMC stopped payment of its balance under the contract because KOGIES allegedly used inferior quality materials contrary to what was agreed upon. PGMC then sent a notice cancelling the contract. KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally rescind their contract nor dismantle and transfer the machineries and equipment on mere imagined violations by KOGIES. It also insisted that their disputes should be settled by arbitration as agreed upon in the arbitration clause of their contract. KOGIES instituted an Application for Arbitration before the Korean Commercial Arbitration Board (KCAB) in Seoul, Korea. Meanwhile, KOGIES also filed a complaint for specific performance against PGSMC in the Regional Trial Court of Muntinlupa City (RTC). KOGIES then filed before the Court of Appeals (CA) a petition for certiorari seeking annulment of certain interlocutory orders of the RTC and praying for, among other reliefs, to direct the RTC to enforce the specific agreement on arbitration to resolve the dispute. The CA affirmed the trial court and declared the arbitration clause to be against public policy because it provided for a final determination of the parties' legal rights, therefore ousting the courts of its jurisdiction. Hence, this petition.

Department of Environment and Natural Resources (DENR) vs. United Planners Consultants, Inc. (UPCI) RULING

May the Special ADR Rules be applied even until the execution of the Arbitral Award, even if the Special Rules are silent as to execution of a confirmed arbitral award? Yes. While it appears that the Special ADR Rules remain silent on the procedure for the execution of a confirmed arbitral award, it is the Court's considered view that the Rules' procedural mechanisms cover not only aspects of confirmation but necessarily extend to a confirmed award's execution in light of the doctrine of necessary implication which states that every statutory grant of power, right or privilege is deemed to include all incidental power, right or privilege. As the Court sees it, execution is but a necessary incident to the Court's confirmation of an arbitral award. To construe it otherwise would result in an absurd situation whereby the confirming court previously applying the Special ADR Rules in its confirmation of the arbitral award would later shift to the regular Rules of Procedure come execution. Irrefragably, a court's power to confirm a judgment award under the Special ADR Rules should be deemed to include the power to order its execution for such is but a collateral and subsidiary consequence that may be fairly and logically inferred from the statutory grant to regional trial courts of the power to confirm domestic arbitral awards. All the more is such interpretation warranted under the principle of ratio legis est anima which provides that a statute must be read according to its spirit or intent, for what is within the spirit is within the statute although it is not within its letter, and that which is within the letter but not within the spirit is not within the statute. Accordingly, since the Special ADR Rules are intended to achieve speedy and efficient resolution of disputes and curb a litigious culture, every interpretation thereof should be made consistent with these objectives.

Hygienic Packaging Corporation vs. Nutri-Asia, Inc., doing business under the name and style of UFC Philippines (formerly Nutri-Asia, Inc.) FACTS

Nutri-Asia purchased from Hygienic 457,128 plastic containers. To cover these transactions, Hygienic issued Sales Invoicesand Delivery Receipts. In 2009, Hygienic filed a Complaint for sum of money against Nutri-Asia. It instituted the case before the Regional Trial Court of Manila "pursuant to the stipulation of the parties as stated in the Sales Invoices submitting themselves to the jurisdiction of the Courts of the City of Manila in any legal action arising out of their transaction. Nutri-Asia alleged that the venue was also improperly laid since the RTC of Manila was not the proper venue for the institution of Hygienic's personal action. The Complaint should have been filed either before the trial courts of San Pedro, Laguna or Pasig City, where the principal places of business of Hygienic and Nutri-Asia are located, respectively. The venue of actions as stated in the Sales Invoices could not bind Nutri-Asia since it did not give its express conformity to that stipulation. The RTC held that the venue was properly laid. It considered the signatures of Nutri-Asia's representatives in the Sales Invoices as the company's concurrence that any dispute would be raised before the courts of Manila. The CA overturned the ruling of the RTC. The CA held that since the signature of Nutri-Asia's employee in the Sales Invoices was only for the receipt of goods, Nutri-Asia did not agree to be bound by the venue stipulation in the Sales Invoices. Meanwhile, Hygienic did not deny that an arbitration clause was written on the Purchase Orders. Its representative even "acknowledged its conformity to the purchase orders."Since Hygienic "availed of the advantages and benefits of the purchase orders when it acted on them, it is thus estopped from rebuffing the arbitration clause.

Dr. Benjamin Adapon et al vs. Medical Doctors Inc.(MDI) FACTS

On April 25, 2011,8 Dr. Benjamin D. Adapon (Dr. Adapon) filed a Complaint9 for himself and as a minority stockholder of Computerized Imaging Institute, Inc. (CII) against Medical Doctors, Inc. (Medical Doctors) for violation of the parties' non-compete agreement. Dr. Adapon is "a medical expert in the field of Neuroradiology, Computed Tomography, diagnostic and therapeutic Neuroangiography[.]"10 Medical Doctors, on the other hand, owns and operates the Makati Medical Center. In the late 1970s, Dr. Adapon was approached by Dr. Constantino P. Manahan, Dr. Raul G. Fores and Dr. Romeo H. Gustillo,11 three of the incorporators, directors, and principal doctors of Medical Doctors. They requested him to set up, operate, and head a computed tomography facility for the Makati Medical Center.12 Even while already established in the United States, Dr. Adapon heeded the call and set up the first computed tomography facility in the Philippines and in Southeast Asia.13 On February 15, 1978, Medical Doctors and Dr. Adapon formally incorporated then Computed Tomography Center, Inc., now en, with 60% of the outstanding capital stock belonging to Medical Doctors and 40% owned by Dr. Adapon and his nominees. As the expert in computed tomography, Dr. Adapon took charge of the Makati Medical Center's operations as its president.14 The parties proceeded with their venture without any written formal agreement.15 Medical Doctors referred patients who needed tomography to CII for its services. Medical Doctors billed, collected, and remitted the payments of the patients to CII.16 In 1988, Dr. Adapon proposed to purchase magnetic resonance imaging equipment for CII to enable it to offer additional services to patients of Makati Medical Center and expand its growing business. Around the time, the parties also executed a Letter of Intent prepared by Medical Doctors, containing a non-compete agreement17 which reads in part: 4. MDI and MMC shall not compete either directly or indirectly with CTCI and shall channel and give all computer tomographical imaging and magnetic resonance imaging work to CTCI. Dr. Benjamin Adapon shall not compete directly or indirectly with CTCI in these fields. . . . . 11. If the parties cannot agree on the specific details to be incorporated in the agreements, as well as any matter arising out of this Letter of Intent, the parties shall agree to have the disputed or unsettled matters arbitrated by a panel of arbitrators and to abide by the ruling of the panel of arbitrators. The arbitration panel shall be composed of three (3) arbitrators. Each party shall be entitled to choose an arbitrator and the third arbitrator shall be a person mutually agreed upon by both parties. Pending the result of the arbitration, the parties shall commit to maintain the status quo.18 Dr. Adapon signed the Letter of Intent in November 1988, and Drs. Manahan, Gustilo, and Fores signed on behalf of Medical Doctors.19 The parties still continued to conduct their business, with Dr. Adapon heading CII, which provided tomography and MRI services for Makati Medical Center patients.20 Ten years later, in 1998, Medical Doctors acquired and installed a 16-slice CT Scanner to be used in the hospital's X-Ray Department. Dr. Adapon questioned this purchase for violating the non-compete agreement.21 Drs. Manahan, Fores, and Gustilo supposedly assured him that his concerns were unfounded and that the machine would only be used for charity patients.22 Yet, Dr. Adapon later learned that Medical Doctors also bought its own MRI machine and instructed its employees to refer patients that needed computed tomography imaging and magnetic imaging procedure to the hospital's own X-Ray Department instead of CII's facility. Dr. Adapon claimed that this action created a false impression that the services offered in CII's facility were inferior to that of the Makati Medical Center. Dr. Adapon called the attention of Medical Doctors, but his complaints were ignored.23 In 2011, Medical Doctors installed a Siemens 128-slice CT Scanner, and an MRI Scanner in 2012, for the paying patients of the Makati Medical Center.24 To Dr. Adapon, all these acts signified Medical Doctors' intention to directly compete with the services offered by CII, in violation of their non-compete agreement. Thus, he filed his Complaint25 with a prayer for preliminary injunction or a temporary restraining order. He also claimed that Medical Doctors failed to pay for past services rendered by CII to the hospital's patients, and to reimburse CII for the damages on its equipment incurred during the hospital's renovation.26 The Regional Trial Court, as a special commercial court, denied Dr. Adapon's application for temporary restraining order in an August 3, 2011 Order.27 It also suspended the proceedings and ordered the parties to undergo arbitration pursuant to paragraph 11 of the Letter of Intent.28 Medical Doctors manifested that the Letter of Intent was not a binding contract, but voluntarily entered into arbitration before the Philippine Dispute Resolution Center, Inc. in Taguig City.29 A three-person arbitration panel heard the dispute,30 composed of former Chief Justice Renato S. Puno, the arbitrator mutually agreed upon by the parties who acted as chairperson; retired Justice Dante O. Tinga (Justice Tinga), Medical Doctors' nominee; and former Integrated Bar of the Philippines President Atty. Jose A. Grapilon, Dr. Adapon's nominee.31 The parties jointly crafted and signed the Terms of Reference that governed the arbitration proceedings. Dr. Adapon submitted his Statement of Claims and Medical Doctors submitted its Statement of Defenses. After trial, the parties submitted their respective Memorials.32 On May 8, 2015, the arbitral tribunal issued a Final Award.33 It first rejected Medical Doctors' claim of lack of jurisdiction, owing to the parties' agreement to arbitrate under the Letter of Intent and pursuant to Sections 2 and 4 of Republic Act No. 876.34 It also held that since the derivative suit could include Dr. Adapon's personal claims against Medical Doctors, the case fell under the jurisdiction of the Regional Trial Court.35 On the substantive issues, the arbitral tribunal held that the non-compete provision in the Letter of Intent was binding and enforceable,36 and that Medical Doctors violated the non-compete agreement when it installed the equipment in 1997, 2011, and 2012 for the service-paying patients of the Makati Medical Center.37 However, it held that prescription barred the claim for damages from 1998 until 2009, though not those beyond 2009.38 The tribunal further held that: (1) the non-compete agreement was not an unlawful restraint of trade;39 (2) no evidence showed that Dr. Adapon violated the non-compete agreement to bar him from seeking redress;40 (3) the case was both a derivative suit and a direct action filed by Dr. Adapon, allowing him to claim for damages in his own capacity;41 (4) the award of damages was based on the unrebutted evidence presented by Dr. Adapon;42 and (5) the principle of rebus sic stantibus, or the doctrine of unforeseen events, which Medical Doctors had invoked,43 did not apply to the case.44

LM Power Engineering Corporation vs. Capitol Industrial Construction Groups, Inc. FACTS

On February 22, 1983, Petitioner LM Power Engineering Corporation and Respondent Capitol Industrial Construction Groups Inc. entered into a "Subcontract Agreement" involving electrical work at the Third Port of Zamboanga. On April 25, 1985, respondent took over some of the work contracted to petitioner. Allegedly, the latter had failed to finish it because of its inability to procure materials. Upon completing its task, petitioner billed respondent. However, the latter contested the accuracy of the amount. Because of the dispute, petitioner filed with the Regional Trial Court (RTC) of Makati (Branch 141) a Complaint for the collection of the amount representing the alleged balance due it under the Subcontract. Instead of submitting an Answer, respondent filed a Motion to Dismiss, alleging that the Complaint was premature, because there was no prior recourse to arbitration. In its Order dated September 15, 1987, the RTC denied the Motion on the ground that the dispute did not involve the interpretation or the implementation of the Agreement and was, therefore, not covered by the arbitral clause. The Court of Appeals (CA) reversed the RTC and ordered the referral of the case to arbitration. Hence, this Petition.

Department of Foreign Affairs (DFA) vs. BCA International Corporation Arbitration; Alternative Dispute Resolution; The State shall encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to achieve speedy and impartial justice and declog court dockets.

RA No. 9285 declares the policy of the State to actively promote party autonomy in the resolution of disputes or the freedom of the parties to make their own arrangements to resolve their disputes. Towards this end, the State shall encourage and actively promote the use of Alternative Dispute Resolution as an important means to achieve speedy and impartial justice and declog court dockets.

LM Power Engineering Corporation vs. Capitol Industrial Construction Groups, Inc. Construction Industry Arbitration Commission (CIAC); Recourse to the CIAC may now be availed of whenever a contract "contains a clause for the submission of a future controversy to arbitration .

On the other hand, Section 1 of Article III of the new Rules of Procedure Governing Construction Arbitration has dispensed with this requirement and recourse to the CIAC may now be availed of whenever a contract "contains a clause for the submission of a future controversy to arbitration," in this wise: "SECTION 1. Submission to CIAC Jurisdiction.—An arbitration clause in a construction contract or a submission to arbitration of a construction dispute shall be deemed an agreement to submit an existing or future controversy to CIAC jurisdiction, notwithstanding the reference to a different arbitration institution or arbitral body in such contract or submission. When a contract contains a clause for the submission of a future controversy to arbitration, it is not necessary for the parties to enter into a submission agreement before the claimant may invoke the jurisdiction of CIAC." The foregoing amendments in the Rules were formalized by CIAC Resolution Nos. 2-91 and 3-93.

Hygienic Packaging Corporation vs. Nutri-Asia, Inc., doing business under the name and style of UFC Philippines (formerly Nutri-Asia, Inc.) Remedial Law; Civil Procedure; Venue; Dismissal of Actions; One of the grounds for dismissal of an action under Rule 16, Section 1 of the 1997 Revised Rules of Civil Procedure is when the venue is improperly laid. —

One of the grounds for dismissal of an action under Rule 16, Section 1 of the 1997 Revised Rules of Civil Procedure is when the venue is improperly laid. Although respondent did not file a Motion to Dismiss on this ground, it cited the improper venue as one of the affirmative defenses in its Answer.

Chung Fu Industries (Phils.), Inc. vs. CA FACTS

Petitioner Chung Fu Industries (Philippines) (Chung Fu for brevity) and private respondent Roblecor Philippines, Inc. (Roblecor for short) forged a construction agreement 1 whereby respondent contractor committed to construct and finish on December 31, 1989, petitioner corporation's industrial/factory complex in Tanawan, Tanza, Cavite for and in consideration of P42,000,000.00. In the event of disputes arising from the performance of subject contract, it was stipulated therein that the issue(s) shall be submitted for resolution before a single arbitrator chosen by both parties. However, respondent Roblecor failed to complete the work despite the extension of time allowed it by Chung Fu. Subsequently, the latter had to take over the construction when it had become evident that Roblecor was not in a position to fulfill its obligation. Claiming an unsatisfied account of P10,500,000.00 and unpaid progress billings of P2,370,179.23, Roblecor filed a petition for Compulsory Arbitration with prayer for Temporary Restraining Order before respondent Regional Trial Court, pursuant to the arbitration clause in the construction agreement. Chung Fu moved to dismiss the petition and further prayed for the quashing of the restraining order. Subsequent negotiations between the parties eventually led to the formulation of an arbitration agreement which, among others, provides: 2. The parties mutually agree that the arbitration shall proceed in accordance with the following terms and conditions: — xxx xxx xxx d. The parties mutually agree that they will abide by the decision of the arbitrator including any amount that may be awarded to either party as compensation, consequential damage and/or interest thereon; e. The parties mutually agree that the decision of the arbitrator shall be final and unappealable. Therefore, there shall be no further judicial recourse if either party disagrees with the whole or any part of the arbitrator's award. f. As an exception to sub-paragraph (e) above, the parties mutually agree that either party is entitled to seek judicial assistance for purposes of enforcing the arbitrator's award; xxx xxx xxx (Emphasis supplied) Respondent Regional Trial Court approved the arbitration agreement thru its Order. Thereafter, Engr. Willardo Asuncion was appointed as the sole arbitrator. Arbitrator Asuncion ordered petitioners to immediately pay respondent contractor, the sum of P16,108,801.00. He further declared the award as final and unappealable, pursuant to the Arbitration Agreement precluding judicial review of the award. Consequently, Roblecor moved for the confirmation of said award. On the other hand, Chung Fu moved to remand the case for further hearing and asked for a reconsideration of the judgment award claiming that Arbitrator Asuncion committed twelve (12) instances of grave error by disregarding the provisions of the parties' contract. Respondent lower court denied Chung Fu's Motion to Remand thus compelling it to seek reconsideration therefrom but to no avail. The trial court granted Roblecor's Motion for Confirmation of Award and accordingly, entered judgment in conformity therewith. Moreover, it granted the motion for the issuance of a writ of execution filed by respondent. Chung Fu elevated the case via a petition for certiorari to respondent Court of Appeals. The respondent appellate court concurred with the findings and conclusions of respondent trial court resolving that Chung Fu and its officers, as signatories to the Arbitration Agreement are bound to observe the stipulations thereof providing for the finality of the award and precluding any appeal therefrom. A motion for reconsideration of said resolution was filed by petitioner, but it was similarly denied by respondent Court of Appeals thru its questioned resolution.

Hygienic Packaging Corporation vs. Nutri-Asia, Inc., doing business under the name and style of UFC Philippines (formerly Nutri-Asia, Inc.) Remedial Law; Civil Procedure; Venue; Since there is no contractual stipulation that can be enforced on the venue of dispute resolution, the venue of petitioner's personal action will be governed by the 1997 Revised Rules of Civil Procedure.

Petitioner and respondent may have entered into a contract of sale with respect to petitioner's merchandise. However, the case records do not show that they have a contract in relation to the venue of any civil action arising from their business transaction. Cathay Metal Corporation v. Laguna West Multi-Purpose Cooperative, Inc. , 728 SCRA482 (2014), provides, "[f]or there to be a contract, there must be a meeting of the minds between the parties." Here, no evidence shows that petitioner and respondent had a meeting of minds and agreed to submit any future issue either to the trial court or to arbitration. Since there is no contractual stipulation that can be enforced on the venue of dispute resolution, the venue of petitioner's personal action will be governed by the 1997 Revised Rules of Civil Procedure.

Busan Universal Rail, Inc. vs. Department of Transportation Metro Rail Transit 3 Government Projects; Republic Act (RA) No. 8975 prohibits the issuance of temporary restraining orders (TROs) and preliminary injunctions against national government projects.

RA 8975 prohibits the issuance of temporary restraining orders and preliminary injunctions against national government projects. Section 3 thereof reads: Sec. 3. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions andPreliminary Mandatory Injunctions .—No court, except the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the government, or any of its subdivisions, officials or any person or entity, whether public or private, acting under the government's direction, to restrain, prohibit or compel the following acts: (a) Acquisition, clearance and development of the right-of-way and/or site or location of any national government project; (b) Bidding or awarding of contract/project of the national government as defined underSection 2 hereof; (c) Commencement, prosecution, execution, implementation, operation of any such contract or project; (d) Termination or rescission of any such contract/project; and (e) The undertaking or authorization of any other lawful activity necessary for such contract/project.

Department of Environment and Natural Resources (DENR) vs. United Planners Consultants, Inc. (UPCI) Remedial Law; Civil Law; Alternative Dispute Resolution Act of 2004; Republic Act (RA) No. 9285, otherwise known as the "Alternative Dispute Resolution Act of 2004," institutionalized the use of an Alternative Dispute Resolution System (ADR System) in the Philippines .

Republic Act No.9285, otherwise known as the "Alternative Dispute Resolution Act of2004," institutionalized the use of an Alternative Dispute Resolution System (ADR System) in the Philippines. The Act, however, was without prejudice to the adoption by the Supreme Court of any ADR system as a means of achieving speedy and efficient means of resolving cases pending before all courts in the Philippines. Accordingly, A.M. No. 07-11-08-SC was created setting forth the Special Rules of Court on Alternative Dispute Resolution (referred herein as Special ADR Rules) that shall govern the procedure to be followed by the courts whenever judicial intervention is sought in ADR proceedings in the specific cases where it is allowed.

Chung Fu Industries (Phils.), Inc. vs. CA RULING

Respondents Court of Appeals and trial Judge gravely abused their discretion and/or exceeded their jurisdiction, as well as denied due process and substantial justice to petitioners, — (a) by refusing to exercise their judicial authority and legal duty to review the arbitration award, and (b) by declaring that petitioners are estopped from questioning the arbitration award allegedly in view of the stipulations in the parties' arbitration agreement that "the decision of the arbitrator shall be final and unappealable" and that "there shall be no further judicial recourse if either party disagrees with the whole or any part of the arbitrator's award. Yes. Where the parties agree that the decision of the arbitrator shall be final and unappealable as in the instant case, the pivotal inquiry is whether subject arbitration award is indeed beyond the ambit of the court's power of judicial review. We rule in the negative. It is stated explicitly under Art. 2044 of the Civil Code that the finality of the arbitrators' award is not absolute and without exceptions. Where the conditions described in Articles 2038, 2039 and 2040 applicable to both compromises and arbitrations are obtaining, the arbitrators' award may be annulled or rescinded. Additionally, under Sections 24 and 25 of the Arbitration Law, there are grounds for vacating, modifying or rescinding an arbitrator's award. Thus, if and when the factual circumstances referred to in the above-cited provisions are present, judicial review of the award is properly warranted. 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? 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 an act without or in excess of jurisdiction on the part of the voluntary arbitrator is clearly shown. For "the writ of certiorari is an extra-ordinary remedy and that certiorari jurisdiction is not to be equated with appellate jurisdiction. In a special civil action ofcertiorari, the Court will not engage in a review of the facts found nor even of the law as interpreted or applied by the arbitrator unless the supposed errors of fact or of law are so patent and gross and prejudicial as to amount to a grave abuse of discretion or an exces de pouvoir on the part of the arbitrator." Even decisions of administrative agencies which are declared "final" by law are not exempt from judicial review when so warranted. Thus, in the case of Oceanic Bic Division (FFW), et al. v. Flerida Ruth P. Romero, et al., 22this Court had occasion to rule that: . . . Inspite of statutory provisions making "final" the decisions of certain administrative agencies, we have taken cognizance of petitions questioning these decisions where want of jurisdiction, grave abuse of discretion, violation of due process, denial of substantial justice or erroneous interpretation of the law were brought to our attention . . . (Emphasis ours). It should be stressed, too, that voluntary arbitrators, by the nature of their functions, act in a quasi-judicial capacity. It stands to reason, therefore, that their decisions should not be beyond the scope of the power of judicial review of this Court. In the case at bar, petitioners assailed the arbitral award on the following grounds, most of which allege error on the part of the arbitrator in granting compensation for various items which apparently are disputed by said petitioners. (There are 12 grounds one of which is the Arbitrator committed grave error in granting to Roblecor extra compensation for airduct change in dimension). After closely studying the list of errors, as well as petitioners' discussion of the same in their Motion to Remand Case For Further Hearing and Reconsideration and Opposition to Motion for Confirmation of Award, we find that petitioners have amply made out a case where the voluntary arbitrator failed to apply the terms and provisions of the Construction Agreement which forms part of the law applicable as between the parties, thus committing a grave abuse of discretion. Furthermore, in granting unjustified extra compensation to respondent for several items, he exceeded his powers — all of which would have constituted ground for vacating the award under Section 24 (d) of the Arbitration Law. But the respondent trial court's refusal to look into the merits of the case, despite prima facie showing of the existence of grounds warranting judicial review, effectively deprived petitioners of their opportunity to prove or substantiate their allegations. In so doing, the trial court itself committed grave abuse of discretion. Likewise, the appellate court, in not giving due course to the petition, committed grave abuse of discretion. Respondent courts should not shirk from exercising their power to review, where under the applicable laws and jurisprudence, such power may be rightfully exercised; more so where the objections raised against an arbitration award may properly constitute grounds for annulling, vacating or modifying said award under the laws on arbitration. WHEREFORE, the petition is GRANTED. The Resolutions of the Court of Appeals as well as the Orders of respondent Regional Trial Court including the writ of execution issued pursuant thereto, are hereby SET ASIDE. Accordingly, this case is REMANDED to the court of origin for further hearing on this matter. All incidents arising therefrom are reverted to the status quo ante until such time as the trial court shall have passed upon the merits of this case. No costs. SO ORDERED.

Gonzales vs. Climax Mining Ltd. Fraud; Pleadings and Practice; In all averments of fraud, the circumstances constituting fraud must be stated with particularity to enable the opposing party to controvert the particular facts allegedly constituting the same. —

Sec. 5, Rule 8 of the Rules of Court specifically provides that in all averments of fraud, the circumstances constituting fraud must be stated with particularity. This is to enable the opposing party to controvert the particular facts allegedly constituting the same. Perusal of the complaint indeed shows that it failed to state with particularity the ultimate facts and circumstances constituting the alleged fraud. It does not state what particulars about Climax-Arimco's financial or technical capability were misrepresented, or how the misrepresentation was done. Incorporated in the body of the complaint are verbatim reproductions of the contracts, correspondence and government issuances that reportedly explain the allegations of fraud and misrepresentation, but these are, at best, evidentiary matters that should not be included in the pleading.

Department of Environment and Natural Resources (DENR) vs. United Planners Consultants, Inc. (UPCI) Money Judgments; Section 26 of Presidential Decree (PD) No. 1445 expressly provides that execution of money judgment against the Government or any of its subdivisions, agencies and instrumentalities is within the primary jurisdiction of the Commission on Audit (COA).

Section 26 of PD 1445 expressly provides that execution of money judgment against the Government or any of its subdivisions, agencies and instrumentalities is within the primary jurisdiction of the COA, to wit: SEC. 26. General jurisdiction. — The authority and powers of theCommission shall extend to and comprehend all matters relating to auditing procedures, systems and controls, the keeping of the general accounts of the Government, the preservation of vouchers pertaining thereto for a period of ten years, the examination and inspection of the books, records, and papers relating to those accounts; and the audit and settlement of the accounts of all persons respecting funds or property received or held by them in an accountable capacity, as well as the examination, audit, and settlement of all debts and claims of any sort due from or owing to the Government or any of its subdivisions, agencies and instrumentalities . The said jurisdiction extends to all government-owned or -controlled corporations, including their subsidiaries, and other self-governing boards, commissions, or agencies of theGovernment, and as herein prescribed, including nongovernmental entities subsidized by the government, those funded by donation through the government, those required to pay levies or government share, and those for which the government has put up a counterpart fund or those partly funded by the government. (Emphases supplied) From the foregoing, the settlement of respondent's money claim is still subject to the primary jurisdiction of theCOA despite finality of the confirmed arbitral award by the RTC pursuant to the Special ADR Rules. Hence, the respondent has to first seek the approval of the COA of their monetary claim. This appears to have been complied with by the latter when it fi led a "Petition for Enforcement and Payment ofFinal and Executory Arbitral Award" before the COA. Accordingly, it is now the COA which has the authority to rule on this latter petition.

Lanuza, Jr. vs. BF Corporation RULING

Should petitioners be made parties to the arbitration proceedings, pursuant to the arbitration clause provided in the contract between BF Corporation and Shangri-La? Yes. Petitioners point out, their personalities as directors of Shangri-La are separate and distinct from Shangri-La. Because a corporation's existence is only by fiction of law, it can only exercise its rights and powers through its directors, officers, or agents, who are all natural persons. A corporation cannot sue or enter into contracts without them. A consequence of a corporation's separate personality is that consent by a corporation through its representatives is not consent of the representative, personally. Its obligations, incurred through official acts of its representatives, are its own. A stockholder, director, or representative does not become a party to a contract. However, when there are allegations of bad faith or malice against corporate directors or representatives, it becomes the duty of courts or tribunals to determine if these persons and the corporation should be treated as one. Section 31 of the Corporation Code provides the instances when directors, trustees, or officers may become solidarily liable for corporate acts: a) The director or trustee willfully and knowingly voted for or assented to a patently unlawful corporate act; b) The director or trustee was guilty of gross negligence or bad faith in directing corporate affairs; and c) The director or trustee acquired personal or pecuniary interest in conflict with his or her duties as director or trustee. When the courts disregard the corporation's distinct and separate personality from its directors or officers, the courts do not say that the corporation, in all instances and for all purposes, is the same as its directors, stockholders, officers, and agents. It does not result in an absolute confusion of personalities of the corporation and the persons composing or representing it. Courts merely discount the distinction and treat them as one, in relation to a specific act, in order to extend the terms of the contract and the liabilities for all damages to erring corporate officials who participated in the corporation's illegal acts. This is done so that the legal fiction cannot be used to perpetrate illegalities and injustices. Thus, in cases alleging solidary liability with the corporation or praying for the piercing of the corporate veil, parties who are normally treated as distinct individuals should be made to participate in the arbitration proceedings in order to determine if such distinction should indeed be disregarded and, if so, to determine the extent of their liabilities. Hence, the issue of whether the corporation's acts in violation of complainant's rights, and the incidental issue of whether piercing of the corporate veil is warranted, should be determined in a single proceeding.

Philippine Charity Sweepstakes Office (PCSO) vs. DFNN Inc. RULING

The Court of Appeals erred when itaffirmed the increase of the arbitral award in favor of DFNNI Under the Special ADR Rules, review by the Supreme Court of an appeal by certiorari, while not a matter of right, may nevertheless be permitted under very limited and specific grounds, 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. The following, while neither controlling nor fully measuring the court's discretion, indicate the serious and compelling, and necessarily, restrictive nature of the grounds that will warrant the exercise of the Supreme Court's discretionary powers, when the Court of Appeals:Failed to apply the applicable standard or test for judicial review prescribed in these Special ADK Rules in arriving at its decision resulting in substantial prejudice to the aggrieved party;Erred in upholding a final order or decision despite the lack of jurisdiction of the court that rendered such final order or decision;Failed to apply any provision, principle, policy or rule contained in these Special ADR Rules resulting in substantial prejudice to the aggrieved party; andCommitted an error so egregious and harmful to a party as to amount to an undeniable excess of jurisdiction.The mere fact that the petitioner disagrees with the Court of Appeals' determination of questions of fact, of law or both questions of fact and law, shall not warrant the exercise of the Supreme Court's discretionary power. The error imputed to the Court of Appeals must be grounded upon any of the above prescribed grounds for review or be closely analogous thereto.A mere general allegation that the Court of Appeals has committed serious and substantial error or that it has acted with grave abuse of discretion resulting in substantial prejudice to the petitioner without indicating with specificity the nature of such error or abuse of discretion and the serious prejudice suffered by the petitioner on account thereof, shall constitute sufficient ground for the Supreme Court to dismiss outright the petition. (Emphasis and italics supplied) The first ground applies here.To recall, G.R. No. 234193 originated from Special Proceedings No. M-7844, which DFNNI filed pursuant to Section 25(a), RA 876 for purposes of correcting purported miscalculations in the Arbitral Award. The provision ordains: Section 25. Grounds for modifying or correcting award. - In any one of the following cases, the court must make an order modifying or correcting the award, upon the application of any party to the controversy which was arbitrated:(a)Where there was an evident miscalculation of figures, or an evident mistake in the description of any person, thing or property referred to in the award; or(b)Where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of the decision upon the matter submitted; or(c)Where the award is imperfect in a matter of form not affecting the merits of the controversy, and if it had been a commissioner's-report, the defect could have been amended or disregarded by the court.The order may modify and correct the award so as to effect the intent thereof and promote justice between the parties. The alleged: miscalculated figure DFNNI seeks to correct is the refusal of the Arbitration Panel to impose the 2% monthly interest provided in Par. 13.2(1) of the ELA, viz.: On the two percent interest, it is evident that the interest referred to unpaid lease rentals. As there are no lease rentals due, neither can there be any interest thereon.36 DFNNI, too, seeks an award of temperate damages and attorney's fees.We clarify though that the supposed refusal of the Arbitration Panel to impose the 2% penalty and DFNNI's claim for the award of temperate damages and attorney's fees is not the evident miscalculation of figures contemplated under Section 25(a), RA 876. To be sure, the provision is cut from the same fabric as 9 U.S.C. § 11(a) of the US Federal Arbitration Act (FAA): Section 11, Same; modification or correction; grounds; order, U.S. Federal Arbitration Act. In either of the following cases the United States court in and for the district wherein the award was made may make an order modifying or correcting the award upon the application of any party to the arbitration:(a)Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award. (b)Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted. (c)Where the award is imperfect in matter of form not affecting the merits of the controversy.The order may modify and correct the award, so as to effect the intent thereof and promote justice between the parties. From a recent decision of the United States Court of Appeals Tenth Circuit,37 we quote the discussion of the common meaning of "evident miscalculation of figures" which embodied the so called "face-of-the-award limitation":38 Let's start with § 11(a)'s plain meaning. See Jones v. Comm'r, 560 F.3d 196, 1200 (10th Cir. 2009). That section says, in relevant part, that a court may modify an award if it contains "an evident material miscalculation of figures." 9 U.S.C. § 11(a). In ordinarily English, a "miscalculation of figures" refers to mathematical, not legal, errors. See Calculate, NEW OXFORD AMERICAN DICTIONARY 242 (2d ed. 2005) ("Determine (the amount or number of something) mathematically."); Figure, id. at 626 (defining "figures" as "arithmetical calculations"). Likewise, "material" in this context takes its ordinary meaning of "important; essential; relevant." Material, id. at 1045. The word "evident," too, takes its ordinary meaning of "plain or obvious." Evident, id. at 585.5 The parties do not appear to dispute the ordinary meaning of these terms. See, e.g., Mid Atlantic's Opening Br. at 19-21; Ms. Bien & Mr. Wellman's Resp. & Principal Br. at 17. Putting these definitions together, we read § 11(a) to allow courts to correct obvious, significant mathematical errors.But even with these dictionary definitions, the meaning of § 11 (a) - particularly the word "evident" - is not clear. Must a miscalculation be obvious on the face of the award or must it be obvious after one looks to the arbitration record? x x x x x x xConsider the FAA's purposes. See Abramski v. United States, 573 U.S. 169, 179 (2014) (noting the importance of considering a statute's textually derived purpose in interpreting a provision). Its "'principal purpose' ... is to 'ensur[e] that private arbitration agreements are enforced according to their terms.'"x x x xx x xReading this statutory term "evident" as relating to a material miscalculation that appears on the face of the award furthers the FAA's purposes. A face-of-the-award limitation preserves the integrity of the parties' bargain. Specifically, it preserves the parties' deal for an arbitrator's, rather than a court's, resolution of their dispute. This bargain essentially negates the risk that a court may substitute its judgment (inadvertently or otherwise) for that of the arbitrator when it goes beyond the award's face in search of obvious, material mathematical errors. Further, a face-of-the-award approach also ensures that arbitration remains an efficient means to resolve disputes rather than "merely a prelude to a more cumbersome and time-consuming judicial review process." x x xx x x x "Evident miscalculation of figures," therefore, means obvious mathematical errors that relates to miscalculation that appears on the face of the award. It does not pertain to any allegation of fraud, corruption, or grave abuse. It is limited to clerical errors and honest mistake and are, thus, correctible insofar as they do not affect the merits of the controversy. Such is the restrained attitude that courts were intended to maintain with respect to arbitral awards.Here, under the guise of correcting an "evident miscalculation of figures" the RTC-Makati reviewed the findings of the Arbitration Panel, thus:39 The Court agrees with DFNN[I] that there was an evident miscalculation of the figures in the award of damages in favor of DFNN[I] contained in the Arbitral A ward. Thus, the Court resolves to GRANT the instant Petition. Section 13.2 of the ELA prescribes the proper computation of liquidated damages in case an event of default should occur. Section 13.2 of the ELA states:"(i) PCSO, if it is the party in default, shall pay DFNN[I] liquidated damages uithe amount (sic) equal to the market value of the System pirn rental payments for the unexpired term of this Agreement as provided under Section 10.2 and 10.3 hereof, inclusive of a penalty charge of two percent (2%) per month on the amount due computed from the date of termination or cancellation of the Agreement to the actual date of payment.For the purposes of this provision, "market value" shall be stipulated at Twenty Seven Million Pesos (P27,000,000) less depreciation of twelve and one half percent (12.5%) per year beginning from execution of this Agreement. "Unexpired term of rental payments" shall be computed based on the lease charge of five percent (5%) of the total value of bets placed through this System provided by DFNN[I] or the amount of Five Pesos (P5.00) per successful registrant under the System, whichever is higher, at the time such default shall have occurred multiplied by the remaining period of the term of this Agreement. PCSO shall also return the System to DFNN[I] in accordance with Section 9.2 hereof."Based on the foregoing-quoted Seetion of the ELA, DFNN[I] claims a total amount of Php310,095,149.70 in liquidated damages. The Court agrees with this claim.A reading of the controlling provision in the ELA shows that the two percent (2%) penalty charge per month is computed based on "the amount due." The amount due in this case refers to the "market value of the System plus rental payments for the unexpired term of this Agreement, inclusive of a penalty charge of two percent (2%) per month on the amount due computed from the date of termination or cancellation of the Agreement to the actual date of payment." The Arbitral Tribunal determined the amount due to be Php27,000,000.00.The 2% penalty charge per month should therefore be imposed on the Php27,000,000.00 initially. Thereafter, the 2% penalty charge should be computed based on the Php27,000,000.00 plus the previously incurred penalty charges. The Court[,] therefore[,] corrects the computation of liquidated damages (sic) to Php310,095,149.70.As to the legal interest that must be imposed on the award, it must be noted that the case of Nacar vs. Gallery Frames (G.R. No. 189871, August 13, 2013) already modified the rates stated in Eastern Shipping Lines vs. Court of Appeals (G.R. No. 97412, July 12, 1994) and now prescribes the uniform rate of 6% legal interest per annum from date of finality of this Decision until full satisfaction thereof. WHEREFORE, premises considered, in accordance with the authority granted by Section 11.4(C) of the ADR Rules to this. Court to correct arbitral awards, the award for liquidated damages in the Arbitral Award dated May 21, 2015 is hereby corrected to Php310,095149.70, plus 6% interest from [date] of finality of this Decision until full satisfaction thereof.SO ORDERED." Clearly, the-RTC-Makati passed off its decision as mere correction of the Arbitral Award. But in truth, it reversed and set aside the findings of the Arbitration Panel with respect to the 2% penalty provided in Par. 13.2(i) of the ELA, substituting its decision for that of the Arbitration Panel.In Fruehauf Electronics Philippines Corporation v. Technology Electronics Assembly and Management Pacific Corporation,40 this Court explained the basic principles surrounding an arbitral award: Arbitration is an alternative mode of dispute resolution outside of the regular court system. Although adversarial in character, arbitration is technically not litigation. It is a voluntary process in which one or more arbitrators - appointed according to the parties' agreement or according to the applicable rules of the Alternative Dispute Resolution (ADR) Law - resolve a dispute by rendering an award.41 While arbitration carries many advantages over court litigation, in many ways these advantages also translate into its disadvantages.Resort to arbitration is voluntary. It requires consent from both parties in the form of an arbitration clause that pre-existed the dispute or a subsequent submission agreement. This written arbitration agreement is an independent and legally enforceable contract that must be complied with in good faith. By entering into an arbitration agreement, the parties agree to submit their dispute to an arbitrator (or tribunal) of their own choosing and be bound by the latter's resolution.However, this contractual and consensual character means that the parties cannot implead a third-party in the proceedings even if the latter's participation is necessary for a complete settlement of the dispute. The tribunal does not have the power to compel a person to participate in the arbitration proceedings without that person's consent. It also has no authority to decide on issues that the parties did not submit (or agree to submit) for its resolution.As a purely private mode of dispute resolution, arbitration proceedings, including the records, the evidence, and the arbitral award, are confidential unlike court proceedings which are generally public. This allows the parties to avoid negative publicity and protect their privacy. Our law highly regards the confidentiality of arbitration proceedings that it devised a judicial remedy to prevent or prohibit the unauthorized disclosure of confidential information obtained therefrom.The contractual nature of arbitral proceedings affords the parties substantial autonomy over the proceedings.The parties are free to agree on the procedure to be observed during the proceedings. This lends considerable flexibility to arbitration proceedings as compared to court litigation governed by the Rules of Court. The parties likewise appoint the arbitrators based on agreement. There are no other legal requirements as to the competence or technical qualifications of an arbitrator. Their only legal qualifications are: (1) being of legal age: (2) full-enjoyment of their civil rights; and (3) the ability to read and write. The parties can tailor-fit the tribunal's composition to the nature of their dispute. Thus, a specialized dispute can be resolved by experts on the subject.However, because arbitrators do not necessarily have a background in law, they cannot be expected to have the legal mastery of a magistrate. There is a greater risk that an arbitrator might misapply the law or misappreciate the facts en route erroneous decision.This risk of error is compounded by the absence of an effective appeal mechanism. The errors of an arbitral tribunal are not subject to correction by the judiciary. As a private alternative to court proceedings, arbitration is meant to be an end, not the beginning, of litigation. Thus, the arbitral award is final and binding on the parties by reason of their contract the arbitration agreement. (Emphases and underscoring supplied) In other words, a party may not invoke the grounds for correction of arbitral awards under Section 25(a), RA 876, including the correction of "evident miscalculation of figures", as a ruse to ask for a review of the substantive findings of an arbitral tribunal. The mere fact that a party disagrees with the arbitral tribunal's factual findings and legal conclusions does not warrant the modification or correction of the arbitral award, much less a review thereof.All told, the Court of Appeals gravely erred when it affirmed the ruling of the RTC-Makati which granted DFNNI's petition for correction. PCSO's liability to DFNNI must be set at P27,000,000.00 of liquidated damages in accordance with the Arbitral Award. ACCORDINGLY, the petition in G.R. No. 232801 is GRANTED. The Decision dated February 20, 2017 and Resolution dated July 10, 2017 of the Court of Appeals in CA-G.R. SP No. 145462 are REVERSED and SET ASIDE. The Order dated April 11, 2016 of Regional Trial Court-Branch 212, Mandaluyong City in Civil Case No. MC15-9557 denying the consolidation is REINSTATED.On the other hand, the petition in G.R. No. 234193 is GRANTED. The Decision dated November 17, 2016 and Resolution dated August 31, 2017 of the Court of Appeals in CA-G.R. SP No. 145983 are REVERSED and SET ASIDE. The Arbitral Award dated May 21, 2015 is REINSTATED.

Department of Environment and Natural Resources (DENR) vs. United Planners Consultants, Inc. (UPCI) FACTS

The Department of Environment and Natural Resources (DENR), through the Land Management Bureau (LMB), entered into an Agreement for Consultancy Services with United Planners Consultants, Inc. (UPCI) in connection with an LMB's project. Under the Consultancy Agreement, DENR committed to pay a total contract price of P4,337,141.00. UPCI completed the work required, however, DENR was able to pay only 47% of the total contract price. For failure to pay its obligation under the Consultancy Agreement despite repeated demands, UPCI instituted a complaint against DENR before the Regional Trial Court (RTC). Upon motion of UPCI, the case was subsequently referred to arbitration pursuant to the arbitration clause of the Consultancy Agreement. The parties agreed to adopt the CIAC Revised Rules Governing Construction Arbitration (CIAC Rules) to govern the arbitration proceedings. They further agreed to submit their respective draft decisions in lieu of memoranda of arguments on or before April 21, 2010, among others. The Arbitral Award ruled in favor of UPCI. When DENR filed a Motion for Reconsideration before the RTC, the Arbitral Award was confirmed by the RTC. The RTC also denied DENR's motion to quash the writ of execution of the Arbitral Award. The Court of Appeals denied DENR's petition for certiorari, applying the Special Alternative Dispute Resolution (ADR) Rules.

Busan Universal Rail, Inc. vs. Department of Transportation Metro Rail Transit 3 Alternative Dispute Resolution; Alternative Dispute Resolution Act of 2004; Under Section 28 of Republic Act (RA) No. 9285 or the Alternative Dispute Resolution Act of 2004, as referred to in the above Section 59, the grant of an interim measure of protection by the proper court before the constitution of an arbitral tribunal is allowed.

The MRT3 Contract was entered into as a result of a negotiated procurement under RA 9184, or the Government Procurement Reform Act. Under Section 59, Rule XVIII of the Revised Implementing Rules and Regulations of RA 9184: SECTION 59. Arbitration .—59.1. If any dispute or difference of any kind whatsoever shall arise between the parties in connection with the implementation of the contract covered by the Act and this IRR, the parties shall make every effort to resolve amicably such dispute or difference by mutual consultation. 59.2.Any and all disputes arising from the implementation of a contract covered by the Act and this IRR shall be submitted to arbitration in the Philippines according to the provisions of R.A. 876, otherwise known as the"Arbitration Law" and R.A. 9285, otherwise known as the "Alternative Dispute Resolution Act of 2004": Provided, however , That disputes that are within the competence of the Construction Industry Arbitration Commission to resolve shall be referred thereto. The process of arbitration shall be incorporated as a provision in the contract that will be executed pursuant to the provisions of the Act and this IRR: Provided, further , That by mutual agreement, the parties may agree in writing to resort to other alternative modes of dispute resolution. Under Section 28 of RA 9285 or theAlternative Dispute Resolution Act of 2004, as referred to in the above Section 59, the grant of an interim measure of protection by the proper court before the constitution of an arbitral tribunal is allowed.

Busan Universal Rail, Inc. vs. Department of Transportation Metro Rail Transit 3 FACTS

The parties, together with the other Joint Venture, entered into a contract for the Department of Transportation and Communication (DOTC) - MRT3 System Maintenance Provider. The MRT3 Contract is broken down into four packages. After the issuance of the bill, Usec. Chavez of the Railways required the petitioner to submit additional supporting documents and directed the withholding of certain amounts. The petitioner explained but the bill was still not settled. The petitioner invoked the Settlement of Disputes under Sec. III, General Conditions of the Contract (GCC) and requested for a meeting for mutual consultation. However, as none of the request for mutual consultation was acceded to, petitioner sent the respondent a Notice of Arbitration. Thereafter, petitioner instituted before the RTC a Petition for the Issuance of Interim Measures of Protection, with Prayer for the Issuance of a Temporary Order of Protection under the Special ADR Rules, seeking to maintain the status quo and enjoin (instruct or urge) respondent from termination the MRT3 Contract. The RTC denied the petition for the case had already been referred to the Philippine Dispute Resolution Center, Inc. for Arbitration. Subsequently, respondent issued a Notice to Terminate the Contract. Petitioner moved for reconsideration (omnibus motion) to the RTC. The RTC held that it has no jurisdiction over the petition and ruled that the issue raised in the petition are arbitrable.

Gonzales vs. Climax Mining Ltd. Arbitration; R.A. No. 876; 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.

Hygienic Packaging Corporation vs. Nutri-Asia, Inc., doing business under the name and style of UFC Philippines (formerly Nutri-Asia, Inc.) The Supreme Court (SC) reminds litigants that while the rules on venue are for the convenience of plaintiffs, these rules do not give them unbounded freedom to file their cases wherever they may please.

This Court reminds litigants that while the rules on venue are for the convenience of plaintiffs, these rules do not give them unbounded freedom to file their cases wherever they may please: [T]he rules on venue, like the other procedural rules, are designed to insure a just and orderly administration of justice or the impartial and even-handed determination of every action and proceeding. Obviously, this objective will not be attained if the plaintiff is given unrestricted freedom to choose the court where he may file his complaint or petition. The choice of venue should not be left to the plaintiff's whim or caprice. He [or she] may be impelled by some ulterior motivation in choosing to file a case in a particular court even if not allowed by the rules on venue.

Gonzales vs. Climax Mining Ltd. 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.

Gonzales vs. Climax Mining Ltd. FACTS

This is a consolidation of two petitions rooted in the same disputed Addendum Contract entered into by the parties. In one case, the Court held that the DENR Panel of Arbitrators had no jurisdiction over the complaint for the annulment of the Addendum Contract on grounds of fraud and violation of the Constitution and that the action should have been brought before the regular courts as it involved judicial issues. Gonzales averred that the DENR Panel of Arbitrators Has jurisdiction because the case involves a mining dispute that properly falls within the ambit of the Panel's authority. Respondents Climax Mining Ltd., et al., on the other hand, seek reconsideration/clarification on the decision holding that the case should not be brought for arbitration under R.A. No. 876. They argued that the arbitration clause in the Addendum Contract should be treated as an agreement independent of the other terms of the contract, and that a claimed rescission of the main contract does not avoid the duty to arbitrate. On another case, Gonzales challenged the order of the RTC requiring him to proceed with the arbitration proceedings while the complaint for the nullification of the Addendum Contract was pending before the DENR Panel of Arbitrators. He contended that any issue as to the nullity, inoperativeness, or incapability of performance of the arbitration clause/agreement raised by one of the parties to the alleged arbitration agreement must be determined by the court prior to referring them to arbitration. While Climax-Arimco contended that an application to compel arbitration under Sec. 6 of R.A. No. 876 confers on the trial court only a limited and special jurisdiction, i.e., a jurisdiction solely to determine (a) whether or not the parties have a written contract to arbitrate, and (b) if the defendant has failed to comply with that contract.

Transfield Philippines, Inc. vs. Luzon Hydro Corporation FACTS

Transfield Philippines (Transfield) contracted Luzon Hydro Corp. (LHC) to construct a hydroelectric plants in Benguet and Ilocos. Transfield was given the sole responsibility for the design, construction, commissioning, testing and completion of the Project. The contract provides for a period for which the project is to be completed and also allows for the extension of the period provided that the extension is based on justifiable grounds such as fortuitous event. Two stand-by letters of credit were required to be opened to guarantee the performance of Transfield. During the construction of the plant, Transfield requested for extension of time citing various reasons delaying the construction. LHC did not give due course to the extension of the period prayed for but referred the matter to arbitration committee. Because of the delay in the construction of the plant, LHC called on the stand-by letters of credit because of default. However, the demand was objected by Transfield on the ground that there is still pending arbitration on their request for extension of time.

Department of Foreign Affairs (DFA) vs. BCA International Corporation Civil Law; Contracts; Established in this jurisdiction is the rule that the law of the place where the contract is made governs, or lex loci contractus . —

Under Article 33 of the UNCITRAL Arbitration Rules governing the parties, "the arbitral tribunal shall apply the law designated by the parties as applicable to the substance of the dispute." "Failing such designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable." Established in this jurisdiction is the rule that the law of the place where the contract is made governs, or lex loci contractus. As the parties did not designate the applicable law and the Agreement was perfected in the Philippines, our Arbitration laws, particularly, RA No. 876, RA No. 9285and its IRR, and the Special ADR Rules apply. The IRR of RA No. 9285 provides that "[t]he arbitral tribunal shall decide the dispute in accordance with such law as is chosen by the parties. In the absence of such agreement, Philippine law shall apply."

Hygienic Packaging Corporation vs. Nutri-Asia, Inc., doing business under the name and style of UFC Philippines (formerly Nutri-Asia, Inc.) RULING

W/N the action for collection of sum of money was laid in the proper venue. NO, A closer look at the Sales Invoices issued by petitioner reveals that above the signature of respondent's representative is the phrase, "Received the above goods in good order and condition." Clearly, the purpose of respondent's representative in signing the Sales Invoices is merely to acknowledge that he or she has received the plastic containers in good condition. He or she did not affix his or her signature in any other capacity except as the recipient of the goods. Petitioner and respondent may have entered into a contract of sale with respect to petitioner's merchandise. However, the case records do not show that they have a contract in relation to the venue of any civil action arising from their business transaction. Since there is no contractual stipulation that can be enforced on the venue of dispute resolution, the venue of petitioner's personal action will be governed by Rule 4, Sec. 2 of the Rules of Court. It has been consistently held that an action for collection of sum of money is a personal action. Taking into account that no exception can be applied in this case, the venue, then, is "where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, ... at the election of the plaintiff." For a corporation, its residence is considered "the place where its principal office is located as stated in its Articles of Incorporation. In its Complaint, petitioner stated that its principal place of business is on San Vicente Road beside South Superhighway, San Pedro, Laguna. Meanwhile, respondent admitted in its Answer that its principal office is at 12/F Centerpoint Building, Garnet Road corner Julia Vargas Avenue, Ortigas Center, Pasig City. Considering that the amount petitioner claims falls within the jurisdiction of the Regional Trial Court, petitioner may file its Complaint for sum of money either in the Regional Trial Court of San Pedro, Laguna or in the Regional Trial Court of Pasig City. DISPOSITION: Petition DENIED. The Decision and Resolution of the CA are AFFIRMED.

Fruehauf Electronics Philippines Corporation vs. Technology Electronics Assembly and Management Pacific Corporation RULING

WON a notice of appeal is an appropriate remedy to an RTC decision confirming, vacating, modifying, or correcting an arbitral award. The Supreme Court held that a notice of appeal under Rule 41 is not an appropriate remedy to arbitration. First, arbitral tribunals are not quasi-judicial agencies. Quasi-judicial or administrative adjudicatory power is only exercised by administrative agencies, the legal organs of the government. A quasi-judicial body's jurisdiction over a subject matter is conferred by law and exists independently from the will of the parties. In other words, quasi-judicial agencies are a creature of law. Meanwhile, the arbitral tribunal acquires jurisdiction over the parties and the subject matter through stipulation. Upon the rendition of the final award, the tribunal becomes functus officio and - save for a few exceptions - ceases to have any further jurisdiction over the dispute. In other words, it arbitral tribunals are a creature of contract. The court is aware of the contrary view of Chief Justice Renato Corona that voluntary arbitrators are "quasi-judicial instrumentality" of the government in ABS-CBN Broadcasting Corporation v. World Interactive Network Systems (WINS) Japan Co., Ltd., and that voluntary arbitrators are included in the Rule 43 jurisdiction of the CA. The court overturns such ruling. First, it is a mere obiter dictum, as in the case, the pronouncements as to the remedies against an arbitral award were unnecessary for their resolution. Second, the ABS-CBN case committed the classic fallacy of equivocation. It equated the term "voluntary arbitrator" of labor cases from "arbitrators/arbitration tribunal". Voluntary Arbitrators resolve labor disputes and grievances arising from the interpretation of Collective Bargaining Agreements. The relationship between capital and labor are heavily impressed with public interest. Thus, Voluntary Arbitrators authorized to resolve labor disputes have been clothed with quasi-judicial authority. On the other hand, commercial relationships covered by our commercial arbitration laws do not possess the same compelling state interest that would justify state interference into the autonomy of contracts, and thus commercial arbitration is a purely private system of adjudication facilitated by private citizens instead of government instrumentalities wielding quasi-judicial powers. As to what the proper mode of appeal is in arbitration, the SC held that courts are 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, since any other rule would make an award the commencement, not the end, of litigation. However, Rule 19.10 of the Special ADR Rules - by referring to Section 24 of the Arbitration Law and Article 34 of the 1985 United Nations Commission on International Trade Law (UNCITRAL) Model Law - recognizes the very limited exceptions to the autonomy of arbitral awards. The RTC shall not set aside or vacate the arbitral award except upon grounds for vacating a domestic arbitral award under Section 24 of the Arbitration Law contemplate the following scenarios: (a) when the award is procured by corruption, fraud, or other undue means; or (b) there was evident partiality or corruption in the arbitrators or any of them; or (c) the arbitrators were guilty of misconduct that materially prejudiced the rights of any party; or (d) 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. The award may also be vacated if an arbitrator who was disqualified to act willfully refrained from disclosing his disqualification to the parties.118 Notably, none of these grounds pertain to the correctness of the award but relate to the misconduct of arbitrators. The RTC may also set aside the arbitral award based on Article 34 of the UNCITRAL Model Law. Notably, these grounds are not concerned with the correctness of the award; they go into the validity of the arbitration agreement or the regularity of the arbitration proceedings. Not even the Court's expanded certiorari jurisdiction under the Constitution can justify judicial intrusion into the merits of arbitral awards. While the Constitution expanded the scope of certiorari proceedings, this power remains limited to a review of the acts of "any branch or instrumentality of the Government." As a purely private creature of contract, an arbitral tribunal remains outside the scope of certiorari. Thus, a losing party cannot assail an arbitral award through, a petition for review under Rule 43 or a petition for certiorari under Rule 65 because these remedies are not specifically permitted in the Special ADR Rules. If we were to insist on reviewing the correctness of the award (or consent to the CA's doing so), it would be tantamount to expanding our jurisdiction without the benefit of legislation. This translates to judicial legislation - a breach of the fundamental principle of separation of powers. The CA's decision is SET ASIDE and the RTC's order CONFIRMING the arbitral award in SP. Proc. No. 11449 is REINSTATED.

Gonzales vs. Climax Mining Ltd. Alternative Dispute Resolution; Arbitration; R.A. No. 876; Appeals; Pleadings and Practice; Statutory Construction; 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; 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 fi ling 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 fi led 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 Gonzales's 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.

LM Power Engineering Corporation vs. Capitol Industrial Construction Groups, Inc. Alternative Dispute Resolution; Arbitration; Courts; Jurisdiction; The inclusion of an arbitration clause in a contract does not ipso facto divest the courts of jurisdiction to pass upon the findings of arbitral bodies, because the awards are still judicially reviewable under certain conditions. —

We side with respondent. Essentially, the dispute arose from the parties' incongruent positions on whether certain provisions of their Agreement could be applied to the facts. The instant case involves technical discrepancies that are better left to an arbitral body that has expertise in those areas. In any event, the inclusion of an arbitration clause in a contract does not ipso facto divest the courts of jurisdiction to pass upon the findings of arbitral bodies, because the awards are still judicially reviewable under certain conditions.

Korea Technologies Co., Ltd. vs. Lerma RULING

Whether or not the arbitration clause is against public policy According to the Supreme Court, the arbitration clause which stipulates that the arbitration must be done in Seoul, Korea and that the arbitral award is final and binding, is not contrary to public policy. The courts should liberally construe arbitration clauses. Provided such clause is susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should be granted. Any doubt should be resolved in favor of arbitration. Also, Article 2044 of the Civil Code sanctions the validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award. Under the said provision, "Any stipulation that the arbitrators' award or decision shall be final, is valid, without prejudice to Articles 2038, 2039 and 2040.

Department of Foreign Affairs (DFA) vs. BCA International Corporation (2017) RULING

What law should govern the Arbitration Proceedings? Under Article 33 of the UNCITRAL Arbitration Rules governing the parties, "the arbitral tribunal shall apply the law designated by the parties as applicable to the substance of the dispute. Failing such designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable." Established in this jurisdiction is the rule that the law of the place where the contract is made governs, or lex loci contractus.As the parties did not designate the applicable law and the Agreement was perfected in the Philippines, our Arbitration laws, particularly, RA No. 876, RA No. 9285 and its IRR, and the Special ADR Rules apply. The IRR of RA No. 9285 provides that "the arbitral tribunal shall decide the dispute in accordance with such law as is chosen by the parties. In the absence of such agreement, Philippine law shall apply." Arbitration is deemed a special proceeding and governed by the special provisions of RA 9285, its IRR, and the Special ADR Rules. RA 9285 is the general law applicable to all matters and controversies to be resolved through alternative dispute resolution methods. While enacted only in 2004, we held that RA 9285 applies to pending arbitration proceedings since it is a procedural law, which has retroactive effect. The IRR of RA 9285 reiterate that RA 9285 is procedural in character and applicable to all pending arbitration proceedings. Consistent with Article 2046 of the Civil Code, the Special ADR Rules were formulated and were also applied to all pending arbitration proceedings covered by RA 9285, provided no vested rights are impaired. Thus, contrary to DFA's contention, RA 9285, its IRR, and the Special ADR Rules are applicable to the present arbitration proceedings. The arbitration between the DFA and BCA is still pending, since no arbitral award has yet been rendered. Moreover, DFA did not allege any vested rights impaired by the application of those procedural rules. 2. No. Court intervention is allowed under R.A. No. 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 Regional Trial Court (RTC); and (3) appeal from the RTC decisions on arbitral awards to the Court of Appeals. 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. The following, while neither controlling nor fully measuring the court's discretion,

Transfield Philippines, Inc. vs. Luzon Hydro Corporation RULING

Whether or not LHC can collect from the letters of credit despite the pending arbitration case. Transfield's argument that any dispute must first be resolved by the parties, whether through negotiations or arbitration, before the beneficiary is entitled to call on the letter of credit in essence would convert the letter of credit into a mere guarantee. The independent nature of the letter of credit may be: (a) independence in toto where the credit is independent from the justification aspect and is a separate obligation from the underlying agreement like for instance a typical standby; or (b) independence may be only as to the justification aspect like in a commercial letter of credit or repayment standby, which is identical with the same obligations under the underlying agreement. In both cases the payment may be enjoined if in the light of the purpose of the credit the payment of the credit would constitute fraudulent abuse of the credit. Jurisprudence has laid down a clear distinction between a letter of credit and a guarantee in that the settlement of a dispute between the parties is not a pre-requisite for the release of funds under a letter of credit. In other words, the argument is incompatible with the very nature of the letter of credit. If a letter of credit is drawable only after settlement of the dispute on the contract entered into by the applicant and the beneficiary, there would be no practical and beneficial use for letters of credit in commercial transactions. The engagement of the issuing bank is to pay the seller or beneficiary of the credit once the draft and the required documents are presented to it. The so-called "independence principle" assures the seller or the beneficiary of prompt payment independent of any breach of the main contract and precludes the issuing bank from determining whether the main contract is actually accomplished or not. Under this principle, banks assume no liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any documents, or for the general and/or particular conditions stipulated in the documents or superimposed thereon, nor do they assume any liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods represented by any documents, or for the good faith or acts and/or omissions, solvency, performance or standing of the consignor, the carriers, or the insurers of the goods, or any other person whomsoever.

Department of Foreign Affairs vs. BCA International Corporation (2016) RULING

Whether or not RA 9285 and the Special ADR Rules apply to the present arbitration proceedings. Yes, RA 9285 and the Special ADR Rules apply to the present arbitration proceedings. While RA 9285 was passed only in 2004, it nonetheless applies in the instant case since it is a procedural law which has a retroactive effect. As a general rule, the retroactive application of procedural laws does not violate any personal rights because no vested right has yet attached nor arisen from them. Further, consistent with Article 2046 of the Civil Code, the Special ADR Rules were formulated and were also applied to all pending arbitration proceedings covered by RA 9285, provided no vested rights are impaired. RA 9285, its IRR, and the Special ADR Rules provide that any party to an arbitration, whether domestic of foreign, may request the court to provide assistance in taking evidence such as the issuance of subpoena ad testificandum and subpoena duces tecum.

Gonzales vs. Climax Mining Ltd. RULING

Whether or not arbitration is proper even though issues of validity and nullity of the Addendum Contract and, consequently, of the arbitration clause were raised. Positive. In La Naval Drug Corporation v. Court of Appeals, the Court held that R.A. No. 876 explicitly confines the court's authority only to the determination of whether or not there is an agreement in writing providing for arbitration. In the affirmative, the statute ordains that the court shall issue an order "summarily directing the parties to proceed with the arbitration in accordance with the terms thereof." If the court, upon the other hand, finds that no such agreement exists, "the proceeding shall be dismissed." The cited case also stressed that the proceedings are summary in nature. Implicit in the summary nature of the judicial proceedings is the separable or independent character of the arbitration clause or agreement. The doctrine of separability or severability 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 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. The Court added that when it declared 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.

Dupasquier vs. Ascendas (Philippines) Corporation RULING

Whether or not the expiration of the MOU also terminated the effectivity of the subject arbitration clause Article 1370 of the Civil Code on the interpretation of contracts mandates that the literal meaning of the stipulations shall prevail if the contract's terms are clear and leave no doubt as to the intention of the contracting parties. If, however, the words of the contract are contrary to the evident intention of the parties, the intention of the parties shall be controlling. In the present case, while there is no doubt that the parties intended that disputes be referred to arbitration, the parties, nonetheless, are in conflict as to whether the Arbitration Clause is time-limited. Using the guidelines for interpreting a contract, the literal meaning of Clause 14(e) of the MOU is that the lapse of the MOU shall have an effect of making all its provisions, except Clause 14(e) on Confidentiality, ineffectual. The MOU itself provides that its "Closing Date" shall be two calendar weeks after the signing of the MOA, but not later than March 31, 2007. Since no MOA was signed by the parties, the MOU lapsed on March 31, 2007 by operation of the provisions of the MOU. Reading Clause 14(e) in relation to the MOU's definition of "Closing Date", the MOU's provisions, including the Arbitration Clause, shall be of no effect as of March 31, 2007. This is the manifest intent of the contracting parties

LM Power Engineering Corporation vs. Capitol Industrial Construction Groups, Inc. RULING

Whether or not there exists a controversy/dispute between petitioner and respondent regarding the interpretation and implementation of the Sub-Contract Agreement which requires prior recourse to voluntary arbitration. The controversy/dispute between the parties involve the interpretation and implementation of the Sub-Contract Agreement. Hence, prior recourse to arbitration is required. The issue as to the correct amount of petitioner's advances and billable accomplishments involves an evaluation of the manner in which the parties completed the work, the extent to which they did it, and the expenses each of them incurred in connection therewith. Arbitrators also need to look into the computation of foreign and local costs of materials, foreign and local advances, retention fees and letters of credit, and taxes and duties as set forth in the Agreement. These data can be gathered from a review of the Agreement. The courts should liberally construe arbitration clauses. Provided such clause is susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should be granted. Any doubt should be resolved in favor of arbitration.

Dupasquier vs. Ascendas (Philippines) Corporation FACTS

an Arbitration clause, as part of Clause 14 entitled "Miscellaneous Provision," which reads: i. Arbitration. In case of any dispute arising out of or in connection with this MOU, the Parties agree to negotiate in good faith within a period of thirty (30) days after written notice by one Party to the other Party of the existence of such dispute, failing which the said dispute shall be referred to and finally resolved by arbitration under the Rules of the United Nations Commission of International Trade Law, which Rules are deemed to be incorporated by reference into this Clause. The arbitration shall be held in Hong Kong. The language to be used in the arbitration shall be English. On September 14, 2007, Ascendas wrote another letter to The Net Group specifying that the parties have until September 28, 2007 to resolve the disputes between them, otherwise, Ascendas will refer the dispute to arbitration. The Net Group filed a petition for declaratory relief with an application for preliminary injunction/temporary restraining order (TRO) before the RTC in Makati City In its petition, The Net Group alleged that Ascendas' demand to arbitrate is baseless. According to its interpretation of the MOU, the Arbitration Clause would not survive the lapse of the MOU on March 31, 2007 because the parties agreed that only the confidentiality clause will survive the termination or lapse of the MOU. Hence, The Net Group pleaded for a judicial declaration that the arbitration agreement contained in the MOU be declared ineffective and that Ascendas can no longer compel The Net Group to submit to arbitration pursuant to the relevant clause. In addition, The Net Group sought for a judicial declaration that it is already entitled to the Due Diligence L/C on the basis of the MOU. Ascendas argued that the MOU had not lapsed and assuming it had lapsed, the Arbitration Clause therein survived and thus, the condition precedent, which is the referral to arbitration, for filing the claim was not complied with. RTC declared that respondent cannot compel petitioners to proceed to arbitration on the basis of said arbitration. Ascendas then filed a notice of appeal. CA unanimously set aside the RTC's Order. It ruled that considering the separability doctrine wherein the Arbitration Clause remains operative despite the termination of the contract, the RTC cannot exercise jurisdiction over the dispute because the parties should have referred the matter to arbitration.

Busan Universal Rail, Inc. vs. Department of Transportation Metro Rail Transit 3 RULING

whether the RTC has jurisdiction to issue the protection and restraining order sought by the petitioner against the respondent. No. Under Sec. 28 of RA 9285 or the Alternative Dispute Resolution Act of 2004, the grant of an interim measure of protection by the proper court before the constitution of an arbitral tribunal is allowed. However, RA 8975 (AN ACT TO ENSURE THE EXPEDITIOUS IMPLEMENTATION AND COMPLETION OF GOVERNMENT INFRASTRUCTURE PROJECTS BY PROHIBITING LOWER COURTS FROM ISSUING TEMPORARY RESTRANING ORDERS. PRELIMINARY INJUNCTIONS OR PRELIMINARY MANDATORY INJUNCTIONS, PROVIDING PENALTIES FOR VIOLATIONS THEREOF, AND FOR OTHER PURPOSES.) prohibits the issuance of TRO and Preliminary Injunctions against national government projects. The rationale in this provision is that, if a project that the government believes to be in default is allowed to enjoin the termination of its contract on the ground that it is contesting the validity of said termination, the government will be unable to enter into a new contract with any other party while the controversy is pending litigation. It is prejudicial to public interest since the government would be indefinitely hampered (hinder) in its duty to provide public goods and services. The only circumstance under which the court may grant injunctive relief is the existence of matter of extreme urgency involving a constitutional issue, such that unless a TRO or injunctive writ is issued, grave injustice and irreparable injury will result.

Dr. Benjamin Adapon et al vs. Medical Doctors Inc.(MDI) RULING

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IP E-Games Ventures Inc vs. Beijing Perfect Word Software Co., LTD. FACTS

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Philippine Charity Sweepstakes Office (PCSO) vs. DFNN Inc. FACTS

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