Adr Doctrines (except 22nd Case).docx

1. BF Corporation vs. CA Same; Same; A contract may be encompassed in several instruments even though every instrument is not signed by the parties, since it is sufficient if the unsigned instruments are clearly identified or referred to and made part of the signed instrument or instruments.— Petitioner’s contention that there was no arbitration clause because the contract incorporating said provision is part of a “hodgepodge” document, is therefore untenable. A contract need not be contained in a single writing. It may be collected from several different writings which do not conflict with each other and which, when connected, show the parties, subject matter, terms and consideration, as in contracts entered into by correspondence. A contract may be encompassed in several instruments even though every instrument is not signed by the parties, since it is sufficient if the unsigned instruments are clearly identified or referred to and made part of the signed instrument or instruments. Similarly, a written agreement of which there are two copies, one signed by each of the parties, is binding on both to the same extent as though there had been only one copy of the agreement and both had signed it. Same; Same; The subscription of the principal agreement effectively covers the other documents incorporated by reference therein.—The flaw in petitioner’s contentions therefore lies in its having segmented the various components of the whole contract between the parties into several parts. This notwithstanding, petitioner ironically admits the execution of the Articles of Agreement. Notably, too, the lower court found that the said Articles of Agreement “also provides that the ‘Contract Documents’ therein listed ‘shall be deemed an integral part of this Agreement,’ and one of the said documents is the ‘Conditions of Contract’ which contains the Arbitration Clause.’ ” It is this Articles of Agreement that was duly signed by Rufo B. Colayco, president of private respondent SPI, and Bayani F. Fernando, president of petitioner corporation. The same agreement was duly subscribed before notary public Nilberto R. Briones. In other words, the subscription of the principal agreement effectively covered the other documents incorporated by reference therein. Same; Same; Words and Phrases; “Reasonableness” is a relative term and the question of whether the time within which an act has to be done is reasonable depends on attendant circumstances.—The arbitration clause provides for a “reasonable time” within which the

parties may avail of the relief under that clause. “Reasonableness” is a relative term and the question of whether the time within which an act has to be done is reasonable depends on attendant circumstances. This Court finds that under the circumstances obtaining in this case, a one-month period from the time the parties held a conference on July 12, 1993 until private respondent SPI notified petitioner that it was invoking the arbitration clause, is a reasonable time. Indeed, petitioner may not be faulted for resorting to the court to claim what was due it under the contract. However, we find its denial of the existence of the arbitration clause as an attempt to cover up its misstep in hurriedly filing the complaint before the lower court. Same; Republic Act 876; The potentials of arbitration as one of the alternative dispute resolution methods that are now rightfully vaunted as “the wave of the future” in international relations, is recognized worldwide.—It should be noted that in this jurisdiction, arbitration has been held valid and constitutional. Even before the approval on June 19, 1953 of Republic Act No. 876, this Court has countenanced the settlement of disputes through arbitration. Republic Act No. 876 was adopted to supplement the New Civil Code’s provisions on arbitration. Its potentials as one of the alternative dispute resolution methods that are now rightfully vaunted as “the wave of the future” in international relations, are recognized worldwide. To brush aside a contractual agreement calling for arbitration in case of disagreement between the parties would therefore be a step backward. 2. ABS-CBN Broadcasting Corporation vs. World Interactive Network Systems (WINS) Japan Co., Ltd. Courts; Jurisdictions; Arbitration; Alternative Dispute Resolution; RA 876 itself mandates that it is the Court of First Instance, now the RTC, which has jurisdiction over questions relating to arbitration, such as a petition to vacate an arbitral award.—RA 876 itself mandates that it is the Court of First Instance, now the RTC, which has jurisdiction over questions relating to arbitration, such as a petition to vacate an arbitral award. Same; Same; Same; Same; As RA 876 did not expressly provide for errors of fact and/or law and grave abuse of discretion (proper grounds for a petition for review under Rule 43 and a petition for certiorari under Rule 65, respectively) as grounds for maintaining a

petition to vacate an arbitral award in the RTC, it necessarily follows that a party may not avail of the latter remedy on the grounds of errors of fact and/or law or grave abuse of discretion to overturn an arbitral award.—The law itself clearly provides that the RTC must issue an order vacating an arbitral award only “in any one of the . . . cases” enumerated therein. Under the legal maxim in statutory construction expressio unius est exclusio alterius, the explicit mention of one thing in a statute means the elimination of others not specifically mentioned. As RA 876 did not expressly provide for errors of fact and/or law and grave abuse of discretion (proper grounds for a petition for review under Rule 43 and a petition for certiorari under Rule 65, respectively) as grounds for maintaining a petition to vacate an arbitral award in the RTC, it necessarily follows that a party may not avail of the latter remedy on the grounds of errors of fact and/or law or grave abuse of discretion to overturn an arbitral award. Same; Same; Same; Same; Adamson v. Court of Appeals (232 SCRA 602) gave ample warning that a petition to vacate filed in the RTC which is not based on the grounds enumerated in Section 24 of RA 876 should be dismissed.—Adamson v. Court of Appeals, 232 SCRA 602 (1994), gave ample warning that a petition to vacate filed in the RTC which is not based on the grounds enumerated in Section 24 of RA 876 should be dismissed. In that case, the trial court vacated the arbitral award seemingly based on grounds included in Section 24 of RA 876 but a closer reading thereof revealed otherwise. On appeal, the CA reversed the decision of the trial court and affirmed the arbitral award. Same; Same; Same; Same; The Court held that a voluntary arbitrator is properly classified as a “quasi-judicial instrumentality” and is, thus, within the ambit of Section 9(3) of the Judiciary Reorganization Act, as amended.—In Luzon Development Bank v. Association of Luzon Development Bank Employees, 249 SCRA 162 (1965), the Court held that a voluntary arbitrator is properly classified as a “quasi-judicial instrumentality” and is, thus, within the ambit of Section 9 (3) of the Judiciary Reorganization Act, as amended. Same; Same; Same; Same; The proper remedy from the adverse decision of a voluntary arbitrator, if errors of fact and/or law are raised, is a petition for review under Rule 43 of the Rules of Court.—This rule was cited in Sevilla Trading Company v. Semana, 428 SCRA 239 (2004), Manila Midtown Hotel v. Borromeo, 438 SCRA 653 (2004), and Nippon Paint

Employees Union-Olalia v. Court of Appeals, 443 SCRA 286 (2004). These cases held that the proper remedy from the adverse decision of a voluntary arbitrator, if errors of fact and/or law are raised, is a petition for review under Rule 43 of the Rules of Court. Thus, petitioner’s contention that it may avail of a petition for review under Rule 43 under the circumstances of this case is correct. Same; Same; Same; Same; Any agreement stipulating that “the decision of the arbitrator shall be final and unappealable” and “that no further judicial recourse if either party disagrees with the whole or any part of the arbitrator’s award may be availed of” cannot be held to preclude in proper cases the power of judicial review which is inherent in courts.—As may be gleaned from the above stated provision, it is well within the power and jurisdiction of the Court to inquire whether any instrumentality of the Government, such as a voluntary arbitrator, has gravely abused its discretion in the exercise of its functions and prerogatives. Any agreement stipulating that “the decision of the arbitrator shall be final and unappealable” and “that no further judicial recourse if either party disagrees with the whole or any part of the arbitrator’s award may be availed of” cannot be held to preclude in proper cases the power of judicial review which is inherent in courts. We will not hesitate to review a voluntary arbitrator’s award where there is a showing of grave abuse of authority or discretion and such is properly raised in a petition for certiorari and there is no appeal, nor any plain, speedy remedy in the course of law. 3. Real Bank, Inc. vs. Samsung Mabuhay Corporation Actions; Mediation; Mediation is part of pre-trial and failure of the plaintiff to appear thereat merits sanction on the part of the absent party.—In Senarlo v. Judge Paderanga, 617 SCRA 247 (2010), this Court accentuated that mediation is part of pre-trial and failure of the plaintiff to appear thereat merits sanction on the part of the absent party. This court held: A.M. No. 01-10-5- SC-PHILJA dated 16 October 2001, otherwise known as the Second Revised Guidelines for the Implementation of Mediation Proceedings and Section 5, Rule 18 of the Rules of Court grant judges the discretion to dismiss an action for failure of the plaintiff to appear at mediation proceedings. 4. 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.

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.

Same; Same; Same; 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.

Same; Same; Alternative Dispute Resolution; Compromise Agreements; The proper course of action that should have been taken by the court a quo, upon manifestation of the parties of their willingness to discuss a settlement, is to suspend the proceedings and allow them reasonable time to come to terms; While the rules allow the trial court to suspend its proceedings consistent with the policy to encourage the use of alternative mechanisms of dispute resolution, the grant to the parties of only 15 days to conclude a deal is, to say the least, a passive and paltry attempt of the court a quo in its task of persuading litigants to agree upon a reasonable concession.—As also explained therein, the proper course of action that should have been taken by the court a quo, upon manifestation of the parties of their willingness to discuss a settlement, was to suspend the proceedings and allow them reasonable time to come to terms (a) If willingness to discuss a possible compromise is expressed by one or both parties; or (b) If it appears that one of the parties, before the commencement of the action or proceeding, offered to discuss a possible compromise but the other party refused the offer, pursuant to Art. 2030 of the Civil Code. If despite efforts exerted by the trial court and the parties the negotiations still fail, only then should the action continue as if no suspension had taken place. Ostensibly, while the rules allow the trial court to suspend its proceedings consistent with the policy to encourage the use of alternative mechanisms of dispute resolution, in the instant case, the trial court only gave the parties fifteen (15) days to conclude a deal. This was, to say the least, a passive and paltry attempt of the court a quo in its task of persuading litigants to agree upon a reasonable concession. Hence, if only to inspire confidence in the pursuit of a middle ground between petitioner and respondents,

Same; Same; Same; 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 ofwhenever a contract “contains a clause for the submission of a future controversy to arbitration,” in this wise: “SECTION 1.

5. Rizal Commercial Banking Corporation vs. Magwin Marketing Corporation

we must not interpret the trial court’s Orders as dismissing the action on its own motion because the parties, specifically petitioner, were anxious to litigate their case as exhibited in their several manifestations and motions.

the spirit of the CIAC rules, whose policy and objective is to “provide a fair and expeditious settlement of construction disputes through a nonjudicial process which ensures harmonious and friendly relations between or among the parties.”

6. Rizalina Positos vs. Jacob Chua

Same; Same; Same; Same; Aware of the objective of voluntary arbitration in the labor field, in the construction industry, and in any other area for that matter, the Court will not assist one or the other or even both parties in any effort to subvert or defeat that objective for their private purposes; The Court will not permit the parties to relitigate before it the issues of facts previously presented and argued before the Arbitral Tribunal, save only where a clear showing is made that, in reaching its factual conclusions, the Arbitral Tribunal committed an error so egregious and hurtful to one party as to constitute a grave abuse of discretion resulting in lack or loss of jurisdiction.—It is worthy to stress our ruling in HiPrecision Steel Center, Inc. v. Lim Kim Steel Builders, Inc., 228 SCRA 397 (1993), which was reiterated in David v. Construction Industry and Arbitration Commission, 435 SCRA 654 (2004), that: x x x Executive Order No. 1008 created an arbitration facility to which the construction industry in the Philippines can have recourse. The Executive Order was enacted to encourage the early and expeditious settlement of disputes in the construction industry, a public policy the implementation of which is necessary and important for the realization of national development goals. Aware of the objective of voluntary arbitration in the labor field, in the construction industry, and in any other area for that matter, the Court will not assist one or the other or even both parties in any effort to subvert or defeat that objective for their private purposes. The Court will not review the factual findings of an arbitral tribunal upon the artful allegation that such body had “misapprehended facts” and will not pass upon issues which are, at bottom, issues of fact, no matter how cleverly disguised they might be as “legal questions.” The parties here had recourse to arbitration and chose the arbitrators themselves; they must have had confidence in such arbitrators. The Court will not, therefore, permit the parties to relitigate before it the issues of facts previously presented and argued before the Arbitral Tribunal, save only where a clear showing is made that, in reaching its factual conclusions, the Arbitral Tribunal committed an error so egregious and hurtful to one party as to constitute a grave abuse of discretion resulting in lack or loss of jurisdiction. Prototypical examples would be factual conclusions of the Tribunal which resulted in deprivation of one or the other party of a fair

Same; Conciliation Proceedings; Non-compliance with conciliation requirement under the Local Government Code (Republic Act No. 7160) affects the sufficiency of a party’s cause of action and renders the complaint susceptible to dismissal on the ground of prematurity.— As reflected above, respondent’s complaint was dismissed for failure to comply with the conciliation process. Non-compliance affected the sufficiency of his cause of action and rendered the complaint susceptible, as in fact it resulted to dismissal on the ground of prematurity. 7. Uniwide Sales Realty and Resources Corporation vs. TitanIkeda Construction and Development Corporation Same; Same; Same; Same; As an arbitration body, the Construction Industry Arbitration Commission (CIAC) can only resolve issues brought before it by the parties through the Terms of Reference (TOR) which functions similarly as a pre-trial brief.— Arbitration has been defined as “an arrangement for taking and abiding by the judgment of selected persons in some disputed matter, instead of carrying it to established tribunals of justice, and is intended to avoid the formalities, the delay, the expense and vexation of ordinary litigation.” Voluntary arbitration, on the other hand, involves the reference of a dispute to an impartial body, the members of which are chosen by the parties themselves, which parties freely consent in advance to abide by the arbitral award issued after proceedings where both parties had the opportunity to be heard. The basic objective is to provide a speedy and inexpensive method of settling disputes by allowing the parties to avoid the formalities, delay, expense and aggravation which commonly accompany ordinary litigation, especially litigation which goes through the entire hierarchy of courts. As an arbitration body, the CIAC can only resolve issues brought before it by the parties through the TOR which functions similarly as a pre-trial brief. Thus, if Uniwide’s claim for liquidated damages was not raised as an issue in the TOR or in any modified or amended version of it, the CIAC cannot make a ruling on it. The Rules of Court cannot be used to contravene

opportunity to present its position before the Arbitral Tribunal, and an award obtained through fraud or the corruption of arbitrators. Any other, more relaxed rule would result in setting at naught the basic objective of a voluntary arbitration and would reduce arbitration to a largely inutile institution. 8. Philrock, Commission

Inc.

vs.

Construction

Industry

Arbitration

Actions; Arbitration; Construction Industry Arbitration Commission (CIAC); Jurisdiction; Section 4 of Executive Order (EO) 1008 expressly vests in the CIAC original and exclusive jurisdiction over disputes arising from or connected with construction contracts entered into by parties that have agreed to submit their dispute to voluntary arbitration.—Petitioner avers that the CIAC lost jurisdiction over the arbitration case after both parties had withdrawn their consent to arbitrate. The June 13, 1995 RTC Order remanding the case to the CIAC for arbitration was allegedly an invalid mode of referring a case for arbitration. We disagree. Section 4 of Executive Order 1008 expressly vests in the CIAC original and exclusive jurisdiction over disputes arising from or connected with construction contracts entered into by parties that have agreed to submit their dispute to voluntary arbitration. Same; Same; Same; Same; The Supreme Court will not countenance the effort of any party to subvert or defeat the objective of voluntary arbitration for its own private motives.—As pointed out by the solicitor general, petitioner maneuvered to avoid the RTC’s final resolution of the dispute by arguing that the regular court also lost jurisdiction after the arbitral tribunal’s April 13, 1994 Order referring the case back to the RTC. In so doing, petitioner conceded and estopped itself from further questioning the jurisdiction of the CIAC. The Court will not countenance the effort of any party to subvert or defeat the objective of voluntary arbitration for its own private motives. After submitting itself to arbitration proceedings and actively participating therein, petitioner is estopped from assailing the jurisdiction of the CIAC, merely because the latter rendered an adverse decision. Same; Same; Same; Judicial Review; Voluntary arbitrators, by the nature of their functions, act in quasi-judicial capacity, such that their decisions are within the scope of judicial review.— We disagree with the solicitor general. As pointed out earlier, factual findings of quasi-

judicial bodies that have acquired expertise are generally accorded great respect and even finality, if they are supported by substantial evidence. The Court, however, has consistently held that despite statutory provisions making the decisions of certain administrative agencies “final,” it still takes cognizance of petitions showing want of jurisdiction, grave abuse of discretion, violation of due process, denial of substantial justice or erroneous interpretation of the law. Voluntary arbitrators, by the nature of their functions, act in a quasi-judicial capacity, such that their decisions are within the scope of judicial review. 9. Agan, Jr. vs. Philippine International Air Terminals Co., Inc. Actions; Alternative Dispute Resolution; Arbitration; Where petitioners are not parties to a contract with an arbitration clause, they cannot be compelled to submit to arbitration proceedings; A speedy and decisive resolution of all the critical issues in the present controversy, including those raised by petitioners, cannot be made before an arbitral tribunal.—It is established that petitioners in the present cases who have presented legitimate interests in the resolution of the controversy are not parties to the PIATCO Contracts. Accordingly, they cannot be bound by the arbitration clause provided for in the ARCA and hence, cannot be compelled to submit to arbitration proceedings. A speedy and decisive resolution of all the critical issues in the present controversy, including those raised by petitioners, cannot be made before an arbitral tribunal. The object of arbitration is precisely to allow an expeditious determination of a dispute. This objective would not be met if this Court were to allow the parties to settle the cases by arbitration as there are certain issues involving nonparties to the PIATCO Contracts which the arbitral tribunal will not be equipped to resolve. 10. Transfield Philippines, Inc. vs. Luzon Hydro Corporation Same; Same; Same; Arbitration; The pendency of arbitral proceedings does not foreclose resort to the courts for provisional reliefs.—As a fundamental point, the pendency of arbitral proceedings does not foreclose resort to the courts for provisional reliefs. The Rules of the ICC, which governs the parties’ arbitral dispute, allows the application of a party to a judicial authority for interim or conservatory measures. Likewise, Section 14 of Republic Act (R.A.) No. 876 (The Arbitration Law) recognizes the rights of any party to

petition the court to take measures to safeguard and/or conserve any matter which is the subject of the dispute in arbitration. In addition, R.A. 9285, otherwise known as the “Alternative Dispute Resolution Act of 2004,” allows the filing of provisional or interim measures with the regular courts whenever the arbitral tribunal has no power to act or to act effectively. 11. Korea Technologies Co., Ltd. vs. Lerma Contracts; Arbitration; Conflict of Laws; While it is established in this jurisdiction is the rule that the law of the place where the contract is made governs—lex loci contractus—Art. 2044 of the Civil Code sanctions the validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award.— Established in this jurisdiction is the rule that the law of the place where the contract is made governs. Lex loci contractus. The contract in this case was perfected here in the Philippines. Therefore, our laws ought to govern. Nonetheless, Art. 2044 of the Civil Code sanctions the validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award. Art. 2044 provides, “Any stipulation that the arbitrators’ award or decision shall be final, is valid, without prejudice to Articles 2038, 2039 and 2040.” (Emphasis supplied.) Arts. 2038, 2039, and 2040 abovecited refer to instances where a compromise or an arbitral award, as applied to Art. 2044 pursuant to Art. 2043, may be voided, rescinded, or annulled, but these would not denigrate the finality of the arbitral award. Same; Same; Same; Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL Model Law); Alternative Dispute Resolution Act of 2004 (R.A. 9285); As signatory to the Arbitration Rules of the United Nations Commission on International Trade Law (UN-CITRAL) Model Law on International Commercial Arbitration of the UNCITRAL in the New York Convention on 21 June 1985, the Phil-ippines committed itself to be bound by the Model Law; The Philip-pines has incorporated the Model Law in Alternative Dispute Resolution Act of 2004.—For domestic arbitration proceedings, we have particular agencies to arbitrate disputes arising from contractual relations. In case a foreign arbitral body is chosen by the parties, the arbitration rules of our domestic arbitration bodies would not be applied. As signatory to the Arbitration Rules of the UNCITRAL Model Law on

International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL) in the New York Convention on June 21, 1985, the Philippines committed itself to be bound by the Model Law. We have even incorporated the Model Law in Republic Act No. (RA) 9285, otherwise known as the Alternative Dispute Resolution Act of 2004 entitled An Act to Institutionalize the Use of an Alternative Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution, and for Other Purposes, promulgated on April 2, 2004. Secs. 19 and 20 of Chapter 4 of the Model Law are the pertinent provisions. Same; Same; Same; Same; Same; Statutory Construction; RA 9285 is a procedural law which has a retroactive effect.—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. Likewise, KOGIES filed its application for arbitration before the KCAB on July 1, 1998 and it is still pending because no arbitral award has yet been rendered. Thus, RA 9285 is applicable to the instant case. Wellsettled is the rule that procedural laws are construed to be applicable to actions pending and undetermined at the time of their passage, and are deemed retroactive in that sense and to that extent. 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. Same; Same; Same; Same; Same; Under Sec. 24 of R.A. 9285, the Regional Trial Court does not have jurisdiction over disputes that are properly the subject of arbitration pursuant to an arbitration clause, and mandates the referral to arbitration in such cases.—Under Sec. 24, the RTC does not have jurisdiction over disputes that are properly the subject of arbitration pursuant to an arbitration clause, and mandates the referral to arbitration in such cases, thus: SEC. 24. Referral to Arbitration.—A court before which an action is brought in a matter which is the subject matter of an arbitration agreement shall, if at least one party so requests not later than the pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. Same; Same; Same; Same; Same; Judicial Review; Even if foreign arbitral awards are mutually stipulated by the parties in the arbitration clause to be final and binding, the same are not immediately

enforceable or cannot be implemented immediately— they must still be confirmed by the Regional Trial Court.—Foreign arbitral awards while mutually stipulated by the parties in the arbitration clause to be final and binding are not immediately enforceable or cannot be implemented immediately. Sec. 35 of the UNCITRAL Model Law stipulates the requirement for the arbitral award to be recognized by a competent court for enforcement, which court under Sec. 36 of the UNCITRAL Model Law may refuse recognition or enforcement on the grounds provided for. RA 9285 incorporated these provisos to Secs. 42, 43, and 44 relative to Secs. 47 and 48. Same; Same; Same; Same; Same; Same; It is now clear that foreign arbitral awards when confirmed by the Regional Trial Court are deemed not as a judgment of a foreign court but as a Foreign arbitral award, and when confirmed, are enforced as final and executory decisions of our courts of law—the concept of a final and binding arbitral award is similar to judgments or awards given by some quasijudicial bodies, like the National Labor Relations Commission and the Mines Adjudication Board.—It is now clear that foreign arbitral awards when confirmed by the RTC are deemed not as a judgment of a foreign court but as a foreign arbitral award, and when confirmed, are enforced as final and executory decisions of our courts of law. Thus, it can be gleaned that the concept of a final and binding arbitral award is similar to judgments or awards given by some of our quasi-judicial bodies, like the National Labor Relations Commission and Mines Adjudication Board, whose final judgments are stipulated to be final and binding, but not immediately executory in the sense that they may still be judicially reviewed, upon the instance of any party. Therefore, the final foreign arbitral awards are similarly situated in that they need first to be confirmed by the RTC. Same; Same; Same; Same; Same; Same; While the Regional Trial Court (RTC) does not have jurisdiction over disputes governed by arbitration mutually agreed upon by the parties, still the foreign arbitral award is subject to judicial review by the RTC which can set aside, reject, or vacate it.—While the RTC does not have jurisdiction over disputes governed by arbitration mutually agreed upon by the parties, still the foreign arbitral award is subject to judicial review by the RTC which can set aside, reject, or vacate it. In this sense, what this Court held in Chung Fu Industries (Phils.), Inc., 206 SCRA 545 (1992), relied upon by KOGIES is applicable insofar as the foreign

arbitral awards, while final and binding, do not oust courts of jurisdiction since these arbitral awards are not absolute and without exceptions as they are still judicially reviewable. Chapter 7 of RA 9285 has made it clear that all arbitral awards, whether domestic or foreign, are subject to judicial review on specific grounds provided for. Same; Same; Same; Same; Same; Same; Grounds for judicial review different in domestic and foreign arbitral awards—for foreign or international arbitral awards, the grounds for setting aside, rejecting or vacating the award by the Regional Trial Court (RTC) are provided under Art. 34(2) of the United Nations Commission on International Trade Law (UNCITRAL) Model Law, while for final domestic arbitral awards, they may only be assailed before the RTC and vacated on the grounds provided under Sec. 25 of RA 876.— The differences between a final arbitral award from an international or foreign arbitral tribunal and an award given by a local arbitral tribunal are the specific grounds or conditions that vest jurisdiction over our courts to review the awards. For foreign or international arbitral awards which must first be confirmed by the RTC, the grounds for setting aside, rejecting or vacating the award by the RTC are provided under Art. 34(2) of the UNCITRAL Model Law. For final domestic arbitral awards, which also need confirmation by the RTC pursuant to Sec. 23 of RA 876 and shall be recognized as final and executory decisions of the RTC, they may only be assailed before the RTC and vacated on the grounds provided under Sec. 25 of RA 876. Same; Same; Same; Same; Same; Same; An arbitration clause, stipulating that the arbitral award is final and binding, does not oust our courts of jurisdiction as the international arbitral award is still judicially reviewable under certain conditions provided for by the United Nations Commission on International Trade Law (UN-CITRAL) Model Law on International Commercial Arbitration (ICA) as applied and incorporated in RA 9285.—Petitioner is correct in its contention that an arbitration clause, stipulating that the arbitral award is final and binding, does not oust our courts of jurisdiction as the international arbitral award, the award of which is not absolute and without exceptions, is still judicially reviewable under certain conditions provided for by the UNCITRAL Model Law on ICA as applied and incorporated in RA 9285. Same; Same; Rescission; Where an arbitration clause in a contract is availing, neither of the parties can unilaterally treat the contract as

rescinded since whatever infractions or breaches by a party or differences arising from the contract must be brought first and resolved by arbitration, and not through an extrajudicial rescission or judicial action.—What this Court held in University of the Philippines v. De Los Angeles, 35 SCRA 102 (1970) and reiterated in succeeding cases, that the act of treating a contract as rescinded on account of infractions by the other contracting party is valid albeit provisional as it can be judicially assailed, is not applicable to the instant case on account of a valid stipulation on arbitration. Where an arbitration clause in a contract is availing, neither of the parties can unilaterally treat the contract as rescinded since whatever infractions or breaches by a party or differences arising from the contract must be brought first and resolved by arbitration, and not through an extrajudicial rescission or judicial action. Same; Same; Court Personnel; Sheriffs; A sheriff is not technically competent to ascertain the actual status of the equipment and machineries as installed in the plant.—Whatever findings and conclusions made by the RTC Branch Sheriff from the inspection made on October 28, 1998, as ordered by the trial court on October 19, 1998, is of no worth as said Sheriff is not technically competent to ascertain the actual status of the equipment and machineries as installed in the plant. Same; Same; Alternative Dispute Resolution Act of 2004 (R.A. 9285); The pendency of an arbitral proceeding does not foreclose resort to the courts for provisional reliefs—the RTC has authority and jurisdiction to grant interim measures of protection.—In the recent 2006 case of Transfield Philippines, Inc. v. Luzon Hydro Corporation, 490 SCRA 14 (2006), we were explicit that even “the pendency of an arbitral proceeding does not foreclose resort to the courts for provisional reliefs.” We explicated this way: As a fundamental point, the pendency of arbitral proceedings does not foreclose resort to the courts for provisional reliefs. The Rules of the ICC, which governs the parties’ arbitral dispute, allows the application of a party to a judicial authority for interim or conservatory measures. Likewise, Section 14 of Republic Act (R.A.) No. 876 (The Arbitration Law) recognizes the rights of any party to petition the court to take measures to safeguard and/or conserve any matter which is the subject of the dispute in arbitration. In addition, R.A. 9285, otherwise known as the “Alternative Dispute Resolution Act of 2004,” allows the filing of provisional or interim measures with the regular courts whenever the arbitral tribunal

has no power to act or to act effectively. It is thus beyond cavil that the RTC has authority and jurisdiction to grant interim measures of protection. 12. Koppel, Inc. vs. Makati Rotary Club Foundation, Inc. Civil Law; Mines and Mining; Mining Act of 1995 (R.A. No. 7942); Arbitrators; Panel of Arbitrators of the Mines and Geosciences Bureau (PA-MGB); Jurisdiction; The Supreme Court pointed out to the provisions of R.A. No. 7942, or the Mining Act of 1995, which granted the PA-MGB with exclusive original jurisdiction only over mining disputes, i.e., disputes involving “rights to mining areas,” “mineral agreements or permits,” and “surface owners, occupants, claimholders or concessionaires” requiring the technical knowledge and experience of mining authorities in order to be resolved.— Gonzales decided the issue in the negative. In holding that the PAMGB was devoid of any jurisdiction to take cognizance of the complaint for arbitration, this Court pointed out to the provisions of R.A. No. 7942, or the Mining Act of 1995, which granted the PA-MGB with exclusive original jurisdiction only over mining disputes, i.e., disputes involving “rights to mining areas,” “mineral agreements or permits,” and “surface owners, occupants, claimholders or concessionaires” requiring the technical knowledge and experience of mining authorities in order to be resolved. Accordingly, since the complaint for arbitration in Gonzales did not raise mining disputes as contemplated under R.A. No. 7942 but only issues relating to the validity of certain mining related agreements, this Court held that such complaint could not be arbitrated before the PA-MGB. It is in this context that we made the pronouncement now in discussion: Arbitration before the Panel of Arbitrators is proper only when there is a disagreement between the parties as to some provisions of the contract between them, which needs the interpretation and the application of that particular knowledge and expertise possessed by members of that Panel. It is not proper when one of the parties repudiates the existence or validity of such contract or agreement on the ground of fraud or oppression as in this case. The validity of the contract cannot be subject of arbitration proceedings. Allegations of fraud and duress in the execution of a contract are matters within the jurisdiction of the ordinary courts of law. These questions are legal in nature and require the application and interpretation of laws and jurisprudence which is necessarily a judicial function.

Same; Doctrine of Separability; Under the doctrine of separability, an arbitration agreement is considered as independent of the main contract. Being a separate contract in itself, the arbitration agreement may thus be invoked regardless of the possible nullity or invalidity of the main contract.—Under the doctrine of separability, an arbitration agreement is considered as independent of the main contract. Being a separate contract in itself, the arbitration agreement may thus be invoked regardless of the possible nullity or invalidity of the main contract. Once again instructive is Cargill, wherein this Court held that, as a further consequence of the doctrine of separability, even the very party who repudiates the main contract may invoke its arbitration clause. Same; Arbitration; Mediation; “Mediation” and “Arbitration,” Distinguished.—The JDR framework is based on the processes of mediation, conciliation or early neutral evaluation which entails the submission of a dispute before a “JDR judge” who shall merely “facilitate settlement” between the parties in conflict or make a “nonbinding evaluation or assessment of the chances of each party’s case.” Thus in JDR, the JDR judge lacks the authority to render a resolution of the dispute that is binding upon the parties in conflict. In arbitration, on the other hand, the dispute is submitted to an arbitrator/s — a neutral third person or a group of thereof — who shall have the authority to render a resolution binding upon the parties. Same; Same; It is clear that under the law, the petitioner and the respondent should have been referred to arbitration pursuant to the arbitration clause of the 2005 Lease Contract.—It is clear that under the law, the instant unlawful detainer action should have been stayed; the petitioner and the respondent should have been referred to arbitration pursuant to the arbitration clause of the 2005 Lease Contract. The MeTC, however, did not do so in violation of the law — which violation was, in turn, affirmed by the RTC and Court of Appeals on appeal. 13. Gonzales vs. Climax Mining Ltd. Actions; Alternative Dispute Resolution; Arbitration; Forum Shopping; Pleadings and Practice; There is no forum shopping where one is a petition for certiorari which raises the issue of whether or not there was grave abuse of discretion while the other is a Petition to Compel for Arbitration seeking the implementation of the arbitration clause in

the agreement between the parties.— Petitioner claims that respondents are guilty of forum-shopping for failing to disclose before this Court that they had filed a Petition to Compel for Arbitration before the RTC of Makati City. However, it cannot be determined from petitioner’s mere allegations in the Petition that the Petition to Compel for Arbitration instituted by respondent Climax-Arimco, involves related causes of action and the grant of the same or substantially the same reliefs as those involved in the instant case. Petitioner did not attach copies of the Petition to Compel for Arbitration or any order or resolution of the RTC of Makati City related to that case. Furthermore, it can be gleaned from the nature of the two actions that the issues in the case before the RTC of Makati City and in the petition for certiorari before the Court of Appeals are different. A petition for certiorari raises the issue of whether or not there was grave abuse of discretion, while the Petition to Compel for Arbitration seeks the implementation of the arbitration clause in the agreement between the parties. Same; Same; Same; Mining Claims; Words and Phrases; A judicial question is a question that is proper for determination by the courts, as opposed to a moot question or one properly decided by the executive or legislative branch while a mining dispute is a dispute involving (a) rights to mining areas, (b) mineral agreements, FTAAs, or permits, and (c) surface owners, occupants and claimholders/concessionaires.—A judicial question is a question that is proper for determination by the courts, as opposed to a moot question or one properly decided by the executive or legislative branch. A judicial question is raised when the determination of the question involves the exercise of a judicial function; that is, the question involves the determination of what the law is and what the legal rights of the parties are with respect to the matter in controversy. On the other hand, a mining dispute is a dispute involving (a) rights to mining areas, (b) mineral agreements, FTAAs, or permits, and (c) surface owners, occupants and claimholders/concessionaires. Under Republic Act No. 7942 (otherwise known as the Philippine Mining Act of 1995), the Panel of Arbitrators has exclusive and original jurisdiction to hear and decide these mining disputes. The Court of Appeals, in its questioned decision, correctly stated that the Panel’s jurisdiction is limited only to those mining disputes which raise questions of fact or matters requiring the application of technological knowledge and experience.

Same; Same; Same; Same; The trend has been to make the adjudication of mining cases a purely administrative matter.—In Pearson v. Intermediate Appellate Court, this Court observed that the trend has been to make the adjudication of mining cases a purely administrative matter. Decisions of the Supreme Court on mining disputes have recognized a distinction between (1) the primary powers granted by pertinent provisions of law to the then Secretary of Agriculture and Natural Resources (and the bureau directors) of an executive or administrative nature, such as granting of license, permits, lease and contracts, or approving, rejecting, reinstating or canceling applications, or deciding conflicting applications, and (2) controversies or disagreements of civil or contractual nature between litigants which are questions of a judicial nature that may be adjudicated only by the courts of justice. This distinction is carried on even in Rep. Act No. 7942. Same; Same; Same; Same; Contracts; The resolution of the validity or voidness of the contracts remains a legal or judicial question as it requires the exercise of judicial function.—Whether the case involves void or voidable contracts is still a judicial question. It may, in some instances, involve questions of fact especially with regard to the determination of the circumstances of the execution of the contracts. But the resolution of the validity or voidness of the contracts remains a legal or judicial question as it requires the exercise of judicial function. It requires the ascertainment of what laws are applicable to the dispute, the interpretation and application of those laws, and the rendering of a judgment based thereon. Clearly, the dispute is not a mining conflict. It is essentially judicial. The complaint was not merely for the determination of rights under the mining contracts since the very validity of those contracts is put in issue. Same; Same; Same; Same; Same; The question of constitutionality is exclusively within the jurisdiction of the courts to resolve as this would clearly involve the exercise of judicial power and a Panel of Arbitrators does not have jurisdiction over such an issue since it does not involve the application of technical knowledge and expertise relating to mining.—The Complaint is also not what is contemplated by Rep. Act No. 7942 when it says the dispute should involve FTAAs. The Complaint is not exclusively within the jurisdiction of the Panel of Arbitrators just because, or for as long as, the dispute involves an FTAA. The Complaint raised the issue of the constitutionality of the FTAA, which is definitely a judicial question. The question of

constitutionality is exclusively within the jurisdiction of the courts to resolve as this would clearly involve the exercise of judicial power. The Panel of Arbitrators does not have jurisdiction over such an issue since it does not involve the application of technical knowledge and expertise relating to mining. This the Panel of Arbitrators has even conceded in its Orders dated 18 October 2001 and 25 June 2002. At this juncture, it is worthy of note that in a case, which was resolved only on 1 December 2004, this Court upheld the validity of the FTAA entered into by the Republic of the Philippines and WMC (Philippines), Inc. and constitutionality of Rep. Act No. 7942 and DENR Administrative Order 96-40. In fact, the Court took the case on an original petition, recognizing “the exceptional character of the situation and the paramount public interest involved, as well as the necessity for a ruling to put an end to the uncertainties plaguing the mining industry and the affected communities as a result of doubts case upon the constitutionality and validity of the Mining Act, the subject FTAA and future FTAAs, and the need to avert a multiplicity of suits.” Same; Same; Same; Same; Same; Arbitration before the Panel of Arbitrators is proper only when there is a disagreement between the parties as to some provisions of the contract between them, which needs the interpretation and the application of that particular knowledge and expertise possessed by members of that Panel—it is not proper when one of the parties repudiates the existence or validity of such contract or agreement on the ground of fraud or oppression.— Arbitration before the Panel of Arbitrators is proper only when there is a disagreement between the parties as to some provisions of the contract between them, which needs the interpretation and the application of that particular knowledge and expertise possessed by members of that Panel. It is not proper when one of the parties repudiates the existence or validity of such contract or agreement on the ground of fraud or oppression as in this case. The validity of the contract cannot be subject of arbitration proceedings. Allegations of fraud and duress in the execution of a contract are matters within the jurisdiction of the ordinary courts of law. These questions are legal in nature and require the application and interpretation of laws and jurisprudence which is necessarily a judicial function. Same; Same; Same; Same; The question of validity of the contract containing the agreement to submit to arbitration will affect the applicability of the arbitration clause itself—a party cannot rely on the

contract and claim rights or obligations under it and at the same time impugn its existence or validity.—We agree that the case should not be brought under the ambit of the Arbitration Law, but for a different reason. The question of validity of the contract containing the agreement to submit to arbitration will affect the applicability of the arbitration clause itself. A party cannot rely on the contract and claim rights or obligations under it and at the same time impugn its existence or validity. Indeed, litigants are enjoined from taking inconsistent positions. As previously discussed, the complaint should have been filed before the regular courts as it involved issues which are judicial in nature. 14. Cargill Philippines, Inc. vs. San Fernando Regala Trading, Inc. Arbitration; Alternative Dispute Resolution; Arbitration, as an alternative mode of settling disputes, has long been recognized and accepted in our jurisdiction.—Arbitration, as an alternative mode of settling disputes, has long been recognized and accepted in our jurisdiction. R.A. No. 876 authorizes arbitration of domestic disputes. Foreign arbitration, as a system of settling commercial disputes of an international character, is likewise recognized. The enactment of R.A. No. 9285 on April 2, 2004 further institutionalized the use of alternative dispute resolution systems, including arbitration, in the settlement of disputes. Same; Same; Contracts; Submission to arbitration is a contract and a clause in a contract providing that all matters in dispute between the parties shall be referred to arbitration is a contract.—A contract is required for arbitration to take place and to be binding. Submission to arbitration is a contract and a clause in a contract providing that all matters in dispute between the parties shall be referred to arbitration is a contract. The provision to submit to arbitration any dispute arising therefrom and the relationship of the parties is part of the contract and is itself a contract. Same; Same; Same; An arbitration agreement which forms part of the main contract shall not be regarded as invalid or nonexistent just because the main contract is invalid or did not come into existence, since the arbitration agreement shall be treated as a separate agreement independent of the main contract.—Applying the Gonzales ruling, an arbitration agreement which forms part of the main contract shall not be regarded as invalid or non-existent just because the main

contract is invalid or did not come into existence, since the arbitration agreement shall be treated as a separate agreement independent of the main contract. To reiterate a contrary ruling would suggest that a party’s mere repudiation of the main contract is sufficient to avoid arbitration and that is exactly the situation that the separability doctrine sought to avoid. Thus, we find that even the party who has repudiated the main contract is not prevented from enforcing its arbitration clause. 15. Uy vs. Public Estates Authority Construction Industry; Alternative Dispute Resolution; Arbitration; Construction Industry Arbitration Commission (CIAC); Appeals; Appeals from judgment of the Construction Industry Arbitration Commission (CIAC) shall be taken to the Court of Appeals (CA) by filing a petition for review within fifteen (15) days from the receipt of the notice of award, judgment, final order or resolution, or from the date of its last publication if publication is required by law for its effectivity, or of the denial of petitioner’s motion for new trial or reconsideration.—Appeals from judgment of the CIAC shall be taken to the CA by filing a petition for review within fifteen (15) days from the receipt of the notice of award, judgment, final order or resolution, or from the date of its last publication if publication is required by law for its effectivity, or of the denial of petitioner’s motion for new trial or reconsideration duly filed in accordance with the governing law of the court or agency a quo. 16. Shinryo (Philippines) Company, Inc. vs. RPN Incorporated Appeals; Administrative Law; Alternative Dispute Resolution (ADR); Construction Industry; It is settled that findings of fact of quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect, but also finality, especially when affirmed by the Court of Appeals; Factual findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal.— As reiterated by the Court in IBEX International, Inc. v. Government Service Insurance System, 603 SCRA 306 (2009), to wit: It is settled that findings of fact of quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect, but also finality, especially when affirmed by the Court of Appeals. In particular, factual findings of construction arbitrators are

final and conclusive and not reviewable by this Court on appeal. This rule, however, admits of certain exceptions. In Uniwide Sales Realty and Resources Corporation v. Titan-Ikeda Construction and Development Corporation, 511 SCRA 335 (2006), we said: In David v. Construction Industry and Arbitration Commission, 435 SCRA 654 (2004), we ruled that, as exceptions, factual findings of construction arbitrators may be reviewed by this Court when the petitioner proves affirmatively that: (1) the award was procured by corruption, fraud or other undue means; (2) there was evident partiality or corruption of the arbitrators or any of them; (3) the arbitrators were guilty of misconduct in refusing to hear evidence pertinent and material to the controversy; (4) one or more of the arbitrators were disqualified to act as such under Section nine of Republic Act No. 876 and willfully refrained from disclosing such disqualifications or of any other misbehavior by which the rights of any party have been materially prejudiced; or (5) 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. Other recognized exceptions are as follows: (1) when there is a very clear showing of grave abuse of discretion resulting in lack or loss of jurisdiction as when a party was deprived of a fair opportunity to present its position before the Arbitral Tribunal or when an award is obtained through fraud or the corruption of arbitrators, (2) when the findings of the Court of Appeals are contrary to those of the CIAC, and (3) when a party is deprived of administrative due process. Arbitration; Mathematical computations, the propriety of arbitral awards, claims for “other costs” and “abandonment” are factual questions.—Again, these issues are purely factual and cannot be properly addressed in this petition for review on certiorari. In Hanjin Heavy Industries and Construction Co., Ltd. v. Dynamic Planners and Construction Corp., 553 SCRA 541 (2008), it was emphasized that mathematical computations, the propriety of arbitral awards, claims for “other costs” and “abandonment” are factual questions. Since the discussions of the CIAC and the CA in their respective Decisions show that its factual findings are supported by substantial evidence, there is no reason why this Court should not accord finality to said findings. Verily, to accede to petitioner’s request for a recalibration of its evidence, which had been thoroughly studied by both the CIAC and the CA would result in negating the objective of Executive Order No. 1008, which created an arbitration body to ensure the prompt and efficient settlement of disputes in the construction industry.

17. Heunghwa Industry Co., Ltd. vs. DJ Builders Corp. Courts; Certiorari; Administrative Law; Jurisdiction; Whether the subject matter falls within the exclusive jurisdiction of a quasijudicial agency is a question of law.—As a general rule, a petition for certiorari before a higher court will not prosper unless the inferior court has been given, through a motion for reconsideration, a chance to correct the errors imputed to it. This rule, though, has certain exceptions: (1) when the issue raised is purely of law, (2) when public interest is involved, or (3) in case of urgency. As a fourth exception, it has been held that the filing of a motion for reconsideration before availment of the remedy of certiorari is not a condition sine qua non when the questions raised are the same as those that have already been squarely argued and exhaustively passed upon by the lower court. The Court agrees with petitioner that the main issue of the petition for certiorari filed before the CA undoubtedly involved a question of jurisdiction as to which between the RTC and the CIAC had authority to hear the case. Whether the subject matter falls within the exclusive jurisdiction of a quasi-judicial agency is a question of law. Thus, given the circumstances present in the case at bar, the non-filing of a motion for reconsideration by petitioner to the CIAC Order should have been recognized as an exception to the rule. Alternative Dispute Resolution; Arbitration; Construction Industry Arbitration Commission (CIAC); Jurisdiction; Executive Order 1008 grants to the Construction Industry Arbitration Commission (CIAC) original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines.—Executive Order 1008 grants to the CIAC original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines. In the case at the bar, it is undeniable that the controversy involves a construction dispute as can be seen from the issues referred to the CIAC, to wit: 1. Manpower and equipment standby time; 2. Unrecouped mobilization expenses; 3. Retention; 4. Discrepancy of billings; and 5. Price escalation for fuel and oil usage. x x x x Same; Same; Same; Same; There are two acts which may vest the Construction Industry Arbitration Commission (CIAC) with jurisdiction over a construction dispute—one is the presence of an arbitration

clause in a construction contract, and the other is the agreement by the parties to submit the dispute to the Construction Industry Arbitration Commission (CIAC).—There are two acts which may vest the CIAC with jurisdiction over a construction dispute. One is the presence of an arbitration clause in a construction contract, and the other is the agreement by the parties to submit the dispute to the CIAC. The first act is applicable to the case at bar. The bare fact that the parties incorporated an arbitration clause in their contract is sufficient to vest the CIAC with jurisdiction over any construction controversy or claim between the parties. The rule is explicit that the CIAC has jurisdiction notwithstanding any reference made to another arbitral body. It is well-settled that jurisdiction is conferred by law and cannot be waived by agreement or acts of the parties. Thus, the contention of petitioner that it never authorized its lawyer to submit the case for arbitration must likewise fail. Petitioner argues that notwithstanding the presence of an arbitration clause, there must be a subsequent consent by the parties to submit the case for arbitration. To stress, the CIAC was already vested with jurisdiction the moment both parties agreed to incorporate an arbitration clause in the subcontract agreement. Thus, a subsequent consent by the parties would be superfluous and unnecessary. Same; Same; Same; Same; Where the jurisdiction of Construction Industry Arbitration Commission (CIAC) is properly invoked by the filing of a Request for Arbitration in accordance with these Rules, the failure despite due notice which amounts to a refusal of the Respondent to arbitrate, shall not stay the proceedings notwithstanding the absence or lack of participation of the respondent.—Under the CIAC rules, even without the participation of petitioner in the proceedings, the CIAC was still required to proceed with the hearing of the construction dispute. Section 4.2 of the CIAC rules provides: SECTION 4.2 Failure or refusal to arbitrate—Where the jurisdiction of CIAC is properly invoked by the filing of a Request for Arbitration in accordance with these Rules, the failure despite due notice which amounts to a refusal of the Respondent to arbitrate, shall not stay the proceedings notwithstanding the absence or lack of participation of the Respondent. In such case, CIAC shall appoint the arbitrator/s in accordance with these Rules. Arbitration proceedings shall continue, and the award shall be made after receiving the evidence of the Claimant. This Court finds that the CIAC simply followed its rules when it proceeded with the hearing of the dispute notwithstanding that petitioner refused to participate therein.

18. Tuna Processing, Inc. vs. Philippine Kingford, Inc. Statutory Construction; Between a general law and a special law, the latter prevails.—In several cases, this Court had the occasion to discuss the nature and applicability of the Corporation Code of the Philippines, a general law, viz-a-viz other special laws. Thus, in Koruga v. Arcenas, Jr., 590 SCRA 49 (2009), this Court rejected the application of the Corporation Code and applied the New Central Bank Act. It ratiocinated: Koruga’s invocation of the provisions of the Corporation Code is misplaced. In an earlier case with similar antecedents, we ruled that: “The Corporation Code, however, is a general law applying to all types of corporations, while the New Central Bank Act regulates specifically banks and other financial institutions, including the dissolution and liquidation thereof. As between a general and special law, the latter shall prevail—generalia specialibus non derogant.” (Emphasis supplied) Further, in the recent case of Hacienda Luisita, Incorporated v. Presidential Agrarian Reform Council, 653 SCRA 154 (2011), this Court held: Without doubt, the Corporation Code is the general law providing for the formation, organization and regulation of private corporations. On the other hand, RA 6657 is the special law on agrarian reform. As between a general and special law, the latter shall prevail—generalia specialibus non derogant. Following the same principle, the Alternative Dispute Resolution Act of 2004 shall apply in this case as the Act, as its title—An Act to Institutionalize the Use of an Alternative Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution, and for Other Purposes—would suggest, is a law especially enacted “to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own arrangements to resolve their disputes.” It specifically provides exclusive grounds available to the party opposing an application for recognition and enforcement of the arbitral award. Same; Alternative Dispute Resolution; Alternative Dispute Resolution Act of 2004; Conflict of Laws; The Alternative Dispute Resolution Act of 2004 complies with international obligations under the New York Convention and the Model Law.—Inasmuch as the Alternative Dispute Resolution Act of 2004, a municipal law, applies in the instant petition, we do not see the need to discuss compliance with international obligations under the New York Convention and the Model Law. After

all, both already form part of the law. In particular, the Alternative Dispute Resolution Act of 2004 incorporated the New York Convention in the Act by specifically providing: SEC. 42. Application of the New York Convention.—The New York Convention shall govern the recognition and enforcement of arbitral awards covered by the said Convention. xxx SEC. 45. Rejection of a Foreign Arbitral Award.—A party to a foreign arbitration proceeding may oppose an application for recognition and enforcement of the arbitral award in accordance with the procedural rules to be promulgated by the Supreme Court only on those grounds enumerated under Article V of the New York Convention. Any other ground raised shall be disregarded by the regional trial court. It also expressly adopted the Model Law, to wit: Sec. 19. Adoption of the Model Law on International Commercial Arbitration. International commercial arbitration shall be governed by the Model Law on International Commercial Arbitration (the “Model Law”) adopted by the United Nations Commission on International Trade Law on June 21, 1985 xxx.” Alternative Dispute Resolution; Alternative Dispute Resolution Act of 2004; Conflict of Laws; Sec. 45 of the Alternative Dispute Resolution Act of 2004 provides that the opposing party in an application for recognition and enforcement of the arbitral award may raise only those grounds that were enumerated under Article V of the New York Convention.—Does a foreign corporation not licensed to do business in the Philippines have legal capacity to sue under the provisions of the Alternative Dispute Resolution Act of 2004? We answer in the affirmative. Sec. 45 of the Alternative Dispute Resolution Act of 2004 provides that the opposing party in an application for recognition and enforcement of the arbitral award may raise only those grounds that were enumerated under Article V of the New York Convention, to wit: Article V 1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that: (a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or (b) The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or (c) The

award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or (d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or (e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made. 2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that: (a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or (b) The recognition or enforcement of the award would be contrary to the public policy of that country. Clearly, not one of these exclusive grounds touched on the capacity to sue of the party seeking the recognition and enforcement of the award. Pertinent provisions of the Special Rules of Court on Alternative Dispute Resolution, which was promulgated by the Supreme Court, likewise support this position. Rule 13.1 of the Special Rules provides that “[a]ny party to a foreign arbitration may petition the court to recognize and enforce a foreign arbitral award.” The contents of such petition are enumerated in Rule 13.5. Capacity to sue is not included. Oppositely, in the Rule on local arbitral awards or arbitrations in instances where “the place of arbitration is in the Philippines,” it is specifically required that a petition “to determine any question concerning the existence, validity and enforceability of such arbitration agreement” available to the parties before the commencement of arbitration and/or a petition for “judicial relief from the ruling of the arbitral tribunal on a preliminary question upholding or declining its jurisdiction” after arbitration has already commenced should state “[t]he facts showing that the persons named as petitioner or respondent have legal capacity to sue or be sued.” Same; Same; Same; When a party enters into a contract containing a foreign arbitration clause and in fact submits itself to arbitration, it becomes bound by the contract, by the arbitration and by the result of arbitration, conceding thereby the capacity of the other party to enter

into the contract, participate in the arbitration and cause the implementation of the result.— Indeed, it is in the best interest of justice that in the enforcement of a foreign arbitral award, we deny availment by the losing party of the rule that bars foreign corporations not licensed to do business in the Philippines from maintaining a suit in our courts. When a party enters into a contract containing a foreign arbitration clause and, as in this case, in fact submits itself to arbitration, it becomes bound by the contract, by the arbitration and by the result of arbitration, conceding thereby the capacity of the other party to enter into the contract, participate in the arbitration and cause the implementation of the result. Although not on all fours with the instant case, also worthy to consider is the wisdom of then Associate Justice Flerida Ruth P. Romero in her Dissenting Opinion in Asset Privatization Trust v. Court of Appeals, 300 SCRA 579 (1998), to wit: xxx Arbitration, as an alternative mode of settlement, is gaining adherents in legal and judicial circles here and abroad. If its tested mechanism can simply be ignored by an aggrieved party, one who, it must be stressed, voluntarily and actively participated in the arbitration proceedings from the very beginning, it will destroy the very essence of mutuality inherent in consensual contracts. Same; Same; Same; On the matter of capacity to sue, a foreign arbitral award should be respected not because it is favored over domestic laws and procedures, but because Republic Act No. 9285 has certainly erased any conflict of law question.—Clearly, on the matter of capacity to sue, a foreign arbitral award should be respected not because it is favored over domestic laws and procedures, but because Republic Act No. 9285 has certainly erased any conflict of law question. Finally, even assuming, only for the sake of argument, that the court a quo correctly observed that the Model Law, not the New York Convention, governs the subject arbitral award, petitioner may still seek recognition and enforcement of the award in Philippine court, since the Model Law prescribes substantially identical exclusive grounds for refusing recognition or enforcement. Premises considered, petitioner TPI, although not licensed to do business in the Philippines, may seek recognition and enforcement of the foreign arbitral award in accordance with the provisions of the Alternative Dispute Resolution Act of 2004. Same; Same; Same; Foreign Corporations; The foreign corporation’s capacity to sue in the Philippines is not material insofar as the recognition and enforcement of a foreign arbitral award is

concerned.—There is no need to consider respondent’s contention that petitioner TPI improperly raised a question of fact when it posited that its act of entering into a MOA should not be considered “doing business” in the Philippines for the purpose of determining capacity to sue. We reiterate that the foreign corporation’s capacity to sue in the Philippines is not material insofar as the recognition and enforcement of a foreign arbitral award is concerned. 19. F.F. Cruz & Co., Inc. vs. HR Construction Corp. Construction Contracts; Construction Industry Arbitration Commission (CIAC); Jurisdiction; Arbitration; Appeals; Executive Order (E.O.) No. 1008 vests upon the Construction Industry Arbitration Commission (CIAC) original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines; The arbitral award of Construction Industry Arbitration Commission (CIAC) shall be final and inappealable except on questions of law which shall be appealable to the Supreme Court.—Executive Order (E.O.) No. 1008 vests upon the CIAC original and exclusive Jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines. Under Section 19 of E.O. No. 1008, the arbitral award of CIAC “shall be final and inappealable except on questions of law which shall be appealable to the Supreme Court.” In Hi-Precision Steel Center, Inc. v. Lim Kim Steel Builders, Inc., 228 SCRA 397 (1993), we explained raison d’ etre for the rule on finality of the CIAC’s arbitral award in this wise: Voluntary arbitration involves the reference of a dispute to an impartial body, the members of which are chosen by the parties themselves, which parties freely consent in advance to abide by the arbitral award issued after proceedings where both parties had the opportunity to be heard. The basic objective is to provide a speedy and inexpensive method of settling disputes by allowing the parties to avoid the formalities, delay, expense and aggravation which commonly accompany ordinary litigation, especially litigation which goes through the entire hierarchy of courts. Executive Order No. 1008 created an arbitration facility to which the construction industry in the Philippines can have recourse. The Executive Order was enacted to encourage the early and expeditious settlement of disputes in the construction industry, a public policy the implementation of which is necessary and important for the realization of national development goals. Aware of the objective of voluntary arbitration in the labor field,

in the construction industry, and in any other area for that matter, the Court will not assist one or the other or even both parties in any effort to subvert or defeat that objective for their private purposes. The Court will not review the factual findings of an arbitral tribunal upon the artful allegation that such body had “misapprehended the facts” and will not pass upon issues which are, at bottom, issues of fact, no matter how cleverly disguised they might be as “legal questions.” The parties here had recourse to arbitration and chose the arbitrators themselves; they must have had confidence in such arbitrators. x x x. 20. Estate of Nelson R. Dulay vs. Aboitiz Jebsen Maritime, Inc. Labor Law; Arbitration; It is settled that when the parties have validly agreed on a procedure for resolving grievances and to submit a dispute to voluntary arbitration then that procedure should be strictly observed.—In any case, the Court agrees with petitioner’s contention that the CBA is the law or contract between the parties. Article 13.1 of the CBA entered into by and between respondent GCI and AMOSUP, the union to which petitioner belongs, provides as follows: The Company and the Union agree that in case of dispute or conflict in the interpretation or application of any of the provisions of this Agreement, or enforcement of Company policies, the same shall be settled through negotiation, conciliation or voluntary arbitration. The Company and the Union further agree that they will use their best endeavor to ensure that any dispute will be discussed, resolved and settled amicably by the parties hereof within ninety (90) days from the date of filing of the dispute or conflict and in case of failure to settle thereof any of the parties retain their freedom to take appropriate action. (Emphasis supplied) From the foregoing, it is clear that the parties, in the first place, really intended to bring to conciliation or voluntary arbitration any dispute or conflict in the interpretation or application of the provisions of their CBA. It is settled that when the parties have validly agreed on a procedure for resolving grievances and to submit a dispute to voluntary arbitration then that procedure should be strictly observed. Same; Same; Collective Bargaining Agreements; It is only in the absence of a collective bargaining agreement that parties may opt to submit the dispute to either the National Labor Relations Commission (NLRC) or to voluntary arbitration.—It is only in the absence of a collective bargaining agreement that parties may opt to submit the dispute to either the NLRC or to voluntary arbitration. It is elementary

that rules and regulations issued by administrative bodies to interpret the law which they are entrusted to enforce, have the force of law, and are entitled to great respect. Such rules and regulations partake of the nature of a statute and are just as binding as if they have been written in the statute itself. In the instant case, the Court finds no cogent reason to depart from this rule. Same; Same; Conciliation; Constitutional Law; Under the third paragraph, Section 3, Article XIII, of the Constitution, “[t]he State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.”—No less than the Philippine Constitution provides, under the third paragraph, Section 3, Article XIII, thereof that “[t]he State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.” 21. Agbayani vs. Court of Appeals Same; Arbitration; The compulsory process of arbitration is a precondition for the filing of the complaint in court.—The compulsory process of arbitration is a pre-condition for the filing of the complaint in court. Where the complaint (a) did not state that it is one of excepted cases, or (b) it did not allege prior availment of said conciliation process, or (c) did not have a certification that no conciliation had been reached by the parties, the case should be dismissed. 23. RCBC Capital Corporation vs. Banco de Oro Unibank, Inc. Alternative Dispute Resolution; A review brought to the Supreme Court under the Special Alternative Dispute Resolution (ADR) Rules is not a matter of right. Rule 19.36 of said Rules specified the conditions for the exercise of this Court’s discretionary review of the Court of Appeal’s decision.―At the outset, it must be stated that a review brought to this Court under the Special ADR Rules is not a matter of right. Rule 19.36 of said Rules specified the conditions for the exercise of this Court’s discretionary review of the CA’s decision. 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: a. Failed to apply the applicable standard or test for judicial review prescribed in these Special ADR Rules in arriving at its decision resulting in substantial prejudice to the aggrieved party; b. Erred in upholding a final order or decision despite the lack of jurisdiction of the court that rendered such final order or decision; c. Failed to apply any provision, principle, policy or rule contained in these Special ADR Rules resulting in substantial prejudice to the aggrieved party; and d. Committed 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 supplied) Same; Evident Partiality; Evident partiality in its common definition thus implies “the existence of signs and indications that must lead to an identification or inference” of partiality.―Evident partiality is not defined in our arbitration laws. As one of the grounds for vacating an arbitral award under the Federal Arbitration Act (FAA) in the United States (US), the term “encompasses both an arbitrator’s explicit bias toward one party and an arbitrator’s inferred bias when an arbitrator fails to disclose relevant information to the parties.” Evident partiality in its common definition thus implies “the existence of signs and indications that must lead to an identification or inference” of partiality. Despite the increasing adoption of arbitration in many jurisdictions, there seems to be no established standard for determining the existence of evident partiality. In the US, evident partiality “continues to be the subject of somewhat conflicting and inconsistent judicial

interpretation when an arbitrator’s failure to disclose prior dealings is at issue.” Same; Same; The plurality opinion written by Justice Black in Commonwealth Coatings Corp. v. Continental Casualty Co., et al., 393 U.S. 145 (1968), laid down the rule that the arbitrators must disclose to the parties “any dealings that might create an impression of possible bias,” and that underlying such standard is “the premise that any tribunal permitted by law to try cases and controversies not only must be unbiased but also must avoid even the appearance of bias.”―The first case to delineate the standard of evident partiality in arbitration proceedings was Commonwealth Coatings Corp. v. Continental Casualty Co., et al. decided by the US Supreme Court in 1968. The Court therein addressed the issue of whether the requirement of impartiality applies to an arbitration proceeding. The plurality opinion written by Justice Black laid down the rule that the arbitrators must disclose to the parties “any dealings that might create an impression of possible bias,” and that underlying such standard is “the premise that any tribunal permitted by law to try cases and controversies not only must be unbiased but also must avoid even the appearance of bias.” In a separate concurring opinion, Justice White joined by Justice Marshall, remarked that “[t]he Court does not decide today that arbitrators are to be held to the standards of judicial decorum of Article III judges, or indeed of any judges.” He opined that arbitrators should not automatically be disqualified from an arbitration proceeding because of a business relationship where both parties are aware of the relationship in advance, or where the parties are unaware of the circumstances but the relationship is trivial. However, in the event that the arbitrator has a “substantial interest” in the transaction at hand, such information must be disclosed. Same; Alternative dispute resolution methods or Alternative Dispute Resolution (ADRs)―like arbitration, mediation, negotiation and conciliation―are encouraged by this Court. By enabling parties to resolve their disputes amicably, they provide solutions that are less time-consuming, less tedious, less confrontational, and more productive of goodwill and lasting relationship.―Alternative dispute resolution methods or ADRs―like arbitration, mediation, negotiation and conciliation―are encouraged by this Court. By enabling parties to resolve their disputes amicably, they provide solutions that are less time-consuming, less tedious, less confrontational, and more productive of goodwill and lasting relationship. Institutionalization of

ADR was envisioned as “an important means to achieve speedy and impartial justice and declog court dockets.” The most important feature of arbitration, and indeed, the key to its success, is the public’s confidence and trust in the integrity of the process. For this reason, the law authorizes vacating an arbitral award when there is evident partiality in the arbitrators.