[G.R. No. 129916.

March 26, 2001] one (1) arbitrator who shall, in turn, nominate and elect who among
MAGELLAN CAPITAL MANAGEMENT CORPORATION and MAGELLAN them shall be the chairman of the committee. Any such arbitration,
CAPITAL HOLDINGS CORPORATION, petitioners, vs. ROLANDO M. including the rendering of an arbitration award, shall take place in Metro
ZOSA and HON. JOSE P. SOBERANO, JR., in his capacity as Presiding Manila. The arbitrators shall interpret this Agreement in accordance with the
Judge of Branch 58 of the Regional Trial Court Of Cebu, 7th Judicial substantive laws of the Republic of the Philippines. The arbitrators shall have
Region, respondents. no power to add to, subtract from or otherwise modify the terms of
Agreement or to grant injunctive relief of any nature. Any judgment upon
the award of the arbitrators may be entered in any court having jurisdiction
FACTS: March 18, 1994 – a management agreement were entered between thereof, with costs of the arbitration to be borne equally by the parties,
Magellan Capital Holdings Corporation [MCHC] and Magellan Capital except that each party shall pay the fees and expenses of its own counsel
Management Corporation [MCMC] the latter being appointed as the manager in the arbitration.
for the operation of its business and affairs of the prior.
November 10, 1995 - respondent Zosa designated his brother, Atty. Francis
MCHC, MCMC, and private respondent Rolando M. Zosa entered into an
Zosa, as his representative while MCHC designated Atty. Inigo S.
"Employment Agreement" designating Zosa as President and Chief
Fojas[10] and MCMC nominated Atty. Enrique I. Quiason[11] as their
Executive Officer of MCHC.
respective representatives in the arbitration panel.
Under the "Employment Agreement", the term of respondent Zosa's
employment shall be co-terminous with the management agreement, or But instead of submitting the dispute to arbitration, respondent Zosa, on
until March 1996,[2] unless sooner terminated pursuant to the provisions of April 17, 1996, filed an action for damages against petitioners before the
the Employment Agreement. RTC OF CEBU[12] to enforce his benefits under the Employment Agreement.
May 10, 1995 - majority of MCHCs Board of Directors decided not to re-elect July 3, 1996 - petitioners filed a motion to dismiss[13] arguing that (1) the
respondent Zosa as President and Chief Executive Officer of MCHC on trial court has no jurisdiction over the instant case since respondent Zosa's
account of loss of trust and confidence[4] arising from alleged violation of claims should be resolved through arbitration pursuant to Section 23 of
the resolution issued by MCHC's board of directors and of the non- the Employment Agreement with petitioners; and (2) the venue is
competition clause of the Employment Agreement.[5] Nevertheless, improperly laid since respondent Zosa, like the petitioners, is a resident of
respondent Zosa was elected to a new position as MCHC's Vice- Pasig City thus the case is cognizable by RTC of PASIG.
Chairman/Chairman for New Ventures Development.
July 5, 1996 - respondent Zosa filed an amended complaint
September 26, 1995 - Zosa communicated his resignation for good reason
from the position of Vice-Chairman under paragraph 7 of the Employment August 1, 1996 - RTC Branch 58 of Cebu City issued an Order denying
Agreement on the ground that said position had less responsibility and petitioners motion to dismiss upon the findings that (1) the validity and
scope than President and Chief Executive Officer. He demanded that he be legality of the arbitration provision can only be determined after trial on the
given termination benefits. merits; and (2) the amount of damages claimed, which is over P100,000.00,
falls within the jurisdiction of the RTC.
October 20, 1995 - MCHC communicated its non-acceptance of respondent
Zosa's resignation for good reason, but instead terminated him for cause. MR: Denied
He was further advised that he shall have no further rights under the said
August 22, 1996 - in compliance with the earlier order of the court directing
Agreement or any claims against the Manager or the Corporation except the
petitioners to file responsive pleading to the amended complaint, petitioners
right to receive within thirty (30) days from November 19, 1995.
filed their Answer Ad Cautelam with counterclaim reiterating their position
Disagreeing with the position taken by petitioners, respondent Zosa invoked that the dispute should be settled through arbitration and the court had no
the Arbitration Clause of the Employment Agreement. jurisdiction over the nature of the action.

October 21, 1996 - the trial court issued its pre-trial order declaring the pre-
23. Arbitration. In the event that any dispute, controversy or claim arises trial stage terminated and setting the case for hearing. The order states:
out of or under any provisions of this Agreement, then the parties hereto
agree to submit such dispute, controversy or claim to arbitration as set forth
ISSUES:
in this Section and the determination to be made in such arbitration shall be
final and binding. Arbitration shall be effected by a panel of three
arbitrators. The Manager, Employee and Corporation shall designate
The Court will only resolve one issue in so far as this case is concerned, to one for the plaintiff, one for the defendants, and the third to be chosen by
wit: both the plaintiff and defendants. The other terms, conditions and
stipulations in the arbitration clause remain in force and effect."[23]
Whether or not the Arbitration Clause contained in Sec.23 of the
Employment Agreement is void and of no effect: and, if it is void and of no Hence the current petition for review on certiorari, under Rule 45 of the.
effect, whether or not the plaintiff is entitled to damages in accordance with
his complaint and the defendants in accordance with their counterclaim. ISSUE/S:

It is understood, that in the event the arbitration clause is valid and binding WON SEC has jurisdiction over the case - Negative
between the parties, the parties shall submit their respective claim to the WON Article 23 of the Employment Agreement or the Arbitration Clause
Arbitration Committee in accordance with the said arbitration clause, in Valid - Affirmative
which event, this case shall be deemed dismissed.[18]
HELD:
November 18, 1996, - petitioners filed their Motion Ad Cautelam for the The controversy does not in any way involve the
Correction, Addition and Clarification of the Pre-trial Order dated November
election/appointment of officers of petitioner MCHC, as claimed by
15 1996.
petitioners in their assignment of errors. Respondent Zosas amended
November 28, 1996 – the court denied the Motion Ad Cautelam. complaint focuses heavily on the illegality of the Employment
Agreements Arbitration Clause initially invoked by him in seeking his
Petitioners MCMC and MCHC filed a Motion Ad Cautelam for the parties to
termination benefits under Section 8 of the employment contract. And under
file their Memoranda to support their respective stand on the issue of the
Republic Act No. 876, otherwise known as the Arbitration Law, it is the
validity of the arbitration clause contained in the Employment Agreement.
regional trial court which exercises jurisdiction over questions relating to
December 13, 1996 - trial court denied the motion of petitioners MCMC arbitration.
and MCHC.

January 17, 1997 - petitioners MCMC and MCHC filed a petition for certiorari That jurisdiction lies with the SEC, which is raised for the first time
and prohibition under Rule 65 of the Rules of Court with the Court of in this petition, suffice it to state that the Amended Complaint squarely put
Appeals, questioning the trial court orders dated August 1, 1996, September in issue the question whether the Arbitration Clause is valid and effective
5, 1996, and December 13, 1996. between the parties. Although the controversy which spawned the action
concerns the validity of the termination of the service of a corporate officer,
CA: rendered a decision, RTC is directed to resolve the issue on the validity the issue on the validity and effectivity of the arbitration clause is
or effectivity of the arbitration clause in the Employment Agreement, giving determinable by the regular courts, and do not fall within the exclusive and
due course to the petition. original jurisdiction of the SEC.
Petitioners filed a motion for partial reconsideration of the CA decision
praying (1) for the dismissal of the case in the trial court, on the ground of The determination and validity of the agreement is not a matter
lack of jurisdiction, and (2) that the parties be directed to submit their intrinsically connected with the regulation and internal affairs of
dispute to arbitration in accordance with the Employment Agreement. corporations it is rather an ordinary case to be decided in accordance with
the general laws, and do not require any particular expertise or training to
CA: denied the motion for partial reconsideration for lack of merit. interpret and apply.

July 18, 1997 - In compliance with the CA decision, RTC rendered a decision
declaring the arbitration clause in the Employment Agreement partially void Decision of the CA affirming the trial courts assumption of
and of no effect. Dispositive reads as. jurisdiction over the case has become the law of the case which now binds
the petitioners. The law of the case doctrine has been defined as a term
WHEREFORE, premises considered, judgment is hereby rendered partially applied to an established rule that when an appellate court passes on a
declaring the arbitration clause of the Employment Agreement void and of question and remands the cause to the lower court for further proceedings,
no effect, only insofar as it concerns the composition of the panel of the question there settled becomes the law of the case upon subsequent
arbitrators, and directing the parties to proceed to arbitration in accordance appeal.[27] CAs decision has already attained finality as evidenced by a
with the Employment Agreement under the panel of three (3) arbitrators, Resolution of this Court ordering entry of judgment of said case.
 Petitioners, therefore, are barred from challenging anew, through MCHC) [herein petitioners] and the third arbitrator to be chosen by the
another remedial measure and in any other forum, the authority of the plaintiff [defendant Zosa] and defendants [petitioners].
regional trial court to resolve the validity of the arbitration clause.
There is no quarrel that both defendants are entirely two different This issue of estoppel, well- settled is the rule that issues not raised below
corporations with personalities distinct and separate from each other and cannot be resolved on review in higher courts.[31] Secondly, employment
that a corporation has a personality distinct and separate from those agreements such as the one at bar are usually contracts of adhesion. Any
persons composing the corporation as well as from that of any other legal ambiguity in its provisions is generally resolved against the party who
entity to which it may be related. drafted the document.
But as the defendants [herein petitioner] represent the same interest, it A contract of employment, being a contract of adhesion, is ambiguous, any
could never be expected, in the arbitration proceedings, that they would not ambiguity therein should be construed strictly against the party who
protect and preserve their own interest, much less, would both or either prepared it. And, finally, respondent Zosa never submitted himself to
favor the interest of the plaintiff. The arbitration law, as all other laws, is arbitration proceedings (as there was none yet) before bewailing the
intended for the good and welfare of everybody. In fact, what is being composition of the panel of arbitrators. He in fact, lost no time in assailing
challenged by the plaintiff herein is not the law itself but the provision of the the arbitration clause upon realizing the inequities that may mar the
Employment Agreement based on the said law, which is the arbitration arbitration proceedings if the existing line-up of arbitrators remained
clause but only as regards the composition of the panel of unchecked.
arbitrators. Arbitration Clause state: We need only to emphasize in closing that arbitration proceedings are
designed to level the playing field among the parties in pursuit of a mutually
It appears that the two (2) defendants [petitioners] (MCMC and MCHC) have acceptable solution to their conflicting claims. Any arrangement or scheme
one (1) arbitrator each to compose the panel of three (3) arbitrators. As the that would give undue advantage to a party in the negotiating table is
anathema to the very purpose of arbitration and should, therefore, be
defendant MCMC is the Manager of defendant MCHC, its decision or vote in
resisted.
the arbitration proceeding would naturally and certainly be in favor of its
employer and the defendant MCHC would have to protect and preserve its WHEREFORE, premises considered, the petition is hereby DISMISSED
own interest; hence, the two (2) votes of both defendants (MCMC and and the decision of the trial court dated July 18, 1997 is AFFIRMED.
MCHC) would certainly be against the lone arbitrator for the plaintiff [herein
SO ORDERED.
defendant].Hence, apparently, plaintiff [defendant] would never get or
receive justice and fairness in the arbitration proceedings from the panel of
arbitrators as provided in the aforequoted arbitration clause. In fairness and Magellan Capital Management Corp vs Zosa
justice to the plaintiff [defendant], the two defendants (MCMC and
MCHC)[herein petitioners] which represent the same interest should be FACTS:
considered as one and should be entitled to only one arbitrator to represent
them in the arbitration proceedings. Accordingly, the arbitration clause,
Under a management agreement, Magellan Capital Holdings
insofar as the composition of the panel of arbitrators is concerned should be
(MCHC) appointed Magellan Capital Management Corp (MCMC) as
declared void and of no effect, because the law says, Any clause giving one manager for the operation of its business and affairs.
of the parties power to choose more arbitrators than the other is void and
of no effect.
Pursant thereto, Zosa, MCHC and MCMC entered into an
"EMPLOYMENT AGREEMENT" where Zosa was designated as
President and CEO of MCMC, and which provided that his term is co-
terminous w/ the management agreement (until March 1996)
The dispute or controversy between the defendants (MCMC and MCHC) unless sooner terminated.
[herein petitioners] and the plaintiff [herein defendant] should be settled in
the arbitration proceeding in accordance with the Employment Agreement, The dispute arose when Zosa was not re-elected by MCHC's Board
but under the panel of three (3) arbitrators, one (1) arbitrator to represent of Directors on May 1995 for account of loss of trust and confidence
the plaintiff, one (1) arbitrator to represent both defendants (MCMC and arising from alleged violation of the resolution issued by MCHC's
board of directors and of the non-competition clause of the -MTD:
Employment Agreement. Nevertheless, respondent Zosa was a. RTC had no jurisdiction: should resort to Arbitration
elected to a new position as MCHC's Vice-
Chairman/Chairman for New Ventures Development.
b. Venue improperly laid: all the parties are residents of Pasig City
so the proper venue should be RTC Pasig, w/o admitting that Zosa
-September 1995: Zosa resigned for good reason from
had a COA.
VChair position under PAR7, EMPLOYMENT AGREEMENT: position
had less responsibility and scope than President and Chief Executive
Officer. Demanded that he be given termination benefits as provided *Zosa filed Amended Complaint
in the Employment Agreement. Instead, he was terminated for
cause (breach of SECTION 12) and was further advised that he *RTC: MTD DISMISSED
shall have no further rights under the EMPLOYMENT
AGREEMENT. His demand for termination benefits were granted a. Validity and legality of the arbitration provision can only be
however. determined after trial on the merits

RESORT TO ARBITRATION b. Amount of damages claimed (P100k) falls w/n jurisdiction of RTC
MR DENIED. So MCMC and MCHC filed ANSWER AD CAUTELAM (w/
Disagreeing with the position taken by petitioners, respondent same arguments as MTD).MCMC and MCHC still insisted that the
Zosa invoked the Arbitration Clause of the Employment dispute is arbitrable, thus the RTC should dismiss it. As the RTC
Agreement, to wit: denied their motions and wanted to proceed with trial on the merits,
they filed a R65 Petition for Certiorari before CA
"23. Arbitration. In the event that any dispute, controversy or claim
arises out of or under any provisions of this Agreement, then the *CA: RTC directed to resolve the issue on the validity or effectivity
parties hereto agree to submit such dispute, controversy or claim to of the arbitration clause + suspend trial on the merits until the
arbitration as set forth in this Section and the determination to be validity of the arbitration clause is resolved. MCMC and MCHC filed
made in such arbitration shall be final and binding. Arbitration shall MOTIONS FOR PARTIAL RECON. Denied for lack of merit.
be effected by a panel of three arbitrators.
*RTC: rendered arbitration clause PARTIALLY VOID insofar as it
The Manager, Employee and Corporation shall designate one (1) concerns the composition of the panel of arbitrators (each of the
arbitrator who shall, in turn, nominate and elect who among parties elect 1 arbitrator); directed the parties to proceed w/
them shall be the chairman of the committee. Any such arbitration with 3 arbitrators, 1 for Zosa, 1 for MCMC and MCHC, and
arbitration, including the rendering of an arbitration award, shall the 3rd to be selected by both parties.
take place in Metro Manila. The arbitrators shall interpret this
Agreement in accordance with the substantive laws of the -to appeal, MCMC and MCHC filed R45 Petition: RTC erred
Republic of the Philippines. The arbitrators shall have no power to in ruling that the manner of selection of the panel arbitrators
add to, subtract from or otherwise modify the terms of is void insofar as MCMC and MCHC represent the same interest
Agreement or to grant injunctive relief of any nature. Any and that Zosa is estopped from questioning the validity of the
judgment upon the award of the arbitrators may be entered in any arbitration agreement as he already designated his own arbitrator.
court having jurisdiction thereof, with costs of the arbitration to be
borne equally by the parties, except that each party shall pay the
ISSUES:.
fees and expenses of its own counsel in the arbitration."

(1) WON the case should fall under SEC jurisdiction (apparently, this
-Zosa, MCMC and MCHC each designated their nominees for the arbitration was raised as an issue before the CA). NO.
panel BUT Zosa ABANDONED RESORT TO ARBITRATION AND FILED
AN ACTION FOR DAMAGES TO ENFORCE BENEFITS UNDER THE (2) WON TC erred in voiding the arbitration clause as it
EMPLOYMENT AGREEMENT before RTC Cebu. would work injustice (in all probability) to Zosa? NO.
(3) WON Zosa is estopped from assailing the validity of the (3) a. Issue of estoppel raised for the 1st time on appeal. Issues not
arbitration clause? NO raised in the pleadings

RULING: cannot be resolved on review in higher courts.

(1) The controversy does not in anyway involve the b. Employment agreements are contracts of adhesion. Any
election/appointment of officers of petitioner MCHC BUT THE ambiguity in its provision is generally resolved against the party
ILLEGALITY OF THE ARBITRATION CLAUSE IN THE who drafted the document.
EMPLOYMENT
CHA: But nothing is ambiguous in the arbitration clause. It may be
AGREEMENT. unfair but it's not ambiguous.

IT FALLS UNDER RTC. Under Republic Act No. 876, otherwise known c. Zosa never submitted himself to arbitration proceedings,
as the "Arbitration Law,"it is the regional trial court which exercises immediately assailed the arbitration clause upon realizing the
jurisdiction over questions relating to arbitration. inequities that may mar the arbitration proceedings...

Although the dispute stems from the validity of the termination of DISPOSITION: DISMISS PETITION. RTC AFFIRMED
the service of a corporate officer, the issue on the validity and
effectivity of the arbitration clause is determinable by the regular
courts, and do not fall within the exclusive and original jurisdiction
of the SEC.
OIL AND NATURAL GAS COMMISSION v CA

LAW OF THE CASE DOCTRINE: a term applied to an established rule

FACTS: This proceeding involves the enforcement of a foreign
that when an appellate court passes on a question and remands the
judgment rendered by the Civil Judge of Dehra Dun, India in favor
cause to the lower court for further proceedings, the question there
of the petitioner, against the private respondent, PACIFIC CEMENT
settled becomes the law of the case upon subsequent appeal. MCMC
COMPANY, INCORPORATED. The petitioner is a foreign corporation
and MCHC are therefore barred from challenging anew the
owned and controlled by the Government of India while the private
authority of the RTC to resolve the validity of the arbitration clause,
respondent is a private corporation duly organized and existing
or else guilty of forum shopping.
under the laws of the Philippines.

(2) -R45 Petition is limited to reviewing errors of law.-even if we

The conflict between the petitioner and the private respondent
review facts, RTC still correct:
rooted from the failure of the respondent to deliver 43,000 metric
tons of oil well cement to the petitioner even it had already received
*MCMC and MCHC represent the same interest. Though they are 2 payment and despite petitioner’s several demands. The petitioner
corporations w/ distinct personalities, they represent the same then informed the private respondent that it was referring its claim
interest. Thus, it would be expected that they would protect and to an arbitrator pursuant to Clause 16 of their contract which
preserve their own interest and neither would favor Zosa's stipulates that he venue for arbitration shall be at Dehra dun.
interest during arbitration. If the arbitration clause would be
followed, MCMC would have 1 arbitrator, MCHC would have another
The chosen arbitrator, one Shri N.N. Malhotra, resolved the dispute
arbitrator, and Zosa would have 1. But MCMC is the manager of
in favour of the petitioner setting forth the arbitral award. To enable
MCHC, MCHC would naturally favor its employer. Thus, their 2 votes
the petitioner to execute the above award, it filed a Petition before
would win vs. Zosa's lone vote.
the Court of the Civil Judge in Dehra Dun. India praying that the
decision of the arbitrator be made "the Rule of Court" in India. This
-A2045, NCC: "Any clause giving one of the parties power to choose was objected by the respondent but foreign court refused to admit
more arbitrators than the other is void and of no effect" (Article the private respondent's objections for failure to pay the required
2045, Civil Code). filing fees. Despite notice sent to the private respondent of the
foregoing order and several demands by the petitioner for
compliance therewith, the private respondent refused to pay the
amount adjudged by the foreign court as owing to the petitioner.

OIL GAS CASE

The petitioner filed a complaint with Branch 30 of the Regional Trial
Court (RTC) of Surigao City for the enforcement of the The private respondent bewails the presumed bias on the part of the
aforementioned judgment of the foreign court. The private arbitrator who was a former employee of the petitioner. This point deserves
respondent moved to dismiss the complaint. RTC dismissed the scant consideration in view of the following stipulation in the contract:
complaint for lack of a valid cause of action. The petitioner then
appealed to the respondent Court of Appeals which affirmed the
. . . . It will be no objection any such appointment that the arbitrator so
dismissal of the complaint. In its decision, the appellate court
appointed is a Commission employer (sic) that he had to deal with the
concurred with the RTC's ruling that the arbitrator did not have
jurisdiction over the dispute between the parties, thus, the foreign matter to which the supply or contract relates and that in the course of his
court could not validly adopt the arbitrator's award. The petitioner duties as Commission's employee he had expressed views on all or any of
filed this petition for review on certiorari, the matter in dispute or difference. 37 (Emphasis supplied.)

ISSUE: Finally, we reiterate hereunder our pronouncement in the case of Northwest

Orient Airlines, Inc. v. Court of Appeals 38 that:
Whether or not the arbitrator had jurisdiction over the dispute
between the petitioner and the private respondent under Clause 16 A foreign judgment is presumed to be valid and binding in the country from
of the contract.
which it comes, until the contrary is shown. It is also proper to presume the
regularity of the proceedings and the giving of due notice therein.
RULING:

Under Section 50, Rule 39 of the Rules of Court, a judgment in an action in

The constitutional mandate that no decision shall be rendered by
personam of a tribunal of a foreign country having jurisdiction to pronounce
any court without expressing therein dearly and distinctly the facts
and the law on which it is based does not preclude the validity of the same is presumptive evidence of a right as between the parties and their
"memorandum decisions" which adopt by reference the findings of successors-in-interest by a subsequent title. The judgment may, however,
fact and conclusions of law contained in the decisions of inferior be assailed by evidence of want of jurisdiction, want of notice to the party,
tribunals. collusion, fraud, or clear mistake of law or fact. Also, under Section 3 of Rule
131, a court, whether of the Philippines or elsewhere, enjoys the
Furthermore, the recognition to be accorded a foreign judgment is presumption that it was acting in the lawful exercise of jurisdiction and has
not necessarily affected by the fact that the procedure in the courts regularly performed its official duty. 39
of the country in which such judgment was rendered differs from
that of the courts of the country in which the judgment is relied on. Consequently, the party attacking a foreign judgment, the private
If the procedure in the foreign court mandates that an Order of the
respondent herein, had the burden of overcoming the presumption of its
Court becomes final and executory upon failure to pay the necessary
validity which it failed to do in the instant case.
docket fees, then the courts in this jurisdiction cannot invalidate the
order of the foreign court simply because our rules provide
otherwise. The foreign judgment being valid, there is nothing else left to be done than
to order its enforcement, despite the fact that the petitioner merely prays
WHEREFORE, the instant petition is GRANTED, and the assailed for the remand of the case to the RTC for further proceedings. As this Court
decision of the Court of Appeals sustaining the trial court's dismissal has ruled on the validity and enforceability of the said foreign judgment in
of the OIL AND NATURAL GAS COMMISSION's complaint before this jurisdiction, further proceedings in the RTC for the reception of evidence
Branch 30 of the RTC of Surigao City is REVERSED, to prove otherwise are no longer necessary.
 which represent the same interest should be considered as one
and should be entitled to only one arbitrator to represent them in
the arbitration proceedings. In consideration of the arbitration
clause in the participation of the panel of arbitrators, the Court
MAGELLAN CASE declared it void and of no effect, because the law says, as state in
"From the foregoing arbitration clause, it appears that the two (2) Article 2045 of the New Civil Code, “Any clause giving one of the
defendants [petitioners] (MCMC and MCHC) have one (1) arbitrator each to parties power to choose more arbitrators than the other is void
compose the panel of three (3) arbitrators. As the defendant MCMC is the and of no effect". While in the Oil and Natural Gas Case, the Court
Manager of defendant MCHC, its decision or vote in the arbitration observe the judgment of the Foreign Court that the said Clause 16
proceeding would naturally and certainly be in favor of its employer and the is valid, this particular provision, “It will be no objection to any
such appointment that the arbitrator so appointed is a Commission
defendant MCHC would have to protect and preserve its own interest; hence,
employer (sic) that he had to deal with the matter to which the
the two (2) votes of both defendants (MCMC and MCHC) would certainly be
supply or contract relates and that in the course of his duties as
against the lone arbitrator for the plaintiff [herein defendant]. Hence, Commission's employee he had expressed views on all or any of
apparently, plaintiff [defendant] would never get or receive justice and the matter in dispute or difference.
fairness in the arbitration proceedings from the panel of arbitrators as
provided in the aforequoted arbitration clause. In fairness and justice to the
plaintiff [defendant], the two defendants (MCMC and MCHC) [herein
petitioners] which represent the same interest should be considered as one
and should be entitled to only one arbitrator to represent them in the
arbitration proceedings. Accordingly, the arbitration clause, insofar as the
composition of the panel of arbitrators is concerned should be declared void
and of no effect, because the law says, "Any clause giving one of the parties
power to choose more arbitrators than the other is void and of no effect"
(Article 2045, Civil Code).

"The dispute or controversy between the defendants (MCMC and MCHC)

[herein petitioners] and the plaintiff [herein defendant] should be settled in
the arbitration proceeding in accordance with the Employment Agreement,
but under the panel of three (3) arbitrators, one (1) arbitrator to represent
the plaintiff, one (1) arbitrator to represent both defendants (MCMC and
MCHC) [herein petitioners] and the third arbitrator to be chosen by the
plaintiff [defendant Zosa] and defendants [petitioners].

In comparing the Magellan vs. Zosa Case and the Oil Gas vs CA Case, the
following were observed in the decision of the Supreme Court in the Parties’
participation in the appointment of Arbitrators:
A) In the Magellan Case, the 3 arbitrators where individually selected
based on the terms of the arbitration clause as indicated in the
agreement, however, the Court held that it is undeniably shown
that the two (2) votes of both defendants (MCMC and MCHC)
would certainly be against the lone arbitrator for the plaintiff
[herein defendant]. The Court further held that in the spirit of
fairness and justice to Zosa, the two defendants, MCMC and MCHC