Home Bankers Savings V CA

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Home Bankers Savings v CA

G.R. No. 115412 November 19, 1999

FACTS:

Victor Tancuan issued Petitioner Home Bankers Savings and Trust Company
a check while Eugene Arriesgado issued Private Respondent Far East Bank
and Trust Company three checks; both checks totaling the amount of
P25,250,000.00. Tancuan and Arriesgado exchanged each other’s checks
and deposited them with their respective banks for collection. When FEBTC
presented Tancuan’s HBSTC check for clearing, it was dishonored for being
DAIF.

Meanwhile, HBSTC sent Arriesgado’s 3 FEBTC checks through the Philippine


Clearing House Corporation (PCHC) to FEBTC but was returned for being
DAIF. HBSTC receive the notice of dishonor but refused to accept the checks
and returned them to FEBTC through the PCHC for the reason “Beyond
Reglementary Period,” implying that HBSTC already treated the 3 checks as
cleared and allowed the proceeds thereof to be withdrawn. FEBTC demanded
reimbursement for the returned checks and inquired from HBSTC whether it
had permitted any withdrawal of funds against the unfunded checks. HBSTC,
however refused to make any reimbursement and to provide FEBTC with the
needed information. Thus, FEBTC submitted the dispute for arbitration
before the PCHC Arbitration Committee, under its Supplementary Rules on
Regional Clearing to which FEBTC and HBSTC are bound as participants in
the regional clearing operations administered by the PCHC.

While the arbitration proceeding was still pending, FEBTC filed an action for
sum of money and damages with preliminary attachment against HBSTC.
HBSTC moved to dismiss on the ground that there is no cause of action and
because it seeks to enforce an arbitral award which as yet does not exist.
The trial court denied the motion to dismiss and the motion for
reconsideration. Petitioner then filed a petition for certiorari with respondent
CA to which it had dismissed.

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

HELD:

We find no merit in the petition. Section 14 of Republic Act 876, otherwise


known as the Arbitration Law, allows any party to the arbitration proceeding
to petition the court to take measures to safeguard and/or conserve any
matter which is the subject of the dispute in arbitration.

Petitioner’s exposition of the foregoing provision deserves scant


consideration. Section 14 simply grants an arbitrator the power to issue
subpoena and subpoena duces tecum at any time before rendering the
award. The exercise of such power is without prejudice to the right of a
party to file a petition in court to safeguard any matter which is the subject
of the dispute in arbitration. In the case at bar, private respondent filed an
action for a sum of money with prayer for a writ of preliminary attachment.
Undoubtedly, such action involved the same subject matter as that in
arbitration, i.e., the sum of P25,200,000.00 which was allegedly deprived
from private respondent in what is known in banking as a “kiting scheme.”
However, the civil action was not a simple case of a money claim since
private respondent has included a prayer for a writ of preliminary
attachment, which is sanctioned by section 14 of the Arbitration Law.

Simply put, participants in the regional clearing operations of the Philippine


Clearing House Corporation cannot bypass the arbitration process laid out by
the body and seek relief directly from the courts. In the case at bar,
undeniably, private respondent has initiated arbitration proceedings as
required by the PCHC rules and regulations, and pending arbitration has
sought relief from the trial court for measures to safeguard and/or conserve
the subject of the dispute under arbitration, as sanctioned by section 14 of
the Arbitration Law, and otherwise not shown to be contrary to the PCHC
rules and regulations.

At this point, we emphasize that arbitration, as an alternative method of


dispute resolution, is encouraged by this Court. Aside from unclogging
judicial dockets, it also hastens solutions especially of commercial disputes.
The Court looks with favor upon such amicable arrangement and will only
interfere with great reluctance to anticipate or nullify the action of the
arbitrator.

Wherefore, premises considered, the petition is hereby dismissed and the


decision of the court a quo is affirmed.

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