Doctrines
Doctrines
Doctrines
198075 – 2013
Third . The operation of the arbitration clause in this case is not at all defeated by the failure of
the petitioner to file a formal "request" or application therefor with the MeTC. We find that the
filing of a "request" pursuant to Section 24 of R.A. No. 9285 is not the sole means by which an
arbitration clause may be validly invoked in a pending suit.
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
that 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.
[Emphasis ours; italics original] The " request " referred to in the above provision is, in turn,
implemented by Rules 4.1 to 4.3 of A.M. No. 07-11-08-SC or the Special Rules of Court on
Alternative Dispute Resolution (Special ADR Rules):
RULE 4: REFERRAL TO ADR Rule 4.1. Who makes the request. - A party to a pending
action filed in violation of the arbitration agreement, whether contained in an arbitration
clause or in a submission agreement, may request the court to refer the parties to arbitration in
accordance with such agreement.
Rule 4.2. When to make request. - (A) Where the arbitration agreement exists before the action
is filed . - The request for referral shall be made not later than the pre-trial conference. After
the pre-trial conference, the court will only act upon the request for referral if it is made with
the agreement of all parties to the case.
Rule 4.3. Contents of request. - The request for referral shall be in the form of a motion, which
shall state that the dispute is covered by an arbitration agreement. A part from other
submissions, the movant shall attach to his motion an authentic copy of the arbitration
agreement.
ID.; ID.; ID.; ID.; BILLS OF LADING; ARBITRATION PROVISION THEREOF, CONSIDERED
AND RESPECTED. — Whether the liability of respondent should be based on the same contract
or that of the bill of lading, the parties are nevertheless obligated to respect the arbitration
provisions on the sales contract and/or the bill of lading. Petitioner being a signatory and party
to the sales contract cannot escape from his obligation under the arbitration clause as stated
therein. Arbitration has been held valid and constitutional.
Even before the enactment of Republic Act No. 876, this Court has countenanced the
settlement of disputes through arbitration. The rule now is that unless the agreement is such as
absolutely to close the doors of the courts against the parties, which agreement would be void,
the courts will look with favor upon such amicable arrangements and will only interfere with
great reluctance to anticipate or nullify the action of the arbitrator. As pointed out in the case
of Mindanao Portland Cement Corp. v. McDough Construction Company of Florida 18 wherein
the plaintiff sued defendant for damages arising from a contract, the Court said: "Since there
obtains herein a written provision for arbitration as well as failure on respondent's part to
comply therewith, the court a quo rightly ordered the parties to proceed to their arbitration in
accordance with the terms of their agreement (Sec. 6 Republic Act 876).
Respondent's arguments touching upon the merits of the dispute are improperly raised herein.
They should be addressed to the arbitrators. This proceeding is merely a summary remedy to
enforce the agreement to arbitrate. The duty of the court in this case is not to resolve the
merits of the parties' claims but only to determine if they should proceed to arbitration or not.
And although it has been ruled that a Frivolous or patently baseless claim should not be
ordered to arbitration it is also recognized that the mere fact that a defense exist against a
claim does not make it frivolous or baseless."
the writ of certiorari (Rule 65) is an extra-ordinary remedy and that certiorari jurisdiction is not
to be equated with appellate jurisdiction. In a special civil action of certiorari, the Court will not
engage in a review of the facts found nor even of the law as interpreted or applied by the
arbitrator unless the supposed errors of fact or of law are so patent and gross and prejudicial as
to amount to a grave abuse of discretion or an exces de pouvoir on the part of the arbitrator." 2
Considering that there was only one question, which may even be deemed to be the very
touchstone of the whole case, the trial court had no cogent reason to deny the Motion for
Preliminary Hearing. Indeed, it committed grave abuse of discretion when it denied a
preliminary hearing on a simple issue of fact that could have possibly settled the entire case.
Verily, where a preliminary hearing appears to suffice, there is no reason to go on to trial. One
reason why dockets of trial courts are clogged is the unreasonable refusal to use a process or
procedure, like a motion to dismiss, which is designed to abbreviate the resolution of a case.
As a rule, the award of an arbitrator cannot be set aside for mere errors of judgment either as
to the law or as to the facts. 29 Courts are without power to amend or overrule merely because
of disagreement with matters of law or facts determined by the arbitrators. 30 They will not
review the findings of law and fact contained in an award, and will not undertake to substitute
their judgment for that of the arbitrators, since any other rule would make an award the
commencement, not the end, of litigation. 31 Errors of law and fact, or an erroneous decision
of matters submitted to the judgment of the arbitrators, are insufficient to invalidate an award
fairly and honestly made. 32 Judicial review of an arbitration is thus, more limited than judicial
review of a trial. 33
Nonetheless, the arbitrators' award is not absolute and without exceptions. The arbitrators
cannot resolve issues beyond the scope of the submission agreement. 34 The parties to such
an agreement are bound by the arbitrators' award only to the extent and in the manner
prescribed by the contract and only if the award is rendered in conformity thereto. 35 Thus,
Sections 24 and 25 of the Arbitration Law provide grounds for vacating, rescinding or
modifying an arbitration award. Where the conditions described in Articles 2038, 36
2039, 37 and 1040 38 of the Civil Code applicable to compromises and arbitration are
attendant, the arbitration award may also be annulled.
Sec. 24. Grounds for vacating award. — In any one of the following cases, the court must make
an order vacating the award upon the petition of any party to the controversy when such party
proves affirmatively that in the arbitration proceedings:
(a) The award was procured by corruption, fraud, or other undue means; or
(b) That there was evident partiality or corruption in the arbitrators or any of them; or
(c) That the arbitrators were guilty of misconduct in refusing to postpone the hearing upon
sufficient cause shown, or in refusing to hear evidence pertinent and material to the
controversy; that one or more of the arbitrators was disqualified to act as such under section
nine hereof, and willfully refrained from disclosing such disqualifications or of any other
misbehavior by which the rights of any party have been materially prejudiced; or
(d) That 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.
Where an award is vacated, the court, in its discretion, may direct a new hearing either before
the same arbitrators or before a new arbitrator or arbitrators chosen in the manner provided in
the submission or contract for the selection of the original arbitrator or arbitrators, and any
provision limiting the time in which the arbitrators may make a decision shall be deemed
applicable to the new arbitration and to commence from the date of the court's order.
Where the court vacates, an award, costs, not exceeding fifty pesos, and disbursements may be
awarded to the prevailing party and the payment thereof may be enforced in like manner as the
payment of costs upon the motion in an action
Sec. 25. Grounds for modifying or correcting award. — In any one of the following cases, the
court must make an order modifying or correcting the award, upon the application of any party
to the controversy which was arbitrated:
(a) Where there was an evident miscalculation of figures, or an evident mistake in the
description of any person, thing or property referred to in the award; or
(b) Where the arbitrators have awarded upon a matter not submitted to them, not affecting the
merits of the decision upon the matter submitted; or
(c) Where the award is imperfect in a matter of form not affecting the merits of the
controversy, and if it had been a commissioner's report, the defect could have been amended
or disregarded by the court.
7. AGAN, JR. ET. AL. V. PHILIPPINENINTERNATIONAL AIR TERMINALS CO., INC., ET.
AL G.R. 155001 2003
- arbitration proceedings could be called for but only with respect to the parties to the contract
in question.
"36.6 The fact that a bank participates in the clearing operations of PCHC shall be deemed its
written and subscribed consent to the binding effect of this arbitration agreement as if it had
done so in accordance with Section 4 of the Republic Act No. 876 otherwise known as the
Arbitration Law."cralaw virtua1aw library
Thus, not only do the parties manifest by mere participation their consent to these rules, but
such participation is deemed (their) written and subscribed consent to the binding effect of
arbitration agreements under the PCHC rules. Moreover, a participant subject to the Clearing
House Rules and Regulations of the PCHC may go on appeal to any of the Regional Trial Courts
in the National Capital Region where the head office of any of the parties is located only after a
decision or award has been rendered by the arbitration committee or arbitrator on questions of
law.
The Court has recognized arbitration agreements as valid, binding, enforceableand not contrary
to public policy so much that when there obtains a written provision forarbitration which is not
complied with, the trial court should suspend the proceedings andorder the parties to proceed
to arbitration in accordance with the terms of theiragreement.
Rule VII, Section 1 of the "Procedural Guidelines in the Conduct of Voluntary Arbitration
Proceedings" provides the key. Therein, what constitutes the voluntary arbitrator's decision
(and, by extension, that of the Panel of voluntary arbitrators) is defined with precision, to wit:
Section 1. Decision Award. - - The final arbitral disposition of issue/s submitted to voluntary
arbitration is the Decision. The disposition may take the form of a dismissal of a claim or grant
of specific remedy, either by way of prohibition of particular acts or specific performance of
particular acts. In the latter case the decision is called an Award.
11. NATIONAL STEEL CORPORATION V. TRC LANAO DEL NORTE BRANCH 2, ILIGAN
CITY 127004 – 1999
Actions; Arbitration; A stipulation to refer all future disputes or to submit an ongoing dispute to
anarbitrator is valid.—A stipulation to refer all future disputes or to submit an ongoing dispute
to anarbitrator is valid. Republic Act 876, otherwise known as the Arbitration Law, was enacted
by Congresssince there was a growing need for a law regulating arbitration in general.
There is no doubt that arbitration is valid and constitutional in our jurisdiction.21 Even before
the enactment of RA 876, this Court has countenanced the settlement of disputes through
arbitration. Unless the agreement is such as absolutely to close the doors of the courts against
the parties, which agreement would be void, the courts will look with favor upon such amicable
arrangement and will only interfere with great reluctance to anticipate or nullify the action of
the arbitrator.22 Moreover, as RA 876 expressly authorizes arbitration of domestic disputes,
foreign arbitration as a system of settling commercial disputes was likewise recognized when
the Philippines adhered to the United Nations "Convention on the Recognition and the
Enforcement of Foreign Arbitral Awards of 1958" under the 10 May 1965 Resolution No. 71 of
the Philippine Senate, giving reciprocal recognition and allowing enforcement of international
arbitration agreements between parties of different nationalities within a contracting state.23
Implicit in the summary nature of the judicial proceedings is the separable orindependent
character of the arbitration clause or agreement. The doctrine of separability or
severability enunciates that an arbitrationagreement is independent of the main contract.
The arbitration agreementis to be treated as a separate agreement and the arbitration
agreement doesnot automatically terminate when the contract of which it is part comes to
anend. The separability of the arbitration agreement is especially significant to
thedetermination of whether the invalidity of the main contract also nullifies thearbitration
clause. Indeed, the doctrine denotes that the invalidity of themain contract, also
referred to as the “container” contract, does not affectthe validity of the arbitration
agreement. Irrespective of the fact that themain contract is invalid, the arbitration
clause/agreement still remains validand enforceable. The validity of the contract containing the
agreement to submit to arbitrationdoes not affect the applicability of the arbitration clause
itself. A contraryruling would suggest that a party’s mere repudiation of the main contract
issufficient to avoid arbitration. That is exactly the situation that theseparability
doctrine, as well as jurisprudence applying it, seeks to avoid.
14. OIL AND NATURAL GAS NCOMISSION V. CA AND PACIFIC CEMENT COMPANY
INC. 114323 – 1998
A foreign judgment is presumed to be valid and binding in the country from 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.
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 for the remand of the case to
the RTC for further proceedings. As this Court has ruled on the validity and enforceability of
the said foreign judgment in this jurisdiction, further proceedings in the RTC for the reception
of evidence to prove otherwise are no longer necessary.
15. DFA AND BSP V. HON. FRANCO T. FALCON, PRESIDING JUDGE OF RTC BR. 71
OF PASIG CITY –GR. 176657 2010
We note that under Section 28, Republic Act No. 9285 or the Alternative Dispute Resolution
Act of 2004,76cralaw the grant of an interim measure of protection by the proper court before
the constitution of an arbitral tribunal is allowed:chanroblesvirtuallawlibrar
Sec. 28. Grant of Interim Measure of Protection. - (a) It is not incompatible with an arbitration
agreement for a party to request, before constitution of the tribunal, from a Court an interim
measure of protection and for the Court to grant such measure. After constitution of the
arbitral tribunal and during arbitral proceedings, a request for an interim measure of protection,
or modification thereof, may be made with the arbitral tribunal or to the extent that the arbitral
tribunal has no power to act or is unable to act effectively, the request may be made with the
Court. The arbitral tribunal is deemed constituted when the sole arbitrator or the third
arbitrator, who has been nominated, has accepted the nomination and written communication
of said nomination and acceptance has been received by the party making the request.
(1) Any party may request that provisional relief be granted against the adverse party.
(3) The order granting provisional relief may be conditioned upon the provision of security or
any act or omission specified in the order.
(6) Either party may apply with the Court for assistance in implementing or enforcing an interim
measure ordered by an arbitral tribunal.
(7) A party who does not comply with the order shall be liable for all damages resulting from
noncompliance, including all expenses and reasonable attorney's fees, paid in obtaining the
order's judicial enforcement.
. The contract in this case was perfected here in the Philippines. Therefore, our laws ought
togovern. Nonetheless, Art. 2044 of the Civil Code sanctions the validity of mutually agreed
arbitral clause orthe 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.” Articles 2038,2039 and 2040 refer to instances where a
compromise or an arbitral award, as applied to Art. 2044 pursuantto Art. 2043 may be voided,
rescinded, or annulled, but these would not denigrate the finality of the arbitralaward.
The arbitration clause was mutually and voluntarily agreed upon by the parties. It has not been
shown to becontrary to any law, or against morals, good customs, public order, or public policy.
There has been noshowing that the parties have not dealt with each other on equal footing.
The definitions under the Electronic Commerce Act of 2000, its IRR and the Rules on Electronic
Evidence, at first glance, convey the impression that facsimile transmissions are electronic data
messages or electronic documents because they are sent by electronic means. The expanded
definition of an "electronic data message" under the IRR, consistent with the UNCITRAL Model
Law, further supports this theory considering that the enumeration "xxx [is] not limited to,
electronic data interchange (EDI), electronic mail, telegram, telex or telecopy." And to telecopy
is to send a document from one place to another via a fax machine.75
As further guide for the Court in its task of statutory construction, Section 37 of the Electronic
Commerce Act of 2000 provides that
Unless otherwise expressly provided for, the interpretation of this Act shall give due regard to
its international origin and the need to promote uniformity in its application and the observance
of good faith in international trade relations. The generally accepted principles of international
law and convention on electronic commerce shall likewise be considered.
Obviously, the "international origin" mentioned in this section can only refer to the UNCITRAL
Model Law, and the UNCITRAL's definition of "data message":
"Data message" means information generated, sent, received or stored by electronic, optical or
similar means including, but not limited to, electronic data interchange (EDI), electronic mail,
telegram, telex or telecopy.76
is substantially the same as the IRR's characterization of an "electronic data message."
However, Congress deleted the phrase, "but not limited to, electronic data interchange (EDI),
electronic mail, telegram, telex or telecopy," and replaced the term "data message" (as found in
the UNCITRAL Model Law ) with "electronic data message." This legislative divergence from
what is assumed as the term's "international origin" has bred uncertainty and now impels the
Court to make an inquiry into the true intent of the framers of the law. Indeed, in the
construction or interpretation of a legislative measure, the primary rule is to search for and
determine the intent and spirit of the law.77 A construction should be rejected that gives to the
language used in a statute a meaning that does not accomplish the purpose for which the
statute was enacted, and that tends to defeat the ends which are sought to be attained by the
enactment.
Arbitration; Courts; Jurisdiction; Under Republic Act No. 876, otherwise known as the
“Arbitration Law,” it is the regional trial court which exercises jurisdiction over questions
relatingto arbitration.
19. TRANSFIELD PH. INC. (TPI) V. LUZON HYDRO CORP. (LHC), AUSTRALIA AND
NEW ZEALAND BANKING GROUP LIMITED AND SECURITY BANK
CORPORATION GR. 146717 – 2006
If at anytime any dispute or difference shall arise between the Employer and the Contractor in
connection with or arising out of this Contract or the carrying out of the Works, the parties
together shall in good faith exert all efforts to resolve such dispute or difference by whatever
means they deem appropriate, including conciliation, mediation and seeking the assistance of
technical, accounting or other experts. At the request of any party, the chief executives of the
Employer and the Contractor shall meet in a good-faith effort to reach an amicable settlement
of the dispute or difference. Any dispute or difference that the parties are unable to resolve
within a reasonable time may, at the option of either party, be referred to arbitration in
accordance with Clause 20.4. (Id. at 179)
·It istrue that Clause 20.4 of the EPCC states that a dispute betweenpetitioner and respondent
as regards the EPCC shall be initiallyreferred to the DAB for decision, and only when the
parties aredissatisfied with the decision of the DAB should arbitrationcommence. This does not
mean, however, that the CIAC isbarred from assuming jurisdiction over the dispute if such
clausewas not complied with. Under Section 1, Article III of the CIACRules, an arbitration clause
in a construction contract shall bedeemed as an agreement to submit an existing or
futurecontroversy to CIAC jurisdiction, „ notwithstanding thereference to a different
arbitration institution or arbitral body insuch contract x x x.‰ Elementary is the rule that when
laws orrules are clear, it is incumbent on the court to apply them. Whenthe law (or rule) is
unambiguous and unequivocal, application,not interpretation thereof, is imperative.
21. HI-PRECISION STEEL CENTER, INC. V. LIM KIM STEELBUILDERS, INC. AND CIAC
GR. 110434 – 1993
Executive Order No. 1008, as amended, provides, in its Section 19, as follows:
Sec. 19. Finality of Awards. - The arbitral award shall be binding upon the parties. It shall be
final and inappealable except on questions of law which shall be appealable to the Supreme
Court.
Section 19 makes it crystal clear that questions of fact cannot be raised in proceedings before
the Supreme Court - which is not a trier of facts - in respect of an arbitral award rendered
under the aegis of the CIAC. Consideration of the animating purpose of voluntary arbitration in
general, and arbitration under the aegis of the CIAC in particular, requires us to apply rigorously
the above principle embodied in Section 19 that the Arbitral Tribunal's findings of fact shall be
final and inappealable.
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. 21chanrobles virtual law library
Obviously there was a clear case of intra-cooperative dispute. Article 121 of the Cooperative
Code is explicit on how the dispute should be resolved; thus:jgc:chanrobles.com.ph
"ART. 121. Settlement of Disputes. — Disputes among members, officers, directors, and
committee members, and intra-cooperative disputes shall, as far as practicable, be settled
amicably in accordance with the conciliation or mediation mechanisms embodied in the by-laws
of the cooperative, and in applicable laws.
"Should such a conciliation/mediation proceeding fail, the matter shall be settled in a court of
competent jurisdiction.
"SEC. 8. Mediation and Conciliation. — Upon request of either or both or both parties, the
[CDA] shall mediate and conciliate disputes with the cooperative or between cooperatives:
Provided, That if no mediation or conciliation succeeds within three (3) months from request
thereof, a certificate of non-resolution shall be issued by the commission prior to the filing of
appropriate action before the proper courts.
23. EDUARDO J. MARINO, JR., ET AL. V. GIL GAMILLA ET AL. GR. 132400 – 2005
ART. 217. Jurisdiction of Labor Arbiters and the Commission.—(a) Except as otherwise provided
under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and
decide within thirty (30) calendar days after the submission of the case by the parties for
decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving
wage, rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the
legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims, arising from employer-employee relations, including those of persons
in domestic or household service, involving an amount exceeding five thousand pesos
(₱5,000.00) regardless of whether accompanied with a claim for reinstatement.
25. CAPITOL MEDICAL CENTER, INC. (THE COMPANY) V. NLRC, ET AL. 147080 –
2005
The NCMB, as a staff and line office, has the following functions:
*Bargaining agent…
***REPORTING OF CASES – WILL BE DISCUSSED LATER
***ALL STUDENTS NEEDS TO DIGEST THIS: ENCODED AND THE DOCTRINE HAND
WRITTEN. TO BE SUBMITTED AT THE END OF THE TERM.