firstcase adr

8/9/2019 Firstcase Adr

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#6. Del Monte Corporation - USA, Paul Derby Jr., Daniel Collins & Luis Hidalgo

vs.

Court o Appeals ,Malabon !"C #ran$% ' Judge #ienvenido !eyes, Montebueno

Mar(eting, )n$., Liong Liong C. Sy and Sabrosa *oods, )n$.

+! o. /0' ,*ebruary , 122

*AC"S3

Del Monte Corporation-USA appointed Montebueno Mar(eting, )n$. as t%e sole

and e4$lusive distributor o its Del Monte produ$ts in t%e P%ilippines or a period o ive

years, rene5able or t5o $onse$utive ive year periods 5it% t%e $onsent o t%e parties.

Said agree6ent provided or an arbitration $lause, 5%i$% states3 7"%is Agree6ent s%all

be governed by t%e la5s o t%e State o Caliornia and8or, i appli$able, t%e United States

o A6eri$a.All disputes arising out o or relating to t%is Agree6ent or t%e parties9

relations%ip, in$luding t%e ter6ination t%ereo, s%all be resolved by arbitration in t%e City

o San *ran$is$o, State o Caliornia, under t%e !ules o t%e A6eri$an Arbitration

Asso$iation."%e arbitration panel s%all $onsist o t%ree 6e6bers, one o 5%o6 s%all be

sele$ted by DMC-USA, one o 5%o6 s%all be sele$ted by MM), and t%ird o 5%o6 s%all

be sele$ted by t%e ot%er t5o 6e6bers and s%all %ave relevant e4perien$e in t%e

industry 7.

"%e appoint6ent o MM) as t%e sole and e4$lusive distributor o Del Monteprodu$ts in t%e P%ilippines 5as publis%ed in several ne5spapers in t%e

$ountry.)66ediately ater its appoint6ent, MM) appointed Sabrosa *oods, )n$. :S*);,

5it% t%e approval o DMC-USA, as MM)9s 6ar(eting ar6 to $on$entrate on its 6ar(eting

and selling un$tion as 5ell as to 6anage its $riti$al relations%ip 5it% t%e trade.

MM), S*) and MM)9s Managing Dire$tor Liong Liong C. Sy iled a Co6plaint

against DMC-USA, Managing Dire$tor o Del Monte Corporation9s


2/186

A$$ording to t%e6, DMC-USA produ$ts $ontinued to be broug%t into t%e $ountry

by parallel i6porters despite t%e appoint6ent o MM) as t%e sole and e4$lusive

distributor o Del Monte produ$ts t%ereby $ausing t%e6 great e6barrass6ent and

substantial da6age."%ey alleged t%at t%e produ$ts broug%t into t%e $ountry by t%ese

i6porters 5ere aged, da6aged, a(e or $ountereit, so t%at in Mar$% ==0 t%ey %ad to

$ause, ater prior $onsultation 5it% Antonio >ngpin, Mar(et Dire$tor or Spe$ial Mar(ets

o Del Monte P%ilippines, )n$., t%e publi$ation o a ?5arning to t%e trade? paid

advertise6ent in leading ne5spapers. DMC-USA and Paul ngpin and to $o66uni$ate dire$tly instead 5it% DMC-USA t%roug% Paul


3/186

issuan$e o rit o Preli6inary Atta$%6ent and not on t%e Distributors%ip Agree6ent

DMC-USA et al. iled a Motion or !e$onsideration to 5%i$% MM) et al. iled t%eir

$o66ent8opposition.DMC-USA et al. iled a reply. "%ey later on iled a Motion to Ad6it

Supple6ental Pleading.Said 6otion 5as ad6itted.

As a result o t%e ad6ission o t%e Supple6ental Co6plaint, DMC-USA et al. iled

on 11 July == a Maniestation adopting t%eir Motion to Suspend Pro$eedings and

Motion or !e$onsideration. "%e Motion to Suspend Pro$eedings 5as denied by t%e trial

$ourt on t%e ground t%at it 5ill not serve t%e ends o usti$e and to allo5 said suspension

5ill only delay t%e deter6ination o t%e issues, rustrate t%e Buest o t%e parties or a

udi$ious deter6ination o t%eir respe$tive $lai6s, and8or deprive and delay t%eir rig%ts

to see( redress.>n appeal, t%e CA air6ed t%e !"C de$ision.

)SSU t%e dispute bet5een t%e parties 5arrants an order $o6pelling t%e6 to

sub6it to arbitration.

!UL)+3 o.

"%ere is no doubt t%at arbitration is valid and $onstitutional in our urisdi$tion.


4/186

bet5een t%e parties is arbitrable.Ho5ever, t%is Court 6ust deny t%e petition."%e

Agree6ent bet5een DMC-USA and MM) is a $ontra$t."%e provision to sub6it to

arbitration any dispute arising t%erero6 and t%e relations%ip o t%e parties is part o t%at

$ontra$t and is itsel a $ontra$t.As a rule, $ontra$ts are respe$ted as t%e la5 bet5een

t%e $ontra$ting parties and produ$e ee$t as bet5een t%e6, t%eir assigns and

%eirs.Clearly, only parties to t%e Agree6ent,i.e., DMC-USA and its Managing Dire$tor or


5/186

arbitration.A$$ordingly, t%e interest o usti$e 5ould only be served i t%e trial $ourt %ears

and adudi$ates t%e $ase in a single and $o6plete pro$eeding.

P%ilro$(, )n$.

vs.

Constru$tion )ndustry Arbitration Co66ission :C)AC; and Spouses Gi$ente and elia

Cid

+.!. 1E'E-'=, June 1/, 122

*AC"S3

"%e spouses Gi$ente and elia Cid pur$%ased ready 6i4 $on$rete ro6 P%ilro$(

)n$. "%e $on$rete delivered turned out to be o substandard Buality. As a result, t%e

spouses sustained da6ages 5%en t%e stru$tures t%ey built using su$% ready 6i4

$on$rete developed $ra$(s and %oney$o6bs.

)nitially, t%e spouses iled suit or da6ages against P%ilro$( and seven o its

oi$ers and engineers 5it% t%e !egional "rial Court. "%e !egional "rial Court dis6issed

t%e $ase and reerred t%e $ase to t%e C)AC be$ause t%e Cid spouses and P%ilro$( )n$.,

%ad e4e$uted an Agree6ent to Arbitrate 5it% t%e C)AC.


6/186

At t%e C)AC, %o5ever, P%ilro$( Buestioned t%e urisdi$tion o C)AC over t%e

P%ilro$( oi$ers and engineers arguing t%ey 5ere not signatories to t%e agree6ent to

arbitrate. "%e C)AC reerred ba$( t%e $ase to t%e !"C 5%i$%, %o5ever, reused to

reassu6e urisdi$tion. "%e spouses Cid opted to e4$lude t%e seven oi$ers and

engineers to pave t%e 5ay or t%e resu6ption o urisdi$tion by t%e C)AC. "%e C)AC

subseBuently rendered udg6ent in avor o t%e Spouses Cid dire$ting t%e respondent

P%ilro$( to rei6burse8reund t%e pay6ents 6ade and a5arded t%e Spouses Cid

P02,222 as 6oral da6ages, P02,222 as no6inal da6ages, P02,222 as attorney9s ees.

P%ilro$( elevated t%e C)AC de$ision to t%e Court o Appeals $ontesting t%e urisdi$tion o

t%e C)AC and assailing t%e propriety o t%e 6onetary a5ards in avor o t%e Spouses

Cid. "%e Court o Appeals sustained t%e C)AC de$ision. !espondent iled a petition or

revie5 5it% t%e Supre6e Court.

)SSU t%e C)AC %as pri6ary urisdi$tion over t%e $ase.

!UL)+ 3 Fes

"%e Supre6e Court ruled t%at Se$tion ' o rder 22E e4pressly

vests in t%e C)AC original and e4$lusive urisdi$tion over disputes arising ro6 or

$onne$ted 5it% $onstru$tion $ontra$ts entered into by parties t%at %ave agreed to sub6it

t%eir dispute to voluntary arbitrary. )t ruled t%at ater sub6itting itsel to arbitration

pro$eedings and a$tively parti$ipating t%erein, petitioner is estopped ro6 assailing t%e

urisdi$tion o t%e C)AC.

"%e Supre6e Court sustained t%e a5ard o a$tual da6ages. Ho5ever, sin$e

a$tual da6ages 5ere proven and t%e Cids 5ere a6ply $o6pensated, t%e Supre6e

Court 5it%dre5 t%e a5ard or no6inal da6ages. )t also sustained t%e a5ard o

attorney9s ees even i t%e spouses represented t%e6selves beore t%e C)AC be$ause

t%ey purportedly in$urred litigation e4penses in pursuing t%eir a$tion beore t%e C)AC,

t%e Court o Appeals and also at t%e Supre6e Court.


7/186

A+A, J!.et al.,

vs.

PH)L)PP)< )"., )C. :P)A"C>;

+.!. os. 0022, 000' & 00//, 20 May 122

*AC"S3


8/186

Petitioners and petitioners-in-intervention iled t%e instant petitions or pro%ibition

under !ule /0 o t%e !evised !ules o Court see(ing to pro%ibit t%e Manila )nternational

Airport Aut%ority :M)AA; and t%e Depart6ent o "ransportation and Co66uni$ations

:D>"C; and its Se$retary ro6 i6ple6enting t%e ollo5ing agree6ents e4e$uted by t%e

P%ilippine +overn6ent t%roug% t%e D>"C and t%e M)AA and t%e P%ilippine )nternational

Air "er6inals Co., )n$. :P)A"C>;3

:; t%e Con$ession Agree6ent signed on July 1, ==.

:1; t%e A6ended and !estated Con$ession Agree6ent dated ove6ber 1/, ===.

:; t%e *irst Supple6ent to t%e A6ended and !estated Con$ession Agree6ent

dated August 1, ===.

:'; t%e Se$ond Supple6ent to t%e A6ended and !estated Con$ession Agree6ent

dated Septe6ber ', 1222.

:0; t%e "%ird Supple6ent to t%e A6ended and !estated Con$ession Agree6ent

dated June 11, 122 :$olle$tively, t%e P)A"C> Contra$ts;

)n August =E=, t%e D>"C engaged t%e servi$es o Aeroport de Paris :ADP; to

$ondu$t a $o6pre%ensive study o t%e inoy ABuino )nternational Airport :A)A; and

deter6ine 5%et%er t%e present airport $an $ope 5it% t%e trai$ develop6ent up to t%e

year 122."%e study $onsisted o t5o parts3irst, trai$ ore$asts, $apa$ity o e4isting

a$ilities, A)A uture reBuire6ents, proposed 6aster plans and develop6ent plans and

se$ond, presentation o t%e preli6inary design o t%e passenger ter6inal building. "%e

ADP sub6itted a Drat *inal !eport to t%e D>"C in De$e6ber =E=. So6e ti6e in

==, si4 business leaders $onsisting o Jo%n +o(ong5ei, Andre5 +otianun, Henry Sy,

Sr., Lu$io "an, +eorge "y and Alonso Fu$%eng$o 6et 5it% t%en President *idel G.

!a6os to e4plore t%e possibility o investing in t%e $onstru$tion and operation o a ne5

international airport ter6inal."o signiy t%eir $o66it6ent to pursue t%e proe$t, t%ey

or6ed t%e Asia9s


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>n De$e6ber 1, ==', t%e D>"C issued Dept. >rder o. ='-E1 $onstituting t%e

Pre -Bualii$ation #ids and A5ards Co66ittee :P#AC; or t%e i6ple6entation o t%e

A)A )P" ))) proe$t. >n Mar$% 1, ==0, t%en D>"C Se$retary Jose +ar$ia endorsed

t%e proposal o An *ebruary ,

==/, t%e


10/186

A)A )nternational Passenger "er6inal ))) :A)A )P" ))); under a build-operate-and-

transer arrange6ent pursuant to !A /=0 as a6ended by !A E :#>" La5;. A$ting

on t%e proposal, t%e D>"C $onstituted t%e Pre-Bualii$ation #ids and A5ards

Co66ittee :P#AC; or t%e proe$t and sub6itted 5it% its endorse6ent t%e proposal to

t%e ational n Septe6ber 12, ==/, t%e $onsortiu6 $o6posed o People9s Air Cargo and

are%ousing Co., )n$., P%il. Air and +rounds Servi$es, )n$. and Se$urity #an( Corp.

sub6itted t%eir $o6petitive proposal to t%e P#AC. >n t%e ollo5ing day, Septe6ber 1',

==/, t%e P#AC pre-Bualiied t%e Pair$argo Consortiu6. "5o days later, A and t%e pro%ibition

i6posed by !A , t%e +eneral #an(ing A$t, on t%e a6ount t%at Se$urity #an( $ould

legally invest in t%e proe$t.

>n >$tober /, ==/, t%e P#AC opened t%e envelope sub6itted by A


11/186

>n *ebruary 1, ==, Pair$argo Consortiu6 in$orporated into P%ilippine

)nternational Airport "er6inals Co., )n$. :P)A"C>;.A. Aperate-and-"ranser Arrange6ent o t%e inoy ABuino )nternational Airport

Passenger "er6inal ))). >n ove6ber 1/, ==E, t%e +overn6ent and P)A"C> signed

an A6ended and !estated Con$ession Agree6ent. SubseBuently, t%e +overn6ent and

P)A"C> also signed t%ree Supple6ents to t%e A!CA. Hen$e, t%e petition.

)SSU t%e == $on$ession agree6ent is valid.

!UL)+3 o

An essential ele6ent o a publi$ly bidded $ontra$t is t%at all bidders 6ust be on

eBual ooting.ot si6ply in ter6s o appli$ation o t%e pro$edural rules and regulations

i6posed by t%e relevant govern6ent agen$y, but 6ore i6portantly, on t%e $ontra$t

bidded upon. %ile a 5inning bidder is not pre$luded ro6 6odiying or a6ending

$ertain provisions o t%e $ontra$t bidded upon, su$% $%anges 6ust not $onstitute

substantial or 6aterial a6end6ents t%at 5ould alter t%e basi$ para6eters o t%e

$ontra$t and 5ould $onstitute a denial to t%e ot%er bidders o t%e opportunity to bid on

t%e sa6e ter6s.

A $lose $o6parison o t%e drat Con$ession Agree6ent atta$%ed to t%e #id

Do$u6ents and t%e == Con$ession Agree6ent reveals t%at t%e do$u6ents dier in at

least t5o 6aterial respe$ts3 a.; Modii$ation on t%e Publi$ Utility !evenues and on-


12/186

Publi$ Utility !evenues t%at 6ay be $olle$ted by P)A"C> and b.; Assu6ption by t%e

+overn6ent o t%e liabilities o

P)A"C> in t%e event o t%e latter9s deault t%ereo. "%e $%anges under t%e ==

Con$ession Agree6ent 5it% respe$t to redu$tion in t%e types o ees t%at are sube$t to

M)AA regulation and t%e rela4ation o su$% regulation 5it% respe$t to ot%er ees $learly

gives P)A"C> 6ore avorable ter6s t%an 5%at 5as available to ot%er bidders at t%e

ti6e t%e $ontra$t 5as bidded out. Also, t%e assu6ption by t%e govern6ent o t%e

liabilities o P)A"C> in t%e event o latter9s deault grants P)A"C> a inan$ial advantage

or beneit 5%i$% 5as not previously 6ade available during t%e bidding pro$ess. "%e a$t

t%at substantial a6end6ents 5ere 6ade on t%e == Con$ession Agree6ent renders

t%e sa6e null and void or being $ontrary to publi$ poli$y. "%ese a6end6ents $onvert

t%e == Con$ession Agree6ent to an entirely dierent agree6ent ro6 t%e $ontra$t

bidded out or t%e drat Con$ession Agree6ent.

"%e provisions o t%e == Con$ession Agree6ent $onstitute a dire$t

govern6ent guarantee 5%i$% is pro%ibited by la5. "%e a$t t%at t%e A!CA superseded

t%e == Con$ession Agree6ent did not $ure t%is atal dee$t. )t is $lear t%at t%e A!CA

provides or a dire$t guarantee by t%e govern6ent to pay P)A"C>9s loans not only to its

Senior Lenders but all ot%er entities 5%o provided P)A"C> unds or servi$es upon

P)A"C>9s deault in its loan obligation 5it% its Senior Lenders. "%e pros$ription against

govern6ent guarantee in any or6 is one o t%e poli$y $onsiderations be%ind t%e #>"

La5. "o de$lare t%e P)A"C> $ontra$ts valid despite t%e $lear statutory pro%ibition

against a dire$t govern6ent guarantee 5ould not only 6a(e a 6o$(ery o 5%at t%e #>"

La5 see(s to prevent -- 5%i$% is to e4pose t%e govern6ent to t%e ris( o in$urring a

6onetary obligation resulting ro6 a $ontra$t o loan bet5een t%e proe$t proponent and

its lenders and to 5%i$% t%e +overn6ent is not a party to -- but 5ould also render t%e

#>" La5 useless or 5%at it see(s to a$%ieve I- to 6a(e use o t%e resour$es o t%e

private se$tor in t%e 7inan$ing, operation and 6aintenan$e o inrastru$ture and

develop6ent proe$tsK 5%i$% are ne$essary or national gro5t% and develop6ent but

5%i$% t%e govern6ent, unortunately, $ould ill-aord to

inan$e at t%is point in ti6e.


13/186


14/186

MA!)L>U +UA> APAL)S>

vs.

!AD)> PH)L)PP)

>n May 0, ==0, Marilou +aun@on Apaliso(, t%en Produ$tion C%ie o !adio

P%ilippines et5or( :!P; Station DFC, re$eived a Me6orandu6 ro6 #ran$%es

>perations Manager +ilito Dato$ as(ing %er to sub6it a 5ritten e4planation 5%y no

dis$iplinary a$tion s%ould be ta(en against %er or peror6an$e o a$ts %ostile to !P,

and arrogant, disrespe$tul and deiant be%avior to5ards %er superior Station Manager

+eorge Sua@o. Co6plying, petitioner sub6itted on May /, ==0 %er Ans5er to t%e

6e6orandu6. >n May , ==0, petitioner re$eived anot%er 6e6orandu6 ro6 t%e

Ad6inistrative Manager o !P, inor6ing %er o t%e ter6ination o %er servi$es

ee$tive t%e $lose o regular oi$e %ours o June 0, ==0. #y letter o June 0, ==0,

petitioner inor6ed !P, by letter o June 0, ==0, o %er de$ision to 5aive %er rig%t to

resolve %er $ase t%roug% t%e grievan$e 6a$%inery o !P as provided or in t%e

Colle$tive #argaining Agree6ent :C#A; and to lodge %er $ase beore t%e proper

govern6ent oru6. S%e t%ereater iled a $o6plaint against !P DFC and Sua@o or

illegal dis6issal beore t%e ational Labor !elations Co66ission, 5%i$% reerred it to

t%e ational Con$iliation and Mediation #oard.

"%e petitioner and respondents agreed to sub6it or voluntary arbitration t%e

issue o 5%et%er petitioners dis6issal 5as valid and to abide by t%e de$ision o t%e

voluntary arbitrator. )n %er position paper sub6itted beore t%e voluntary arbitrator,

petitioner prayed t%at %er dis6issal be de$lared invalid and t%at s%e be a5arded

separation pay, ba$(5ages and ot%er beneits granted to %er by t%e Labor Code sin$e

reinstate6ent is no longer easible due to strained relations. S%e also prayed t%at s%e

be a5arded P1,222,222.22 or 6oral da6ages and P022,222.22 or e4e6plary

da6ages.!espondents on t%e ot%er %and prayed or t%e dis6issal o t%e $o6plaint,

arguing t%at t%e voluntary arbitrator %ad no urisdi$tion over t%e $ase and, assu6ing

t%at %e %ad, t%e $o6plaint is dis6issible or arbitrator %ad no urisdi$tion over t%e $ase


15/186

and, assu6ing t%at %e %ad, t%e $o6plaint is dis6issible or la$( o 6erit as petitioner

5as not illegally dis6issedbitrator rendered an A5ard in avor o Apaliso(.

!espondents 6otion or re$onsideration 5as denied by t%e arbitrator. !espondents

appealed to t%e CA, ruling in t%eir:respondents; avor. )t %eld t%at t%e voluntary arbitrator

did not %ave urisdi$tion over petitioners $o6plaint and a$$ordingly nulliied and set

aside.

)SSU >G"H! D)SPU"


16/186

$ounsels.As t%e voluntary arbitrator %ad urisdi$tion over t%e parties $ontroversy. "%e

Supre6e Court set aside t%e t%e Court o Appeals De$ision !


17/186

to a$t on t%eir $o6plaint. ConseBuently, respondents res$inded t%e $ontra$t on >$tober

, ==E, ater paying '.E'O o t%e $ost o $onstru$tion.

!espondents t%en engaged t%e servi$es o anot%er $ontra$tor, !!A and

Asso$iates, to inspe$t t%e proe$t and assess t%e a$tual a$$o6plis%6ent o petitioners

in t%e $onstru$tion o t%e building. )t 5as ound t%at petitioners revised and deviated

ro6 t%e stru$tural plan o t%e building 5it%out noti$e to or approval by t%e respondents.

!espondents iled a $ase or brea$% o $ontra$t against petitioners beore t%e

!egional "rial Court :!"C; o Manila. At t%e pre-trial $oneren$e, t%e parties agreed to

sub6it t%e $ase or arbitration to t%e Constru$tion )ndustry Arbitration Co66ission

:C)AC;. Atty. Custodio >. Parlade 5as appointed by t%e C)AC as sole arbitrator to

resolve t%e dispute. it% t%e agree6ent o t%e parties, Atty. Parlade designated


18/186

entered into by parties 5%o %ave agreed to sub6it t%eir $ase to voluntary arbitration.

Se$tion = o . o. 22E provides t%at its arbitral a5ard s%all be appealable to t%e

Supre6e Court only on Buestions o la5.

"!AS*) C>!P>!A")>, AUS"!AL)A and !P>!A")>

+.!. o. '/. ove6ber 11, 122'

*AC"S3

"ransield and Lu@on Hydro Corp. :LHC; entered into a turn-(ey $ontra$t 5%ere

"ransield 5ere to $onstru$t a %ydro-ele$tri$ plants in #enguet and )lo$os. "%e $ontra$t

provides or a period or 5%i$% t%e proe$t is to be $o6pleted and also allo5s or t%e

e4tension o t%e period provided t%at t%e e4tension is based on ustiiable grounds su$%

as ortuitous event. )n order to guarantee peror6an$e by "ransield, t5o stand-by

letters o $redit 5ere reBuired to be opened. During t%e $onstru$tion o t%e plant,

"ransield reBuested or e4tension o ti6e $iting ortuitous events broug%t about by

typ%oon eb, barri$ades and de6onstration. LHC did not give due $ourse to t%e


19/186

e4tension o t%e period prayed or but reerred t%e 6atter to arbitration $o66ittee. )n t%e

6ean5%ile, be$ause o t%e delay in t%e $onstru$tion o t%e plant, LHC $alled on t%e

stand-by letters o $redit be$ause o deault. Ho5ever, t%e de6and 5as obe$ted by

"ransield on t%e ground t%at t%ere is still pending arbitration on t%eir reBuest or

e4tension o ti6e. LHC invo(ed t%e 7independen$e prin$ipleK.

>n t%e ot%er %and, "ransield $lai6s raud on t%e part o LHC on $alling t%e

stand-by letters o $redit. "%e trial $ourt %eld or t%e LHC. *ollo5ing t%e independen$e

prin$iple, even granting t%at t%ere is still issue to be resolved arising ro6 t%e turn-(ey

proe$t. "%is issue is not supposed to ae$t t%e obligation o t%e ban( to pay t%e letter o

$redit in Buestion. "%e $ourt stressed t%at a LC a$$o66odation is intended to beneit

not only t%e benei$iary t%erein but t%e appli$ant t%ereon. Dissatisied 5it% t%e trial

$ourt9s denial o its appli$ation or a 5rit o preli6inary inun$tion, petitioner elevated t%e

$ase to t%e Court o Appeals 5it% prayer or t%e issuan$e o a te6porary restraining

order and 5rit o preli6inary inun$tion. Petitioner sub6itted to t%e appellate $ourt t%at

LHC9s $all on t%e Se$urities 5as pre6ature $onsidering t%at t%e issue o its deault %ad

not yet been resolved 5it% inality by t%e C)AC and8or t%e )CC. )t asserted t%at until t%e

a$t o delay $ould be establis%ed, LHC %ad no rig%t to dra5 on t%e Se$urities or

liBuidated da6ages.

)SSU


20/186

arbitration. )n addition, !.A. =1E0, ot%er5ise (no5n as t%e 7Alternative Dispute

!esolution A$t o 122',K allo5s t%e iling o provisional or interi6 6easures 5it% t%e

regular $ourts 5%enever t%e arbitral tribunal %as no po5er to a$t or to a$t ee$tively.

J>!+< +>AL!S

vs.

CL)MA M))+ L"D., CL)MA-A!)MC> M))+ C>!P., and AUS"!ALAS)A

PH)L)PP)


21/186

P%ilippines Mining )n$, see(ing t%e de$laration o nullity or ter6ination o t%e addendu6

$ontra$t and t%e ot%er $ontra$ts e6anating ro6 it on t%e grounds o raud and

oppression. "%e Panel dis6issed t%e $o6plaint or la$( o urisdi$tion. Ho5ever, t%e

Panel, upon petitioners 6otion or re$onsideration, ruled t%at it %ad urisdi$tion over t%e

dispute 6aintaining t%at it 5as a 6ining dispute, sin$e t%e sube$t $o6plaint arose ro6

a $ontra$t bet5een t%e parties 5%i$% involved t%e e4ploration and e4ploitation o

6inerals over t%e disputed area. !espondents assailed t%e order o t%e Panel o

Arbitrators via a petition or beore t%e CA. "%e CA granted t%e petition and de$lared

t%at t%e Panel o Arbitrators did not $ertiorari %ave urisdi$tion over t%e $o6plaint, sin$e

its urisdi$tion 5as li6ited to t%e resolution o 6ining disputes, su$% as t%ose 5%i$%

raised a Buestion o a$t or 6atter reBuiring t%e te$%ni$al (no5ledge and e4perien$e o

6ining aut%orities and not 5%en t%e $o6plaint alleged raud and oppression 5%i$%

$alled or t%e interpretation and appli$ation o la5s. "%e CA urt%er ruled t%at t%e

petition s%ould %ave been settled t%roug% arbitration under !.A. o. E/ Q t%e

Arbitration La5 Q as provided under t%e addendu6 $ontra$t.

)SSUA %as e4$lusive and original urisdi$tion to %ear

and de$ide 6ining disputes.

!UL)+3

Panel o Arbitrators 5%o, under !.A. o. ='1 o t%e P%ilippine Mining A$t o

==0, %as e4$lusive and original urisdi$tion to %ear and de$ide 6ining disputes, su$%

as 6ining areas, 6ineral agree6ents, *"AAs or per6its and sura$e o5ners, o$$upants

and $lai6%olders8$on$essionaires, is beret o urisdi$tion over t%e $o6plaint or

de$laration o nullity o t%e addendu6 $ontra$t t%us, t%e Panels urisdi$tion is li6ited

only to t%ose 6ining disputes 5%i$% raised Buestion o a$ts or 6atters reBuiring t%e

te$%ni$al (no5ledge and e4perien$e o 6ining aut%orities.

An agree6ent to arbitrate is a separate and distin$t $ontra$t ro6 t%e 6ain

$ontra$t. *urt%er a sub6ission to arbitration is a $ontra$t. A $lause in a $ontra$t

providing t%at all 6atters in dispute bet5een t%e parties s%all be reerred to arbitration is


22/186

a $ontra$t. "%e provision to sub6it to arbitration any dispute arising t%erero6 and t%e

relations%ip o t%e parties is a part o t%at $ontra$t and is itsel a $ontra$t. "%e do$trine

o separability, or severability as ot%er 5riters $all it, enun$iates t%at an arbitration

agree6ent is independent o t%e 6ain $ontra$t. "%e arbitration agree6ent is to be

treated as a separate agree6ent and t%e arbitration agree6ent does not auto6ati$ally

ter6inate 5%en t%e $ontra$t o 5%i$% it is part $o6es to an end."%e separability o t%e

arbitration agree6ent is espe$ially signii$ant to t%e deter6ination o 5%et%er t%e

invalidity o t%e 6ain $ontra$t also nulliies t%e arbitration $lause. )ndeed, t%e do$trine

denotes t%at t%e invalidity o t%e 6ain $ontra$t, also reerred to as t%e ?$ontainer?

$ontra$t, does not ae$t t%e validity o t%e arbitration agree6ent. )rrespe$tive o t%e a$t

t%at t%e 6ain $ontra$t is invalid, t%e arbitration $lause8agree6ent still re6ains valid and

enor$eable.

>!


23/186

H>. AL#!P>!A")>

+.!. o. '0E, January , 122E

*AC"S3

P+SMC and >+)+)+)+)+)+)+)n May 2, 1222, t%e CA rendered t%e assailed De$ision air6ing t%e !"C

>rders and dis6issing t%e petition or $ertiorari iled by >+)rders. Moreover, t%e CA reasoned t%at >+)


24/186

ully paid 5as $ontrary to t%e inding o t%e !"C t%at P+SMC ully paid t%e pri$e o USD

,11',222, 5%i$% 5as or all t%e 6a$%ineries and eBuip6ent. A$$ording to t%e CA, t%is

deter6ination by t%e !"C 5as a a$tual inding beyond t%e a6bit o a petition or

$ertiorari.

>n t%e issue o t%e validity o t%e arbitration $lause, t%e CA agreed 5it% t%e lo5er $ourt

t%at an arbitration $lause 5%i$% provided or a inal deter6ination o t%e legal rig%ts o

t%e parties to t%e $ontra$t by arbitration 5as against publi$ poli$y.

)SSU


25/186

A#S-C# #!>ADCAS")+ C>!P>!A")>

vs.

>!LD )"! SFS"., L"D.,

+.!. o. /=1, *ebruary , 122E

*AC"S3

A#S-C# #road$asting Corporation :A#S-C#; entered into a li$ensing

agree6ent 5it% orld )ntera$tive et5or( Syste6s :)S; to distribute and subli$ense

t%e distribution o t%e television servi$e (no5n as ?"%e *ilipino C%annel? :"*C; in

Japan. A#S-C# undertoo( to trans6it t%e "*C progra66ing signals to )S 5%i$%

t%e latter re$eived t%roug% its de$oders and distributed to its subs$ribers. A dispute

arose bet5een t%e parties 5%en A#S-C# a$$used )S o inserting nine episodes o

)S


26/186

"%e CA dis6issed A#S-C#9s petition or la$( o urisdi$tion. )t stated t%at as t%e

ter6s or reeren$e :">!; itsel provided t%at t%e arbitrators de$ision s%all be inal and

unappealable and t%at no 6otion or re$onsideration s%all be iled, t%en t%e petition or

revie5 6ust ail. )t ruled t%at it is t%e !"C 5%i$% %as urisdi$tion over Buestions relating

to arbitration. )t %eld t%at t%e only instan$e it $an e4er$ise urisdi$tion over an arbitral

a5ard is an appeal ro6 t%e trial $ourts de$ision $onir6ing, va$ating or 6odiying t%e

arbitral a5ard. )t urt%er stated t%at a petition or $ertiorari under !ule /0 o t%e !ules o

Court is proper in arbitration $ases only i t%e $ourts reuse or negle$t to inBuire into t%e

a$ts o an arbitrators a5ard.

)SSU


27/186

petition or $ertiorari under !ule /0, respe$tively; as grounds or 6aintaining a petition

to va$ate an arbitral a5ard in t%e !"C, it ne$essarily ollo5s t%at a party 6ay not avail

o t%e latter re6edy on t%e grounds o errors o a$t and8or la5 or grave abuse o

dis$retion to overturn an arbitral a5ard.

Proper issues t%at 6ay be raised in a petition or revie5 under !ule ' pertain to

errors o a$t, la5 or 6i4ed Buestions o a$t and la5. %ile a petition or $ertiorari under

!ule /0 s%ould only li6it itsel to errors o urisdi$tion, t%at is, grave abuse o dis$retion

a6ounting to a la$( or e4$ess o urisdi$tion. Moreover, it $annot be availed o 5%ere

appeal is t%e proper re6edy or as a substitute or a lapsed appeal.

"%e re6edy A#S-C# #road$asting Corporation availed o, entitled ?alternative

petition or revie5 under !ule ' or petition or $ertiorari under !ule /0,? 5as 5rong.

"%e petition is D< AU"H>!)"F

vs.

:#A"AA; C>+

+.! o. =0, >$tober 1, 122=

*AC"S3

P%ilippine


28/186

aut%ority to sub6it t%e dispute to arbitration pursuant to t%e arbitration $lause in t%e

agree6ent.

"%e aut%ority reused to sub6it to arbitration, and t%us


29/186

>!M>C SU+A!CA< PLA"C)A")>, )C. :>SPA;,>CC)DL*AMCA;, U)*A!M

MUL")-PU!P>S< C>>P

)!!)+A")> MUL")-PU!P>S< C>>PU!" >* APP., )C., and >!M>C SU+A! M)LL)+ C>., )C.,

+.!. o. 0///2, August 1', 122=

*AC"S3

"%e relations%ip bet5een respondents and t%e individual sugar planters is

governed by 6illing $ontra$ts. Arti$le G)) o t%e 6illing $ontra$ts provides t%at 'O o

t%e sugar and 6olasses produ$ed ro6 6illing t%e Planter9s sugar$ane s%all belong to

t%e $entrals :respondents; as $o6pensation, /0O t%ereo s%all go to t%e Planter and t%e


30/186

re6aining O s%all go t%e asso$iation to 5%i$% t%e Planter $on$erned belongs, as aid to

t%e said asso$iation. "%e O aid s%all be used by t%e asso$iation or any purpose t%at

it 6ay dee6 it or its 6e6bers, laborers and t%eir dependents. ) t%e Planter 5as not a

6e6ber o any asso$iation, t%en t%e said O s%all revert to t%e $entrals. Petitioners

$lai6ed t%at respondents violated t%e Milling Contra$t 5%en t%ey gave to independent

planters 5%o do not belong to any asso$iation t%e O s%are, instead o reverting said

s%are to t%e $entrals. Petitioners $ontended t%at respondents unduly a$$orded t%e

independent Planters 6ore beneits and t%us prayed t%at an order be issued dire$ting

t%e parties to $o66en$e 5it% arbitration in a$$ordan$e 5it% t%e ter6s o t%e 6illing

$ontra$ts. Petitioners, 5it%out i6pleading any o t%eir individual 6e6bers, iled t5in

petitions 5it% t%e !"C or Arbitration under !.A. E. !espondents iled a 6otion to

dis6iss on ground o la$( o $ause o a$tion be$ause petitioners %ad no 6illing $ontra$t

5it% respondents. !"C denying t%e 6otion to dis6iss, de$laring t%e e4isten$e o a

6illing $ontra$t bet5een t%e parties, and dire$ting respondents to no6inate t5o

arbitrators to t%e #oard o Arbitrators

)SSU sugar planters9 asso$iations are $lot%ed 5it% legal personality to ile

a suit against, or de6and arbitration ro6, respondents in t%eir o5n na6e 5it%out

i6pleading t%e individual Planters.

!UL)+3

Se$tion 1 o !.A. o. E/ provides3

Se$. 1. Persons and 6atters sube$t to arbitration. I "5o or 6ore persons or parties

6ay sub6it to t%e arbitration o one or 6ore arbitrators any $ontroversy e4isting

bet5een t%e6 at t%e ti6e o t%e sub6ission and 5%i$% 6ay be t%e sube$t o an a$tion,

or t%e parties to any $ontra$t 6ay in su$% $ontra$t agree to settle by arbitration a

$ontroversy t%ereater arising bet5een t%e6. Su$% sub6ission or $ontra$t s%all be valid,

enor$eable and irrevo$able, save upon su$% grounds as e4ist at la5 or t%e revo$ation

o any $ontra$t.

"%e irst step to5ard t%e settle6ent o a dieren$e by arbitration is t%e entry by t%e

parties into a valid agree6ent to arbitrate. An agree6ent to arbitrate is a $ontra$t I t%e


31/186

relation o t%e parties is $ontra$tual- and t%e rig%ts and liabilities o t%e parties are

$ontrolled by t%e la5 o $ontra$ts. )n an agree6ent or arbitration, t%e ordinary ele6ents

o a valid $ontra$t 6ust appear I in$luding an agree6ent to arbitrate so6e spe$ii$

t%ing and an agree6ent to abide by t%e a5ard eit%er in e4press language or by

i6pli$ation.

)t 5as de$reed in #.*. Corporation v. CA t%at an arbitration agree6ent 6ust be

5ritten and subs$ribed by t%e parties t%ereto. one o t%e petitioners 5ere parties or

signatories to t%e 6illing $ontra$ts. "%is is atal to t%eir $ause sin$e t%ey an$%or t%eir

rig%t to de6and arbitration upon t%e arbitration $lause on t%e 6illing $ontra$ts.

"%ere is no legal basis or petitioners9 purported rig%t to de6and arbitration 5%en

t%ey are not parties to t%e 6illing $ontra$ts, espe$ially 5%en t%e language o t%e

arbitration $lause e4pressly grants t%e rig%t to de6and arbitration only to t%e parties o

t%e $ontra$t.

)LL)AM +>LA+C> C>S"!UC")> C>!P>!A")>

vs.

!AF #U!"> D

+.!. o. /0E1, August =, 122

*AC"S3


32/186

!ay #urton Develop6ent Corporation and illia6 +olang$o Constru$tion

Corporation :+CC; entered into a Contra$t or t%e $onstru$tion o t%e i$e8!esidential Condo6iniu6;. +CC iled a $o6plaint 5it% a reBuest or arbitration

5it% t%e Constru$tion )ndustry Arbitration Co66ission praying or t%e udg6ent o

ordering !DC to pay +CC t%e a6ount o or or a total o *ity "%ree Million Si4

Hundred Si4ty-Seven "%ousand "5o Hundred ineteen and interest $%arges based on

t%e prevailing ban( rates on t%e oregoing a6ount and until su$% ti6e as t%e sa6e s%all

be ully paid.

!#DC iled a Motion to Dis6iss t%e $o6plaint on t%e ground o la$( o

urisdi$tion. )t $ontends t%at t%e C)AC a$Buires urisdi$tion over disputes arising ro6 or

$onne$ted 5it% $onstru$tion $ontra$ts only 5%en t%e parties to t%e $ontra$t agree to

sub6it t%e sa6e to voluntary arbitration. )n t%e $ontra$t bet5een !DC and +CC,

petitioner $lai6ed t%at only disputes by reason o dieren$es in interpretation o t%e

$ontra$t do$u6ents s%all be dee6ed sube$t to arbitration.

+CC averred t%at t%e $lai6s set ort% in t%e $o6plaint reBuire $ontra$t

interpretation and are t%us $ogni@able by t%e C)AC pursuant to t%e arbitration $lause in

t%e $onstru$tion $ontra$t bet5een t%e parties. Moreover, even assu6ing t%at t%e $lai6s

do not involve diering $ontra$t interpretation, t%ey are still $ogni@able by t%e C)AC as

t%e arbitration $lause 6andates t%eir dire$t iling t%ere5it%.

"%e C)AC rendered an >rder in avor o +CC. >n appeal,t%e CA reversed t%e

de$ision o t%e C)AC, ruling t%at t%e C)AC %ad no urisdi$tion over t%e sube$t 6atter o

t%e $ase be$ause t%e parties agreed t%at only disputes regarding dieren$es in

interpretation o t%e $ontra$t do$u6ents s%all be sub6itted or arbitration, 5%ile t%e

allegations in t%e $o6plaint 6a(e out a $ase or $olle$tion o su6 o 6oney. +CC

6oved or re$onsideration o said ruling, but t%e sa6e 5as denied.


33/186

)SSU C)AC %as urisdi$tion.

!UL)+3

Fes. Clearly, t%e sube$t 6atter o petitioners $lai6s arose ro6 dieren$es in

interpretation o t%e $ontra$t, and under t%e ter6s t%ereo, su$% disputes are sube$t to

voluntary arbitration. Sin$e, under Se$tion ' o rder o. 22E t%e C)AC s%all

%ave original and e4$lusive urisdi$tion over disputes arising ro6, or $onne$ted 5it%,

$ontra$ts entered into by parties involved in $onstru$tion in t%e P%ilippines and all t%at is

needed or t%e C)AC to a$Buire urisdi$tion is or t%e parties to agree to sub6it t%e sa6e

to voluntary arbitration, t%ere $an be no ot%er $on$lusion but t%at t%e C)AC %ad

urisdi$tion over petitioners $o6plaint. *urt%er6ore,Se$tion , Arti$le ))) o t%e C)AC

!ules o Pro$edure +overning Constru$tion Arbitration :C)AC !ules; urt%er provide t%at

7Tan arbitration $lause in a $onstru$tion $ontra$t or a sub6ission to arbitration o a

$onstru$tion dispute s%all be dee6ed an agree6ent to sub6it an e4isting or uture

$ontroversy to C)AC urisdi$tion, not5it%standing t%e reeren$e to a dierent arbitration

institution or arbitral body in su$% $ontra$t or sub6ission.K "%us, even i t%ere is no

s%o5ing t%at petitioner previously broug%t its $lai6s beore a #oard o Arbitrators

$onstituted under t%e ter6s o t%e $ontra$t, t%is $ir$u6stan$e 5ould not divest t%e C)AC

o urisdi$tion.

Under Se$tion , Arti$le ))) o t%e C)AC !ules, an arbitration $lause in a

$onstru$tion $ontra$t s%all be dee6ed as an agree6ent to sub6it an e4isting or uture

$ontroversy to C)AC urisdi$tion, 7not5it%standing t%e reeren$e to a dierent arbitration

institution or arbitral body in su$% $ontra$t 4 4 4.K


34/186

CA!+)LL PH)L)PP)

Cargill P%ilippines, )n$. and !egala "rading, )n$. entered into a $ontra$t and

agreed upon t%at San *ernando !egala "rading, )n$. 5ould pur$%ase ro6 Cargill a

"%ailand origin $ane bla$(strap 6olasses and t%e delivery 5as to be 6ade in January

or *ebruary %o5ever, t%e delivery 5as 6oved to April or May and t%e pay6ent 5ould be

by an )rrevo$able Letter o Credit Payable at Sig%t. Cargill ailed to $o6ply 5it% t%e

obligation and !egala "rading iled a $o6plaint 5it% t%e !"C or t%e !es$ission o t%e

Contra$t 5it% Da6ages against Cargill. Cargill iled a Motion to Dis6iss 8 Suspend

Pro$eedings and reer $ontroversy to Goluntary Arbitration, it argued t%at t%e $ontra$t

bet5een t%e parties 5as never $onsu66ated be$ause !egala "rading did not return

t%e proposed agree6ent bearing its 5ritten a$$eptan$e.

)SSU t%e validity and enor$eability o t%e $ontra$t $ontaining t%e arbitration

agree6ent violate any provision o t%e Arbitration La5.

!UL)+3

Applying t%e +on@ales ruling, an arbitration agree6ent 5%i$% or6s part o t%e

6ain $ontra$t s%all not be regarded as invalid or non-e4istent ust be$ause t%e 6ain

$ontra$t is invalid or did not $o6e into e4isten$e, sin$e t%e arbitration agree6ent s%all

be treated as a separate agree6ent independent o t%e 6ain $ontra$t. A $ontrary ruling

5ould suggest t%at a partys 6ere repudiation o t%e 6ain $ontra$t is sui$ient to avoid

arbitration and t%at is e4a$tly t%e situation t%at t%e separability do$trine soug%t to avoid.

"%us, 5e ind t%at even t%e party 5%o %as repudiated t%e 6ain $ontra$t is not prevented

ro6 enor$ing its arbitration $lause.


35/186

"%e separability o t%e arbitration agree6ent is espe$ially signii$ant to t%e

deter6ination o 5%et%er t%e invalidity o t%e 6ain $ontra$t also nulliies t%e arbitration

$lause. )ndeed, t%e do$trine denotes t%at t%e invalidity o t%e 6ain $ontra$t, also

reerred to as t%e ?$ontainer? $ontra$t, does not ae$t t%e validity o t%e arbitration

agree6ent. )rrespe$tive o t%e a$t t%at t%e 6ain $ontra$t is invalid, t%e arbitration

$lause8agree6ent still re6ains valid and enor$eable.

!C#C Capital Corporation

vs.

#an$o de >ro Uniban( )n$

+! =/, De$e6ber 2 121

----------------------------------------------

#an$o de >ro Uniban( )n$

vs.

Court o Appeals and !C#C

+.! o. ==1E, De$e6ber 2,121

*AC"S3

"%e respondent :#D>;reused to pay its s%are o t%e advan$e on arbitration

$osts, as i4ed by t%e )nternational C%a6ber o Co66er$e :)CC; )nternational Court o

Arbitration. "%e respondent $lai6ed t%at t%e a6ount o t%e $lai6 5as substantially

%ig%er I 6ore t%an '2 ti6es I t%an t%e total a6ount o t%e $ounter$lai6s. "%e $ourt

instru$ted t%e arbitration tribunal to suspend its 5or( unless t%e parties paid t%e balan$e

o t%e advan$e 5it%in 0 days. )n vie5 o t%e respondents ongoing reusal to pay its

s%are, t%e $lai6ant:!C#C; 5as $o6pelled to pay all advan$e $osts and soug%t to

de$lare t%e respondent in deault, 5it% no rig%t to parti$ipate in t%e pro$eedings.

)n a letter to t%e parties, t%e $%air6an 5rote t%at t%e tribunal %ad no po5er under

)CC rules to order t%e respondent to pay t%e advan$e $osts soug%t by t%e )CC or to give

t%e $lai6ant relie. )t 6ay %ave been possible or t%e $lai6ant, in t%e $ourse o t%e

arbitral %earing, to 6a(e sub6issions based on t%e ailure o t%e respondent to pay its


36/186

s%are. !elie, i any, 5ould need to be deter6ined by t%e tribunal ater %earing

sub6issions ro6 t%e respondent.

"%e 6aority o t%e tribunal rendered a irst partial a5ard, 5%i$% reserved a

resolution on $osts to a urt%er or inal a5ard. )n anot%er letter, t%e $lai6ant reiterated its

plea t%at t%e respondent be de$lared in deault and t%e $ounter$lai6s dee6ed

5it%dra5n. )n response, t%e $%air6an ruled t%at t%e tribunal %ad no urisdi$tion to

de$lare t%at t%e respondent %ad no rig%t to parti$ipate in t%e pro$eedings. Arti$le /:';

o t%e )CC rules applies only to $ounter$lai6s. "%e tribunal interpreted t%e $lai6ants

letter as an appli$ation to t%e tribunal or t%e issuan$e o a partial a5ard against t%e

respondent in respe$t o its ailure to pay. "%e $lai6ant $onir6ed t%e tribunals

interpretation.

)n t%e ensuing %earing, t%e $%air6an advised t%e parties as ollo5s3

?. "%e "ribunal a$(no5ledges t%e !espondents response to t%e Clai6ants appli$ation

or a Partial A5ard, based on t%e !espondents ailure to pay its s%are o t%e $osts, as

reBuested by t%e )CC.

1. "%e "ribunal notes t%at neit%er party %as reerred to an arti$le by MatTt%e5 Se$o6b

on t%is very sube$t 5%i$% appears in t%e )CC #ulletin Gol. ' o. :Spring 122;. "o

assist bot% sides and to ensure t%at t%e "ribunal does not $onsider 6aterial on 5%i$%

t%e parties %ave not been given an opportunity to address, ) atta$% a $opy o t%is arti$le,

5%i$% also $ontains reeren$e to ot%er s$%olarly 5or(s on t%e sube$t.

. "%e "ribunal 5ill give ea$% party seven days 5it%in 5%i$% to sub6it urt%er 5ritten

$o66ents as a $onseBuen$e o being alerted to t%e above aut%orities.?

"%e parties sub6itted t%eir $o66ents 5it% t%e $lai6ant $ontending t%at based on

Se$o6bs arti$le, 5%et%er t%e $ontra$tual or provisional 6easures approa$% 5as

applied, t%e tribunal 5as vested 5it% urisdi$tion and aut%ority to render an a5ard 5it%

respe$t to t%e rei6burse6ent o $osts paid by t%e non-deaulting party.

"%e respondent, on t%e ot%er %and, 6aintained t%at t%e $lai6ants appli$ation or

rei6burse6ent o $osts %ad no basis under t%e )CC rules. A$$ording to t%e respondent,

t%e 6atter o $osts or arbitration is bet5een t%e )CC and t%e parties, not t%e tribunal

and t%e parties. An arbitration tribunal $an issue de$isions only on t%ose $osts not i4ed

by t%e )CC.


37/186

"%e respondent also argued t%at a partys rei6burse6ent or pay6ents o t%e deaulting

partys s%are depends on t%e inal arbitral a5ard 5%ere t%e party liable or $osts 5ould

be deter6ined. "%e tribunal t%en rendered a se$ond partial a5ard reBuiring t%e

respondent to pay t%e $lai6ant t%e $osts it advan$ed and to $onsider t%e respondents

$ounter$lai6 5it%dra5n.

"%ereater, t%e $lai6ant iled a 6otion in $ourt to $onir6 t%e se$ond partial a5ard, 5%ile

t%e respondent iled a 6otion to va$ate t%e se$ond partial a5ard. "%e $ourt $onir6ed

t%e se$ond partial a5ard and denied t%e respondents 6otion to va$ate t%e sa6e.

A$ting on a petition or $ertiorari, t%e Court o Appeals reversed t%e order o t%e lo5er

$ourt and set aside t%e se$ond partial a5ard.

)SSU t%ere is legal ground to va$ate t%e Se$ond Partial A5ard.

!UL)+3

>n petition or revie5, t%e Supre6e Court up%eld t%e Court o Appeals ruling t%at

in treating t%e letter o t%e $lai6ant as an appli$ation or a partial a5ard and in

urnis%ing t%e parties 5it% a $opy o Se$o6bs arti$le - 5%i$% avoured t%e $lai6ant by

advan$ing its $ause - t%e $%air6an a$ted 5it% partiality. "%e Supre6e Court adopted

t%e reasonable i6pression o partiality standard and %eld t%at t%e a$t o urnis%ing t%e

parties 5it% Se$o6bs arti$le, $onsidering t%e attendant $ir$u6stan$es, 5as indi$ative o

partiality su$% t%at a reasonable individual 5ould %ave to $on$lude t%at it 5as avouring

t%e $lai6ant. rders Dealing 5it% t%e Advan$e on

Costs in )CC Arbitration3 "%eoreti$al Nuestions and Pra$ti$al Proble6s?, states3

?As 5e $an see, t%e !ules %ave $ertain 6e$%anis6s to deal 5it% deaulting parties.

>$$asionally, %o5ever, parties %ave soug%t to use ot%er 6et%ods to ta$(le t%e proble6

o a party reusing to pay its part o t%e advan$e on $osts. "%ese %ave in$luded see(ing


38/186

an order or a5ard ro6 t%e arbitral tribunal $onde6ning t%e deaulting party to pay its

s%are o t%e advan$e on $osts. Su$% appli$ations are t%e sube$t o t%is arti$le.?

A$$ording to t%e Supre6e Court, by urnis%ing bot% parties 5it% a $opy o t%e

arti$le :alt%oug% purportedly done to assist bot% parties;, t%e $%air6an provided t%e

$lai6ant 5it% supporting legal argu6ents. "%is bolstered t%e i6pression t%at t%e

$%air6an 5as pre-disposed to grant relie to t%e $lai6ant. "%e $ourt ound t%e

$%air6ans a$t $learly violated Arti$le 0 o t%e )CC rules and de$lared t%at ?in all $ases,

t%e Arbitration "ribunal s%all a$t airly and in partiality and ensure t%at ea$% party %as a

reasonable opportunity to present its $ase?. Co66ent )n urnis%ing bot% parties 5it% a

$opy o an arti$le, and in providing bot% parties t%e opportunity to sub6it t%eir

$o66ents, t%e $%air6an did not a$t 5it% partiality nor did %e pre-udge t%e issue. )t is

Buite $o66on, even in litigation, or a udge to $all t%e attention o bot% parties to $ertain

rules or de$isions 5%i$% t%e parties 6ay %ave o6itted in argu6ent, and to as( t%e6 to

$o66ent on t%eir appli$ability or pertinen$e in t%e resolution o an issue. Su$% a$tion by

itsel does not a6ount to partiality or pre-udg6ent.

)ndeed, t%e tribunal 6ay %ave urnis%ed t%e arti$le in an eort to guide t%e parties,

s%orten pro$eedings and $ondu$t t%e arbitration in an e4peditious 6anner. Ater t%e

issuan$e o t%e se$ond partial a5ard :but beore t%e Supre6e Court issued its

resolution;, t%e sa6e tribunal rendered a inal a5ard in avour o t%e $lai6ant. Ater t%e

$ourt $onir6ed and ordered enor$e6ent o t%e inal a5ard, bot% t%e Court o Appeals

and t%e Supre6e Court reused to stay or enoin its enor$e6ent.

DEL MONTE CORP. USA vs. CAGR No. 136154 | Feb 7, !!1 | Pe""o$ %o& Reve' o$ Ce&"o&(& | )e**os**oPe""o$e&s+ De* Mo$"e Co&. USA, P(-* De&b /&., D($e* Co**$s 0 L-s 2(*oReso$2e$"s+ CA, M(*(bo$ RTC )&($ 74 /-2e )e$ve$2o Rees, Mo$"eb-e$o

M(&e"$, $., Lo$ Lo$ C. S ($2 S(b&os( Fo22s, $.

F("s+

♣ 1 July 1994 - in a Distributorship Agreement, Del Monte Corporation-USA (DMC-USA)appointe Montebueno Mar!eting, "n#$ (MM") as the sole an e%#lusi&e istributor o' itsDel Monte prou#ts in the hilippines 'or a perio o' &e (*) years, rene+able 'or t+o ()#onse#uti&e &e (*) year perios +ith the #onsent o' the parties$

♣ Sai agreement pro&ie 'or an arbitration #lause, +hi#h states

This Agreement shall be governed by the laws of the State of California and/or, if applicable, the United States of America. All disputes arising out of or relating to this Agreement or the parties’ relationship, including the termination thereof, shall beresolved by arbitration in the City of San rancisco, State of California, under the !ules of the American Arbitration Association. The arbitration panel shall consist of three


39/186

members, one of whom shall be selected by "#C$USA, one of whom shall be selected by ##%, and third of whom shall be selected by the other two members and shall haverelevant e&perience in the industry

♣ .#tober 1994 - appointment o' MM" as the sole an e%#lusi&e istributor o' Del Monte

prou#ts in the hilippines +as publishe in se&eral ne+spapers in the #ountry$

♣ "mmeiately a'ter its appointment, MM" appointe Sabrosa /oos, "n#$ (S/"), +ith the

appro&al o' DMC-USA, as MM"0s mar!eting arm to #on#entrate on its mar!eting an selling'un#tion as +ell as to manage its #riti#al relationship +ith the trae$

♣ .#tober 1992 - MM", S/" an MM"0s Managing Dire#tor 3iong 3iong C$ Sy (3"3 S) le a

Complaint against DMC-USA, Managing Dire#tor o' Del Monte Corporation0s 5%port SalesDepartment aul 5$ Derby, Jr$, 6egional Dire#tor o' Del Monte Corporation0s 5%port SalesDepartment Daniel Collins, 7ea o' Creit Ser&i#es Department o' Del Monte Corporation3uis 7ialgo an De+ey 3t$ be'ore Malabon 68C$

♣ MM" et al$ prei#ate their #omplaint on the allege &iolations by Del Monte et al$ o'

Arti#les 1, 1 an o' the Ci&il Coe$A##oring to them, DMC-USA prou#ts #ontinue to be brought into the #ountry byparallel importers espite the appointment o' MM" as the sole an e%#lusi&e istributor o' Del Monte prou#ts thereby #ausing them great embarrassment an substantialamage$ 8hey allege that the prou#ts brought into the #ountry by these importers+ere age, amage, 'a!e or #ounter'eit, so that in Mar#h 199* they ha to #ause, a'ter

prior #onsultation +ith Antonio .ngpin, Mar!et Dire#tor 'or Spe#ial Mar!ets o' Del Montehilippines, "n#$, the publi#ation o' a :+arning to the trae: pai a&ertisement in leaingne+spapers$ DMC-USA an aul 5$ Derby, Jr$, apparently upset +ith the publi#ation,instru#te pri&ate responent MM" to stop #oorinating +ith Antonio .ngpin an to#ommuni#ate ire#tly instea +ith DMC-USA through aul 5$ Derby, Jr$

♣ MM" et al$ 'urther a&erre that

1 DMC-USA et al$ !no+ingly an surreptitiously #ontinue to eal +ith the 'ormer in ba'aith by in&ol&ing isintereste thir parties an by proposing solutions +hi#h +ereentirely out o' their #ontrol

they ha e%hauste all possible a&enues 'or an ami#able resolution an settlement o' their grie&an#es

as a result o' the 'rau, ba 'aith, mali#e an +anton attitue o' DMC-USA et al$, theyshoul be hel responsible 'or all the a#tual e%penses in#urre by MM" et al$ in theelaye shipment o' orers +hi#h resulte in the e%tra hanling thereo', the a#tual

e%penses an #ost o' money 'or the unuse 3etters o' Creit (3Cs) an the substantialopportunity losses ue to #reate out-o'-sto#! situations an unauthori;e shipmentso' Del Monte-USA prou#ts to the hilippine Duty /ree Area an 5#onomi#


40/186

* the shre+ an subtle manner +ith +hi#h DMC-USA et al$ #on#o#te imaginary&iolations by MM" o' the Distributorship Agreement in orer to >usti'y the untimelytermination thereo' +as a subter'uge

♣ 1 .#tober 1992 @ DMC-USA et al$ le a #otion to Suspend 'roceedings, in&o!ing the

arbitration #lause$

♣ 68C e'erre #onsieration o' DMC-USA et al$0s #otion to Suspend 'roceedings as the

grouns allege therein i not #onstitute the suspension o' the pro#eeings #onsieringthat the a#tion +as 'or amages +ith prayer 'or the issuan#e o' (rit of 'reliminary Attachment an not on the Distributorship Agreement

♣ DMC-USA et al$ le a M6 to +hi#h MM" et al$ le their #ommentopposition$

♣ DMC-USA et al$ le a reply$ 8hey later on le a Motion to Amit Supplemental leaing$

♣ Sai motion +as amitte$

♣ As a result o' the amission o' the Supplemental Complaint , DMC-USA et al$ le on

July 199B a #anifestation aopting their #otion to Suspend 'roceedings o' 1B .#tober1992 an #otion for !econsideration o' 14 January 199B$

♣ 11 o&ember 199B - the #otion to Suspend 'roceedings +as enie by the trial #ourt on

the groun that it )will not serve the ends of *ustice and to allow said suspension will only delay the determination of the issues, frustrate the +uest of the parties for a *udiciousdetermination of their respective claims, and/or deprive and delay their rights to see redress$

♣ .n appeal, the CA arme the 68C e#ision$

♣ 7en#e, this petition$

ss-e+E. the ispute bet+een the parties +arrants an orer #ompelling them to submit to arbitrationFNOG

R("o+♣ 8here is no oubt that arbitration is &ali an #onstitutional in our >urisi#tion$ 5&en

be'ore the ena#tment o' 6A HB2, this Court has #ountenan#e the settlement o' isputesthrough arbitration$ Unless the agreement is su#h as absolutely to #lose the oors o' the#ourts against the parties, +hi#h agreement +oul be &oi, the #ourts +ill loo! +ith 'a&orupon su#h ami#able arrangement an +ill only inter'ere +ith great relu#tan#e to

anti#ipate or nulli'y the a#tion o' the arbitrator$ Moreo&er, as 6A HB2 e%pressly authori;esarbitration o' omesti# isputes, 'oreign arbitration as a system o' settling #ommer#ialisputes +as li!e+ise re#ogni;e +hen the hilippines ahere to the Uniteations )Convention on the !ecognition and the -nforcement of oreign Arbitral Awardsof 01) uner the 1 May 192* 6esolution o$ B1 o' the hilippine Senate, gi&ingre#ipro#al re#ognition an allo+ing en'or#ement o' international arbitration agreementsbet+een parties o' iIerent nationalities +ithin a #ontra#ting state$

♣ A #are'ul e%amination o' the instant #ase sho+s that the arbitration #lause in the

Distributorship Agreement bet+een DMC-USA an MM" is &ali an the ispute bet+eenthe parties is arbitrable$ 7o+e&er, this Court must eny the petition$

♣ Te A&ee8e$" be"'ee$ DMC9USA ($2 MM s ( o$"&("$ Te &ovso$ "o

s-b8" "o (&b"&("o$ ($ 2s-"e (&s$ "e&e%&o8 ($2 "e &e*("o$s o% "e(&"es s (&" o% "(" o$"&(" ($2 s "se*% ( o$"&("$ As a rule, #ontra#ts arerespe#te as the la+ bet+een the #ontra#ting parties an prou#e eIe#t as bet+eenthem, their assigns an heirs$

♣ Clearly, only parties to the Agreement, i.e$, DMC-USA an its Managing Dire#tor 'or 5%port

Sales aul 5$ Derby, Jr$, an MM" an its Managing Dire#tor 3"3 S are boun by theAgreement an its arbitration #lause as they are the only signatories thereto$o Daniel Collins an 3uis 7ialgo, an S/", not parties to the Agreement an #annot

e&en be #onsiere assigns or heirs o' the parties, are not boun by the Agreementan the arbitration #lause therein$

♣ Co$se:-e$"*, &e%e&&(* "o (&b"&("o$ $ "e S"("e o% C(*%o&$( -&s-($" "o "e

(&b"&("o$ *(-se ($2 "e s-se$so$ o% "e &oee2$s $ Cv* C(se No. 6379


41/186

MN e$2$ "e &e"-&$ o% "e (&b"&(* ('(&2 o-*2 be (**e2 %o& b-" o$* (s "oDMC9USA ($2 P(-* E. De&b, /&., ($2 MM ($2 LL; S;, ($2 $o" (s "o "e o"e&(&"es $ "s (se, in a##oran#e +ith the re#ent #ase o' 2eirs of Augusto 3. Salas, 4r.v. 3aperal !ealty Corporation, +hi#h supersee that o' Toyota #otor 'hilippines Corp. v.Court of Appeals$o "n Toyota, the Court rule that :FtGhe #ontention that the arbitration #lause has

be#ome ys'un#tional be#ause o' the presen#e o' thir parties is untenable

ratio#inating that :F#Gontra#ts are respe#te as the la+ bet+een the #ontra#tingparties: an that :FaGs su#h, the parties are thereby e%pe#te to abie +ith goo 'aithin their #ontra#tual #ommitments$:

o 7o+e&er, in Salas, 4r., only parties to the Agreement, their assigns or heirs ha&e the

right to arbitrate or #oul be #ompelle to arbitrate$ 8he Court +ent 'urther bye#laring that $ &eo$


42/186

Ho5ever, petitioner in$urred delay in t%e $onstru$tion 5or( t%at SP) $onsidered as ?serious and substantial.? 1 >n t%e ot%er %and,

a$$ording to petitioner, t%e $onstru$tion 5or(s ?progressed in ait%ul $o6plian$e 5it% t%e *irst Agree6ent

until a ire bro(e out on ove6ber 2, ==2 da6aging P%ase )? o t%e Proe$t. 2 Hen$e, SP) proposed t%e

re-negotiation o t%e agree6ent bet5een t%e6.

ConseBuently, on May 2, ==, petitioner and SP) entered into a 5ritten agree6ent deno6inated as

?Agree6ent or t%e lbes, +erardo >. Lanu@a, Jr., Ma4i6o +. Li$au$o ))) and #ena6in C. !a6os.

>n August , ==, SP) and its $o-deendants iled a 6otion to suspend pro$eedings instead o iling an

ans5er. "%e 6otion 5as an$%ored on deendants allegation t%at t%e or6al trade $ontra$t or t%e

$onstru$tion o t%e proe$t provided or a $lause reBuiring prior resort to arbitration beore udi$ial

intervention $ould be invo(ed in any dispute arising ro6 t%e $ontra$t. "%e ollo5ing day, SP) sub6itted a

$opy o t%e $onditions o t%e $ontra$t $ontaining t%e arbitration $lause t%at it ailed to append to its 6otion

to suspend pro$eedings.

Petitioner opposed said 6otion $lai6ing t%at t%ere 5as no or6al $ontra$t bet5een t%e parties alt%oug%

t%ey entered into an agree6ent deining t%eir rig%ts and obligations in underta(ing t%e proe$t. )t

e6p%asi@ed t%at t%e agree6ent did not provide or arbitration and t%ereore t%e $ourt $ould not be

deprived o urisdi$tion $onerred by la5 by t%e 6ere allegation o t%e e4isten$e o an arbitration $lause in

t%e agree6ent bet5een t%e parties.

)n reply to said opposition, SP) insisted t%at t%ere 5as su$% an arbitration $lause in t%e e4isting $ontra$t

bet5een petitioner and SP). )t alleged t%at suspension o pro$eedings 5ould not ne$essarily deprive t%e

$ourt o its urisdi$tion over t%e $ase and t%at arbitration 5ould e4pedite rat%er t%an delay t%e settle6ent

o t%e parties respe$tive $lai6s against ea$% ot%er.

)n a reoinder to SP)s reply, petitioner reiterated t%at t%ere 5as no arbitration $lause in t%e $ontra$t

bet5een t%e parties. )t averred t%at granting t%at su$% a $lause indeed or6ed part o t%e $ontra$t,

suspension o t%e pro$eedings 5as no longer proper. )t added t%at deendants s%ould be de$lared in

deault or ailure to ile t%eir ans5er 5it%in t%e regle6entary period.

)n its sur-reoinder, SP) pointed out t%e signii$an$e o petitioners ad6ission o t%e due e4e$ution o t%e

?Arti$les o Agree6ent.? "%us, on page D8/ t%ereo, t%e signatures o !uo #. Colay$o, SP) president, and

#ayani *ernando, president o petitioner appear, 5%ile page D8 s%o5s t%at t%e agree6ent is a publi$

do$u6ent duly notari@ed on ove6ber 0, == by otary Publi$ ilberto !. #riones as do$u6ent o.

'0, page 2, boo( o. L, Series o == o %is notarial register. 5


43/186

"%ereater, upon a inding t%at an arbitration $lause indeed e4ists, t%e lo5er $ourt * denied t%e 6otion to

suspend pro$eedings, t%us3

)t appears ro6 t%e said do$u6ent t%at in t%e letter-agree6ent dated May 2, ==

:Anne4 C, Co6plaint;, plainti #* and deendant S%angri-La Properties, )n$. agreed upon

t%e ter6s and $onditions o t%e #uilders or( or t%e 5ner and t%e Contra$tor or t%eir sae (eeping.? :e6p%asis

supplied;.

And it is signii$ant to note urt%er t%at t%e said ?Conditions o Contra$t? is not duly signed

by t%e parties on any page t%ereo R alt%oug% it bears t%e initials o #*s representatives

:#ayani *. *ernando and !eynaldo M. de la Cru@; 5it%out t%e initials t%ereon o any

representative o S%angri-La Properties, )n$.

Considering t%e insisten$e o t%e plainti t%at t%e said Conditions o Contra$t 5as not

duly e4e$uted or signed by t%e parties, and t%e ailure o t%e deendants to sub6it any

signed $opy o t%e said do$u6ent, t%is Court entertains serious doubt 5%et%er or not t%e

arbitration $lause ound in t%e said Conditions o Contra$t is binding upon t%e parties to

t%e Arti$les o Agree6ent.? :


44/186

arbitration s%all be 6ade 5it%in a reasonable ti6e ater t%e dispute %as arisen and

atte6pts to settle a6i$ably %ave ailed in no $ase, %o5ever, s%all t%e de6and %e 6ade

be later t%an t%e ti6e o inal pay6ent e4$ept as ot%er5ise e4pressly stipulated in t%e

$ontra$t.

Against t%e above ba$(drop, t%e lo5er $ourt ound t%at per t%e May 2, == agree6ent, t%e proe$t 5as

to be $o6pleted by >$tober , ==. "%ereater, t%e $ontra$tor 5ould pay PE2,222 or ea$% day o delay

$ounted ro6 ove6ber , == 5it% ?liBuiied :sic ; da6ages up to a 6a4i6u6 o 0O o t%e total $ontra$t

pri$e.?

"%e lo5er $ourt also ound t%at ater t%e proe$t 5as $o6pleted in a$$ordan$e 5it% t%e agree6ent t%at

$ontained a provision on ?progress pay6ent billing,? SP) ?too( possession and started operations t%ereo

by opening t%e sa6e to t%e publi$ in ove6ber, ==.? SP), %aving ailed to pay or t%e 5or(s, petitioner

billed SP) in t%e total a6ount o P2,EE,2.01, $ontained in a de6and letter sent by it to SP) on

*ebruary , ==. )nstead o paying t%e a6ount de6anded, SP) set up its o5n $lai6 o P112,222,222.22

and s$%eduled a $oneren$e on t%at $lai6 or July 1, ==. "%e $oneren$e too( pla$e but it proved

utile.

Upon t%e above a$ts, t%e lo5er $ourt $on$luded3

Considering t%e a$t t%at under t%e supposed Arbitration Clause invo(ed by deendants, it

is reBuired t%at ?oti$e o t%e de6and or arbitration o a dispute s%all be iled in 5riting

5it% t%e ot%er party . . . . in no $ase . . . . later t%an t%e ti6e o inal pay6ent . . . ?5%i$%

apparently, %ad elapsed, not only be$ause deendants %ad ta(en possession o t%e

inis%ed 5or(s and t%e plaintis billings or t%e pay6ent t%ereo %ad re6ained pending

sin$e ove6ber, == up to t%e iling o t%is $ase on July ', ==, but also or t%e

reason t%at deendants %ave ailed to ile any 5ritten noti$e o any de6and or arbitration

during t%e said long period o one year and eig%t 6ont%s, t%is Court inds t%at it $annot

stay t%e pro$eedings in t%is $ase as reBuired by Se$. o !epubli$ A$t o. E/, be$ause

deendants are in deault in pro$eeding 5it% su$% arbitration.

"%e lo5er $ourt denied SP)s 6otion or re$onsideration or la$( o 6erit and dire$ted it and t%e ot%er

deendants to ile t%eir responsive pleading or ans5er 5it%in iteen :0; days ro6 noti$e.

)nstead o iling an ans5er to t%e $o6plaint, SP) iled a petition or certiorari under !ule /0 o t%e !ules o

Court beore t%e Court o Appeals. Said appellate $ourt granted t%e petition, annulled and set aside t%e

orders and stayed t%e pro$eedings in t%e lo5er $ourt. )n so ruling, t%e Court o Appeals %eld3

"%e reasons given by t%e respondent Court in denying petitioners 6otion to suspend

pro$eedings are untenable.

. "%e notari@ed $opy o t%e arti$les o agree6ent atta$%ed as Anne4 A to petitioners

reply dated August 1/, ==, %as been sub6itted by t%e6 to t%e respondent Court

:Anne4 +, petition;. )t bears t%e signature o petitioner !uo #. Colay$o, president o

petitioner S%angri-La Properties, )n$., and o #ayani *ernando, president o respondent

Corporation :Anne4 +-, petition;. At page D8' o said arti$les o agree6ent it is

e4pressly provided t%at t%e $onditions o $ontra$t are ?dee6ed an integral part? t%ereo

:page EE, rollo;. And it is at pages D8'1 to D8'' o t%e $onditions o $ontra$t t%at t%e


45/186

provisions or arbitration are ound :Anne4es +- to +-0, petition, pp. 11-11=;. Clause

o. 0 on arbitration spe$ii$ally provides3

Provided al5ays t%at in $ase any dispute or dieren$e s%all arise

bet5een t%e >5ner or t%e Proe$t Manager on %is be%al and t%e

Contra$tor, eit%er during t%e progress or ater t%e $o6pletion or

abandon6ent o t%e or(s as to t%e $onstru$tion o t%is Contra$t or as to

any 6atter or t%ing o 5%atsoever nature arising t%ereunder or in

$onne$tion t%ere5it% :in$luding any 6atter or being let by t%is Contra$t

to t%e dis$retion o t%e Proe$t Manager or t%e 5it%%olding by t%e Proe$t

Manager o any $ertii$ate to 5%i$% t%e Contra$tor 6ay $lai6 to be

entitled or t%e 6easure6ent and valuation 6entioned in $lause 2 :0; :a;

o t%ese Conditions or t%e rig%ts and liabilities o t%e parties under

$lauses 10, 1/, 1 or o t%ese Conditions;, t%e >5ner and t%e

Contra$tor %ereby agree to e4ert all eorts to settle t%eir dieren$es or

dispute a6i$ably. *ailing t%ese eorts t%en su$% dispute or dieren$e

s%all be reerred to Arbitration in a$$ordan$e 5it% t%e rules and

pro$edures o t%e P%ilippine Arbitration La5.

"%e a$t t%at said $onditions o $ontra$t $ontaining t%e arbitration $lause bear only t%e

initials o respondent Corporations representatives, #ayani *ernando and !eynaldo de la

Cru@, 5it%out t%at o t%e representative o petitioner S%angri-La Properties, )n$. does not

6ilitate against its ee$tivity. Said petitioner %aving $ategori$ally ad6itted t%at t%e

do$u6ent, Anne4 A to its reply dated August 1/, == :Anne4 +, petition;, is t%e

agree6ent bet5een t%e parties, t%e initial or signature o said petitioners representative

to signiy $onor6ity to arbitration is no longer ne$essary. "%e parties, t%ereore, s%ould

be allo5ed to sub6it t%eir dispute to arbitration in a$$ordan$e 5it% t%eir agree6ent.

1. "%e respondent Court %eld t%at petitioners ?are in deault in pro$eeding 5it% su$%

arbitration.? )t too( note o ?t%e a$t t%at under t%e supposed Arbitration Clause invo(ed

by deendants, it is reBuired t%at ?oti$e o t%e de6and or arbitration o a dispute s%all

be iled in 5riting 5it% t%e ot%er party . . . in no $ase . . . later t%an t%e ti6e o inal

pay6ent,? 5%i$% apparently, %ad elapsed, not only be$ause deendants %ad ta(en

possession o t%e inis%ed 5or(s and t%e plaintis billings or t%e pay6ent t%ereo %ad

re6ained pending sin$e ove6ber, == up to t%e iling o t%is $ase on July ', ==,

but also or t%e reason t%at deendants %ave ailed to ile any 5ritten noti$e o any

de6and or arbitration during t%e said long period o one year and eig%t 6ont%s, . . . .?

!espondent Court %as overloo(ed t%e a$t t%at under t%e arbitration

$lause R

oti$e o t%e de6and or arbitration dispute s%all be iled in 5riting 5it%

t%e ot%er party to t%e $ontra$t and a $opy iled 5it% t%e Proe$t Manager.

The demand for arbitration shall be made within a reasonable time after

the dispute has arisen and attempts to settle amicably had failed in no

$ase, %o5ever, s%all t%e de6and be 6ade later t%an t%e ti6e o inal

pay6ent e4$ept as ot%er5ise e4pressly stipulated in t%e $ontra$t

:e6p%asis supplied;


46/186

Buoted in its order :Anne4 A, petition;. As t%e respondent Court t%ere said, ater t%e inal

de6and to pay t%e a6ount o P2,EE,2.01, instead o paying, petitioners set up its

o5n $lai6 against respondent Corporation in t%e a6ount o P112,222,222.22 and set a

$oneren$e t%ereon on July 1, ==. Said $oneren$e proved utile. "%e ne4t day, July

', ==, respondent Corporation iled its $o6plaint against petitioners. >n August ,

==, petitioners 5rote to respondent Corporation reBuesting arbitration. Under t%e

$ir$u6stan$es, it $annot be said t%at petitioners resort to arbitration 5as 6ade beyond

reasonable ti6e. eit%er $an t%ey be $onsidered in deault o t%eir obligation to

respondent Corporation.

Hen$e, t%is petition beore t%is Court. Petitioner assigns t%e ollo5ing errors3

A

"H< C>U!" >* APPU+H "H< !* APP

:i; "H< PA!")" A

A+!

A!< AL!


47/186

urisdi$tion $o66itted by a lo5er $ourt. ?%ere t%e proper re6edy is appeal, t%e a$tion

or certiorari 5ill not be entertained. . . . Certiorari is not a re6edy or errors o udg6ent.


48/186

6ay be rela4ed. 10 As 5e s%all s%o5 %ereunder, %ad t%e Court o Appeals dis6issed t%e petition or

certiorari , t%e issue o 5%et%er or not an arbitration $lause e4ists in t%e $ontra$t 5ould not %ave been

resolved in a$$ordan$e 5it% eviden$e e4tant in t%e re$ord o t%e $ase. ConseBuently, t%is 5ould %ave

resulted in a udi$ial ree$tion o a $ontra$tual provision agreed by t%e parties to t%e $ontra$t.

)n t%e sa6e vein, t%is Court %olds t%at t%e Buestion o t%e e4isten$e o t%e arbitration $lause in t%e

$ontra$t bet5een petitioner and private respondents is a legal issue t%at 6ust be deter6ined in t%is

petition or revie5 on certiorari .

Petitioner, 5%ile not denying t%at t%ere e4ists an arbitration $lause in t%e $ontra$t in Buestion, asserts t%at

in contemplation of law t%ere $ould not %ave been one $onsidering t%e ollo5ing points. $irst , t%e trial

$ourt ound t%at t%e ?$onditions o $ontra$t? e6bodying t%e arbitration $lause is not duly signed by t%e

parties. Second , private respondents 6isrepresented beore t%e Court o Appeals t%at t%ey produ$ed in

t%e trial $ourt a notari@ed dupli$ate original $opy o t%e $onstru$tion agree6ent be$ause 5%at 5ere

sub6itted 5ere 6ere p%oto$opies t%ereo. "%e $ontra$t:s; introdu$ed in $ourt by private respondents

5ere t%ereore ?o dubious aut%enti$ity? be$ause3 :a; t%e Agree6ent or t%e


49/186

6eans to 5rite underneat%, as ones na6e to sign at t%e end o a do$u6ent. 11 "%at 5ord 6ay

so6eti6es be $onstrued to 6ean to give $onsent to or to attest. 12

"%e Court inds t%at, upon a s$rutiny o t%e re$ords o t%is $ase, t%ese reBuisites 5ere $o6plied 5it% in

t%e $ontra$t in Buestion. "%e Arti$les o Agree6ent, 5%i$% in$orporates all t%e ot%er $ontra$ts and

agree6ents bet5een t%e parties, 5as signed by representatives o bot% parties and duly notari@ed. "%e

ailure o t%e private respondents representative to initial t%e ?Conditions o Contra$t? 5ould t%ereor not

ae$t $o6plian$e 5it% t%e or6al reBuire6ents or arbitration agree6ents be$ause t%at parti$ular portion

o t%e $ovenants bet5een t%e parties 5as in$luded by reeren$e in t%e Arti$les o Agree6ent.

Petitioners $ontention t%at t%ere 5as no arbitration $lause be$ause t%e $ontra$t in$orporating said

provision is part o a ?%odge-podge? do$u6ent, is t%ereore untenable. A $ontra$t need not be $ontained

in a single 5riting. )t 6ay be $olle$ted ro6 several dierent 5ritings 5%i$% do not $onli$t 5it% ea$% ot%er

and 5%i$%, 5%en $onne$ted, s%o5 t%e parties, sube$t 6atter, ter6s and $onsideration, as in $ontra$ts

entered into by $orresponden$e. 1( A $ontra$t 6ay be en$o6passed in several instru6ents even t%oug%

every instru6ent is not signed by t%e parties, sin$e it is sui$ient i t%e unsigned instru6ents are $learly

identiied or reerred to and 6ade part o t%e signed instru6ent or instru6ents. Si6ilarly, a 5ritten

agree6ent o 5%i$% t%ere are t5o $opies, one signed by ea$% o t%e parties, is binding on bot% to t%esa6e e4tent as t%oug% t%ere %ad been only one $opy o t%e agree6ent and bot% %ad signed it. 1)

"%e la5 in petitioners $ontentions t%ereore lies in its %aving seg6ented t%e various $o6ponents o t%e

5%ole $ontra$t bet5een t%e parties into several parts. "%is not5it%standing, petitioner ironi$ally ad6its t%e

e4e$ution o t%e Arti$les o Agree6ent. otably, too, t%e lo5er $ourt ound t%at t%e said Arti$les o

Agree6ent ?also provides t%at t%e Contra$t Do$u6ents t%erein listed s%all be dee6ed an integral part o

t%is Agree6ent, and one o t%e said do$u6ents is t%e Conditions o Contra$t 5%i$% $ontains t%e

Arbitration Clause.? )t is t%is Arti$les o Agree6ent t%at 5as duly signed by !uo #. Colay$o, president o

private respondent SP), and #ayani *. *ernando, president o petitioner $orporation. "%e sa6e

agree6ent 5as duly subs$ribed beore notary publi$ ilberto !. #riones. )n ot%er 5ords, t%e subs$ription

o t%e prin$ipal agree6ent ee$tively $overed t%e ot%er do$u6ents in$orporated by reeren$e t%erein.

"%is Court li(e5ise does not ind t%at t%e Court o Appeals erred in ruling t%at private respondents 5ere

not in deault in invo(ing t%e provisions o t%e arbitration $lause 5%i$% states t%at ?:t;%e de6and or

arbitration s%all be 6ade 5it%in a reasonable ti6e ater t%e dispute %as arisen and atte6pts to settle

a6i$ably %ad ailed.? Under t%e a$tual 6ilieu, private respondent SP) s%ould %ave paid its liabilities tinder

t%e $ontra$t in a$$ordan$e 5it% its ter6s. Ho5ever, 6isunderstandings appeared to %ave $ropped up

bet5een t%e parties ostensibly broug%t about by eit%er delay in t%e $o6pletion o t%e $onstru$tion 5or( or

by or$e 6aeure or t%e ire t%at partially gutted t%e proe$t. "%e al6ost t5o-year delay in paying its

liabilities 6ay not t%ereore be 5%olly as$ribed to private respondent SP).

#esides, private respondent SP)s initiative in $alling or a $oneren$e bet5een t%e parties 5as a step

to5ards t%e agreed resort to arbitration. Ho5ever, petitioner post%aste iled t%e $o6plaint beore t%e lo5er $ourt. "%us, 5%ile private respondent SP)s reBuest or arbitration on August , == 6ig%t appear an

atert%oug%t as it 5as 6ade ater it %ad iled t%e 6otion to suspend pro$eedings, it 5as be$ause petitioner

also appeared to a$t %astily in order to resolve t%e $ontroversy t%roug% t%e $ourts.

"%e arbitration $lause provides or a ?reasonable ti6e? 5it%in 5%i$% t%e parties 6ay avail o t%e relie

under t%at $lause. ?!easonableness? is a relative ter6 and t%e Buestion o 5%et%er t%e ti6e 5it%in 5%i$%

an a$t %as to be done is reasonable depends on attendant $ir$u6stan$es. 15 "%is Court inds t%at under


50/186

t%e $ir$u6stan$es obtaining in t%is $ase, a one-6ont% period ro6 t%e ti6e t%e parties %eld a $oneren$e

on July 1, == until private respondent SP) notiied petitioner t%at it 5as invo(ing t%e arbitration $lause,

is a reasonable ti6e. )ndeed, petitioner 6ay not be aulted or resorting to t%e $ourt to $lai6 5%at 5as due

it under t%e $ontra$t. Ho5ever, 5e ind its denial o t%e e4isten$e o t%e arbitration $lause as an atte6pt to

$over up its 6isstep in %urriedly iling t%e $o6plaint beore t%e lo5er $ourt.

)n t%is $onne$tion, it bears stressing t%at t%e lo5er $ourt %as not lost its urisdi$tion over t%e $ase. Se$tion

o !epubli$ A$t o. E/ provides t%at pro$eedings t%erein %ave only been stayed. Ater t%e spe$ial

pro$eeding o arbitration 1* %as been pursued and $o6pleted, t%en t%e lo5er $ourt 6ay $onir6 t%e a5ard17 6ade by t%e arbitrator.

)t s%ould be noted t%at in t%is urisdi$tion, arbitration %as been %eld valid and $onstitutional.

S> >!D

%arvasa, C&'&, (apunan and Purisima, ''&, concur&

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 91228. March 22, 1993.

PUROMINES, INC., petitione, !s. COURT O" #PPE#$ an% PHI$IPP &ROTHERSOCE#NIC, INC., espon%ents.

S'$$#&US

(. CIVI$ $#)* O&$I+#TIONS O" VENDOR* D#M#+ES #RISIN+ "ROM C#RRI#+E#ND DE$IVER'. )e a-ee ith the cout a /uo that the sales contact is co0pehensi!eenou-h to inclu%e clai0s fo %a0a-es aisin- fo0 caia-e an% %eli!e1 of the -oo%s. #s a-eneal ule, the selle has the obli-ation to tans0it the -oo%s to the bu1e, an% conco0itanttheeto, the contactin- of a caie to %eli!e the sa0e.


51/186

2. COMMERCI#$ $#)* M#RITIME TR#NSPORT#TION* M#RITIME COMMERCE*CH#RTER P#RTIES, CONSTRUED. #0eican 3uispu%ence %efines chate pat1 as acontact b1 hich an entie ship o so0e pincipal pat theeof is let b1 the one to anothe peson fo a specifie% ti0e o use. Chate o chate paties ae of to 4in%s. Chate of %e0iseo baeboat an% contacts of affei-ht0ent.

5. ID.* ID.* ID.* ID.* 6INDS* CH#RTER O" DEMISE, CONSTRUED. Un%e the %e0ise o baeboat chate of the !essel, the chatee ill -eneall1 be consi%ee% as one fo the !o1a-eo se!ice stipulate%. The chatee 0ans the !essel ith his on people an% beco0es, in effect,the one po hac !ice, sub3ect to liabilit1 to othes fo %a0a-es cause% b1 ne-li-ence. To ceatea %e0ise the one of a !essel 0ust co0pletel1 an% e7clusi!el1 elin/uish possession, an1thin-shot of such a co0plete tansfe is a contact of affei-ht0ent 8ti0e o !o1a-e chate pat19 onot a chate pat1 at all.

:. ID.* ID.* ID.* ID.* ID.* CONTR#CT O" #""REI+NMENT, CONSTRUED. # contact ofaffei-ht0ent is in hich the one of the !essel leases pat o all of its space to haul -oo%s fo

othes. It is a contact fo a special se!ice to be en%ee% b1 the one of the !essel an% un%esuch contact the -eneal one etains the possession, co00an% an% na!i-ation of the ship, thechatee o fei-hte 0eel1 ha!in- use of the space in the !essel in etun fo his pa10ent of thechate hie. If the chate is a contact of affei-ht0ent, hich lea!es the -eneal one in possession of the ship as one fo the !o1a-e, the i-hts, esponsibilities of oneship est onthe one an% the chatee is usuall1 fee fo0 liabilit1 to thi% pesons in espect of the ship.

;. ID.* ID.* ID.* ID.* $I#&I$IT' TO THIRD PERSONS "OR +OODS SHIPPED ON &O#RD# VESSE$. Responsibilit1 to thi% pesons fo -oo%s shippe% on boa% a !essel follos the!essel. ID.* ID.* ID.* ID.* &I$$S O" $#DIN+* #R&ITR#TION PROVISION THEREO",CONSIDERED #ND RESPECTED. )hethe the liabilit1 of espon%ent shoul% be base% onthe sa0e contact o that of the bill of la%in-, the paties ae ne!etheless obli-ate% to espect theabitation po!isions on the sales contact an%?o the bill of la%in-. Petitione bein- a si-nato1an% pat1 to the sales contact cannot escape fo0 his obli-ation un%e the abitation clause asstate% theein. #bitation has been hel% !ali% an% constitutional. E!en befoe the enact0ent ofRepublic #ct No. @A>, this Cout has countenance% the settle0ent of %isputes thou-h abitation.The ule no is that unless the a-ee0ent is such as absolutel1 to close the %oos of the coutsa-ainst the paties, hich a-ee0ent oul% be !oi%, the couts ill loo4 ith fa!o upon sucha0icable aan-e0ents an% ill onl1 intefee ith -eat eluctance to anticipate o nullif1 theaction of the abitato. #s pointe% out in the case of Min%anao Potlan% Ce0ent Cop. !.McDou-h Constuction Co0pan1 of "loi%a (@ heein the plaintiff sue% %efen%ant fo %a0a-esaisin- fo0 a contact, the Cout sai%B Since thee obtains heein a itten po!ision foabitation as ell as failue on espon%ent


52/186

o%ee% the paties to pocee% to thei abitation in acco%ance ith the te0s of thei a-ee0ent8Sec. > Republic #ct @A>9. Respon%ent, (G@G ( e!esin- the o%e of the tial coutan% %is0issin- petitione


53/186

of e!en %ate co!ein- :, 0etic tons fo unloa%in- in Iloilo Cit1* an% &ill of $a%in- No. 5,also %ate% Ma1 (2, (G@@, co!ein- (,; 0etic tons li4eise fo %ischa-e% in Manila

The ship0ent co!ee% b1 &ill of $a%in- No. 2 as %ischa-e% in Iloilo Cit1 co0plete an% in-oo% o%e an% con%ition. Hoe!e, the ship0ents co!ee% b1 &ill of $a%in- Nos. ( an% 5 ee

%ischa-e% in Manila in ba% o%e an% con%ition, ca4e%, ha%ene% an% lu0p1, %iscoloe% an%conta0inate% ith ust an% %it. Da0a-es ee !alue% at P>@5, ;>. 2G inclu%in- a%%itional%ischa-in- e7penses.

Conse/uentl1, petitione file% a co0plaint 5 ith the tial cout : fo beach of contact ofcaia-e a-ainst Maiti0e "actos Inc. 8hich as not inclu%e% as espon%ent in this petition9 asship=a-ent in the Philippines fo the ones of the !essel MV $iliana Di0ito!a, hile pi!ateespon%ent, Philipp &othes Oceanic Inc., as i0plea%e% as chatee of the sai% !essel an% pope pat1 to acco% petitione co0plete elief. Maiti0e "actos, Inc. file% its #nse ; to theco0plaint, hile pi!ate espon%ent file% a 0otion to %is0iss, %ate% "ebua1 G, (G@G, on the-oun%s that the co0plaint states no cause of action* that it as pe0atuel1 file%* an% that

petitione shoul% co0pl1 ith the abitation clause in the sales contact. >

The 0otion to %is0iss as oppose% b1 petitione conten%in- the inapplicabilit1 of the abitationclause inas0uch as the cause of action %i% not aise fo0 a !iolation of the te0s of the salescontact but athe fo clai0s of ca-o %a0a-es hee thee is no abitation a-ee0ent. On #pil2>, (G@G, the tial cout %enie% espon%ent


54/186

It is also note% that the bills of la%in- attache% as #nne7es


55/186

Unless otheise authoie% b1 the bu1e, the selle 0ust ta4e such contact ith the caie on behalf of the bu1e as 0a1 be easonable, ha!in- e-a% to the natue of the -oo%s an% the othecicu0stances of the case. If the selle o0it so to %o, an% the -oo%s ae lost o %a0a-e% in couseof tansit, the bu1e 0a1 %ecline to teat the %eli!e1 to the caie as a %eli!e1 to hi0self,, o0a1 hol% the selle esponsible in %a0a-es.

777 777 777

The %ispute% sales contact po!i%es fo con%itions elati!e to the %eli!e1 of -oo%s, such as %ateof ship0ent, %e0ua-e, ei-ht as %ete0ine% b1 the bill of la%in- at loa% pot an% 0oe paticulal1 the folloin- po!isionsB

5. Intention is to ship in one botto0, appo7i0atel1 ;, 0etics tons to Puo0ines an%appo7i0atel1 (;, 0etic tons to Ma4ati #-o. Hoe!e, Selles to ha!e i-ht to ship 0ateialas patial ship0ent o co=ship0ent in a%%ition to abo!e. In the e!ent of co=ship0ent to a thi% pat1 ithin Philippines sa0e to be %iscusse% ith an% acceptable to both Puo0ines an% Ma4ati

#-o.

:. Selles to appoint neutal su!e1 fo Selle


56/186

Un%e the %e0ise o baeboat chate of the !essel, the chatee ill -eneall1 be consi%ee% asone fo the !o1a-e o se!ice stipulate%. The chatee 0ans the !essel ith his on peoplean% beco0es, in effect, the one po hac !ice, sub3ect to liabilit1 to othes fo %a0a-es cause% b1 ne-li-ence. (( To ceate a %e0ise the one of a !essel 0ust co0pletel1 an% e7clusi!el1elin/uish possession, an1thin- shot of such a co0plete tansfe is a contact of affei-ht0ent

8ti0e o !o1a-e chate pat19 o not a chate pat1 at all.

On the othe han%, a contact of affei-ht0ent is in hich the one of the !essel leases pat oall of its space to haul -oo%s fo othes. It is a contact fo a special se!ice to be en%ee% b1 theone of the !essel (2 an% un%e such contact the -eneal one etains the possession,co00an% an% na!i-ation of the ship, the chatee o fei-hte 0eel1 ha!in- use of the space inthe !essel in etun fo his pa10ent of the chate hie. (5 If the chate is a contact ofaffei-ht0ent, hich lea!es the -eneal one in possession of the ship as one fo the !o1a-e,the i-hts, esponsibilities of oneship est on the one an% the chatee is usuall1 fee fo0liabilit1 to thi% pesons in espect of the ship. (:

Responsibilit1 to thi% pesons fo -oo%s shippe% on boa% a !essel follos the !essel Hence, it as then pope fo the cout a /uo to %iscuss thecontents of the bills of la%in-, ha!in- been 0a%e pat of the eco%.

+oin- bac4 to the 0ain sub3ect of this case, abitation has been hel% !ali% an% constitutional.E!en befoe the enact0ent of Republic #ct No. @A>, this Cout has countenance% the settle0entof %isputes thou-h abitation. The ule no is that unless the a-ee0ent is such as absolutel1 toclose the %oos of the couts a-ainst the paties, hich a-ee0ent oul% be !oi%, the couts ill


57/186

loo4 ith fa!o upon such a0icable aan-e0ents an% ill onl1 intefee ith -eat eluctance toanticipate o nullif1 the action of the abitato. (A

#s pointe% out in the case of Min%anao Potlan% Ce0ent Cop. !. McDonou-h ConstuctionCo0pan1 of "loi%a (@ heein the plaintiff sue% %efen%ant fo %a0a-es aisin- fo0 a contact,

the Cout sai%B

Since thee obtains heein a itten po!ision fo abitation as ell as failue on espon%ent Republic #ct @A>9. Respon%ent


58/186

G.R. No. 9*28( F+r-ar 25, 1992

CUNG FU IN#USTRIES /PILIPPINES INC., 3 #r+cor3 a%& O44c+r3 %a+6 UANG UO!CANG, UANG AN!CUNG, 'AMES

'.R. CEN, TRISTAN A. CATIN#IG, ICENTE B. AMA#OR, ROC A.C. UANG, 'EM S.C. UANG, MARIA TERESA SOLIEN a%&

IRGILIO M. #EL ROSARIO, petitioners,

vs.

COURT OF APPEALS, ON. FRANCISCO $. ELE: /Pr+3&%; '-&;+, R+;o%a6 Tra6 Co-r o4 Ma a%& ROBLECOR

PILIPPINES, INC., respondents.

ROMERO, J.:

"%is is a spe$ial $ivil a$tion or certiorari see(ing to annul t%e !esolutions o t%e Court o Appeals? dated >$tober 11, ==2 and De$e6ber ,

==2 up%olding t%e >rders o July , ==2 and August 1, ==2 o t%e !egional "rial Court o Ma(ati, #ran$% 0, in Civil Case o. =2-0.

!espondent Court o Appeals air6ed t%e ruling o t%e trial $ourt t%at %erein petitioners, ater sub6itting t%e6selves or arbitration and

agreeing to t%e ter6s and $onditions t%ereo, providing t%at t%e arbitration a5ard s%all be inal and unappealable, are pre$luded ro6 see(ing udi$ial revie5 o sube$t arbitration a5ard.

)t appears t%at on May , =E=, petitioner C%ung *u )ndustries :P%ilippines; :C%ung *u or brevity; and private respondent !oble$or

P%ilippines, )n$. :!oble$or or s%ort; orged a $onstru$tion agree6ent1 5%ereby respondent $ontra$tor $o66itted to

$onstru$t and inis% on De$e6ber , =E=, petitioner $orporations industrial8a$tory $o6ple4 in

"ana5an, "an@a, Cavite or and in $onsideration o P'1,222,222.22. )n t%e event o disputes arising ro6

t%e peror6an$e o sube$t $ontra$t, it 5as stipulated t%erein t%at t%e issue:s; s%all be sub6itted or

resolution beore a single arbitrator $%osen by bot% parties.

Apart ro6 t%e aoresaid $onstru$tion agree6ent, C%ung *u and !oble$or entered into t5o :1; ot%er

an$illary $ontra$ts, to 5it3 one dated June 1, =E=, or t%e $onstru$tion o a dor6itory and support

a$ilities 5it% a $ontra$t pri$e o P,E0,1E0.22, to be $o6pleted on or beore >$tober , =E=2

and t%eot%er dated August 1, =E=, or t%e installation o ele$tri$al, 5ater and %ydrant syste6s at t%e plant site,

$o66anding a pri$e o P1. 6illion and reBuiring $o6pletion t%ereo one 6ont% ater $ivil 5or(s %ave

been inis%ed. (

Ho5ever, respondent !oble$or ailed to $o6plete t%e 5or( despite t%e e4tension o ti6e allo5ed it by

C%ung *u. SubseBuently, t%e latter %ad to ta(e over t%e $onstru$tion 5%en it %ad be$o6e evident t%at

!oble$or 5as not in a position to ulill its obligation.

Clai6ing an unsatisied a$$ount o P2,022,222.22 and unpaid progress billings o P1,2,=.1,

!oble$or on May E, ==2, iled a petition or Co6pulsory Arbitration 5it% prayer or "e6porary

!estraining >rder beore respondent !egional "rial Court, pursuant to t%e arbitration $lause in t%e

$onstru$tion agree6ent. C%ung *u 6oved to dis6iss t%e petition and urt%er prayed or t%e Buas%ing o

t%e restraining order.

SubseBuent negotiations bet5een t%e parties eventually led to t%e or6ulation o an arbitration agree6ent

5%i$%, a6ong ot%ers, provides3

1. "%e parties 6utually agree t%at t%e arbitration s%all pro$eed in a$$ordan$e 5it% t%e

ollo5ing ter6s and $onditions3 R


59/186

444 444 444

d. "%e parties 6utually agree t%at t%ey 5ill abide by t%e de$ision o t%e

arbitrator in$luding any a6ount t%at 6ay be a5arded to eit%er party as

$o6pensation, $onseBuential da6age and8or interest t%ereon

e. "%e parties 6utually agree t%at t%e de$ision o t%e arbitrator s%all be

inal and unappealable. "%ereore, there shall be no further )udicial

recourse if either party disagrees with the whole or any part of the

arbitrator*s award&

. As an e4$eption to s

firstcase adr

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