Notes On ADR (Recovered)

ADR: PERSONAL NOTES (J.F.
BRIONES)
PART II: DEFINITION OF TERMS
I. INTRO: READ: pp. 1-26, ADR, Atty. Gabriel Robeniol,
Central Books, 2012 Ed.
II. ALTERNATIVE DISPUTE RESOLUTION (ADR) SYSTEM
"Alternative Dispute Resolution System" means
any process or procedure used to resolve a
dispute or controversy, other than by
adjudication of a presiding judge of a court or an
officer of a government agency, as defined in
this Act, in which a neutral third party
participates to assist in the resolution of issues,
which
includes
arbitration,
mediation,
conciliation, early neutral evaluation, mini-trial,
or any combination thereof. [Sec. 3(a), RA No
9285]
III. FORMS OF ADR
a. Mediation
"Mediation" means a voluntary process in which
a mediator, selected by the disputing parties,
facilitates communication and negotiation, and
assist the parties in reaching a voluntary
agreement regarding a dispute. [Sec. 3(q) RA
No 9285]
1. Court-Annexed Mediation
"Court-Annexed
Mediation"
means
any
mediation process conducted under the
auspices of the court, after such court has
acquired jurisdiction of the dispute. [Sec. 3(l)
RA No 9285]
2. Court-Referred Mediation
"Court-Referred Mediation" means mediation
ordered by a court to be conducted in
accordance with the Agreement of the Parties
when as action is prematurely commenced in
Page |1
violation of such agreement. [Sec. 3(m) RA No
9285]
No doubt Mediation is the wave of the future, and
the
gateway
of
Filipino
lawyers
into
international/global legal practice. (Frabelle Fishing
Corporation v. PhilAm Properties, et. al., GR No.
158580, 17 August 2007
FRABELLE FISHING CORPORATION vs. THE
PHILIPPINE AMERICAN LIFE INSURANCE
COMPANY, PHILAM PROPERTIES CORPORATION
and PERF REALTY CORPORATION
FACTS:
On May 8, 1996, PhilAm entered into a
MOA whereby each agreed to contribute cash,
property, and services for the construction and
development of Philamlife Tower, a 45-storey office
condominium along Paseo de Roxas, Makati City.
On December 6, 1996, PhilAm executed a
DOA wherein they assigned to Frabelle Properties
Corporation (Frabelle) their rights and obligations
under the 1996 MOA with respect to the construction,
development, and subsequent ownership of Unit No.
38-B located at the 38th floor of Philamlife Tower. The
parties also stipulated that the assignee shall be
deemed as a co-developer of the construction project
with respect to Unit No. 38-B.
Frabelle, in turn, assigned to Frabelle Fishing
Corporation (Frabelle Fishing), its rights, obligations
and interests over Unit No. 38-B.
On March 9, 1998, petitioner Frabelle Fishing
and respondents executed a MOA to fund the
construction of designated office floors in Philamlife
Tower.
The dispute between the parties started when
ADR: PERSONAL NOTES (J.F. BRIONES)

Frabelle Fishing found material concealment on the
part of PhilAm regarding certain details in the 1996
DOA and 1998 MOA and their gross violation of their
contractual obligations as condominium developers.
These violations are: (a) the non-construction of a
partition wall between Unit No. 38-B and the rest of the
floor area; and (b) the reduction of the net usable floor
area from four hundred sixty eight (468) square
meters to only three hundred fifteen (315) square
meters.
On October 22, 2001, Frabelle Fishing referred
the matter to the PDRCI for arbitration. However, in a
letter dated November 7, 2001, FilAm manifested their
refusal to submit to PDRCIs jurisdiction.
On February 11, 2002, HLURB, Expanded
National Capital Region Field Office a complaint for
reformation of instrument, specific performance and
damages against respondents. Frabelle Fishing
alleged, among others, that the contracts do not
reflect the true intention of the parties; and that it is a
mere buyer and not co-developer and/or co-owner of
the condominium unit.
On May 14, 2002, HLURB Arbiter Atty. Dunstan
T. San Vicente denied the petition for dismissal by the
PhilAm.
PhilAm then filed with the Court of Appeals a
petition for prohibition with prayer for the issuance of a
temporary restraining order and/or writ of preliminary
injunction. PhilAm claimed, among others, that the
HLURB has no jurisdiction over the subject matter of
the controversy and that the contracts between the
parties provide for compulsory arbitration.
On December 2, 2002, the Court of Appeals
rendered its Decision granting the petition. In
dismissing petitioners complaint, the Court of Appeals
held that the HLURB has no jurisdiction over an action
Page |2
for reformation of contracts. The jurisdiction lies with
the Regional Trial Court.
Forthwith, petitioner filed a motion for
reconsideration12 but it was denied by the appellate
court in its Resolution dated May 30, 2003.
ISSUE:
(1) Whether the HLURB has jurisdiction over the
complaint for reformation of instruments, specific
performance and damages.
(2)Whether the parties should initially resort to
arbitration.
RULING:
(1) Declaring that the instruments executed by
the complainant FRABELLE and respondent PHILAM to
have been in fact a Contract to Sell. The parties are
thereby governed by the provisions of P.D. 957
entitled, "Regulating the Sale of Subdivision Lots and
Condominiums, Providing Penalties for Violations
Thereof" as buyer and developer, respectively, of a
condominium unit and not as co-developer and/or coowner of the same;
We hold that being an action for reformation of
instruments, petitioners complaint necessarily falls
under the jurisdiction of the Regional Trial Court
pursuant to Section 1, Rule 63 of the 1997 Rules of
Civil Procedure, as amended, which provides:
SECTION 1. Who may file petition. Any person
interested under a deed, will, contract or other written
instrument, whose rights are affected by a statute,
executive order or regulation, ordinance, or any other
governmental regulation may, before breach or
violation
thereof,
bring
an
action
in
the
appropriate Regional Trial Court to determine any
question of construction or validity arising, and for a
declaration of his rights or duties thereunder.
An action for the reformation of an instrument,

to quiet title to real property or remove clouds
therefrom, or to consolidate ownership under Article
1607 of the Civil Code, may be brought under this
Rule. (Emphasis ours)
As correctly held by the Court of Appeals, any
disagreement as to the nature of the parties
relationship which would require first an amendment
or reformation of their contract is an issue which the
courts may and can resolve without the need of the
expertise and specialized knowledge of the HLURB.
(2) Paragraph 4.2 of the 1998 MOA mandates
that any dispute between or among the parties "shall
finally be settled by arbitration conducted in
accordance with the Rules of Conciliation and
Arbitration of the International Chamber of
Commerce." Petitioner referred the dispute to the
PDRCI but respondents refused to submit to its
jurisdiction.
It bears stressing that such arbitration
agreement is the law between the parties. They are,
therefore, expected to abide by it in good faith.
This Court has previously held that arbitration is
one of the alternative methods of dispute resolution
that is now rightfully vaunted as "the wave of the
future" in international relations, and is recognized
worldwide. To brush aside a contractual agreement
calling for arbitration in case of disagreement between
the parties would therefore be a step backward.
WHEREFORE, we DENY the petition. The
challenged Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 71389 are AFFIRMED.
b. Arbitration
"Arbitration" means a voluntary dispute
resolution process in which one or more
arbitrators, appointed in accordance with the
Page |3
agreement of the parties, or rules promulgated
pursuant to this Act, resolve a dispute by
rendering an award. [Sec. 3(d) RA No 9285]
1. Commercial Arbitration
"Commercial Arbitration" An arbitration is
"commercial if it covers matter arising from all
relationships of a commercial nature, whether
contractual or not. [Sec. 3(g) RA No 9285]
2. International Commercial Arbitration
a. What law governs International Commercial
Arbitration? (Section 19, RA No. 9285)
SEC. 19. Adoption of the Model Law on
International
Commercial
Arbitration. International commercial arbitration shall be governed
by the Model Law on International Commercial
Arbitration (the "Model Law") adopted by the United
Nations Commission on International Trade Law on
June 21, 1985 (United Nations Document A/40/17) and
recommended approved on December 11, 1985, copy
of which is hereto attached as Appendix "A".
What is the purpose of the UNCITRAL MODEL

LAW?
As a consequence of the increasing awareness
that ADR methods, particularly arbitration, are
better alternatives to litigation in resolving
disputes especially in the field of international
commerce, the United Nations Commission on
International Trade Law adopted the UNCITRAL
Model Law. The Model Law is designed to meet
concerns relating to the current state of national
laws on arbitration and is intended to be used as
a basis for the harmonization and improvement
of national laws. The main thrust of the law is to
meet head on the inadequacies and disparities

of domestic laws on arbitration which make
them
inappropriate
and
inapplicable
to
international cases. The Model Law is also
designed to encourage states to update their
own domestic laws by enacting modern
legislation with respect to domestic cases.
b. Institutionalize arbitration
Consistent with the UNCITRAL Model Law, the
ADR Act of 2004 entitled An act to
institutionalize the use of an ADR system in the
Philippines and to establish the office for ADR,
and for other purposes was recently enacted.
The law promotes the use of different methods
of ADR for the speedy and impartial
dispensation of justice. The ADR Act expressly
adopted under Section 19 the UNCITRAL Model
Law as the law governing international
commercial arbitration in the Philippines. By
embracing the Model Law, the ADR Act has
partly eased the concern and the unwillingness
of foreign parties to a contract to have matters
submitted for arbitration here in the Philippines.
The Act has now opened the window for the
Philippines to be a venue for international
commercial arbitration and mediation. However,
in so far as domestic cases are concerned, the
ADR Act provides that the same shall still be
governed by Republic Act No. 876.
3. Specialized Arbitration: The Construction Industry
Arbitration (CIA) Arbitration
a. What law governs the arbitration of construction
disputes?
Executive Order No. 1008 otherwise known as
the Construction Industry Arbitration Law of
1985 governs arbitration of construction
disputes in the Philippines.
Page |4
i. Jurisdiction of the CIAC
The
Construction
Industry
Arbitration
Commission (CIAC) has original and exclusive
jurisdiction over construction disputes which are
subject to an arbitration clause or arbitration
agreement.
ii. Comprehensive jurisdiction of the CIAC (China
Chiang vs. CA, GR No. 125706, September 30,
1996; and NIA vs. CA, CIAC, GR No. 129169,
November 17 1999, 318 SCRA 255)
NATIONAL IRRIGATION ADMINISTRATION (NIA) vs
CA
FACTS:
In a competitive bidding held by NIA in August
1978, Hydro Resources Contractors Corporation
(hereafter HYDRO) was awarded Contract PI-C-2 for the
construction of the Magat River Multi-Purpose Project.
The contract provided that HYDRO would be paid
partly in Philippine pesos and partly in U.S. dollars.
HYDRO substantially completed the works under the
contract in 1982 and final acceptance by NIA was
made in 1984. HYDRO thereafter determined that it
still had an account receivable from NIA representing
the dollar rate differential of the price escalation for
the contract.
On 7 December 1994, HYDRO filed with the CIAC
a Request for Adjudication of the aforesaid claim.
HYDRO nominated six arbitrators for the arbitration
panel, from among whom CIAC appointed Engr. Lauro
M. Cruz. On 6 January 1995, NIA filed its Answer
wherein it questioned the jurisdiction of the CIAC
alleging lack of cause of action, laches and estoppel in
view of HYDRO's alleged failure to avail of its right to
submit the dispute to arbitration within the prescribed
period as provided in the contract. On the same date,

NIA filed a Compliance wherein it nominated six
arbitrators, from among whom CIAC appointed Atty.
Custodio O. Parlade, and made a counterclaim for
P1,000,000 as moral damages; at least P100,000
as exemplary damages; P100,000 as attorney's fees;
and the costs of the arbitration.
On 13 March 1995, NIA filed a Motion to
Dismiss alleging lack of jurisdiction over the disputes.
NIA contended that there was no agreement with
HYDRO to submit the dispute to CIAC for arbitration
considering that the construction contract was
executed in 1978 and the project completed in 1982,
whereas the Construction Industry Arbitration Law
creating CIAC was signed only in 1985; and that while
they have agreed to arbitration as a mode of
settlement of disputes, they could not have
contemplated submission of their disputes to CIAC. NIA
further argued that records show that it had not
voluntarily submitted itself to arbitration by CIAC.
On 11 April 1995, the arbitral body issued an
order which deferred the determination of the motion
to dismiss and resolved to proceed with the hearing of
the case on the merits as the grounds cited by NIA did
not seem to be "indubitable." NIA filed a motion for
reconsideration of the aforesaid Order. CIAC in denying
the motion for reconsideration ruled that it has
jurisdiction over the HYDRO's claim over NIA pursuant
to E.O 1008 and that the hearing should proceed as
scheduled.
On 26 May 1996, NIA filed with the Court of
Appeals an original action of certiorari and prohibition
with prayer for restraining order and/or injunction,
seeking to annul the Orders of the CIAC for having
been issued without or in excess of jurisdiction.
The Court of Appeals, after finding that there
was no grave abuse of discretion on the part of the
Page |5
CIAC in issuing the aforesaid Orders, dismissed the
petition in its Resolution dated 28 June 1996. NIA's
motion for reconsideration of the said decision was
likewise denied by the Court of Appeals on 26 February
1997.
On 2 June 1997, NIA filed before us an original
action for certiorari and prohibition with urgent prayer
for temporary restraining order and writ of preliminary
injunction, praying for the annulment of the
Resolutions of the Court of Appeals dated 28 June 1996
and 24 February 1997. In the said special civil action,
NIA merely reiterates the issues it raised before the
Court of Appeals.
RULING:
Whether or not the case should be dismissed.
(procedural issue)
The petition suffers from a procedural defect
that warrants its outright dismissal. The questioned
resolutions of the Court of Appeals have already
become final and executory by reason of the failure of
NIA to appeal therefrom. Instead of filing this petition
for certiorari under Rule 65 of the Rules of Court, NIA
should have filed a timely petition for review under
Rule 45.
Since the Court of Appeals had jurisdiction over
the petition under Rule 65, any alleged errors
committed by it in the exercise of its jurisdiction would
be errors of judgment which are reviewable by timely
appeal and not by a special civil action of certiorari. If
the aggrieved party fails to do so within the
reglementary period, and the decision accordingly
becomes final and executory, he cannot avail himself
of the writ of certiorari, his predicament being the
effect of his deliberate inaction.
The appeal from a final disposition of the Court
of Appeals is a petition for review under Rule 45 and

not a special civil action under Rule 65 of the Rules of
Court, now Rule 45 and Rule 65, respectively, of the
1997 Rules of Civil Procedure. Rule 45 is clear that
decisions, final orders or resolutions of the Court of
Appeals in any case, i.e., regardless of the nature of
the action or proceedings involved, may be appealed
to this Court by filing a petition for review, which would
be but a continuation of the appellate process over the
original case. Under Rule 45 the reglementary period
to appeal is fifteen (15) days from notice of judgment
or denial of motion for reconsideration.
In the instant case the Resolution of the Court of
Appeals dated 24 February 1997 denying the motion
for reconsideration of its Resolution dated 28 June
1997 was received by NIA on 4 March 1997. Thus, it
had until 19 March 1997 within which to perfect its
appeal. NIA did not appeal. What it did was to file an
original action for certiorari before this Court,
reiterating the issues and arguments it raised before
the Court of Appeals.
Whether or not the CIAC has a jurisdiction over
the case.
Contrary to the claim of NIA, the CIAC has
jurisdiction over the controversy. Executive Order No.
1008, otherwise known as the "Construction Industry
Arbitration Law" which was promulgated on 4 February
1985, vests upon CIAC original and exclusive
jurisdiction over disputes arising from, or connected
with contracts entered into by parties involved in
construction in the Philippines, whether the dispute
arises before or after the completion of the contract, or
after the abandonment or breach thereof. The disputes
may involve government or private contracts. For the
Board to acquire jurisdiction, the parties to a dispute
must agree to submit the same to voluntary
arbitration.
Page |6
The complaint of HYDRO against NIA on the
basis of the contract executed between them was filed
on 7 December 1994, during the effectivity of E.O. No.
1008. Hence, it is well within the jurisdiction of CIAC.
The jurisdiction of a court is determined by the law in
force at the time of the commencement of the action.
NIA's argument that CIAC had no jurisdiction to
arbitrate on contract which preceded its existence is
untenable. E.O. 1008 is clear that the CIAC has
jurisdiction over all disputes arising from or connected
with construction contract whether the dispute arises
before or after the completion of the contract. Thus,
the date the parties entered into a contract and the
date of completion of the same, even if these occurred
before the constitution of the CIAC, did not
automatically divest the CIAC of jurisdiction as long as
the dispute submitted for arbitration arose after the
constitution of the CIAC. Stated differently, the
jurisdiction of CIAC is over the dispute, not the
contract; and the instant dispute having arisen when
CIAC was already constituted, the arbitral board was
actually
exercising
current,
not
retroactive,
jurisdiction. As such, there is no need to pass upon the
issue of whether E.O. No. 1008 is a substantive or
procedural statute.
Whether or not the CIAC has no jurisdiction since
it is only HYDRO who submits for arbitration.
NIA also contended that the CIAC did not
acquire jurisdiction over the dispute since it was only
HYDRO that requested for arbitration. It asserts that to
acquire jurisdiction over a case, as provided under E.O.
1008, the request for arbitration filed with CIAC should
be made by both parties, and hence the request by
one party is not enough.
It is undisputed that the contracts between
HYDRO and NIA contained an arbitration clause

wherein they agreed to submit to arbitration any
dispute between them that may arise before or after
the termination of the agreement. Consequently, the
claim of HYDRO having arisen from the contract is
arbitrable. NIA's reliance with the ruling on the case
of Tesco Services Incorporated v. Vera, is misplaced.
The 1988 CIAC Rules of Procedure which were applied
by this Court in Tesco case had been duly amended by
CIAC Resolutions No. 2-91 and 3-93, Section 1 of
Article III of which read as follows:
Submission to CIAC Jurisdiction An
arbitration clause in a construction
contract or a submission to arbitration of
a construction contract or a submission to
arbitration of a construction dispute shall
be deemed an agreement to submit an
existing or future controversy to CIAC
jurisdiction,
notwithstanding
the
reference to a different arbitration
institution or arbitral body in such
contract or submission. When a contract
contains a clause for the submission of a
future controversy to arbitration, it is not
necessary for the parties to enter into a
submission
agreement
before
the
claimant may invoke the jurisdiction of
CIAC.
Under the present Rules of Procedure, for a particular
construction contract to fall within the jurisdiction of
CIAC, it is merely required that the parties agree to
submit the same to voluntary arbitration. Unlike in the
original version of Section 1, as applied in the Tesco
case, the law as it now stands does not provide that
the parties should agree to submit disputes arising
from their agreement specifically to the CIAC for the
latter to acquire jurisdiction over the same. Rather, it
Page |7
is plain and clear that as long as the parties agree to
submit to voluntary arbitration, regardless of what
forum they may choose, their agreement will fall within
the jurisdiction of the CIAC, such that, even if they
specifically choose another forum, the parties will not
be precluded from electing to submit their dispute
before the CIAC because this right has been vested
upon each party by law, i.e., E.O. No. 1008.
Moreover, it is undeniable that NIA agreed to
submit the dispute for arbitration to the CIAC. NIA
through its counsel actively participated in the
arbitration proceedings by filing an answer with
counterclaim, as well as its compliance wherein it
nominated arbitrators to the proposed panel,
participating in the deliberations on, and the
formulation of, the Terms of Reference of the
arbitration proceeding, and examining the documents
submitted by HYDRO after NIA asked for the originals
of the said documents.
4. Other Institutionalized and Special Arbitration in the
Philippines.
a. Philippine Clearing House Corporation (PCHC)
The member banks cannot invoke the
jurisdiction of the trial court without prior
recourse to the PCHC Arbitration Committee.
b. Philippine Dispute Resolution Center, Inc.
It was established by the Philippine Chamber of
Commerce and Industry which was created to
encourage the use of modes of ADR for
settlement of domestic and international
disputes in the Philippines
c. The Office of the ADR
SEC.
49. Office
for
Alternative
Dispute
Resolution. - There is hereby established the Office

for Alternative Dispute Resolution as an attached
agency to the Department of Justice (DOJ) which shall
have a Secretariat to be headed by an executive
director. The executive director shall be appointed by
the President of the Philippines.
The objective of the office are:
(a) to promote, develop and expand the use of
ADR in the private and public sectors; and
To assist the government to monitor, study and
evaluate the use by the public and the private sector
of ADR, and recommend to Congress needful statutory
changes to develop. Strengthen and improve ADR
practices in accordance with world standards.
SEC. 50. Powers and Functions of the Office for
Alternative Dispute Resolution. - The Office for
Alternative Dispute Resolution shall have the following
powers and functions:
(a) To formulate standards for the training of the
ADR practitioners and service providers;
(b) To certify that such ADR practitioners and
ADR service providers have undergone the
professional training provided by the office;
(c)
To
coordinate
the
development,
implementation, monitoring, and evaluation of
government ADR programs;
(d) To charge fees for their services; and
(e) To perform such acts as may be necessary to
carry into effect the provisions of this Act.
It is an agency attached to the DOJ which is

currently being formed to promote the use of
ADR in the private and public sector
c. Early Neutral Evaluation
"Early Neutral Evaluation" means an ADR
process wherein parties and their lawyers are
brought together early in a pre-trial phase to
Page |8
present summaries of their cases and receive a
nonbinding assessment by an experienced,
neutral person, with expertise in the subject in
the substance of the dispute. [Sec. 3(n) RA No
9285]
d. Mini-trial
"Mini-Trial"
means
a
structured
dispute
resolution method in which the merits of a case
are argued before a panel comprising senior
decision makers with or without the presence of
a neutral third person after which the parties
seek a negotiated settlement. [Sec. 3(u) RA
No 9285]
e. Med-Arb
"Mediation-Arbitration" or Med-Arb is a step
dispute resolution process involving both
mediation and arbitration. [Sec. 3(t) RA No
9285]
f. Conciliation
Conciliation is the adjustment and settlement of
a dispute in a friendly, unantagonistic manner.
(Blacks Law Dictionary
g. On-line Dispute Resolution
IV. ADVANTAGES OF ADR
1. ADR as alternative to litigation. (ASAP)
a. Party Autonomy
The emphasis of these procedures is on the
voluntary agreement of the parties in submitting
their dispute and in choosing the arbitrators, the
venue or place of arbitration, the language to be
used, and the rules or procedure to be followed.
b. Speedy and Cost- Efficient
ADR methods are considered as a speedy and
cost-efficient ways of settling disputes. Issues
submitted to arbitral tribunals and through the

help of mediators are resolved in a very short
period of time. Usually, awards are rendered
and agreements are reached in a few months,
depending on the complexity of the issue
involved.
c. Awards are Final and Binding
As a rule, an award rendered by an arbitral
tribunal is final and binding on the parties.
Generally, courts shall not review the findings of
fact made by the arbitral tribunals. However,
this rule admits of exceptions.
d. Privacy and Confidentiality
Unlike court litigation, greater degree of privacy
and confidentiality can be enjoyed by the
parties in ADR proceedings. The proceedings are
not open to third persons who are not party to
the transaction, much more to the public.
2. ADR as the wave of the future in international
relations. [BF Corp v. CA, 288 SCRA 267 (1998)]
BF CORPORATION vs. COURT OF APPEALS
FACTS:
BF Corp and respondent Shangri-la Properties,
Inc. (SPI) entered into an agreement whereby the
latter engaged the former to construct the main
structure of the "EDSA Plaza Project," a shopping mall
complex in the City of Mandaluyong. The construction
work was in progress when SPI decided to expand the
project by engaging the services of BF Corp again.
Thus, the parties entered into an agreement for the
main contract works after which construction work
began.
However, BF Corp incurred delay in the
construction work that SPI considered as "serious and
substantial." On the other hand, according to BF Corp,
the construction works "progressed in faithful
Page |9
compliance with the First Agreement until a fire broke
out on November 30, 1990 damaging Phase I" of the
Project. Hence, SPI proposed the re-negotiation of the
agreement between them.
Consequently, on May 30, 1991, petitioner and
SPI entered into a written agreement denominated as
"Agreement for the Execution of Builder's Work for the
EDSA Plaza Project." Said agreement would cover the
construction work on said project as of May 1, 1991
until its eventual completion.
According to SPI, petitioner "failed to complete
the construction works and abandoned the project.
This resulted in disagreements between the parties as
regards their respective liabilities under the contract.
On July 12, 1993, upon SPI's initiative, the parties'
respective representatives met in conference but they
failed to come to an agreement.
Barely two days later or on July 14, 1993, BF
Corp filed with the RTC of Pasig a complaint for
collection of the balance due under the construction
agreement.
On August 3, 1993, SPI and its co-defendants
filed a motion to suspend proceedings instead of filing
an answer. The motion was anchored on defendants'
allegation that the formal trade contract for the
construction of the project provided for a clause
requiring prior resort to arbitration before judicial
intervention could be invoked in any dispute arising
from the contract. The following day, SPI submitted a
copy of the conditions of the contract containing the
arbitration clause that it failed to append to its motion
to suspend proceedings.
Upon a finding that an arbitration clause indeed
exists, the lower court denied the motion to suspend
proceedings
RTC: denied the motion to suspend

The 'Conditions of Contract' referred to, contains
the following provisions:
3. Contract Document.
Three copies of the Contract
Documents referred to in the
Articles of Agreement shall
be signed by the parties to
the contract and distributed
to the Owner and the
Contractor for their safe
keeping."
(emphasis
supplied).
And it is significant to note further that
the said "Conditions of Contract" is not
duly signed by the parties on any page
thereof although it bears the initials of
BF's representatives (Bayani F. Fernando
and Reynaldo M. de la Cruz) without the
initials thereon of any representative of
Shangri-La Properties, Inc.
Considering the insistence of the plaintiff that
the said Conditions of Contract was not duly executed
or signed by the parties, and the failure of the
defendants to submit any signed copy of the said
document, this Court entertains serious doubt whether
or not the arbitration clause found in the said
Conditions of Contract is binding upon the parties to
the Articles of Agreement."
The lower court then ruled that, assuming that the
arbitration clause was valid and binding, still, it was
"too late in the day for defendants to invoke
arbitration." It quoted the following provision of the
arbitration clause:
Notice of the demand for arbitration of a
dispute shall be filed in writing with the
other party to the contract and a copy
P a g e | 10
filed with the Project Manager. The
demand for arbitration shall be made
within a reasonable time after the dispute
has arisen and attempts to settle
amicably have failed; in no case,
however, shall the demand he made be
later than the time of final payment
except as otherwise expressly stipulated
in the contract.
Against the above backdrop, the lower court
found that per the May 30, 1991 agreement, the
project was to be completed by October 31, 1991.
Thereafter, the contractor would pay P80,000 for each
day of delay counted from November 1, 1991 with
"liquified damages up to a maximum of 5% of the total
contract price.
Considering the fact that under the supposed
Arbitration Clause invoked by defendants, it is required
that "Notice of the demand for arbitration of a dispute
shall be filed in writing with the other party . . . . in no
case . . . . later than the time of final payment . . .
"which apparently, had elapsed, not only because
defendants had taken possession of the finished works
and the plaintiff's billings for the payment thereof had
remained pending since November, 1991 up to the
filing of this case on July 14, 1993, but also for the
reason that defendants have failed to file any written
notice of any demand for arbitration during the said
long period of one year and eight months, this Court
finds that it cannot stay the proceedings in this case as
required by Sec. 7 of Republic Act No. 876, because
defendants are in default in proceeding with such
arbitration.
CA: Instead of filing an answer to the complaint, SPI
filed a petition for certiorari under Rule 65 of the Rules
of Court before the CA. CA granted the petition,

annulled and set aside the orders and stayed the
proceedings in the lower court.
The fact that said conditions of contract
containing the arbitration clause bear only the initials
of respondent Corporation's representatives, Bayani
Fernando and Reynaldo de la Cruz, without that of the
representative of petitioner Shangri-La Properties, Inc.
does not militate against its effectivity. Said petitioner
having categorically admitted that the document,
Annex A to its reply dated August 26, 1993 (Annex G,
petition), is the agreement between the parties, the
initial or signature of said petitioner's representative to
signify conformity to arbitration is no longer necessary.
The parties, therefore, should be allowed to submit
their dispute to arbitration in accordance with their
agreement.
Respondent Court has overlooked the fact that
under the arbitration clause
Notice of the demand for arbitration dispute
shall be filed in writing with the other party to
the contract and a copy filed with the Project
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 case, however, shall the demand be
made later than the time of final payment
except as otherwise expressly stipulated in the
contract (emphasis supplied)
quoted in its order (Annex A, petition). As the
respondent Court there said, after the final demand to
pay the amount of P110,883,101.52, instead of paying,
petitioners set up its own claim against respondent
Corporation in the amount of P220,000,000.00 and set
a conference thereon on July 12, 1993. Said
conference proved futile. The next day, July 14, 1993,
respondent Corporation filed its complaint against
P a g e | 11
petitioners. On August 13, 1993, petitioners wrote to
respondent Corporation requesting arbitration. Under
the circumstances, it cannot be said that petitioners'
resort to arbitration was made beyond reasonable
time. Neither can they be considered in default of their
obligation to respondent Corporation.
RULING:
Whether or not the petition for certiorari is
proper appeal to the CA.
CONTENTION: BF Corporation
Petitioner contends that the Order of the lower
court denying the motion to suspend proceedings "is a
resolution of an incident on the merits." As such, upon
the continuation of the proceedings, the lower court
would appreciate the evidence adduced in their totality
and thereafter render a decision on the merits that
may or may not sustain the existence of an arbitration
clause. A decision containing a finding that the
contract has no arbitration clause can then be
elevated to a higher court "in an ordinary appeal"
where an adequate remedy could be obtained. Hence,
to petitioner, the Court of Appeals should have
dismissed the petition for certiorari because the
remedy of appeal would still be available to private
respondents at the proper time.
COURTS DECISION:
The contention is without merit.
The writs of certiorari and prohibition are
remedies to correct lack or excess of jurisdiction or
grave abuse of discretion equivalent to lack of
jurisdiction committed by a lower court. "Where the
proper remedy is appeal, the action for certiorari will
not be entertained. . . . Certiorari is not a remedy for
errors of judgment. Errors of judgment are correctible
by appeal, errors of jurisdiction are reviewable
by certiorari."

Rule 65 is very clear. The extraordinary
remedies of certiorari, prohibition and mandamus are
available only when "there is no appeal or any plain,
speedy and adequate remedy in the ordinary course of
law . . . ." That is why they are referred to as
"extraordinary." . . . .
The Court has likewise ruled that "certiorari will
not be issued to cure errors in proceedings or correct
erroneous conclusions of law or fact. As long as a court
acts within its jurisdiction, any alleged errors
committed in the exercise of its jurisdiction will
amount to nothing more than errors of judgment which
are reviewable by timely appeal and not by a special
civil action of certiorari."
This is not exactly so in the instant case. While
this Court does not deny the eventual jurisdiction of
the lower court over the controversy, the issue posed
basically is whether the lower court prematurely
assumed jurisdiction over it. If the lower court indeed
prematurely assumed jurisdiction over the case, then it
becomes an error of jurisdiction which is a proper
subject of a petition for certiorari before the Court of
Appeals. And if the lower court does not have
jurisdiction over the controversy, then any decision or
order it may render may be annulled and set aside by
the appellate court.
However, the question of jurisdiction, which is a
question of law depends on the determination of the
existence of the arbitration clause, which is a question
of fact. In the instant case, the lower court found that
there exists an arbitration clause. However, it ruled
that in contemplation of law, said arbitration clause
does not exist.
The issue, therefore, posed before the Court of
Appeals in a petition for certiorari is whether the
Arbitration Clause does not in fact exist. On its face,
P a g e | 12
the question is one of fact which is not proper in a
petition for certiorari.
The Court of Appeals found that an Arbitration
Clause does in fact exist. In resolving said question of
fact, the Court of Appeals interpreted the construction
of the subject contract documents containing the
Arbitration Clause in accordance with Republic Act No.
876 (Arbitration Law) and existing jurisprudence which
will be extensively discussed hereunder. In effect, the
issue posed before the Court of Appeals was likewise a
question of law. Being a question of law, the private
respondents rightfully invoked the special civil action
of certiorari.
Whether or not there exists an arbitration
clause.
CONTENTION: BF Corporation
Petitioner denies the existence of the arbitration
clause
primarily
on
the
ground
that
the
representatives of the contracting corporations did not
sign the "Conditions of Contract" that contained the
said clause. Its other contentions, specifically that
insinuating fraud as regards the alleged insertion of
the arbitration clause, are questions of fact that should
have been threshed out below.
COURTS RULING:
Republic Act No. 876 provides for the formal
requisites of an arbitration agreement as follows:
Sec. 4. Form of arbitration agreement. A
contract to arbitrate a controversy thereafter arising
between the parties, as well as a submission to
arbitrate an existing controversy, shall be in writing
and subscribed by the party sought to be charged, or
by his lawful agent.
The making of a contract or submission for
arbitration described in section two hereof, providing
for arbitration of any controversy, shall be deemed a

consent of the parties of the province or city where
any of the parties resides, to enforce such contract of
submission. (Emphasis supplied.).
The formal requirements of an agreement to
arbitrate are therefore the following:
(a) it must be in writing and
(b)it must be subscribed by the parties or their
representatives.
There is no denying that the parties entered into
a written contract that was submitted in evidence
before the lower court. To "subscribe" means to write
underneath, as one's name; to sign at the end of a
document. That word may sometimes be construed to
mean to give consent to or to attest.
The Court finds that, upon a scrutiny of the
records of this case, these requisites were complied
with in the contract in question. The Articles of
Agreement, which incorporates all the other contracts
and agreements between the parties, was signed by
representatives of both parties and duly notarized. The
failure of the private respondent's representative to
initial the "Conditions of Contract" would therefor not
affect compliance with the formal requirements for
arbitration agreements because that particular portion
of the covenants between the parties was included by
reference in the Articles of Agreement.
Petitioner's contention that there was no
arbitration clause because the contract incorporating
said provision is part of a "hodge-podge" document, is
therefore untenable. A contract need not be contained
in a single writing. It may be collected from several
different writings which do not conflict with each other
and which, when connected, show the parties, subject
matter, terms and consideration, as in contracts
entered into by correspondence. A contract may be
encompassed in several instruments even though
P a g e | 13
every instrument is not signed by the parties, since it
is sufficient if the unsigned instruments are clearly
identified or referred to and made part of the signed
instrument or instruments. Similarly, a written
agreement of which there are two copies, one signed
by each of the parties, is binding on both to the same
extent as though there had been only one copy of the
agreement and both had signed it.
Whether or not the SPI were in default in
invoking the arbitration clause.
This Court likewise does not find that the Court
of Appeals erred in ruling that private respondents
were not in default in invoking the provisions of the
arbitration clause which states that "(t)he demand for
arbitration shall be made within a reasonable time
after the dispute has arisen and attempts to settle
amicably had failed." Under the factual milieu, private
respondent SPI should have paid its liabilities tinder
the contract in accordance with its terms. However,
misunderstandings appeared to have cropped up
between the parties ostensibly brought about by either
delay in the completion of the construction work or by
force majeure or the fire that partially gutted the
project. The almost two-year delay in paying its
liabilities may not therefore be wholly ascribed to
private respondent SPI.
Besides, private respondent SPI's initiative in
calling for a conference between the parties was a
step towards the agreed resort to arbitration. However,
petitioner posthaste filed the complaint before the
lower court. Thus, while private respondent SPI's
request for arbitration on August 13, 1993 might
appear an afterthought as it was made after it had
filed the motion to suspend proceedings, it was
because petitioner also appeared to act hastily in order
to resolve the controversy through the courts.

The arbitration clause provides for a "reasonable
time" within which the parties may avail of the relief
under that clause. "Reasonableness" is a relative term
and the question of whether the time within which an
act has to be done is reasonable depends on attendant
circumstances. This Court finds that under the
circumstances obtaining in this case, a one-month
period from the time the parties held a conference on
July 12, 1993 until private respondent SPI notified
petitioner that it was invoking the arbitration clause, is
a reasonable time. Indeed, petitioner may not be
faulted for resorting to the court to claim what was due
it under the contract. However, we find its denial of the
existence of the arbitration clause as an attempt to
cover up its misstep in hurriedly filing the complaint
before the lower court.
PART III: LEGAL FRAMEWORK FOR ADR
ADVOCACY
ADR LAW IN THE PHILIPINES
2. History
a. Traditional and Cultural Modes of Dispute Resolution
in the Philippines
i. Barangay Justice System. [Sections 416 & 417, RA
No. 7160 (The Local Government Code)
Section 416. Effect of Amicable Settlement and
Arbitration Award. - The amicable settlement and
arbitration award shall have the force and effect of a
final judgment of a court upon the expiration of ten
(10) days from the date thereof, unless repudiation of
the settlement has been made or a petition to nullify
the award has been filed before the proper city or
municipal court.
However, this provision shall not apply to court cases
settled by the lupon under the last paragraph of
P a g e | 14
Section 408 of this Code, in which case the
compromise or the pangkat chairman shall be
submitted to the court and upon approval thereof,
have the force and effect of a judgment of said court.
Section 417. Execution. - The amicable settlement or
arbitration award may be enforced by execution by the
lupon within six (6) months from the date of the
settlement. After the lapse of such time, the
settlement may be enforced by action in the
appropriate city or municipal court.
ii. Mode of Enforcement of Lupon Arbitral Awards.
(Idolor v. CA, GR No. 141853, February 7, 2001)
TERESITA V. IDOLOR vs. HON. COURT OF
APPEALS
FACTS:
On March 21, 1994, to secure a loan of
P520,000.00, petitioner Teresita Idolor executed in
favor of private respondent Gumersindo De Guzman a
Deed of Real Estate Mortgage with right of extrajudicial foreclosure upon failure to redeem the
mortgage on or before September 20, 1994. The
object of said mortgage is a 200-square meter
property with improvements located at 66 Ilocos Sur
Street, Barangay Ramon Magsaysay, Quezon City.
On September 21, 1996, private respondent
Iluminada de Guzman, wife of Gumersindo de Guzman,
filed a complaint against petitioner Idolor before the
Office of the Barangay Captain of Barangay Ramon
Magsaysay, Quezon City, which resulted in a
"Kasunduang Pag-aayos". Where they agreed that
Idolor would be given a time until December 21, 1996
to settle his accounts. Failure to settle the above
account on or before December 21, 1996, Idolor agree
to execute a deed of sale with the agreement to

repurchase without interest within one year
Petitioner failed to comply with her undertaking;
thus private respondent Gumersindo filed a motion for
execution before the Office of the Barangay captain
who subsequently issued a certification to file action.
On March 21, 1997, Gumersindo De Guzman
filed an extra judicial foreclosure of the real estate
mortgage pursuant to the parties agreement set forth
in the real estate mortgage dated March 21, 1994. On
May 23, 1997, the mortgaged property was sold in a
public auction to Gumersindo, as the highest bidder
and consequently, the Sheriff's Certificate of Sale was
registered with the Registry of Deeds of Quezon City
on June 23, 1997.
On June 25, 1998, Idolor filed with the RTC of
Quezon City a complaint for annulment of Sheriff's
Certificate of Sale with prayer for the issuance TRO
and a writ of preliminary injunction alleging among
others alleged irregularity and lack of notice in the
extra-judicial foreclosure proceedings subject of the
real estate mortgage. In the meantime, a temporary
restraining order was issued by the trial court.
On July 28, 1998, the trial court issued a writ of
preliminary injunction enjoining private respondents,
the Deputy Sheriffs and the Registry of Deeds of
Quezon City from causing the issuance of a final deed
of sale and consolidation of ownership of the subject
property in favor of the De Guzman spouses. The trial
court denied the motion for reconsideration filed by
the de Guzman spouses.
Spouses de Guzman filed with the respondent
Court of Appeals a petition for certiorari seeking
annulment of the trial court's order dated July 28, 1998
which granted the issuance of a preliminary injunction.
On September 28, 1999, the respondent court
granted the petition and annulled the assailed writ of
P a g e | 15
preliminary injunction. Teresita Idolor filed her motion
for reconsideration which was denied in a resolution
dated February 4, 2000.
RULING:
Whether or not there was a proper public notice
of the foreclosure sale.
CONTENTION: Idolor
Petitioner claims that her proprietary right over
the subject parcel of land was not yet lost since her
right to redeem the subject land for a period of one
year had neither lapsed nor run as the sheriff's
certificate of sale was null and void; that petitioner and
the general public have not been validly notified of the
auction sale conducted by respondent sheriffs; that the
newspaper utilized in the publication of the notice of
sale was not a newspaper of general circulation.
COURTS DECISION:
In the instant case, we agree with the
respondent Court that petitioner has no more
proprietary right to speak of over the foreclosed
property to entitle her to the issuance of a writ of
injunction. It appears that the mortgaged property was
sold in a public auction to private respondent
Gumersindo on May 23, 1997 and the sheriff's
certificate of sale was registered with the Registry of
Deeds of Quezon City on June 23, 1997. Petitioner had
one year from the registration of the sheriff's sale to
redeem the property but she failed to exercise her
right on or before June 23, 1998, thus spouses de
Guzman are now entitled to a conveyance and
possession of the foreclosed property. When petitioner
filed her complaint for annulment of sheriff's sale
against private respondents with prayer for the
issuance of a writ of preliminary injunction on June 25,
1998, she failed to show sufficient interest or title in
the property sought to be protected as her right of

redemption had already expired on June 23, 1998, i.e.
two (2) days before the filing of the complaint. It is
always a ground for denying injunction that the party
seeking it has insufficient title or interest to sustain it,
and no claim to the ultimate relief sought - in other
words, that she shows no equity. The possibility of
irreparable damage without proof of actual existing
right
is
not
aground
for
an
injunction.
Whether or not the Kasunduan novated the
original mortgage.
Novation is the extinguishment of an obligation
by the substitution or change of the obligation by a
subsequent one which terminates it, either by
changing its objects or principal conditions, or by
substituting a new debtor in place of the old one, or by
subrogating a third person to the rights of the
creditor.14 Under the law, novation is never presumed.
The parties to a contract must expressly agree that
they are abrogating their old contract in favor of a new
one.15 Accordingly, it was held that no novation of a
contract had occurred when the new agreement
entered into between the parties was intended to give
life to the old one.
A review of the "Kasunduang Pag-aayos" which
is quoted earlier does not support petitioner's
contention that it novated the real estate mortgage
since the will to novate did not appear by express
agreement of the parties nor the old and the new
contracts were incompatible in air points. In fact,
petitioner expressly recognized in the Kasunduan the
existence and the validity of the old obligation where
she acknowledged her long overdue account since
September 20, 1994 which was secured by a real
estate mortgage and asked for a ninety (90) days
grace period to settle her obligation on or before
December 21, 1996 and that upon failure to do so, she
P a g e | 16
will execute a deed of sale with a right to repurchase
without interest within one year in favor of private
respondents. Where the parties to the new obligation
expressly recognize the continuing existence and
validity of the old one, where, in other words, the
parties expressly negated the lapsing of the old
obligation, there can be no novation.
Notably, the provision in the "Kasunduang Pagaayos" regarding the execution of a deed of sale with
right to repurchase within one year would have the
same effect as the extra-judicial foreclosure of the real
estate mortgage wherein petitioner was given one
year from the registration of the sheriff's sale in the
Registry of property to redeem the property, i.e.,
failure to exercise the right of redemption would
entitle the purchaser to possession of the property. It
is not proper to consider an obligation novated by.
unimportant modifications which do not alter its
essence.18 It bears stress that the period to pay the
total amount of petitioner's indebtedness inclusive of
interest amounted to P1,233,288.23 expired on
December 21, 1996 and petitioner failed to execute a
deed of sale with right to repurchase on the said date
up to the time private respondents filed their petition
for extra-judicial foreclosure of real estate mortgage.
The failure of petitioner to comply with her
undertaking in the "kasunduan" to settle her obligation
effectively delayed private respondents' right to extrajudicially foreclose the real estate mortgage which
right accrued as far back as 1994. Thus, petitioner has
not shown that she is entitled to the equitable relief of
injunction
b. Indigenous Modes of Dispute Resolution (IPRA
LAW)

REPUBLIC ACT NO. 8371
AN ACT TO RECOGNIZE, PROTECT AND PROMOTE
THE RIGHTS OF INDIGENOUS CULTURAL
COMMUNITIES/ INDIGENOUS PEOPLES, CREATING
A NATIONAL COMMISSION ON INDIGENOUS
PEOPLES, ESTABLISHING IMPLEMENTING
MECHANISMS, APPROPRIATING FUNDS
THEREFOR, AND FOR OTHER PURPOSES
SEC. 62. Resolution of Conflicts. In cases of conflicting
interest, where there are adverse claims within the
ancestral domains as delineated in the survey plan,
and which can not be resolved, the NCIP shall hear and
decide, after notice to the proper parties, the disputes
arising from the delineation of such ancestral domains:
Provided, That if the dispute is between and/or among
ICCs/IPs regarding the traditional boundaries of their
respective ancestral domains, customary process shall
be followed. The NCIP shall promulgate the necessary
rules and regulations to carry out its adjudicatory
functions: Provided, further, That any decision, order,
award or ruling of the NCIP on any ancestral domain
dispute or on any matter pertaining to the application,
implementation, enforcement and interpretation of this
Act may be brought for Petition for Review to the Court
of Appeals within fifteen( 15) days from receipt of a
copy thereof
SEC. 63. Applicable Laws. Customary laws, traditions
and practices of the ICCs/IPs of the land where the
conflict arises shall be applied first with respect to
property rights, claims and ownerships, hereditary
succession and settlement of land disputes. Any doubt
or ambiguity in the application and interpretation of
laws shall be resolved in favor of the ICCs/IPs.
SEC. 65. Primacy of Customary Laws and Practices.
P a g e | 17
When disputes involve ICCs/IPs, customary laws and
practices shall be used to resolve the dispute
SEC. 66. Jurisdiction of the NClP. The NCIP, through its
regional offices, shall have jurisdiction over all claims
and disputes involving rights of ICCs/IPs: Provided,
however, That no such dispute shall be brought to the
NCIP unless the parties have exhausted all remedies
provided under their customary laws. For this purpose,
a certification shall be issued by the Council of
Elders/Leaders who participated in the attempt to
settle the dispute that the same has not been
resolved, which certification shall be a condition
precedent to the filing of a petition with the NCIP
c. ADR Methods are encouraged by the Philippine
Supreme Court and have been held valid and
constitutional even before laws were enacted to
regulate these procedures. [Puromines v. CA, 220
SCRA 281 (1993)
PUROMINES, INC. vs. PHILIPP BROTHERS
OCEANIC, INC.
FACTS:
Puromines, Inc. and Makati Agro Trading, Inc.
entered into a contract Philipp Brothers Oceanic, Inc.
for the sale of prilled Urea in bulk. The sale contract
provided an arbitration clause which states,
9. Arbitration
Any disputes arising under this contract
shall be settled by arbitration in London in
accordance with the Arbitration Act 1950
and any statutory amendment or
modification thereof. Each party is to
appoint an Arbitrator, and should they be
unable to agree, the decision of an
Umpire appointed by them to be final.

The Arbitrators and Umpire are all to be
commercial men and resident in London.
This submission may be made a rule of
the High Court of Justice in England by
either party.
On May 22, 1988, the vessel M/V "Liliana
Dimitrova" loaded on board at Yuzhny, USSR a
shipment of 15,500 metric tons prilled Urea in bulk
complete and in good order and condition for transport
to Iloilo and Manila, to be delivered to petitioner. Three
bills of lading were issued by the ship-agent in the
Philippines, Maritime Factors Inc., namely: Bill of
Lading No. 1 dated May 12, 1988 covering 10,000
metric tons for discharge in Manila; Bill of Lading No. 2
of even date covering 4,000 metric tons for unloading
in Iloilo City; and Bill of Lading No. 3, also dated May
12, 1988, covering 1,500 metric tons likewise for
discharge in Manila.
The shipment covered by Bill of Lading No. 2
was discharged in Iloilo City complete and in good
order and condition. However, the shipments covered
by Bill of Lading Nos. 1 and 3 were discharged in
Manila in bad order and condition, caked, hardened
and lumpy, discolored and contaminated with rust and
dirt. Damages were valued at P683,056.29 including
additional discharging expenses.
Consequently, petitioner filed a complaint with
the trial court for breach of contract of carriage against
Maritime Factors, Inc. as ship-agent in the Philippines
for the owners of the vessel MV "Liliana Dimitrova,"
while private respondent, Philipp Brothers Oceanic,
Inc., was impleaded as charterer of the said vessel and
proper party to accord petitioner complete relief.
Maritime Factors, Inc. filed its Answer to the complaint,
while private respondent filed a motion to dismiss,
dated February 9, 1989, on the grounds that the
P a g e | 18
complaint states no cause of action; that it was
prematurely filed; and that petitioner should comply
with the arbitration clause in the sales contract.
The motion to dismiss was opposed by
petitioner contending the inapplicability of the
arbitration clause inasmuch as the cause of action did
not arise from a violation of the terms of the sales
contract but rather for claims of cargo damages where
there is no arbitration agreement. On April 26, 1989,
the trial court denied respondent's motion to dismiss.
RTC:
Any disputes arising under this contract shall be
settled by arbitration . . . (emphasis supplied)
A perusal of the facts alleged in the complaint upon
which the question of sufficiency of the cause of action
is to be determined shows quite clearly that the cause
of action of the complaint arose from a breach of
contract of carriage by the vessel chartered by the
defendant Philipp Brothers Oceanic, Inc. Thus, the
aforementioned arbitration clause cannot apply to the
dispute in the present action which concerns plaintiff's
claim for cargo loss/damage arising from breach of
contract of carriage.
CA:
The appellate court found that the arbitration
provision in the sales contract and/or the bills of lading
is applicable in the present case.
An examination of the sales contract No.
S151.8.01018 shows that it is broad enough to include
the claim for damages arising from the carriage and
delivery of the goods subject-matter thereof.
It is also noted that the bills of lading attached
as Annexes "A", "B" and "C" to the complaint state, in
part, "any dispute arising under this Bill of Lading shall
be referred to arbitration of the Maritime Arbitration
Commission at the USSR Chamber of Commerce and

Industry, 6 Kuibyshevskaia Str., Moscow, USSR, in
accordance with the rules of procedure of said
commission."
Considering that the private respondent was one
of the signatories to the sales contract . . . all parties
are obliged to respect the terms and conditions of the
said sales contract, including the provision thereof on
"arbitration."
ISSUE
Whether or not the phrase "any dispute arising
under this contract" in the arbitration clause of the
sales contract covers a cargo claim against the vessel
(owners and/or charterers) for breach of contract of
carriage.
SC:
CONTENTION: Puromines Inc.
Petitioner argues that the sales contract does
not include the contract of carriage which is a different
contract entered into by the carrier with the cargo
owners. That it was an error for the respondent court
to touch upon the arbitration provision of the bills of
lading in its decision inasmuch as the same was not
raised as an issue by private respondent who was not
a party in the bills of lading (emphasis Ours).
COURTS DECISION
We agree with the court a quo that the sales
contract is comprehensive enough to include claims for
damages arising from carriage and delivery of the
goods. As a general rule, the seller has the obligation
to transmit the goods to the buyer, and concomitant
thereto, the contracting of a carrier to deliver the
same. Art. 1523 of the Civil Code provides:
Art. 1523. Where in pursuance of a
contract of sale, the seller is authorized or
required to send the goods to the buyer,
delivery of the goods to a carrier, whether
P a g e | 19
named by the buyer or not, for the
purpose of transmission to the buyer is
deemed to be a delivery of the goods to
the buyer, except in the cases provided
for in article 1503, first, second and third
paragraphs, or unless a contrary intent
appears.
Unless otherwise authorized by the buyer, the
seller must make such contract with the carrier on
behalf of the buyer as may be reasonable, having
regard to the nature of the goods and the other
circumstances of the case. If the seller omit so to do,
and the goods are lost or damaged in course of transit,
the buyer may decline to treat the delivery to the
carrier as a delivery to himself, or may hold the seller
responsible in damages.
In any case, whether the liability of respondent
should be based on the sales 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.
Neither can petitioner contend that the
arbitration provision in the bills of lading should not
have been discussed as an issue in the decision of the
Court of Appeals since it was not raised as a special or
affirmative defense. The three bills of lading were
attached to the complaint as Annexes "A," "B," and
"C," and are therefore parts thereof and may be
considered as evidence although not introduced as
such. Hence, it was then proper for the court a quo to
discuss the contents of the bills of lading, having been
made part of the record.
Going back to the main subject of this case,

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. McDonough Construction Company of
Florida 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 exists against a
claim does not make it frivolous or
P a g e | 20
baseless.
d. HISTORY OF ARBITRATION
i. Jurisprudential Basis [Chan Linte vs. Law Union &
Rock Insurance, 42 Phil 548 (1921), Vega vs. San
Carlos Miling Co., 51 Phil 908 (1924)]
A. CHAN LINTE vs. LAW UNION AND ROCK
INSURANCE CO., LTD
FACTS:
Chan Linte entered into an agreement with the
Law Union and Rock Insurance Co. to insure Lintes
30,992.50 kilos of hemp stored in the warehouse in
Calbayog, Samar. The property is insured in the
amount of P5,000 incosideration of the company
premium of P87.50 paid by Chan Linte. On April 10,
1918, the hemp was destroyed by a fire. Chan Linte
informed the company regarding the fire and
demanded for payment but the insurance company
refused to pay for the insurance.
The company requested that its liability should
be submitted to arbitration. and that Linte acceded to
the arbitration, but not that the award of arbitration
should be conclusive or final, or deprive the courts of
jurisdiction. By agreement of both, Frank B. Ingersoll
was named sole arbitrator, and both parties informally
presented evidence before him and he made return of
arbitration to the effect that Linte had only seven bales
of hemp destroyed in the fire of April 10, 1918.Chan
Linte is dissatisfied, and comes to this court for proper
action.
The other insurance companies are Tokyo
Marine Insurance Co., Ltd., and the Chine Fire
Insurance Co., Ltd., defendants and appellees.
After the filing of the amended complaint, both
parties agreed upon Frank B. Ingersoll as arbitrator,

and submitted to him the evidence pro and con. His
first finding was made on December 28, 1918, and on
July 8, 1919, he filed a supplemental report in which he
found the value of the property destroyed to be
P608.34.
After the testimony was taken, the trial court
rendered judgment against each of the defendants for
P202.78, and that plaintiff should pay the costs of the
action.
Chan Linte appealed the decision claiming that
the court erred in holding that the decision of the
arbitrator is conclusive or in any way binding on the
plaintiff; that the arbitrator's decision is in the main
supported by the evidence; and that it erred in not
awarding judgment for the plaintiff, is prayed for in his
complaint.
Chan Linte contends; First, that the arbitration
clauses are null and void as against public policy;
second, that the award of the arbitrator of December
28, 1918, without finding the value of the property
destroyed, was final, and that on July 8, 1919, he had
no authority to make a supplemental finding as to the
value of the property; and, third, that upon the
evidence the court should have found for the plaintiff.
Upon the first point he cites the case of Wahl and
Wahl vs. Donaldson, Sims and Co. (2 Phil., 301), which
apparently sustains his contention. That case holds
that "a clause in a contract providing that all matters
in dispute between the parties shall be referred to
arbitrators and to them alone is contrary to public
policy and cannot oust the courts of jurisdiction."
ISSUE:
Whether the arbitration is null and void as
against public policy.
RULING:
Ruling Case Law, vol. 2, p. 359, says that when
P a g e | 21
the subject-matter of a pending suit is submitted to
arbitration without rule of court "there is a conflict
among the authorities as to whether or not the mere
submission effects a discontinuance of the action. The
majority rule is that the parties themselves show an
intent to discontinue the pending suit by substituting
another tribunal, so that a submission furnishes
ground for a discontinuance."
On page 352 of the same volume, it is said:
Arbitration as a method of settling disputes and
controversies is recognized at common law. The
award of the arbitrators is binding on the
parties, but, in the absence of statute, the
successful party can only enforce his rights
thereunder by a suit at law. Thus the only gain
by a common law arbitration is the substitution
of the definite findings of the award as the basis
of a suit, in the place of the former unsettled
rights of the parties. In an action on the award
the award itself is conclusive evidence of all
matters therein contained, provided the
arbitrators have not exceeded the powers
delegated to them by the agreement of
submission.
The
courts
regard
matters
submitted as concluded by the award, and in an
action thereon they will not review the merits of
the arbitrators' findings.
Corpus Juris, vol. 5, p. 16, says:
The statement of controversies by arbitration is
an ancient practice at common law. In its broad
sense it is a substitution, by consent of parties,
of another tribunal for the tribunals provided by
the ordinary processes of law; a domestic
tribunal, as contradistinguished from a regularly
organized court proceeding according to the
course of the common law, depending upon the

voluntary act of the parties disputant in the
selection of judges of their own choice. Its object
is the final disposition, in a speedy and
inexpensive way, of the matters involved, so
that they may not become the subject of future
litigation between the parties.
On page 20, it is said:
APPROVED METHOD OF SETTLEMENT; FAVORED BY
CONSTRUCTION.
Although arbitration was recognized at the
common law as a mode of adjusting matters in
dispute, especially such as concerned personal
chattels and personal wrongs, yet, from efforts
perceptible in the earlier cases to construe
arbitration proceedings and awards so as to
defeat them, it would seem that they were not
originally favored by the courts. This hostility,
however, has long since disappeared, and, by
reason of the fact that the proceeding
represents a method of the parties' own choice
and furnishes a more expeditious and less
expensive means of settling controversies than
the ordinary course of regular judicial
proceedings, it is the policy of the law to favor
arbitration.
Therefore
every
reasonable
intendment will be indulged to give effect to
such proceedings, and in favor of the regularity
and integrity of the arbitrators' acts.
On page 43, it is said:
Where a contract contains a stipulation, not that
all questions arising thereunder, whether as to
the validity or effect of such contract, or
otherwise, shall be submitted to arbitration, but
that the decision of arbitrators on a certain
question or questions, such as the quantity,
quality, or price of materials or workmanship,
P a g e | 22
the value of work, the amount of loss or
damage, or the like, shall be a condition
precedent to the right of action on the contract
itself, no fixed sum being stated in the contract,
such stipulation will be enforced, because the
parties to a contract have a right to adopt
whatever method they see fit for determining
such questions, and until the method adopted
has been pursued, or some sufficient reason
given for not pursuing it, no action can be
brought on the contract. "Freedom to contract
for arbitration to this extent," it has been said,
"imports no invasion of the province of the
courts, and there is no ground upon which a
right so essential to the convenient transaction
of modern business affairs can be denied," nor is
such agreement objectionable as being against
public policy. In order to give effect to such an
agreement it must of course appear that the
matter proposed to be referred is a difference,
within the meaning of the agreement.
In the instant case, there was no dispute about
the policy of insurance or the fire. The only real
difference was the amount of the loss which plaintiff
sustained, and that was the only question submitted to
arbitration. In December, the arbitrator found the
amount of plaintiff's hemp which was destroyed, but
did not find its value.
Hence the award on the question submitted was
not complete or final. In the finding of the actual value
of the hemp, there was no change or revision of any
previous finding. It was simply the completion by the
arbitrator of an unfinished work. No formal notice was
served on the arbitrator, and he was not removed or
discharged, and until such time as his duties were fully
performed, or he was discharged, he would have the

legal right to complete his award. The plaintiff, having
agreed to arbitration after the action was commenced
and submitted his proof to the arbitrator, in the
absence of fraud or mistake, is estopped and bound by
the award. Where a plaintiff has commenced an action
to recover upon an insurance policy, and then
voluntarily submits the amount of his loss to
arbitration, he cannot ignore or nullify the award and
treat it as void upon the ground that he is dissatisfied
with the decision.
TEODORO VEGA vs. THE SAN CARLOS MILLING
CO., LTD.,
FACTS:
Vega instituted an action for the recovery of
32,959 kilos of centrifugal sugar, or its value, P6,252,
plus the payment of P500 damages and the costs.
The CFI of Occidental Negros rendered a
judgment in favor of Vega and ordered the delivery of
the 32,959 kilos of centrifugal sugar manufactured in
the defendants' central to Vega. If in default, the
selling price thereof, amounting to P5,981.06 should
be paid.
The Milling Company appealed the decision of
the CFI questioning its jurisdiction based on clause 23
of the Mill's covenants and clause 14 of the Planter's
Covenant which state that:
23. That it (the Mill Party of the first part) will
submit and all differences that may arise
between the Mill and the Planters to the decision
of arbitrators, two of whom shall be chosen by
the Mill and two by the Planters, who in case of
inability to agree shall select a fifth arbitrator,
and to respect and abide by the decision of said
arbitrators, or any three of them, as the case
may be.
P a g e | 23
xxx
xxx
xxx
14. That they (the Planters--Parties of the
second part) will submit any and all differences
that may arise between the parties of the first
part and the parties of the second part of the
decision of arbitrators, two of whom shall be
chosen by the said parties of the first part and
two by the said party of the second part, who in
case of inability to agree, shall select a fifth
arbitrator, and will respect and abide by the
decision of said arbitrators, or any three of
them, as the case may be.
The Milling Company contends that as such
stipulations on arbitration are valid, they constitute a
condition precedent, to which Vega should have
resorted before applying to the courts, as he
prematurely did.
ISSUE:
Whether or not Vega should have submitted the
case for arbitration before resorting the case to the
court.
RULING:
(1)The defendant is right in contending that
such covenants on arbitration are valid, but they are
not for the reason a bar to judicial action, in view of
the way they are expressed:
An agreement to submit to arbitration, not
consummated by an award, is no bar to suit at
law or in equity concerning the subject matter
submitted. And the rule applies both in respect
of agreements to submit existing differences
and agreements to submit differences which
may arise in the future. (5 C. J., 42.)
And in view of the terms in which the said
covenants on arbitration are expressed, it cannot be
held that in agreeing on this point, the parties

proposed to establish the arbitration as a condition
precedent to judicial action, because these clauses
quoted do not create such a condition either expressly
or by necessary inference.
Submission as Condition Precedent to
Suit. Clauses in insurance and other contracts
providing for arbitration in case of disagreement
are very similar, and the question whether
submission to arbitration is a condition
precedent to a suit upon the contract depends
upon the language employed in each particular
stipulation. Where by the same agreement
which creates the liability, the ascertainment of
certain facts by arbitrators is expressly made a
condition precedent to a right of action thereon,
suit cannot be brought until the award is made.
But the courts generally will not construe an
arbitration clause as ousting them of their
jurisdiction
unless
such
construction
is
inevitable,
and
consequently
when
the
arbitration clause is not made a condition
precedent by express words or necessary
implication, it will be construed as merely
collateral to the liability clause, and so no bar to
an action in the courts without an award. (2 R.
C. L., 362, 363.)
Neither does not reciprocal covenant No. 7 of
said contract Exhibit A expressly or impliedly establish
the arbitration as a condition precedent. Said
reciprocal covenant No. 7 reads:
7. Subject to the provisions as to
arbitration, hereinbefore appearing, it is
mutually agreed that the courts of the City of
Iloilo shall have jurisdiction of any and all judicial
proceedings that may arise out of the
contractual relations herein between the party
P a g e | 24
of the first and the part is of the second part.
The expression "subject to the provisions as to
arbitration, hereinbefore appearing" does not declare
such to be a condition precedent. This phrase does not
read "subject to the arbitration," but "subject to the
provisions as to arbitration hereinbefore appearing."
And, which are these "provisions as to arbitration
hereinbefore appearing?" Undoubtedly clauses 23 and
14 quoted above, which do not make arbitration a
condition precedent.
DISENTING OPINION: MALCOLM, J.
I join with Mr. Justice Ostrand in his dissent
based on the proposition that the defendant is not
bound to furnish cars free of charge for use on the
plaintiff's portable railway tracks, in relation with its
corollary, that the letter written by the manager of the
defendant's mill on March 18, 1916, does not estop the
defendant from demanding compensation for the
future use of the cars. I dissent also on another
ground, which is, that the parties having formally
agreed submit their differences to arbitrators, while
recognizing the jurisdiction of the courts, arbitration
has been made a condition precedent to litigation, and
should be held valid and enforceable.
Lamentable, to say the least, is the chaotic
condition which exists with reference to the efficacy of
arbitration agreements. While the variety of reasons
advanced by the courts for refusing to compel parties
to abide by their arbitration contracts are not always
convincing, and while research discloses that the rules
have mounted on antiquity rather than on reason, yet
we presume that, with or without reason, the general
principles must be accepted. A light is, however,
breaking through the clouds of obscurity and courts
which formerly showed hostility to arbitration are now
looking upon it with reluctant favor. The possibly

inevitable jealousy of the courts toward anything which
deprives them of jurisdiction and the idea which once
prevailed that since there are courts, therefore
everybody must go to the courts, is, as Federal Judge
Hough declares in the case of United States Asphalt
Refining Co. vs. Trinidad Lake Petroleum Co. ([1915],
222 Fed., 1006), "A singular view of juridical sanctity."
In the Philippines fortunately, the attitude of the
courts toward arbitration agreements is slowly
crystallizing into definite and workable form. The
doctrine announced in Wahl and Wahl vs. Donaldson,
Sims & Co. ([1903], 2 Phil., 301), was that a clause in a
contract providing that all matters in dispute shall be
referred to arbitrators and to them alone, is contrary to
public policy and cannot oust the courts of jurisdiction.
But even this conservative expression of the doctrine
has been modernized by the subsequent cases of
Chang vs. Royal Exchange Assurance Corporation of
London ([1907], 8 Phil., 399); Allen vs. Province of
Tayabas ([1918], 38 Phil., 356); and Chan Linte vs. Law
Union and Rock Ins. Co. ([1921], 42 Phil., 548). 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 arrangement and
will only with great reluctance interfere to anticipate or
nullify the action of the arbitrator.
The new point of the judiciary in the progressive
jurisdiction of Pennsylvania, in England, and under the
Civil Law, is also worthy of our serious consideration. It
is the rule in Pennsylvania that when the persons
making an executory contract stipulate in it that all
disputes and differences between them, present or
prospective, in reference to such contract or any sum
payable under it, shall be submitted to the arbitrament
of a named individual, or specifically designated
P a g e | 25
persons, they are effectually bound irrevocaby by that
stipulation, and precluded from seeking redress
elsewhere until the arbiter or arbiters agreed upon
have rendered an award or otherwise been discharged.
The courts there, however, make distinction between
agreements for a general reference to arbitration and
designating a particular individual or tribunal to
arbitrate. The former may be waived or revoked, and is
no obstacle to a suit or action for the same matter; the
latter is irrevocable and until the designated arbiter or
arbiters have decided, no right of action arises which
can
be
enforced
in
law
or
in
equity.
(Snodgrass vs. Gavit [1857], 28 Pa., 221; Commercial
Union Assur. Co. vs. Hocking [1886], 115 Pa., 407; 2
Am St. Rep., 562; Page vs. Vankirk, 1 Brewst. [Pa.],
282; 47 L. R. A. [N. S.], note, pp. 399, 400.)
In England, the view seems now to prevail that a
contractual stipulation for a general arbitration,
constitutes a condition precedent to the institution of
judicial proceedings for the enforcement of the
contract. (Compagnie de Commerce etc. vs. Hamburg
Amerika etc. [1917], 36 Phil., 590, 635.) Law Watson in
Hamlyn vs. Talisker Distillery ([1894], App. Cas., 202),
said: "The rule that a reference to arbiters not named
cannot be enforced does not appear to me to rest
upon any essential considerations of public policy.
Even if an opposite inference were deducible from the
authorities by which it was established, the rule has
been so largely trenched upon by the legislation of the
last 50 years, . . . that I should hesitate to affirm that
the policy upon which it was originally based could
now be regarded as of cardinal importance.
Finally, it is within our knowledge that the
Spanish civil law wisely contains elaborate provisions
looking to the amicable adjustment of controversies
out of court. Litigation by means of friendly adjusters

was formerly well known. The procedure in this kind of
litigation was minutely outlined in the Ley de
Enjuiciamiento to Civil. Two articles of the Civil Code,
namely articles 1820 and 1821, were given up to the
subject of arbitration, and expressly confirmed this
method of settling differences. (See Cordoba vs. Conde
[1903], 2 Phil., 445.)
It was plainly the solemn purpose of the parties
to settle their controversies amicably if possible before
resorting to the courts. They provided for themselves
by mutual consent a method which was speedier and
less expensive for all concerned and less likely to
breed that ill-feeling which is often the consequence of
hotly contested litigation. All this was done by the
Planters on the one hand and by the Milling Company
on the other, to the end that justice might guide them
and possible differences by quickly adjusted.
It is clear, by paragraph 7 of the Mutual
Covenants, that these parties did not intend that the
decision of the arbitrators should prevent resort to the
courts, for they expressly agreed to carry litigation
between them to the courts of Iloilo. Acting under legal
rules, even in their most restrictive form, disputes
arising out of the contract, were to be referred to
arbitration so that the damages sustained by a breach
of the contract, could be ascertained by specified
arbitrators before any right of action arose; but the
matters in dispute were not to be referred to
arbitrators and to them alone, to the utter exclusion of
the courts. It is exactly correct to state that the
clauses of the Covenants hereinbefore quoted, were
meant as a condition precedent to litigation, which
accordingly should be given effect.
ii. RA No. 876, the Arbitration Law adopted the
modern view that arbitration is inexpensive, speedy
P a g e | 26
and amicable method of settling disputes and as a
means of avoiding litigation. [Eastbord v. Juan
Ysmael and Co., 102 Phil 1 (1957)]
MANILA
ELECTRIC
COMPANY
vs.
PASAY
TRANSPORTATION COMPANY, INC., ET AL.
FACTS:
Act No. 1446 is entitled. "An Act granting a
franchise to Charles M. Swift to construct, maintain,
and operate an electric railway, and to construct,
maintain, and operate an electric light, heat, and
power system from a point in the City of Manila in an
easterly direction to the town of Pasig, in the Province
of Rizal." Under Section 11 of the Act provides:
"Whenever any franchise or right of way is granted to
any other person or corporation, now or hereafter in
existence, over portions of the lines and tracks of the
grantee herein, the terms on which said other person
or corporation shall use such right of way, and the
compensation to be paid to the grantee herein by such
other person or corporation for said use, shall be fixed
by the members of the Supreme Court, sitting as a
board of arbitrators, the decision of a majority of whom
shall be final."
Manila
Electric
Company
requested
the
members of the Supreme Court to sit as a board of
arbitrators and to fix the terms upon which certain
transportation companies shall be permitted to use the
Pasig bridge of the Manila Electric Company and the
compensation to be paid to the Manila Electric
Company by such transportation companies. Basically,
this action questions the validity of Section 11 of Act
No. 1446.
ISSUE:
Whether or not Section 11 of the Act No. 1446
valid.

RULING:
Examining the statutory provision which is here
invoked, it is first noted that power is attempted to be
granted to the members of the Supreme Court sitting
as a board of arbitrators and to the Supreme Court as
an entity. It is next seen that the decision of a majority
of the members of the Supreme Court is made final.
And it is finally observed that the franchise granted the
Manila Electric Company by the Government of the
Philippine Islands, although only a contract between
the parties to it, is now made to effect the rights of
persons not signatories to the covenant.
The law calls for arbitration which represents a
method of the parties' own choice. A submission to
arbitration is a contract. The parties to an arbitration
agreement may not oust the courts of jurisdiction of
the matters submitted to arbitration. These are
familiar rules which find support in articles 1820 and
1821 of the Civil Code. Citation of authority is hardly
necessary, except that it should be recalled that in the
Philippines, and in the United States for that matter, it
has been held that a clause in a contract, providing
that all matters in dispute between the parties shall be
referred to arbitrators and to them alone, is contrary to
public policy and cannot oust the courts of jurisdiction
(Wahl and Wahl vs. Donaldson, Sims & Co. [1903], 2
Phil., 301; Puentebella vs. Negros Coal Co. [1927], 50
Phil., 69; Vega vs. San Carlos Milling Co. [1924], 51
Phil., 908; District of Columbia vs. Bailey [1897], 171
U. S., 161.)
We would not be understood as extending the
principles governing arbitration and award too far.
Unless the arbitration agreement is such as absolutely
to close the doors of the courts against the parties, the
courts should look with favor upon such amicable
arrangements. We can also perceive a distinction
P a g e | 27
between a private contract for submission to
arbitration and agreements to arbitrate falling within
the terms of a statute enacted for such purpose and
affecting others than the parties to a particular
franchise. Here, however, whatever else may be said
in extenuation, it remains true that the decision of the
board of arbitrators is made final, which if literally
enforced would leave a public utility, not a party to the
contract authorized by Act No. 1446, without recourse
to the courts for a judicial determination of the
question in dispute.
We run counter to this dilemma. Either the
members of the Supreme Court, sitting as a board of
arbitrators, exercise judicial functions, or the members
of the Supreme Court, sitting as board of arbitrators,
exercise administrative or quasi judicial functions. The
first case would appear not to fall within the
jurisdiction granted the Supreme Court. Even
conceding that it does, it would presuppose the right
to bring the matter in dispute before the courts, for
any other construction would tend to oust the courts of
jurisdiction and render the award a nullity. But if this
be the proper construction, we would then have the
anomaly of a decision by the members of the Supreme
Court, sitting as a board of arbitrators, taken therefrom
to the courts and eventually coming before the
Supreme Court, where the Supreme Court would
review the decision of its members acting as
arbitrators. Or in the second case, if the functions
performed by the members of the Supreme Court,
sitting as a board of arbitrators, be considered as
administrative or quasi judicial in nature, that would
result in the performance of duties which the members
of the Supreme Court could not lawfully take it upon
themselves to perform. The present petition also
furnishes an apt illustration of another anomaly, for we

find the Supreme Court as a court asked to determine
if the members of the court may be constituted a
board of arbitrators, which is not a court at all.
Confirming the decision to the basic question at
issue, the Supreme Court holds that section 11 of Act
No. 1446 contravenes the maxims which guide the
operation of a democratic government constitutionally
established, and that it would be improper and illegal
for the members of the Supreme Court, sitting as a
board of arbitrators, the decision of a majority of whom
shall be final, to act on the petition of the Manila
Electric Company. As a result, the members of the
Supreme Court decline to proceed further in the
matter.
e. HISTORY OF MEDIATION
3. Sources of Philippine ADR Law
a. 1987 Philippine Constitution
Section 16, Article III
Sec. 16. All person shall have the right to a speedy
disposition of their cases before all judicial, quasijudicial, or administrative bodies.
P a g e | 28

Notes On ADR (Recovered)

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Notes On ADR (Recovered)

Încărcat de

Drepturi de autor:

Formate disponibile

ADR: PERSONAL NOTES (J.F.

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

What is the purpose of the UNCITRAL MODEL

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

It is an agency attached to the DOJ which is

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

ADR: PERSONAL NOTES (J.F. BRIONES)

S-ar putea să vă placă și