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Submitted by: DENNIS SEBASTIAN B.

DAVIDE

ADR

DECEMBER 18, 2014

G.R. No. 169332


February 11, 2008
ABS-CBN vs. WORLD INTERACTIVE NETWORK SYSTEMS (WINS) JAPAN CO., LTD.
FACTS: Petitioner ABS-CBN entered into an agreement with respondent World Interactive
Network Systems (WINS). Under the agreement, respondent was granted the exclusive license to
distribute and sublicense the distribution of the television service known as "The Filipino Channel"
(TFC) in Japan.
A dispute arose when petitioner accused respondent of inserting nine episodes of WINS
WEEKLY, into the TFC programming from March to May 2002, claiming that such insertions were
unauthorized thus constituting a material breach of their agreement. As a result, petitioner notified
respondent of its intention to terminate their licensing agreement.
Thereafter, respondent filed an arbitration suit pursuant to the arbitration clause of its agreement
with petitioner and contended that the airing of WINS WEEKLY was made with petitioner's prior
approval. It also alleged that petitioner only threatened to terminate their agreement because it
wanted to renegotiate the terms thereof to allow it to demand higher fees. Respondent also prayed
for damages for petitioner's alleged grant of an exclusive distribution license to another entity,
NHK (Japan Broadcasting Corporation).
The parties appointed a sole arbitrator in the person of Professor Alfredo F. Tadiar and the latter
reached a decision in favor of respondent.
Petitioner filed in the CA a petition for review under Rule 43 of the Rules of Court or, in the
alternative, a petition for certiorari under Rule 65 of the same Rules, with application for temporary
restraining order and writ of preliminary injunction.
The CA rendered the assailed decision dismissing ABS-CBNs petition for lack of jurisdiction. It
ruled that it is the RTC which has jurisdiction over questions relating to arbitration. It held that the
only instance it can exercise jurisdiction over an arbitral award is an appeal from the trial court's
decision confirming, vacating or modifying the arbitral award. It further stated that a petition for
certiorari under Rule 65 of the Rules of Court is proper in arbitration cases only if the courts refuse
or neglect to inquire into the facts of an arbitrator's award.
ISSUE: Whether or not an aggrieved party in a voluntary arbitration dispute may avail of, directly
in the CA, a petition for review under Rule 43 or a petition for certiorari under Rule 65 of the Rules
of Court, instead of filing a petition to vacate the award in the.
RULING: The CAs decision is sound. A petition for review under Rule 43 or a petition for certiorari
under Rule 65 directly in the CA is NOT the proper remedy.
RA 876 itself mandates that it is the Court of First Instance, now the RTC, which has jurisdiction
over questions relating to arbitration, such as a petition to vacate an arbitral award.
As RA 876 did not expressly provide that errors of fact and/or law and grave abuse of discretion,
which is the proper grounds for a petition for review under Rule 43 and a petition for certiorari
under Rule 65, This means that such ground is not acceptable for maintaining a petition to vacate
an arbitral award in the RTC. Thus, it follows that a party may not avail of the remedies under Rule
43 and Rule 65 on the grounds of errors of fact and/or law or grave abuse of discretion to overturn
an arbitral award.
ADR Case Digests by Dennis Sebastian B. Davide

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Submitted by: DENNIS SEBASTIAN B. DAVIDE

ADR

DECEMBER 18, 2014

G.R. No. 141818 June 22, 2006


INSULAR SAVINGS BANK VS. FAR EAST BANK
FACTS: On December 11, 1991, Far East Bank and Trust Company (Respondent) filed a
complaint against Home Bankers Trust and Company (HBTC) with the Philippine Clearing House
Corporations (PCHC) Arbitration Committee Respondent sought to recover from the petitioner,
the sum of P25,200,000.00 representing the total amount of the three checks drawn and debited
against its clearing account. HBTC sent these checks to respondent for clearing by operation of
the PCHC clearing system. Thereafter, respondent dishonored the checks for insufficiency of
funds and returned the checks to HBTC. However, the latter refused to accept them since the
checks were returned by respondent after the reglementary regional clearing period.
Meanwhile, on January 17, 1992, before the termination of the arbitration proceedings,
respondent filed another complaint but this time with the Regional Trial Court (RTC)
in Makati City docketed as Civil Case No. 92-145 for Sum of Money and Damages with
Preliminary Attachment. The complaint was filed not only against HBTC but also against Robert
Young, Eugene Arriesgado and Victor Tancuan (collectively known as Defendants), who were the
president and depositors of HBTC respectively. Aware of the arbitration proceedings between
respondent and petitioner, the RTC, in an Omnibus Order dated April 30, 1992. suspended the
proceedings in the case against all the defendants pending the decision of the Arbitration
Committee.
On February 2, 1998, the PCHC Arbitration Committee rendered its decision in favor of
respondent. The motion for reconsideration filed by petitioner was denied by the Arbitration
Committee. Consequently, to appeal the decision of the Arbitration Committee in Arbicom Case
No. 91-069, petitioner filed a petition for review in the earlier case filed by respondent in
Branch 135 of the RTC of Makati and docketed as Civil Case No. 92-145.
ISSUE: Whether or not the RTC has jurisdiction on the petition for review filed by petitioner.
RULING: No. THe proper recourse of petitioner from the denial of its motion for reconsideration
by the Arbitration Committee is to file either a motion to vacate the arbitral award with the RTC, a
petition for review with the Court of Appeals under Rule 43 of the Rules of Court, or a petition for
certiorari under Rule 65 of the Rules of Court. In the case at bar, petitioner filed a petition for
review with the RTC when the same should have been filed with the Court of Appeals under Rule
43 of the Rules of Court. Thus, the RTC of Makati did not err in dismissing the petition for review
for lack of jurisdiction but not on the ground that petitioner should have filed a separate case from
Civil Case No. 92-145 but on the necessity of filing the correct petition in the proper court. It is
immaterial whether petitioner filed the petition for review in Civil Case No. 92-145 as an appeal of
the arbitral award or whether it filed a separate case in the RTC, considering that the RTC will only
have jurisdiction over an arbitral award in cases of motions to vacate the same. Otherwise, as
elucidated herein, the Court of Appeals retains jurisdiction in petitions for review or in petitions for
certiorari. Consequently, petitioners arguments, with respect to the filing of separate action from
Civil Case No. 92-145 resulting in a multiplicity of suits, cannot be given due course.

ADR Case Digests by Dennis Sebastian B. Davide

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Submitted by: DENNIS SEBASTIAN B. DAVIDE

ADR

DECEMBER 18, 2014

G.R. No. 163101 February 13, 2008


Benguet Corp. vs DENR
FACTS: Benguet and J.G. Realty entered into a RAWOP, wherein J.G. Realty was acknowledged
as the owner of four mining claims.
In the RAWOP, Benguet obligated itself to perfect the rights to the mining claims and/or
otherwise acquire the mining rights to the mineral claims.
One day, Benguet informed J.G. Realty of its intention to develop the mining claims.
However, J.G. Realty informed Benguet that it was terminating the RAWOP.
J.G. Realty filed a Petition for Declaration of Nullity/Cancellation of the RAWOP with the
Legaspi City POA
The POA issued a Decision cancelling the RAWOP.
ISSUE: Whether or not the controversy has to be first submitted to arbitration before the POA took
cognizance of the case.
RULING:.
YES. POA has no jurisdiction over the dispute which is governed by RA 876, the arbitration law.
In the event a case that should properly be the subject of voluntary arbitration is erroneously filed
with the courts or quasi-judicial agencies, on motion of the defendant, the court or quasi-judicial
agency shall determine whether such contractual provision for arbitration is sufficient and effective.
If in affirmative, the court or quasi-judicial agency shall then order the enforcement of said
provision
However, we find that Benguet is already estopped from questioning the POAs
jurisdiction. As it were, when J.G. Realty filed DENR Case No. 2000-01, Benguet filed its answer
and participated in the proceedings before the POA, Region V. Secondly, when the adverse
March 19, 2001 POA Decision was rendered, it filed an appeal with the MAB in Mines
Administrative Case No. R-M-2000-01 and again participated in the MAB proceedings. When the
adverse December 2, 2002 MAB Decision was promulgated, it filed a motion for reconsideration
with the MAB. When the adverse March 17, 2004 MAB Resolution was issued, Benguet filed a
petition with this Court pursuant to Sec. 79 of RA 7942 impliedly recognizing MABs jurisdiction. In
this factual milieu, the Court rules that the jurisdiction of POA and that of MAB can no longer be
questioned by Benguet at this late hour. What Benguet should have done was to immediately
challenge the POAs jurisdiction by a special civil action for certiorari when POA ruled that it has
jurisdiction over the dispute.

ADR Case Digests by Dennis Sebastian B. Davide

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Submitted by: DENNIS SEBASTIAN B. DAVIDE

ADR

DECEMBER 18, 2014

G.R. No. 126619


December 20, 2006
UNIWIDE SALES REALTY AND RESOURCES CORPORATION
vs.TITAN-IKEDA CONSTRUCTION AND DEVELOPMENT CORPORATION
FACTS: Titan-Ikeda entered into 3 construction agreement with Uniwide. Titan-Ikeda then filed
with the RTC an action for a sum of money against Uniwide because the latter failed to pay certain
claims billed by Titan after the completion of the 3 projects. Uniwide moved for the
dismissal/suspension of the proceeding in order for them to proceed with arbitration. The
Arbitrators issued terms of reference which was signed by the parties. Uniwide did not attempt to
modify the TOR to accommodate its belated counterclaim on deadlines for liquidated damages.
Titan then filedthe case with CIAC.
In its decision, the CIAC declared the following: That in Project 1, Uniwide is absolved of
any liability. In Project 2, Uniwide is absolved of any liability for VAT payment and for the account
of Titan, and Titan is absolved from liability for defective construction. In Project 3, Uniwide is held
liable for unpaid balance (5,158,364.63) plus 12% interest/annum and to pay the full VAT for the
additional work where no written authorization was presented.
CIAC likewise rejected the claim on liquidated damages.
After Uniwides motion for reconsideration was denied by CIAC, it filed a petition for review
with CA but same was denied, thus, Uniwide filed a petition for review under rule 45 to seek partial
reversal of the decision of CA which modified the decision of CIAC. Uniwide claims that CIAC
should have applied procedural rules such as section 5, Rule 10 with more liberality because it
was an administrative tribunal which free from all rigid technicalities of regular courts because the
CA held that the issue on liquidated damages should be left for determination in future
proceedings.
ISSUE: Whether or not CIAC should have applied the Rules of Court in the arbitration proceeding.
RULING:
No. The rule of Procedure Governing Construction Arbitration promulgated by the CIAC
contains no provision on the application of the Rules of Court to arbitration proceedings, even in a
suppletory capacity. Such importation of the Rules of Court provision on amendment to conform
to evidence would contravene the spirit, if not the letter of the CIAC rules. This is for the reason
that the formulation of the Terms of Reference is done with the active participation of the parties
and their counsel themselves. The TOR is further required to be signed by all the parties, their
respective counsel and all the members of the Arbitral Tribunal. Unless the issues thus carefully
formulated in the Terms of Reference were expressly showed to be amended, issues outside
thereof may not be resolved. As already noted in the Decision, "no attempt was ever made by the
[Uniwide] to modify the TOR in order to accommodate the issues related to its belated
counterclaim" on this issue.
Arbitration has been defined as "an arrangement for taking and abiding by the judgment of
selected persons in some disputed matter, instead of carrying it to established tribunals of justice,
and is intended to avoid the formalities, the delay, the expense and vexation of ordinary litigation.

ADR Case Digests by Dennis Sebastian B. Davide

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Submitted by: DENNIS SEBASTIAN B. DAVIDE

ADR

DECEMBER 18, 2014

G.R. No. 182248 December 18, 2008


EQUITABLE PCI BANKING vs. RCBC CAPITAL CORPORATION
FACTS: RCBC Capital Corporation (RCBC), as buyer, executed a Share Purchase Agreement
(SPA) for the purchase of petitioners interests in Bankard, representing 226,460,000 shares, for
the price of PhP 1,786,769,400. To expedite then purchase, RCBC agreed to dispense with the
conduct of a due diligence audit on the financial status of Bankard.
RCBC deposited the stipulated down-payment amount in an escrow account after which it
was given full management and operational control of Bankard. June 2, 2000 is also considered
by the parties as the Closing Date referred to in the SPA.
Sometime in September 2000, RCBC had Bankards accounts audited, creating for the
purpose an audit team and the conclusion was that the warranty, as contained in Section 5(h) of
the SPA (simply Sec. 5[h] hereinafter), was correct.
RCBC paid the balance of the contract price. The corresponding deeds of sale for the
shares in question were executed in January 2001. Thereafter RCBC informed petitioners of its
having overpaid the purchase price of the subject shares, claiming that there was an
overstatement of valuation of accounts amounting to PhP 478 million, resulting in the overpayment
of over PhP 616 million. Thus, RCBC claimed that petitioners violated their warranty, as sellers,
embodied in Sec. 5(g) of the SPA (Sec. 5[g] hereinafter).
RCBC, in accordance with Sec. 10 of the SPA, filed a Request for Arbitration dated May 12,
2004 with the ICC-ICA. In the request, RCBC charged Bankard with deviating from, contravening
and not following generally accepted accounting principles and practices in maintaining their
books.
Arbitration in the ICC-ICA proceeded after the formation of the arbitration tribunal consisting
of retired Justice Santiago M. Kapunan, nominated by petitioners; Neil Kaplan, RCBCs nominee;
and Sir Ian Barker, appointed by the ICC-ICA.
After drawn out proceedings with each party alleging deviation and non-compliance by the
other with arbitration rules, the tribunal, with Justice Kapunan dissenting, rendered a Partial Award
. On the matter of prescription, the tribunal held that RCBCs claim is not time-barred, the claim
properly falling under the contemplation of Sec. 5(g) and not Sec. 5(h). As such, the tribunal
concluded, RCBCs claim was filed within the three (3)-year period under Sec. 5(g) and that the six
(6)-month period under Sec. 5(h) did not apply.The tribunal also exonerated RCBC from laches,
the latter having sought relief within the three (3)-year period prescribed in the SPA.
Notably, the tribunal considered the rescission of the SPA and ASPA as impracticable and
"totally out of the question."
RCBC filed with the RTC a Motion to Confirm Partial Award. The RTC issued the first
assailed order confirming the Partial Award and denying the adverted separate motions to vacate
and to suspend and inhibit. From this order, petitioners sought reconsideration, but their motion
was denied by the RTC .
ISSUE: Whether or not Rule 45 is the proper remedy.

ADR Case Digests by Dennis Sebastian B. Davide

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Submitted by: DENNIS SEBASTIAN B. DAVIDE

ADR

DECEMBER 18, 2014

RULING:
The petition must be denied.
Rule 45 is not the remedy available to petitioners as the proper mode of appeal assailing
the decision of the RTC confirming as arbitral award is an appeal before the CA pursuant to Sec.
46 of Republic Act No. (RA) 9285, otherwise known as the Alternative Dispute Resolution Act of
2004.
The Court Will Not Overturn an Arbitral Award Unless It Was Made in Manifest Disregard of
the law. Errors in law and fact would not generally justify the reversal of an arbitral award. A party
asking for the vacation of an arbitral award must show that any of the grounds for vacating,
rescinding, or modifying an award are present or that the arbitral award was made in manifest
disregard of the law. Otherwise, the Court is duty-bound to uphold an arbitral award.
The instant petition dwells on the alleged manifest disregard of the law by the ICC-ICA.
The US case of Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Jaros18 expounded on the
phrase "manifest disregard of the law" in the following wise:
This court has emphasized that manifest disregard of the law is a very narrow standard of
review. Anaconda Co. v. District Lodge No. 27, 693 F.2d 35 (6th Cir.1982). A mere error in
interpretation or application of the law is insufficient. Anaconda, 693 F.2d at 37-38. Rather, the
decision must fly in the face of clearly established legal precedent. When faced with questions of
law, an arbitration panel does not act in manifest disregard of the law unless (1) the applicable
legal principle is clearly defined and not subject to reasonable debate; and (2) the arbitrators
refused to heed that legal principle.
Thus, to justify the vacation of an arbitral award on account of "manifest disregard of the
law," the arbiters findings must clearly and unequivocally violate an established legal precedent.
Anything less would not suffice.

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