G.R. No. 126619 December 20, 2006 UNIWIDE SALES REALTY AND RESOURCES CORPORATION, petitioner, vs.

TITAN-IKEDA CONSTRUCTION AND DEVELOPMENT CORPORATION, respondent. FACTS: Uniwide Sales Realty and Resources Corporation and Titan-Ikeda Construction and Development Corporation entered into 3 three projects covered by agreements. Whereby, project 1 constitutes a written construction contract sometime in 1991 which Titan undertook to construct Uniwides Club and Administration building for a fee of 120,936,591.50 payable in monthly progress billings. The second project entered into by the parties is to construct an additional floor and renovate the Uniwides warehouse at EDSA Central Market Area. There was no written contract. The estimated cost of this project is 21,301,075.77 inclusive of Titans 20% mark-up. Titan conceded in its complaint to having received 15,000,000 of this amount. The third project consist of written construction contract which Titan undertook to construct the Uniwide Sales Department Store building in Caloocan City for the price of 118,000,000 payable on progress billing. Titan filed before the RTC of Pasay City an action for a sum of money against Uniwide arising from Uniwides non-payment of certain claims billed by Titan after completion of 3 projects covered by the agreements entered into by each other. Uniwide in its petition assert that it overpaid Titan for unauthorized additional works in Project 1 and 3; that it is not liable for any Value-Added-Tax (VAT) for Project 1; that it is entitled liquidated damages for the delay incurred in constructing Project 1 and Project 3; and that it should not have been found liable for deficiencies in the defectively constructed Project 2. An Arbitral Tribunal conducted a preliminary conference with the parties and thereafter issued a Terms of References (TOR) which was signed by both parties. After it conducted the ocular inspection, hearings and received the evidence of the parties, it promulgated the following decisions; On Project 1, Uniwide is absolved of any liability for the claims made by Titan; On Project 2- Uniwide is absolved of the payment of VAT, however is made liable for the unpaid balance in the amount of P6, 301, 075.77 which was ordered to be paid to the Titan with 12% interest per annum commencing from 19 December 1992 until the date of payment; and on Project 3- Uniwide is held liable for the unpaid balance of P5, 158, 364.63 which was ordered to be paid to the Titan with 12% interest per annum commencing from 8 September 1993 until the date of payment and to pay in full the VAT on this project. Uniwide filed a Motion for Reconsideration which was denied by the CIAC, it was likewise denied by the CA. Uniwide then filed a petition for Review under Rule 45 before the Supreme Court. ISSUE: Whether or not Uniwide is entitled to liquidated damages. RULING: As an arbitration body, the CIAC can only resolve issues brought before it by the parties through the Terms of Reference which functions similarly as a pre- trial brief. Uniwides claim for liquidated damages was not raised as an issue in the Terms of Reference or in any modified or amended version of it. Thus, the CIAC cannot make a ruling on it. Uniwide only introduced and quantified its claim for liquidated damages in its memorandum submitted to the CIAC at the end of the arbitration proceeding. Verily, Titan was not given a chance to present evidence to counter Uniwides claim for liquidated damages. Uniwide claims that the required evidence for an affirmative ruling on its claim is already on the record. It cites pertinent provisions of the written contracts which contained deadlines for liquidated damages. Uniwide asserts that the CIAC should have applied procedural rules such as Section 5, Rule 10 with more liberality because it was an administrative tribunal free from the rigid technicalities of regular courts. On this point, 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. Suppletory application is made only if it would not contravene a specific provision in the arbitration rules and the spirit thereof.

G.R. No. 163101 February 13, 2008 BENGUET CORPORATION vs. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES -MINES ADJUDICATION BOARD and J.G. REALTY AND MINING CORPORATION FACTS: On June 1, 1987, Benguet and J.G. Realty entered into a RAWOP, wherein J.G. Realty was acknowledged as the owner of four mining claims respectively named as Bonito-I, Bonito-II, Bonito-III, and Bonito-IV, with a total area of 288.8656 hectares, situated in Barangay Luklukam, Sitio Bagong Bayan, Municipality of Jose Panganiban, Camarines Norte. The parties also executed a Supplemental Agreement5 dated June 1, 1987. The mining claims were covered by MPSA Application No. APSA-V-0009 jointly filed by J.G. Realty as claimowner and Benguet as operator. In the RAWOP, Benguet obligated itself to perfect the rights to the mining claims and within 24 months from the execution of the RAWOP, Benguet should also cause the examination of the mining claims for the purpose of determining whether or not they are worth developing with reasonable probability of profitable production. Benguet shall conduct all necessary exploration in accordance with a prepared exploration program. It is also provided in the RAWOP that if the mining claims were placed in commercial production by Benguet, J.G. Realty should be entitled to a royalty of five percent (5%) of net realizable value, and to royalty for any production done by Benguet whether during the examination or development periods. The Executive Vice-President of Benguet, Antonio N. Tachuling, issued a letter informing J.G. Realty of its intention to develop the mining claims on August 9, 1989 although on February 9, 1999 J.G. Realty, through its President, Johnny L. Tan, then sent a letter to the President of Benguet informing the latter that it was terminating the RAWOP on the grounds that it has failed to perform the obligations set forth in the RAWOP, violation of the Contract by allowing high graders to operate on our claim, no stipulation was provided with respect to the term limit of the RAWOP, and non-payment of the royalties thereon as provided in the RAWOP. Benguets Manager for Legal Services, Reynaldo P. Mendoza, wrote J.G. Realty a letter dated March 8, 1999, therein alleging that Benguet complied with its obligations under the RAWOP by investing PhP 42.4 million to rehabilitate the mines, and that the commercial operation was hampered by the non- issuance of a Mines Temporary Permit by the Mines and Geosciences Bureau (MGB) which must be considered as force majeure. Benguet posited that there was no valid ground for the termination of the RAWOP. It also reminded J.G. Realty that it should submit the disagreement to arbitration rather than unilaterally terminating the RAWOP. On June 7, 2000, J.G. Realty filed a Petition for Declaration of Nullity/Cancellation of the RAWOP with the Legaspi City POA. POA ordered that its Supplemental Agreement is declared cancelled and without effect. BENGUET is excluded from the joint MPSA Application over the mineral claims. Benguet filed a Notice of Appeal with the MAB on April 23, 2001 but the decision still the same. Benguet then filed a Motion for Reconsideration of the assailed Decision which was denied in the March 17, 2004 Resolution of the MAB. Hence, Benguet filed the instant petition. ISSUE: Should the controversy have first been submitted to arbitration before the POA took cognizance of the case? HELD: YES. Secs. 11.01 and 11.02 of the RAWOP pertinently provide: Any disputes, differences or disagreements between BENGUET and the OWNER with reference to anything whatsoever pertaining to this Agreement that cannot be amicably settled by them shall not be cause of any action of any kind whatsoever in any court or administrative agency but shall, upon notice of one party to the other, be referred to a Board of Arbitrators consisting of three (3) members, one to be selected by BENGUET, another to be selected by the OWNER and the third to be selected by the aforementioned two arbitrators so appointed; and No action shall be instituted in court as to any matter in dispute as hereinabove stated, except to enforce the decision of the majority of the Arbitrators. There can be no quibbling that POA is a quasi-judicial body which forms part of the DENR, an administrative agency.
Hence, the provision on mandatory resort to arbitration, freely entered into by the parties, must be held binding against them. In sum, on the issue of whether POA should have referred the case to voluntary arbitration, we find that, indeed, POA has no jurisdiction over the dispute which is governed by RA 876, the arbitration law.

G.R. No. 175404 January 31, 2011 CARGILL PHILIPPINES, INC., Petitioner, vs. SAN FERNANDO REGALA TRADING, INC., Respondent. FACTS: San Fernando Regala Trading entered into a contract with Cargill Philippines to purchase 12,000 tons of cane blackstrap molasses originating from Thailand at the price of $192 per metric ton, and that delivery would be made in April or May 1997, and that payment would be by an Irrevocable Letter of Credit payable at sight, to be opened upon petitioner's advice. Cargill, however, failed to comply with his obligations under the contract. San Fernando then filed a complaint for rescission of contract with damages. Cargill moved to dismiss and/or suspend the court proceedings to refer the matter to voluntary arbitration citing the arbitration clause which states: "Any dispute which the Buyer and Seller may not be able to settle by mutual agreement shall be settled by arbitration in the City of New York before the American Arbitration Association. The Arbitration Award shall be final and binding on both parties." Regala Trading argued that since it was seeking rescission of the contract, it was in effect repudiating the contract which included the arbitration clause. Further, it argued that rescission constitutes a judicial issue, which requires the exercise of judicial function and cannot be the subject of arbitration. RTC denied Cargills motion, holding that the Arbitration Clause contravenes the policy that arbitration shall be conducted in the Philippines and under the jurisdiction and control of the RTC, before an arbitrator who resides in the country. A petition for certiorari was then filed before the CA, but was likewise denied, after holding that arbitration is not proper when one of the parties repudiated the existence or validity of the contract. The CA, however, found error in the RTC decision that the arbitration clause violates public policy, for none was said that arbitration must be conducted only in the Philippines and the arbitrators should be Philippine residents. ISSUE: Whether or not the Arbitration is not proper when one of the parties repudiates the existence or validity of the contract. HELD/RATIO: The doctrine of separability states that a provision to submit to arbitration any dispute arising between the parties is part of the contract and is itself a contract. The arbitration agreement is to be treated as a separate agreement and does not automatically terminate when the contract of which it is a part comes to an end. To reiterate a contrary ruling would suggest that a party's mere repudiation of the main contract is sufficient to avoid arbitration; that is exactly the situation that the separability doctrine seeks to avoid. San Fernando filed a complaint for rescission of contract and damages with the trial court. In so doing, it alleged that a contract existed. It was that contract which provided for an arbitration clause which expressed the parties' intention that any dispute to arise between them, as buyer and seller, should be referred to arbitration. It is for the arbitrator and not the court to decide whether a contract between the parties exists or is valid. Under the circumstances, the argument that rescission is judicial in nature is misplaced.