HI-PRECISION STEEL CENTER INC. v LIM KIM STEEL BUILDERS INC. G.R No. 110434 December 13, 1993 FACTS: Hi-Precision (Petitioner) entered into a contract with Steel Builders (Private Respondent) under which the latter as Contractor was to complete a 21 Million Pesos construction project owned by Hi-Precision with a period of 153 days. The said completion of the project was then moved, however, when the date came, only 75.8674% of the project was actually completed. Petitioner attributed this non-completion to Steel Builders which allegedly incurred delays both during the original contract and period of extension. On the other hand, the Steel Builders claimed that the said non-completion of the project was either excusable or was due to HiPrecision’s own fault and issuance of change orders. The said project was taken over and completed by Hi-Precision. Steel Builders requested for an adjudication with CIAC (Public Respondent) and sought payment of its unpaid billings, alleged unearned profits and other receivables. Hi-Precision on the other hand claimed for damages and reimbursement of alleged additional costs. The CIAC formed an Arbitral Tribunal with 3 members and such tribunal rendered a decision in favor of Steel Builders Inc ordering Hi-Precision to pay Steel Builders their claim. Hi-Precision then asks the court to set aside the award on the basis of misapprehension of facts. ISSUE: Whether or not it was correct should set aside the ruling of the Arbitral Tribunal. RULING: No. The court said that it will not assist one or the other or even both parties in an effort to subvert or defeat the objective for their private purposes and also, that it will not review the factual findings of an arbitral tribunal upon the allegation that such body misapprehended facts. The court will not, therefore, permit the parties to relitigate before it the issues of facts previously presented and argued before the Arbitral Tribunal, save only where a vey clear showing is made that, in reaching its factual conclusions, the Arbitral Tribunal committed an error so hurtful to one party as to constitute a grave abuse of discretion resulting on lack or loss of jurisdiction.
HOME BANKERS SAVINGS AND TRUST COMPANY v COURT OF APPEALS and FAR EAST BANK &TRUST COMPANY G.R No. 115412 November 19 1999 FACTS: Victor Tancuan issued Home Bankers Savings and Trust Company (HBSTC) a check for 25,250,000.00 Pesos while Eugene Arriesgrado issued Far & East Bank and Trust Company (FEBTC) checks for 8.6 Million pesos, 8.5 Million pesos and 8.1 Million pesos, respectively, the three checks amounting to 25,200,000 pesos. Tancuan and Arriesgrado exchanged each other’s checks an deposited them with their respective banks for collection. When FEBTC presented Tancuan’s HBSTC check for clearing, HBSTC dishonored it for being “Drawn against insufficient funds”. After that, HBSTC sent Arriesgrado’s 3 FEBTC checks through the Philippine Clearing House Corporation (PCHC) to FEBTC but was returned for being “Drawn against insufficient funds”. HBSTC received the notification of dishonor but refused to accept them and instead returned them to FEBTC through PCHC for the reason “Beyond Reglementary Period” implying that HBSTC already treated the 3 FEBTC checks as cleared and allowed the proceeds thereof to be withdrawn. FEBTC demanded reimbursement for the returned checks and inquired form HBSTC whether it had permitted any withdrawal of funds against the unfunded checks and if so, on what date. HBSTC refused to make any reimbursement. FEBTC submitted the dispute for arbitration with PCHC. While the arbitration proceedings was still pending, FEBTC filed and action for sum of money and damages with preliminary attachment against HBSTC, Robert Tancuan, Victor Tancuan and Eugene Arriesgrado. HBTSC filed a motion to dismiss and said that the complaint stated no cause of action and that it should be dismissed because it seeks to enforce an arbitral award which as yet does not exist. ISSUE: Whether or not FEBTC which commenced the arbitration proceeding under PCHC may subsequently file a separate case in court over the same subject matter or arbitration despite the pendency of the arbitration to obtain the provisional remedy of attachment against the bank, the adverse party in the arbitration proceeding RULING: No. Section 14 of the Arbitration Law allows any party to the proceeding to petition the court to take measures to safeguard or conserve any matter which is the subject of the dispute. The civil action was not a simple case of money claim since private respondent has included a prayer for a writ of preliminary attachment which is sanctioned by the Arbitration Law (Sec 14). Also, the participants cannot bypass the arbitration process laid out by the body and seek relief directly from the courts. In the case at bar, the private respondent has initiated arbitration proceedings as required by the PCHC rules and regulations, and pending arbitration has sought relief from the trial court for measures to safeguard the subject of the dispute.
LM POWER ENGINEERING COPORATION v CAPITOL INDUSTRIAL CONSTRUCTION GROUPS G.R No. 141833 March 26 2003
FACTS: LM Power Engineering Corporation (Petitioner) and Capitol Industrial Construction Groups (Respondent) entered into a Subcontract Agreement involving electrical work at the Port of Zamboanga. Respondent then took over some of the work contracted to Petitioner, It was alleged that the petitioner failed to finish it because of its inability to procure materials. Upon completion of the task, Petitioner billed the respondent the amount of 6,711,813.90 pesos. Respondent refused to pay and contested the accuracy of the amount of advances and billable accomplishments listed by the petitioner. Respondent also took refuge in the termination clause agreement which allowed it to set off the cost of the work that petitioner had failed to undertake (due to termination of take over). Because of the dispute, the Petitioner filed a complaint foe collection of the balance due under the subcontract agreement. However, instead of filing an answer, the respondent filed a Motion to Dismiss, alleging that the complaint was premature because there was no prior recourse to arbitration. RTC denied the motion on the ground that the dispute did not involve the interpretation or implementation of the agreement and was, therefore, not covered by the arbitral clause. Also, the RTC ruled that the take over of some work items by the respondent was not equivalent to termination but a mere modification of the subcontract. ISSUE: Whether or not there exists a dispute between petitioner and respondent regarding the interpretation and implementation of the Sub-Contract Agreement that requires prior recourse to voluntary arbitration. RULING: Yes. The instant case involves technical discrepancies that are better left to an arbitral body that has expertise on those areas. The Subcontract has the Arbitral clause stating that the parties agree that “Any dispute or conflict as regards to interpretation and implementation of this agreement which cannot be settled between the parties amicably shall be settled by means of arbitration.” Within the scope of the Arbitration clause are discrepancies as to the amount of advances and billable accomplishments, the application of the provision on termination, and the consequent set-off expenses. Also, there is no need for prior request for arbitration. As long as the parties agre 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 form electing to submit their dispute before the CIAC because this right has been vested upon each party by the law.
RIZAL COMMERCIAL BANKING COPORATION v THE HONORABLE PACIFICO DE CASTRO G.R No. L-34548 November 29, 1988
FACTS: In an action for recovery of unpaid tobacco deliveries, the presiding judge rendered a decision ordering the defendants therein to pay jointly and severally, Badoc Planters, Inc. within 48 hours the aggregate amount of P206,916.76, with legal interests thereon. The judge who rendered the decision issued a Writ of Execution addressed to Special Sheriff Faustino Rigor, who then issued a Notice of Garnishment addressed to the General Manager and/or Cashier of Rizal Commercial Banking Corporation (RCBC), requesting a reply within 5 days to said garnishment as to any property which the Philippine Virginia Tobacco Administration (hereinafter referred to as "PVTA") might have in the possession or control of petitioner or of any debts owing by the petitioner to said defendant. Respondent PVTA filed a Motion for Reconsideration which was granted setting aside the Orders of Execution and of Payment and the Writ of Execution and ordering petitioner and BADOC to restore the account of PVTA with the said bank in the same condition and state. ISSUE: Whether or not the PVTA funds may be garnished. RULING: The PVTA funds may be garnished. Republic Act No. 2265 created the PVTA as an ordinary corporation with all the attributes of a corporate entity subject to the provisions of the Corporation Law. Hence, it possesses the power "to sue and be sued" and "to acquire and hold such assets and incur such liabilities resulting directly from operations authorized by the provisions of this Act or as essential to the proper conduct of such operations. PVTA has been endowed with a personality distinct and separate from the government which owns and controls it. Accordingly, this Court has heretofore declared that the funds of the PVTA can be garnished since "funds of public corporation which can sue and be sued were not exempt from garnishment"
METRO CONSTRUCTION, INC. vs. CHATHAM PROPERTIES, INC. G.R. NO. 141897, September 24, 2001
FACTS: Respondent, Chatham Properties, Inc. (CHATHAM) and petitioner, Metro Construction, Inc. (MCI) entered into a contract for the construction of the multi-storey building known as the Chatham House. The preliminary conference before the CIAC started in June 1998 and was concluded a month after with the signing of the Terms of Reference (TOR) of the Case. The CIAC rendered a decision for the adjudication of MCI’s claims in order to collect from CHATHAM the sum of money for the unpaid progress billings and other charges. The CIAC listed up all the amounts due to MCI and added up and the total payment is deducted from therein. The Tribunal did not consider the evidence that was presented to them by CHATHAM in order to compute the amount that was due to MCI. CHATHAM filed a petition for review with the Court of Appeals alleging that the CIAC gravely erred when it did not consider all the pieces of evidence that were presented to them by the respondents. The Court of Appeals reversed the decision of the CIAC and claimed that MCI failed to complete the project in pursuance to the construction agreement that was signed by the parties. The MCI filed the instant petition for review to challenge the decision of the Court of Appeals.
ISSUE: Whether the Court of Appeals may reverse the decision of the Supreme Court. RULING: Yes, Under Sec. 1, 2, and 3 of Rule 43 of the 1997 Rules of Civil Procedure, Sec. 3 of the Rules of Civil Procedure states that an appeal under the Rule may be taken to the Court of Appeals within the period and in the manner provided there, whether the appeal involves question of fact, of law, or mixed questions of fact and law while the latter included the CIAC in its enumeration of the quasi-judicial agencies. The right to appeal from judgments, awards, or final orders of the CIAC is granted in E.O. No. 1008. The procedure for the exercise or application of this right was initially outlined in E.O. No. 1008. While R. A. No. 7902 and circulars subsequently issued by the Supreme Court and its amendments to the 1997 Rules on Procedure effectively modified the manner by which the right to appeal ought to be exercised, nothing in these changes impaired vested rights.
PHILROCK INC. v CONSTRUCTION INDUSTRY ARBITRATION COMMISSION G.R. No. 132848-49
FACTS: The Cid spouses, herein private respondents, purchased ready-mix concrete from the petitioner, PhilRock, Inc. The concrete delivered by the petitioner was found out to be of substandard quality which resulted to the structures being built with such cement developing cracks and honeycombs. Thereafter, preliminary conferences were held among the parties and their appointed arbitrators. At these conferences, disagreements arose as to whether moral and exemplary damages and tort should be included as an issue along with breach of contract, and whether the seven officers and engineers of Philrock who are not parties to the Agreement to Arbitrate should be included in the arbitration proceedings. No common ground could be reached by the parties. Before the CA, petitioner filed a Petition for Review contesting the jurisdiction of the CIAC and assailing the propriety of the monetary awards in favor of respondent spouses ISSUE: Whether or not the CIAC could take jurisdiction over the case of respondent spouses and petitioner after it had been dismissed by both the RTC and CIAC. RULING: The petition has no merit. Section 4 of EO 1008 expressly vests in the CIAC original and exclusive jurisdiction over disputes arising from or connected with construction contracts entered into by parties that have agreed to submit their disputes to voluntary arbitration. Especially since the parties submitted themselves to the jurisdiction of the Commission by virtue of their Agreement to Arbitrate. After submitting itself to arbitration proceedings and actively participating therein, petitioner is estopped from assailing the jurisdiction of the CIAC, merely because the latter rendered an adverse decision.
SEA-LAND SERVICE INC v COURT OF APPEALS G.R No. 126212 March 2 2000 FACTS: Sea-land service (petitioner) and A.P Moller/Maersk LINE (AMML/ private respondent) both carriers of cargo in containerships as well as common carriers, entered into a contract entitled “Co-operation in the Pacific” (Agreement), a vessel sharing agreement whereby they mutually agree to purchase, share and exchange needed space for cargo in their respective containerships. They could either be a Principal Carrier or a containership operator. During the lifetime of the said agreement, Florex Iternational delivered to AMML cargo of various foodstuffs. The corresponding Bill of Lading was issued to Florex by respondent AMML. Pursuant to the agreement, AMML loaded the subject cargo on MS Sealand Pacer, a vessel owned by Sea-land services. Therefore, in this agreement, AMML was the principal carrier while Sea-land service was the containership operator. The consignee refused to pay for the cargo alleging that delivery thereof was delayed. Florex then filed a complaint against Maersk-Tabacalera Shipping Agency for reimbursement of the value of the cargo. According to Florex, the cargo was received ony by the consignee on June 28 1991 but was discharged June 5 1991. AMML filed its answer alleging that it was the petitioner who should be liable. Accordingly, AMML filed a Third Party Complaint against Sealand service stating that whatever damages sustained by Florex were caused by petitioner because they were the ones who actually received and transported Florex’s cargo on its vessels and unloaded them. Petitioner filed a Motion to Dismis on the fround of failure to state a cause of action and also prayed for the dismissal of the Third Party Complaint in the ground that there exists an arbitration agreement between it and respondent AMML. ISSUE: Whether or not the Third Party Complaint should be dismissed on the ground that there exists and arbitration agreement between the parties. RULING: Yes. It is provided for in the agreement between the parties that whatever dispute there may be between the Principal Carrier and the Containership Operator arising from the contracts of carriage shall be governed by the provisions of the bills of lading deemed issued to the Principal Carrier by the Containership Operator. The Third Party Complaint filed by AMML against Sea-land service is a violation of their agreement.
MAGELLAN CAPITAL MANAGEMENT CORPORATION v ROLANDO M. ZOSA G.R No. 129916 March 26 2001
FACTS: Magellan Capital Holdings Corporation (MCHC) appointed Magellan Capital Management Corporation (MCMC) as manager for the operation of its business and affair. MCMC, MCHC and Rolando Zosa entered into an employment agreement designating Zosa as Chief Executive Officer of MCHC. It is provided for in the Employment Agreement that the term of Zosa’s ecmployment shall be co-terminous with the management agreement or until March 1996, unless sooner terminated. Majority of the Board of Directors deided not to re-elect Zosa as President and Chief Executive Officer on account of loss of trust and violation of the resolution issued by the MCHC’s board of directors and of the non-competition clause of the Employment Agreement. Nevertheless, Zosa was elected to a new position as MCHC’s Vice-Chairman/Chairman for New Ventures Development. Zosa communicated his resignation from his position of Vice-Chairman under the Employment Agreement on the ground that the said position had less responsibility and scope that President and Chief Executive Officer. He demanded that he be given termination benefits as provided for in the Employment Agreement. MCHC did not accept the resignation for a good reason and instead informed him tht the Employment Agreement is terminated for cause on account of his breach of Section 12 thereof. Zosa was also advised that he shall have no further rights under the agreement or any claims against the manager of the corporation except the right to receive within 30 days the amounts stated in the Agreement. Zosa invoked the Arbitration clause. Zosa designated his brother (Atty. Francis Zosa) as his representative in the arbitration panel while MCHC designated 2 representatives in the arbitration panel. However, instead of submitting the dispute to arbitration, Zosa filed an action for damages against petitioners. ISSUE: Whether or not the court erred in voiding the arbitration clause as it would work injustice to Zosa RULING: No. MCMC and MCHC represent the same interest. Though they are 2 corporations with distinct personalities, they represent the same interest. Thus, it would be expected that they would protect and preserve their own interest and neither would favor Zosa’s interest during the arbitration. If the arbitration clause would be followed, MCMC would have 1 arbitrator, MCHC would have another arbitrator, and Zosa would have 1. But MCMC is the manager of MCHC, MCHC would naturally favor its employed. Thus, their 2 votes would win vs Zosa’s lone vote.
