Remedial Law Digest: CARGILL PHILS. V. SAN FERNANDO REGALA TRADING [G.R. No. 178008,October 09, 2013]

CARGILL PHILS. v. SAN FERNANDO REGALA TRADING

Facts:

CARGILL and SAN FERNANDO are sellers and buyers of molasses under the contract. It was agreed that SAN FERNANDO would purchase 12,000 metric tons of Thailand origin cane blackstrap molasses at a certain price. CARGILL however failed to deliver the ordered molasses to SAN FERNANDO. Thus, SAN FERNANDO filed a complaint for rescission of contract with damages before the RTC.

CARGILL field a motion to dismiss or suspend the proceedings and to refer the controversy to voluntary arbitration pursuant to the arbitration clause. It alleged that the contract was never consummated because SAN FERNANDO did not return the proposed agreement bearing its written acceptance and conformity. The controversy being the existence of the contract, it argued that the RTC was not the proper forum but by an arbitration proceeding before the American Arbitration Association.

SAN FERNANDO opposed. It argued that RTC has jurisdiction over the action for rescission of contract and could not be changed by the arbitration clause.

RTC denied the motion to dismiss and directed CARGILL to file answer.

CARGILL filed a Petition for Certiorari with the CA. CA denied the petition and affirmed RTC’s Orders. It held that the case cannot be brought under the Arbitration Law for the purpose of suspending the proceedings before the RTC and it was proper that the issue on the validity of the contract and the arbitration clause be resolved first. Arbitration is not proper when one of the parties repudiated the existence or validity of the contract.

ISSUE: IS the CA correct?

HELD:

NO. Petition for Certiorari with the CA is the proper remedy.

RTC has acted in excess of its jurisdiction. In issuing the Order which denied CARGILL’s motion to dismiss and to refer to Voluntary arbitration and directing CARGILL to file an answer, the RTC went beyond its authority of determining ONLY the issue of whether or not there is an agreement in writing providing for arbitration.  RTC should have instead ordered the parties to proceed to arbitration.

Since RTC acted in excess of jurisdiction and since there is no plain, speedy and adequate remedy in the ordinary course of law, Petition for Certiorari is proper.

Remedial Law Digest: EQUITABLE PCI BANK V. RCBC CAPITAL CORPORATION [G.R. NO. 182248, December 18, 2008]

EQUITABLE PCI BANK V. RCBC CAPITAL CORPORATION

Facts:

Equitable PCI, as seller and RCBC as buyer executed a Share Purchase Agreement for the purchase of Equitable PCI’s interest in Bankard. After three years from the execution of the deed of sale, RCBC however informed Equitable PCI of overpayment of over P616M for the purchase price of the shares. RCBC claimed that Equitable PCI violated their warranty as sellers.

Following the unsuccessful attempts for settlement, RCBC filed a request for Arbitration on May 12, 2004 with the International Chamber of Commerce – International Court of Arbitration (ICC- ICA).

In its Answer, Equitable PCI denied RCBC’s averments, claimed that the period for filing the claim has already lapsed, was guilty of laches and was not entitled to rescission having had ample opportunity and reasonable time to file a claim against Equitable PCI.

The Arbitral Tribunal rendered a Partial Award holding that RCBC’s claim is not time-barred as it was filed within the 3 year period. It also exonerated RCBC from laches and it considered impracticable the rescission of the Agreements.

RCBC field with the RTC a Motion to Confirm Partial Award. Equitable PCI countered through a Motion to Vacate the Partial Award.

RTC ordered confirming the Partial Award. Equitable PCI sought reconsideration but RTC denied.

Thus, Equitable PCI filed a Petition for Review with the Supreme Court under Rule 45 of the Rules of Court.

ISSUE:  Is Rule 45 the proper remedy or the direct appeal to SC?

HELD:

NO. Rule 45 is not the remedy but an appeal before the CA pursuant to Sec. 46 of the ADR Act of 2004 which was already effective at the time the arbitral proceeding commenced or on May 12, 2004 through a request for arbitration with the ICC-ICA.  RA 9285 took effect on April 28, 2004.

Remedial Law Digest: DENR V. United Planners Consultants [G.R. No. 212081, February 23, 2015]

DENR v. United Planners Consultants

Principles involved: “expressio unios est exclusio alterius”

TOPIC: Only those allowed remedies provided in the Special ADR rules must apply.

FACTS:

DENR and UNITED PLANNERS entered into a consultancy agreement for one of DENR’S Land Resource Management Master Plan Project. It was agreed that DENR will pay around P4M based on a predetermined percentage corresponding to the particular stage of work accomplished. UNITED PLANNERS had completed the work but DENR only paid around P2M, only 47% of the total contract price. DENR failed to pay the remaining balance despite acknowledging its liability and assured payment at the soonest possible time.

UNITED PLANNERS then filed a complaint with the RTC. Likewise, it filed a Motion to Refer to Arbitration pursuant to the ARBITRATION CLAUSE in the contract.

During pre-trial, both agreed to adapt CIAC Rules to govern the arbitration proceeding. Hence, an Arbitral Tribunal (AT) was created. The AT rendered an award in favor of UNITED PLANNERS directing DENR to pay the unpaid balance, with interests and other costs.

DENR filed a Motion for Reconsideration (MR) to the Arbitral Award (AA) with the RTC.

UNITED PLANNERS opposed the MR and moved to confirm the AA. RTC confirmed the AA and issued a Writ of Execution.

DENR filed a Motion to Quash of the Writ of Execution. 

RTC denied the Motion to Quash.

DENR received RTC’s order on July 12, 2012. On Sept 10, DENR filed a PETITION FOR CERTIORARI before the COURT OF APPEALS questioning the merits of the Arbitral Award.

CA dismissed the Petition for Certiorari on 2 grounds:

1) the petition was prohibited under the CIAC rules because it assails the merits of the AA and

2) it was filed out of time, violating the 15 day reglementary period to file a Special Civil Action for certiorari under the Special ADR Rules.

ISSUE: Is the CA correct dismissing the petition for certiorari?

HELD: YES.

Under CIAC rules, filing a Motion for Reconsideration of the Arbitral Award was a prohibited pleading. Thus, rendering the Arbitral Award final and executory.

By referral to arbitration, the case falls within the coverage of the Special ADR Rules. A petition for certiorari under the Rules of Court, even in suppletory capacity is NOT allowed. 

Rule 22.1 of the Special ADR rules is explicit that the provisions of the Rules of Court that are applicable to the proceedings enumerated in Rule 1.1 of the Special ADR rules have either been included and incorporated or specifically referred to. Also, it in cases where no specific rule is provided under the Special ADR Rules, the court shall resolve the matter summarily and be guided by the spirit and intent of the Special ADR Rules and the ADR laws.

Further, Special ADR rules provides that Petition for Certiorari must be filed within 15 days from notice of RTC’s order. In this case, since the Petition was filed nearly 2 months after July 12, the petition is dismissible.