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Asset Privatization Trust vs CA

FACTS

Pursuant to a Mortgage Trust Agreement, the Development Bank of the Philippines and
the Philippine National Bank foreclosed the assets of the Marinduque Mining and
Industrial Corporation. The assets were sold to Philippine National Bank and later
transferred to the Asset Privatization Trust (APT).

In February 1985, Jesus Cabarrus, Sr., together with other stockholders of Marinduque
Mining and Industrial Corporation, filed a derivative suit against Development Bank of
the Philippines and Philippine National Bank before the Regional Trial Court of Makati
for Annulment of Foreclosures, Specific Performance and Damages. In the course of
the trial, Marinduque Mining and Industrial Corporation and Asset Privatization Trust as
successor in interest of Development Bank of the Philippines and Philippine National
Bank, agreed to submit the case to arbitration by entering into a Compromise and
Arbitration Agreement. This agreement was approved by the trial court and the
complaint was corollarily dismissed.

Thereafter, the Arbitration Committee rendered a decision ordering Asset Privatization


Trust to pay Marinduque Mining and Industrial Corporation damages and arbitration
costs in the amount of P2.5 Billion, P13,000,000.00 of which is for moral and exemplary
damages.

On motion of Cabarrus and the other stockholders of Marinduque Mining and Industrial
Corporation, the trial court confirmed the Arbitration Committees award. Its motion for
reconsideration having been denied, Asset Privatization Trust filed a special civil action
for certiorari with the Court of Appeals. It was likewise denied.

Hence, this petition for review on certiorari.

ISSUE

WHETHER THE RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF


DISCRETION AND ACTED WITHOUT OR IN EXCESS OF JURISDICTION, IN
ISSUING THE QUESTIONED ORDERS CONFIRMING THE ARBITRAL AWARD AND
DENYING THE MOTION FOR RECONSIDERATION OF ORDER OF AWARD.

HELD
As a rule, the award of an arbitrator cannot be set aside for mere errors of judgment
either as to the law or as to the facts. [29] Errors of law and fact, or an erroneous decision
of matters submitted to the judgment of the arbitrators, are insufficient to invalidate an
award fairly and honestly made.[32] Judicial review of an arbitration is, thus, more limited
than judicial review of a trial.[33]
Nonetheless, the arbitrators awards is not absolute and without exceptions. The
arbitrators cannot resolve issues beyond the scope of the submission agreement. [34]
While a court is precluded from overturning an award for errors in determination of
factual issues, nevertheless, if an examination of the record reveals no support
whatever for the arbitrators determinations, their award must be vacated. [40] In the same
manner, an award must be vacated if it was made in manifest disregard of the law.[41]