GR NO.

163101

Benguet Corporation vs. DENR

FACTS

Benguet Corporation (“Benguet”) and J.G. Realty and Mining (“J.G. Realty”) entered into a
Royalty Agreement with Option to Purchase (“RAWOP”), wherein J.G. Realty was acknowledged
as the owner of four mining claims covered by Mineral Production Sharing Agreement (“MPSA”)
Application No. APSA-V-0009 jointly filed by J.G. Realty as claimowner and Benguet as
operator. The RAWOP, among others, provide that “any disputes x x x between Benguet and
[J.G. Realty] with reference to anything whatsoever pertaining to [the RAWOP] x x x shall not be
cause of any action x x x in any court or administrative agency but shall x x x be referred to a
Board of Arbitrators consisting of three (3) members, one to be selected by Benguet, another to
be selected by [J.G. Realty] and the third to be selected by the aforementioned two arbitrators so
appointed.”

J.G. Realty subsequently informed Benguet that it was terminating the RAWOP by reason of
Benguet’s failure to comply with its obligations thereunder. J.G. Realty sought the cancellation of
the RAWOP, filing a petition for this purpose with the Panel of Arbitrators (“POA”) having territorial
jurisdiction over the mining area involved. In its Decision, the POA declared the RAWOP
cancelled. Benguet then filed a notice of appeal with the MAB. The decision was affirmed on
appeal to the Mines Adjudication Board (“MAB”).

Benguet contended that the issue raised by the J.G. Realty should have been raised first with the
arbitration before POA took cognizance of the case.

ISSUE

WON the controversy should have first been submitted to arbitration before the POA

HELD

YES. Sec. 2 of RA 876 elucidates the scope of arbitration:

Section 2. Persons and matters subject to arbitration.Two or more persons or parties may submit
to the arbitration of one or more arbitrators any controversy existing between them at the time of
the submission and which may be the subject of an action, or the parties to any contract may in
such contract agree to settle by arbitration a controversy thereafter arising between them. Such
submission or contract shall be valid, enforceable and irrevocable, save upon such grounds as
exist at law for the revocation of any contract.

In RA 9285 or the Alternative Dispute Resolution Act of 2004, the Congress reiterated the efficacy
of arbitration as an alternative mode of dispute resolution by stating in Sec. 32 thereof that
domestic arbitration shall still be governed by RA 876. Clearly, a contractual stipulation that
requires prior resort to voluntary arbitration before the parties can go directly to court is not illegal
and is in fact promoted by the State.
G.R. No. 196723, 28 August 2013

ASIAN CORPORATION vs. SUMITOMO CORPORATION

FACTS

Petitioner filed a complaint before the Construction Industry Arbitration Commission ("CIAC")
against Respondent for alleged losses and reimbursements amounting to US $9M and attorney's
fees of PhP 2M to which Respondent set up a counterclaim amounting to PhP 10M. An Arbitral
Tribunal was constituted and it rendered a Partial Award dismissing the claims and counterclaims
of both parties for being time-barred under New York State Law, the agreed governing
law. Petitioner filed a Petition for Review before the Court of Appeals under Rule 43 ("First
Petition") seeking the reversal of the Partial Award. While the First Petition was pending, the
Arbitral Tribunal ordered both parties to submit proof of costs and attorney's fees incurred due to
the arbitration proceedings. Respondent complied but Petitioner did not and instead filed an
Opposition against the claims for costs by Respondent. The Arbitral Tribunal did not act on the
Opposition because it treated it as a Motion for Reconsideration of the Partial Award which was
a prohibited pleading under the CIAC Rules. The Arbitral Tribunal rendered a Final Award
granting attorney's fees in favor for Respondent, reasoning that Respondent was merely forced
to litigate to defend its interest. Aggrieved, Petitioner filed before the Court of Appeals another
Petition for Review under Rule 43 ("Second Petition") assailing, this time, the Final Award. The
Court of Appeals dismissed the First Petition on the ground of forum shopping but gave due
course to the Second Petition. In deciding the Second Petition, the Court of Appeals modified the
Final Award by deleting the attorney's fees awarded to Respondent. Petitioner filed a petition for
certiorari under Rule 65 to set aside the denial of the First Petition while Respondent filed a
separate petition for certiorari to assail the modification made in the Second Petition. The cases
were consolidated before the Supreme Court.

ISSUES

1. WON the dismissal of the Petition for Review of a Partial Award of the Arbitral Tribunal on
the ground of forum shopping proper
2. WON Court of Appeals can modify a final and non-appealable award of the Arbitral Tribunal

HELD

1. Yes. The Supreme Court enumerated three ways by which forum shopping can be
committed: (a) by filing multiple cases with same cause of action and prayer when neither
of the cases filed has yet been terminated; (b) by filing multiple cases with the same cause
of action and prayer when one case has already been finally resolved; and (c) by filing
multiple cases with the same cause of action but with different prayers for relief.

The filing of the First Petition before the Court of Appeals and the Opposition before the
Arbitral Tribunal when both were still pending constituted forum shopping under the first
 mode. This is true even if one was not a court but an arbitral tribunal, since the Petitioner
was asking for the same relief--the reversal of the Partial Award.

2. Yes. The Supreme Court ruled that notwithstanding a statement in the law (E.O. 1008)
that the decision of the CIAC arbitral tribunal shall be final and non-appealable, the same
is still subject to judicial review.

Courts may take cognizance of the case when there is a showing of (1) want of jurisdiction,
(2) violation of due process, (3) denial of substantial justice, or (4) erroneous interpretation
of the law. This is sanctioned both by Rule 43 of the Rules of Court and the CIAC Revised
Rules which provide that decisions of the CIAC arbitral tribunals may be appealed to the
Court of Appeals on questions of fact, law or mixed questions of fact and law.

Since the Arbitral Tribunal made an erroneous interpretation of the law, the Court of
Appeals was justified in modifying the Final Award.

AQUINAS UNIVERSITY
COLLEGE OF LAW

ALTERNATIVE DISPUTE RESOLUTION

JERIC BIRAQUIT
2E