DENR vs.
UPCI Petitioner filed a Motion for Reconsideration which the Arbitral Tribunal merely noted
G.R No. 212081/February 23, 2015
FACTS:
On July 26, 1993, petitioner, through the Land Management Bureau (LMB), entered into an
Agreement for Consultancy Services (Consultancy Agreement) with respondent United
Planners Consultants, Inc. (respondent) in connection with the LMB' s Land Resource
Management Master Plan Project (LRMMP). Under the Consultancy Agreement, petitioner
committed to pay a total contract price of ₱4,337,141.00, based on a predetermined
percentage corresponding to the particular stage of work accomplished. Respondent
completed the work required which the petitioner formally accepted on December 27, 1994,
however, petitioner was only able to pay 47% (P2,038,456.30) of the contract price of the
total amount agreed.
Subsequently, the Commission on Audit released the Technical Services Office Report (TSO)
and found the contract price of the agreement to be 84.14% excessive. Petitioner
acknowledged its liability to respondent in the amount of ₱2,239,479.60 and assured
payment at the soonest possible time.
Respondent instituted a complaint against petitioner before the RTC of Quezon City for
petitioner’s failure to pay the obligation despite repeated demands. Thereafter, the case was
subsequently referred to arbitration pursuant to the arbitration clause of the Consultancy
Agreement which the petitioner did not oppose. With that, Atty. Alfredo F. Tadiar, Architect
Armando N. Alli, and Construction Industry Arbitration Commission (CIAC) Accredited
Arbitrator Engr. Ricardo B. San Juan were appointed as members of the Arbitral Tribunal. The
parties agreed to adopt the CIAC Revised Rules Governing Construction Arbitration (CIAC
Rules) to govern the arbitration proceedings and further agreed to submit their respective
draft decisions in lieu of memoranda of arguments on or before April 21, 2010. However,
only respondent complied with the given deadline while petitioner moved for the deferment
of the deadline which it followed with another motion for extension of time and asked that it
be given until May 11, 2010 to submit its draft decision.
The Arbitral Tribunal denied petitioner’s motion and deemed its non-submission as a waiver
ut declared that it would still consider petitioner’s draft decision if submitted before May 7,
2010, or the expected date of the final award’s promulgation. Petitioner complied on the
same date. The Arbitral Tribunal rendered its award in favor of the respondent, directing the
petitioner to pay the latter the amount of (a) ₱2,285,089.89 representing the unpaid
progress billings, with interest at the rate of 12% per annum from the date of finality of the
Arbitral Award upon confirmation by the RTC until fully paid; (b) ₱2,033,034.59 as accrued
interest thereon; (c) ₱500,000.00 as exemplary damages; and (d) ₱150,000.00 as attorney’s
fees. It also ordered petitioner to reimburse respondent its proportionate share in the
arbitration costs as agreed upon in the amount of ₱182,119.44.
without action claiming that it had lost jurisdiction over the case after it had submitted to the
RTC its report together with a copy of the Arbitral Award. Consequently, petitioner filed
before the RTC a Motion for Reconsideration and a Manifestation and Motion asserting that
it was denied the opportunity to be heard when the Arbitral Tribunal failed to consider its
draft decision and merely noted its motion for reconsideration. Respondent filed an
Opposition and moved for the confirmation of the of the arbitral award in accordance with
the Special ADR Rules. RTC merely noted petitioner’s motion and confirmed the arbitral
award. Respondent moved for the issuance of a writ of execution, petitioner did not file any
comment despite RTC’s directive. Petitioner moved to quash the writ of execution but was
denied by the RTC.
Petitioner filed a petition for certiorari before the CA. CA dismissed the certiorari petition.
ISSUE:
Whether or not the CA erred in applying the provisions of the Special ADR Rules, resulting in
the dismissal of petitioner’s special civil action for certiorari- No
HELD:
The Court ruled in the negative and cited RA 9285 (Alternative Dispute Resolution Act of
2004) which institutionalized the use of an ADR system. The Act, however, was without
prejudice to the adoption by the Supreme Court of any ADR system as a means of achieving
speedy and efficient means of resolving cases pending before all courts in the Philippines.
Accordingly, A.M. No. 07-11-08-SC was created setting forth the Special Rules of Court on
Alternative Dispute Resolution (referred herein as Special ADR Rules) that shall govern the
procedure to be followed by the courts whenever judicial intervention is sought in ADR
proceedings in the specific cases where it is allowed. Rule 1.1 of the Special ADR Rules lists
down the instances when the said rules apply. It should be noted that the Special ADR Rules
do not automatically govern the arbitration proceedings itself and a pivotal feature of
arbitration as an alternative mode of dispute resolution is that it is a product of party
autonomy or the freedom of the parties to make their own arrangements to resolve their
own disputes as laid down in Rule 2.3 of the Special ADR Rules proceedings.
In the case at bar, the Consultancy Agreement contained an arbitration clause. Hence,
respondent, after it filed its complaint, moved for its referral to arbitration which was not
objected to by petitioner. By its referral to arbitration, the case fell within the coverage of
the Special ADR Rules. However, with respect to the arbitration proceedings itself, the parties
had agreed to adopt the CIAC Rules before the Arbitral Tribunal in accordance with Rule 2.3
of the Special ADR Rules. The Arbitral Tribunal rendered the arbitral award in favor of the
respondent and as provided by the CIAC rules, no motion for reconsideration or new trial
may be sought but any of the parties may file a motion for correction of the final award
based on miscalculation of figures, a typographical or arithmetical error. Such motion shall be
acted upon by the Arbitral Tribunal or the surviving/remaining members. Moreover, the
parties may appeal the final award to the CA through a petition for review under Rule 43 of
the Rules of Court but petitioner did not avail of any mentioned remedies. Instead it filed a
Motion for Reconsideration of the arbitral award which was a prohibited pleading according
to the CIAC Rules.

A special civil action for certiorari may be filed to annul or set aside the orders of the RTC as
provided for in Rule 19.26. Petitioner, in this case, asserted that its petition is not covered by
the Special ADR Rules (particularly, Rule 19.28 on the 15-day reglementary period to file a
petition for certiorari) but by Rule 65 of the Rules of Court (particularly, Section 4 thereof on
the 60-day reglementary period to file a petition for certiorari), which it claimed to have
suppletory application in arbitration proceedings since the Special ADR Rules do not explicitly
provide for a procedure on execution.

The Court held that the position is untenable. Execution is fittingly called the fruit and end of
suit and the life of the law. A judgment, if left unexecuted, would be nothing but an empty
victory for the prevailing party. Execution is but a necessary incident to the Court’s
confirmation of an arbitral award. To construe it otherwise would result in an absurd
situation whereby the confirming court previously applying the Special ADR Rules in its
confirmation of the arbitral award would later shift to the regular Rules of Procedure come
execution. Irrefragably, a court’s power to confirm a judgment award under the Special ADR
Rules should be deemed to include the power to order its execution for such is but a
collateral and subsidiary consequence that may be fairly and logically inferred from the
statutory grant to regional trial courts of the power to confirm domestic arbitral awards. The
Court concluded that the Special ADR Rules, as far as practicable, should be made to apply
not only to the proceedings on confirmation but also to the confirmed award’s execution.

Petition is DENIED.