Home Bankers Savings and Trust Company v. CA (G.R. No.
115412) ISSUES:
Facts: Victor Tancuan issued Petitioner Home Bankers Savings and Trust
Company a check while Eugene Arriesgado issued Private Respondent Far East
Bank and Trust Company three checks; both checks totaling the amount of
P25,250,000.00. Tancuan and Arriesgado exchanged each other’s checks and
deposited them with their respective banks for collection. When FEBTC presented
Tancuan’s HBSTC check for clearing, it was dishonored for being DAIF.
Meanwhile, HBSTC sent Arriesgado’s 3 FEBTC checks through the Philippine
Clearing House Corporation (PCHC) to FEBTC but was returned for being DAIF.
HBSTC receive the notice of dishonor but refused to accept the checks and
returned them to FEBTC through the PCHC for the reason “Beyond Reglementary
Period,” implying that HBSTC already treated the 3 checks as cleared and allowed
the proceeds thereof to be withdrawn. FEBTC demanded reimbursement for the
returned checks and inquired from HBSTC whether it had permitted any withdrawal
of funds against the unfunded checks. HBSTC, however refused to make any
reimbursement and to provide FEBTC with the needed information. Thus, FEBTC
submitted the dispute for arbitration before the PCHC Arbitration Committee, under
its Supplementary Rules on Regional Clearing to which FEBTC and HBSTC are
bound as participants in the regional clearing operations administered by the
PCHC. While the arbitration proceeding was still pending, FEBTC filed an action
for sum of money and damages with preliminary attachment against HBSTC.
HBSTC moved to dismiss on the ground that there is no cause of action and
because it seeks to enforce an arbitral award which as yet does not exist. The trial
court denied the motion to dismiss and the motion for reconsideration. Petitioner
then filed a petition for certiorari with respondent CA to which it had dismissed.
Issue: Whether or not private respondent which commenced an arbitration
proceeding under the auspices of the PCHC may subsequently file a separate
case in court over the same subject matter despite the pendency of that arbitration,
simply to obtain the provisional remedy of attachment against the adverse party in
the arbitration proceeding.
Ruling: We find no merit in the petition. Section 14 of Republic Act 876, otherwise
known as the Arbitration Law, allows any party to the arbitration proceeding to
petition the court to take measures to safeguard and/or conserve any matter which
is the subject of the dispute in arbitration.
Petitioner’s exposition of the foregoing provision deserves scant consideration.
Section 14 simply grants an arbitrator the power to issue subpoena and subpoena
duces tecum at any time before rendering the award. The exercise of such power
is without prejudice to the right of a party to file a petition in court to safeguard any
matter which is the subject of the dispute in arbitration. In the case at bar, private
respondent filed an action for a sum of money with prayer for a writ of preliminary
attachment. Undoubtedly, such action involved the same subject matter as that in
arbitration, i.e., the sum of P25,200,000.00 which was allegedly deprived from
private respondent in what is known in banking as a “kiting scheme.” However, the
civil action was not a simple case of a money claim since private respondent has
included a prayer for a writ of preliminary attachment, which is sanctioned by
section 14 of the Arbitration Law.
Simply put, participants in the regional clearing operations of the Philippine
Clearing House Corporation cannot bypass the arbitration process laid out by the
body and seek relief directly from the courts. In the case at bar, undeniably, 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 and/or conserve the subject of the dispute under
arbitration, as sanctioned by section 14 of the Arbitration Law, and otherwise not
shown to be contrary to the PCHC rules and regulations.
At this point, we emphasize that arbitration, as an alternative method of dispute
resolution, is encouraged by this Court. Aside from unclogging judicial dockets, it
also hastens solutions especially of commercial disputes. The Court looks with
favor upon such amicable arrangement and will only interfere with great reluctance
to anticipate or nullify the action of the arbitrator. Wherefore, premises considered,
the petition is hereby dismissed and the decision of the court a quo is affirmed.
LUCAS ADAMSON vs. COURT OF APPEALS
FACTS: A deficiency tax assessment was issued against Petitioners relating to
their payment of capital gains tax and VAT on their sale of shares of stock and
parcels of land. Subsequent to the preliminary conference, the CIR filed with the
Department of Justice her Affidavit of Complaint against Petitioners. The Court of
Appeals ultimately ruled that, in a criminal prosecution for tax evasion, assessment
of tax deficiency is not required because the offense of tax evasion is complete or
consummated when the offender has knowingly and willfully filed a fraudulent
return with intent to evade the tax.
itself to arbitration, it becomes bound by the contract, by the arbitration and by the
(1) Dis the CIR issue an assessment? result of arbitration, conceding thereby the capacity of the other party to enter into
(2) Must a criminal prosecution for tax evasion be preceded by a deficiency tax the contract, participate in the arbitration and cause the implementation of the
assessment? result.
(3) Does the CTA have jurisdiction on the case?
The subject Resolution was REVERSED and SET ASIDE.
HELD:
(1) NO. The recommendation letter of the Commissioner cannot be considered a
formal assessment as (a) it was not addressed to the taxpayers; (b) there was no
demand made on the taxpayers to pay the tax liability, nor a period for payment
set therein; (c) the letter was never mailed or sent to the taxpayers by the
Commissioner. It was only an affidavit of the computation of the alleged liabilities
and thus merely served as prima facie basis for filing criminal informations.
(2) YES. When fraudulent tax returns are involved as in the cases at bar, a
proceeding in court after the collection of such tax may be begun without
assessment considering that upon investigation of the examiners of the BIR, there
was a preliminary finding of gross discrepancy in the computation of the capital
gains taxes due from the transactions. The Tax Code is clear that the remedies
may proceed simultaneously.
(3) NO. While the laws governing the CTA have expanded the jurisdiction of the
Court, they did not change the jurisdiction of the CTA to entertain an appeal only
from a final decision of the Commissioner, or in cases of inaction within the
prescribed period. Since in the cases at bar, the Commissioner has not issued an
assessment of the tax liability of the Petitioners, the CTA has no jurisdiction.
TUNA PROCESSING, INC., Petitioner, v. PHILIPPINE KINGFORD, INC.,
Respondent.
G.R. No. 185582 : February 29, 2012
FACTS: Kanemitsu Yamaoka, five Philippine tuna processors, and respondent
Kingford entered into a Memorandum of Agreement (MOA), which provided,
among others, the establishment of Tuna Processors, Inc. (TPI). Due to a series
of events, the licensees, including respondent Kingford, withdrew from petitioner
TPI and correspondingly reneged on their obligations. Petitioner submitted the
dispute for arbitration before the International Centre for Dispute Resolution in the
State of California, USA and won the case against respondent. To enforce the
award, petitioner TPI filed a Petition for Confirmation, Recognition, and
Enforcement of Foreign Arbitral Award before the RTC of Makati City. The petition
was dismissed on the ground that the petitioner lacked legal capacity to sue in the
Philippines. Petitioner TPI now seeks to nullify the order of the trial court dismissing
its Petition for Confirmation, Recognition, and Enforcement of Foreign Arbitral
Award.
ISSUE: Can a foreign corporation not licensed to do business in the Philippines,
but which collects royalties from entities in the Philippines, sue here to enforce a
foreign arbitral award?
RULING: The petition is impressed with merit. We reiterate that the foreign
corporation’s capacity to sue in the Philippines is not material insofar as the
recognition and enforcement of a foreign arbitral award is concerned. Following
the generalia specialibus non derogant principle, the Alternative Dispute
Resolution Act of 2004 shall apply in this case as the Act, as its title – An Act to
Institutionalize the Use of an Alternative Dispute Resolution System in the
Philippines and to Establish the Office for Alternative Dispute Resolution, and for
Other Purposes – would suggest, is a law especially enacted to actively promote
party autonomy in the resolution of disputes or the freedom of the party to make
their own arrangements to resolve their disputes. It specifically provides exclusive
grounds available to the party opposing an application for recognition and
enforcement of the arbitral award. Sec. 45 of the Alternative Dispute Resolution
Act of 2004 provides that the opposing party in an application for recognition and
enforcement of the arbitral award may raise only those grounds that were
enumerated under Article V of the New York Convention, and not one of these
exclusive grounds touched on the capacity to sue of the party seeking the
recognition and enforcement of the award. Rule 13.1 of the Special Rules provides
that [a]ny party to a foreign arbitration may petition the court to recognize and
enforce a foreign arbitral award. The contents of such petition are enumerated in
Rule 13.5. Capacity to sue is not included. Oppositely, in the Rule on local arbitral
awards or arbitrations in instances where the place of arbitration is in the
Philippines, it is specifically required that a petition to determine any question
concerning the existence, validity and enforceability of such arbitration agreement
available to the parties before the commencement of arbitration and/or a petition
for judicial relief from the ruling of the arbitral tribunal on a preliminary question
upholding or declining its jurisdiction after arbitration has already commenced
should state [t]he facts showing that the persons named as petitioner or
respondent have legal capacity to sue or be sued. When a party enters into a
contract containing a foreign arbitration clause and, as in this case, in fact submits