b.

Arbitration Agreement
19. BF Corporation v. CA, GR 120105, March 27, 1998, Romero, J., Third Division.
FACTS:
Petitioner BFC and respondent Shangri-la Properties, Inc. (SPI) entered into an agreement where SPI engaged BFC to construct EDSA Plaza Project, a shopping mall
in Mandaluyong. While the construction was in progress, SPI expanded the project by engaging BFC again. The parties entered into an agreement for the main
contract works.BFC incurred delay that SPI considered serious and substantial. But according to BFC, the construction progressed in faithful compliance with the first
agreement until a fire broke out, damaging Phase I of the project. SPI proposed the renegotiation of the agreement.

On May 30, 1991, BFC and SPI entered into a written agreement, “Agreement for Execution of Builder’s Work.” SPI claims that BFC failed to complete the
construction and abandoned the project. This resulted in disagreements between the parties as to their liabilities under the contract. The parties met in conference on
July 12, 1993, but they failed to come to an agreement.

On July 14, BFC filed in RTC a complaint for collection of the balance due under the construction agreement. SPI moved to suspend proceedings alleging that the
formal trade contract for construction had an arbitration clause. (*The arbitration clause was in the Conditions of Contract.)

RTC found that there was an arbitration clause but denied the motion to suspend. It found that:
Defendants submitted a copy of a trade contract- Contract Documents for Builder’s Work- page 2 of which is entitled “Contents of Contract Documents”,
Section A of which consists of the “Agreement for Execution of Builder’s Work” dated May 30 1991. Section C is entitled Articles of Agreement and
Conditions of Contract. The Articles of Agreement were signed by the parties and notarized. The Articles also provides that the “Contract documents”
therein listed “shall be deemed an integral part of this Agreement.”
However, RTC said the ”Conditions of Contract” (which had the arbit clause) is not signed, having only the initials of BFC’s representatives, without that of any
representative of SPI.

SPI filed a Rule 65 special civil action for certiorari with CA. CA annulled the RTC orders and stayed the proceedings therein. (See text for CA ruling)

The arbitration agreement stated:

"Notice of the demand for arbitration of a dispute shall be filed in writing with the other party to the contract and a copy filed with the Project Manager.
The demand for arbitration shall be made within a reasonable time after the dispute has arisen and attempts to settle amicably have failed; in no case,
however, shall the demand he made be later than the time of final payment except as otherwise expressly stipulated in the contract."
ISSUE:
Whether the arbitration clause complied with the formalities required by RA 876.
HELD: YES.
1) Rule 65 to CA of RTC order denying motion to suspend proper- BFC claims that the RTC order is a resolution of an incident on the merits, after which RTC would
decide on the merits that may rule on the existence of an arbitration. This decision can be appealed. Thus, BFC claims CA should have dismissed the Rule 65
certiorari since the remedy of appeal would still be available to respondents at the proper time. This is without merit.

The special civil action of certiorari (Rule65) may not be invoked as substitute for the remedy of appeal. It is available only when there is “no appeal or any plain,
speedy, and adequate remedy in the ordinary course of law.” Rule 65 will not be issued to cure erroneous conclusions of law or fact. But here, the issue is whether
RTC prematurely assumed jurisdiction over the case. If it did, then it becomes an error of jurisdiction which is a proper subject of Rule 65 in CA. If RTC has no
jurisdiction, any decision it may render may be annulled.

1.1) Question of law was involved- The question of jurisdiction, which is a question of law, depends on the determination of the existence of the arbitration clause,
which is a question of fact. In effect, the issue posed in CA was likewise a question of law. Thus, respondents rightfully invoked Rule 65. SC holds that the question of
existence of the arbitration clause in the contract is a legal issue that must be determined in this petition for review on certiorari.

2) Form of arbitration agreement- BFC claims that there is no arbitration clause considering that the “conditions of contract” embodying said clause is not duly signed
by the parties.

RA 876 provides for the formal requisites of an arbitration agreement:

"Section 4. Form of arbitration agreement. — A contract to arbitrate a controversy thereafter arising between the parties, as well as a submission to
arbitrate an existing controversy, shall be in writing and subscribed by the party sought to be charged, or by his lawful agent.
The formal requirements thus are: 1) It must be in writing and 2) subscribed by the parties or their representatives. To subscribe means to write underneath as one’s
name; to sign at the end of a document. These were complied with.

2.1) Articles of Agreement incorporating other contracts was signed- The articles of Agreement, which incorporates all other agreements between the parties, was
signed and duly notarized. The failure of respondent’s representative to initial the “conditions of contract” would thus not affect compliance with the formal
requirements since that portion of the covenants was included by reference in the articles.

2.2) Contract may be in several documents- A contract need not be contained in a single writing. It may be collected from several writings which do not conflict with
each other. A contract may be encompassed in several instruments even though every instrument is not signed by the parties, since it is sufficient if the unsigned
instruments are clearly identified or referred to and made part of the signed insturments. BFC admits the execution of the articles of agreement, which provides that
the “contract documents” shall be “deemed an integral part of this agreement.” The contract documents contains the arbitration clause.

3) RTC proceedings stayed during arbitration- It bears stressing that the lower court has not lost its jurisdiction over the case. S7, RA 876 provides that proceedings
therein have only been stayed. After the arbitration is completed, the lower court may confirm the award made by the arbitrator.

20. Steamship Mutual Underwriting Association (Bermuda) Limited v. Sulpicio Lines, Inc., GR 196072, September 20, 2017, Third Division. (See case #6)

21. Cargill PHL, Inc. v. San Fernando Regala Trading, Inc., GR 175404, January 31, 2011, Peralta, J., Second Division. (See case #17)

22. PEZA v. Edison (Bataan) Cogeneration Corporation, GR 179537, October 23, 2009, Carpio-Morales, J., Second Division.
FACTS:
PEZA and Edison (respondent) entered into a Power Supply and Purchase Agreement (PSPA) for a 10-year period where respondent undertook to construct, operate,
and maintain a power plant which would sell, supply, and deliver electricity to PEZA for resale to business locators in the Bataan Economic Processing Zone. In the
course of discharging the obligation, respondent requested PEZA for a tariff increase, which request was reiterated on March 5, 2004. PEZA did not respond.
Respondent thus wrote PEZA on May 3, 2004, citing a tariff increase which PEZA granted to East Asia Utilities Corporation (EAUC), another electricity supplier in
the Mactan Economic Zone. Respondent said that PEZA violated its obligation under Clause 4.9 of PSPA not to give preferential treatment to other power suppliers.

After 90 days, respondent terminated PSPA and demanded P708M as pre-termination fee. PEZA disputed respondent’s right to terminate the agreement and refused to
pay. Respondent requested PEZA to submit the dispute to arbitration pursuant to the arbitration clause of PSPA. PEZA refused to submit the dispute to arbitration.

Respondent filed a complaint against PEZA for specific performance in RTC, alleging that:
4. Under Clauses 14.1 and 14.2 of the Agreement, the dispute shall be resolved through arbitration before an Arbitration Committee.
In its answer, PEZA admitted the allegation in paragraph 4 of the complaint, but arguing that the dispute subject of the request for arbitration is not an arbitrable issue
since the provision on pre-termination fee in the PSPA is gravely onerous and disadvantageous to the government, against public policy, and thus invalid.
Respondent moved to render judgment on the pleadings. RTC granted, ruling for respondents, and appointing 3 arbitrators – retired SC justice Narvasa and Gutierrez,
and Justice Feria. CA affirmed RTC. Hence this petition.

ISSUE:
Whether RTC’s referral of the case to arbitration was proper.
HELD: YES.
RA 876 provides:
SECTION 6. Hearing by court. — A party aggrieved by the failure, neglect or refusal of another to perform under an agreement in writing providing for
arbitration may petition the court for an order directing that such arbitration proceed in the manner provided for in such agreement. xxx. The court shall
hear the parties, and upon being satisfied that the making of the agreement or such failure to comply therewith is not in issue, shall make an order
directing the parties to proceed to arbitration in accordance with the terms of the agreement. If the making of the agreement or default be in issue the
court shall proceed to summarily hear such issue. If the finding be that no agreement in writing providing for arbitration was made, or that there is no
default in the proceeding thereunder, the proceeding shall be dismissed. If the finding be that a written provision for arbitration was made and there is a
default in proceeding thereunder, an order shall be made summarily directing the parties to proceed with the arbitration in accordance with the terms
thereof.
1) PEZA admitted existence of written arbitration clause- RA 876 explicitly confines the court’s authority only to the determination of whether there is an agreement
in writing providing for arbitration. Given PEZA’s admission of the allegations in respondent’s complaint, including the existence of a written agreement to resolve
disputes thru arbitration, CA’s affirmance of RTC’s grant of the motion for judgment on the pleadings is in order.

2) Doctrine of separability- PEZA argues that it tendered an issue in its answer as it disputed the legality of the pre-termination fee clause of PSPA. But even
assuming that the clause is illegal, it would not affect the agreement between the parties to resolve the dispute by arbitration. The doctrine of separability denotes
that the invalidity of the main contract (container contract) does NOT affect the validity of the arbitration agreement.

3) Doctrine of separability applied upon MR of Gonzales- PEZA claims that the legality of the pre-termination fee clause is not arbitrable, citing Gonzales v. Climax
Mining, which held that the complaint should be brought before the regular courts, not before an arbitration tribunal, as it involved a judicial issue. Therein, We said,
“The question of validity of the contract containing the agreement to submit to arbitration will affect the applicability of the arbitration clause itself.”

But the Gonzales ruling was modified on MR: “We now hold that the validity of the contract containing the agreement to submit to arbitration does not affect the
applicability of the arbitration clause itself.” “ when it was declared in [the Gonzales ruling before MR] that the case should not be brought for arbitration, the case
referred to is the case filed by Gonzales in DENR Panel of Arbitrators which was for the nullification of the main contract on the ground of fraud, as it had already
been determined that the case should have been brought before the courts as it involved judicial issues.”

4) Respondent does not seek to nullify the main contract. It merely submits issues like Whether PEZA accorded preferential treatment to EAUC in violation of the
agreement (see text for other issues raised). These are all subject to arbitration in accordance with the parties’ arbitration clause.

23. Benguet Corporation v. DENR, GR 163101, February 13, 2008, Velasco, Jr., J., Second Division.
FACTS:
Benguet and JR Realty and Mining Corporation entered into a Royalty Agreement with Option to Purchase (RAWOP) where JG Realty was acknowledged as owner
of 4 mining claims named as Bonito-I to Bonito-IV with area of 288ha in Camarines Norte. In the RAWOP, Benguet obligated itself to examine the mining claims
within 24 months to determine whether they are worth developing, to, after examination, conduct exploration, and that if the mining claims were put into commercial
production by Benguet, JG Realty will be entitled to 5% royalte.

On Aug. 9, 1989, EVP of Benguet Tachuing sent a letter to JG informing it of Benguet’s intention to develop the mining claims. But on Feb. 09, 1999, JG sent a letter
to Benguet informing Benguet that it was terminating the RAWOP due to failure to undertake development works within 2 years from the execution of RAWOP and
non-payment of royalties. Benguet replied, alleging compliance and that the commercial operation was hampered by the non-issuance of a Mines Temporary Permit
by MGB, which is force majeure entitled it to extension of time. (See text for other grounds of cancelling RAWOP by JG)

JG filed a petition for declaration of nullity of RAWOP with the Legaspi City Minings Adjudication Board(MAB)-Panel of Arbitrators (POA). POA declared
RAWOP cancelled. MAB affirmed. Hence this petition.

ISSUE:
Whether the controversy should have been first submitted to arbitration before POA took cognizance of the case.
HELD: YES, but Benguet now estopped as it participated in POA and MAB proceedings.
S11.01 and 11.02 of RAWOP provides for an arbitration clause and that no court action shall be instituted except to enforce the decision of the majority of the
arbitrators. Benguet argues that POA should have first referred the case to voluntary arbitration, citing S2, RA 876.

POA denied this argument, saying that the terms of contract cannot be contrary to public policy and that RA 7942, PHL Mining Act of 1995, is a special law which
prevails over the stipulations of the parties and over a general law, like RA 876.

MAB also denied on the ground of estoppel in questioning the jurisdiction of POA. MAB also said that the arbitration clause merely provided for an additional forum
and did not divest POA of jurisdiction.

JG Realty also argues that jurisprudence saying that prior resort to arbitration before filing a case with courts is inapplicable as POA is itself already engaged in
arbitration.

1) Arbitration clauses in PHL valid, encouraged- We rule for Benguet. S2, RA 876 states:
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.
RA 9285 reiterated the efficacy of arbitration as an alternative mode of dispute resolution by stating in S32 that domestic arbitration shall still be governed by RA 876.
Thus, an arbitration clause is not illegal and is in fact promoted by the state.

2) No conflict between RA 7942 and 876- The contention that RA 7942 prevails over RA 876 presupposes a conflict between the two laws. To reiterate, availment of
voluntary arbitration before resort is made to the courts or quasi-judicial agencies of the government is a valid stipulation. As stated in S6 and 7 of RA 876:
Section 6. Hearing by court xxx.
Section 7. Stay of civil action.––If any suit or proceeding be brought upon an issue arising out of an agreement providing for the arbitration thereof, the
court in which such suit or proceeding is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration, shall
stay the action or proceeding until an arbitration has been had in accordance with the terms of the agreement: Provided, That the applicant, for the stay is
not in default in proceeding with such arbitration.
In other words, where a case that should be subject of voluntary arbitration is erroneously filed with the courts/quasi-judicial agencies, on motion of defendant, the
court/quasi-judicial agency shall determine whether the arbitration clause is sufficient and effective. If yes, the court/agency shall order enforcement of said
provision. In BF Corporation v. CA, we held that the lower court “has not lost its jurisdiction over the case. S7 of RA 876 provides that proceedings therein have only
been stayed.”

3) Compulsory vs voluntary arbitration- JG’s contention that prior resort to arbitration is unavailing since POA’s mandate is to arbitrate disputes involving mineral
agreements is misplaced. A distinction must be made between voluntary and compulsory arbitration. Compulsory arbitration has been defined both as "the process of
settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties, and as a
mode of arbitration where the parties are compelled to accept the resolution of their dispute through arbitration by a third party." While a voluntary arbitrator is not
part of the governmental unit or labor department’s personnel, said arbitrator renders arbitration services provided for under labor laws.

The arbitration provided by POA is compulsory while the arbitration in the RAWOP is voluntary, not involving any government agency.

4) RAWOP prohibits filing to administrative agencies w/o arbitration- As to JG’s contention that RA 876 does not apply since the case involves an administrative
agency, S11.01 of RAWOP states:
[Any controversy with regard to the contract] shall not be cause of any action of any kind whatsoever in any court or  administrative  agency but shall xxx
be referred to a board of arbitrators xxx.
POA is a quasi-judical body, an administrative agency.

5) But Benguet is already estopped from questioning POA’s jurisdiction. When JG filed DENR Case 2000-01, Benguet filed its answer and participated in the
proceedings in POA. When it appealed to MAB, it also participated in its proceedings. When the adverse MAB decision was promulgated and after its MR was also
denied, Benguet filed a petition with SC under S79 of RA 7942, impliedly recognizing MAB’s jurisdiction. Benguet should have immediately challenged POA’s
jurisdiction.

(SC ruled that the cancellation of RAWOP was supported by evidence and that there was no unjust enrichment since the cancellation of RAWOP was due to
Benguet’s violation of RAWOP.)

24. Bengson v. Chan, GR L-27283. July 29, 1977, Aquino, J., Second Division.
FACTS:
Soledad Bengson and Mariano Chan entered into a construction of a 6-story building on Bengson’s lot in San Fernando, La Union. Bengson bound herself to pay
Chan P352k. It was stipulated that the construction would start July 5, 1965, that the 1st and 2nd stories should be completed and available for use within 5 months,
and that construction should be finished within 12 calendar months. The contract has an arbitration clause in par.15:
15. Any and all questions, disputes or differences arising between the parties hereto relative to the construction of the BUILDING shall be determined by
arbitration of two persons, each chosen by the parties themselves.
On May 24, 1966, Bengson filed an action for damages against Chan and sureties on his performance bond, alleging that Chan violated the contract by not
constructing the 1st and 2nd stories within 5 months and that she suffered damages. Chan claims that he stopped construction as Bengson refused to pay for 90% of
the work already accomplished and that construction actually began in February 1966 due to changes requested by Bengson.

In an amended answer, Chan alleged as additional affirmative defense that the complaint states no cause of action since Soledad did not first submit the controversy
for arbitration.

Trial court dismissed the complaint, sustaining the new defense of arbitration. Hence this petition.

ISSUE:
1) Whether Par.15 covers the dispute in question.
2) Whether trial court was correct in dismissing the action.
HELD:
Bengson claims that her causes of action do not involve disputes relative to the construction of the building and thus should not be submitted for arbitration, and that
par. 15 refers to disputes as to the “technical process of putting up the building,” and that her causes for damages do not involve questions as to the construction of the
building but is based on violation of the contract for construction. Alternatively, Bengson argues that if arbitration is proper, trial court should have required the
parties to proceed to arbitration under S6, RA 876.

Chan argues that par. 15 embraces all breaches of contract

1) YES. Par. 15 covers all disputes- Par. 15 expresses the intent of the parties that all disputes between them should first be arbitrated before court action can be
taken. Bengson’s interpretation of par.15 has a sophistical flavor. Her distinction between the contract for construction of the building and construction of the building
is specious but not convincing.

2) NO. Trial Court should refer parties to arbitration, not dismiss the case- But although the causes of action in Bengson’s complaint are covered by par. 15, her
failure to resort to arbitration does not warrant dismissal of her complaint. We agree with her alternative contention that arbitration may be resorted to during
pendency of the case. RA 876, S6 and 7 provides xxx.

Under S6, the failure of Bengson to resort to arbitration may be regarded as refusal to comply with the stipulation for arbitration. Chan’s interposition of the defense
that arbitration is a condition precedent to court action may be interpreted as a petition for an order that arbitration should proceed. Thus, instead of dismissing the
case, the proceedings should have been suspended and the parties directed to go thru arbitration . With the parties’ consent, trial court may appoint a 3rd
arbitrator to prevent deadlock between the 2 arbitrators.

25. General Insurance & Surety Corporation v. Union Insurance Society of Canton, Ltd., GR L-30475, November 22, 1989. Medialdea, J., First Division.
FACTS:
Union Insurance and British Traders’ Insurance Co., Ltd. (respondents) Are insurance corporations organized under the laws of Great Britain and licensed to do
business in PHL.

In Civil case 68558, respondents and General (petitioner) entered into a First Surplus Reinsurance Agreement (FSRA), agreeing on reciprocal reinsurance payable in
pounds sterling commencing on Janaury 1, 1959 until Dec. 31, 1961. The agreement had an arbitration clause in Art. XII. This was terminated on Dec. 31, 1961.
Respondents claim that there was due from General under treaties negotiated between respondents as ceding companies and General as reinsurer the sum of 4,784.51,
which General should pay to respondents in Pounds Sterling at the rate of exchange prevailing at time of payment. General refused to pay in pound sterling and
insisted that it should pay in PHL pesos at the old exchange rate of P2.015 to $1. Respondents made demand upon General to proceed with arbitration. General
refused, contending that there was no controversy and thus there was no need for arbitration. Respondents filed the civil case praying for declaration that a dispute
exists between the parties.

In Civil Case 68559, the parties entered into a Retrocession Quota Share Fire Pool Agreement (RQSFPA) where they agreed on reciprocal reinsurance arrangements
payable in pounds sterling to commence Jan. 1, 1960 until Dec. 31, 1961. This also had an arbitration agreement. RQSFPA was terminated Dec. 31, 1961, on which
respondents claim the sum of 1,035 from General in pounds sterling or PHL pesos at the exchange rate at time of payment. General refused to pay in pounds and
insisted to pay in PHL pesos at the old exchange rate of P2.015 to $1. General also refused to proceed to arbitration for the same reason. Respondents thus filed the
civil case praying for declaration that a dispute exists between the parties.

Trial court declared that a valid controversy existed and General was ordered to submit to arbitration. Hence this petition for review.
ISSUE:
Whether there was a controversy subject to arbitration.
HELD: YES.
1) There is a dispute properly subject of arbitration- The complaints and answers in the trial court reveals that a valid controversy existed between the parties which is
a proper subject for arbitration. The 2 civil cases brought by respondents alleged that there was still some amount payable in pounds sterling due to it from petitioner.
Petitioner denied this, anchoring its defenses on 3 grounds- that the arbitration clause can no longer be enforced 5 years after termination of both agreements, that it
was respondents who owe petitioner some amount, and a previous agreement that starting Jan. 1, 1959, the balance under the agreement will be made payable in US
dollars. Since it is undisputed that in both the FSRA and RQSFPA, the parties agreed that any dispute arising from these agreements shall be referred to a set of
arbitrators, trial court correctly ordered the parties to submit to arbitration.

2) Under RA 529, payment in PHL currency at rate of exchange at time of payment- Petitioner belatedly invokes RA 529 as defense, which declares as against public
policy provisions in agreements which purports to give the oblige the right to require payment in gold or currency other than PHL currency. But RA 529 does not
invalidate the whole contract, only the provision to such effect. The most that could be demanded is to pay in PHL currency. In Kalalo v. Luz, we held that if the
obligation was incurred prior to enactment of RA 529 (June 16, 1950) and require payment in a currency other than PHL currency, the same shall be paid in PHL
currency at the prevailing rate of exchange at the time the obligation was incurred. Since the obligation here was incurred between 1958-1961, the rate of exchange
shall be that prevailing at the time of payment.

3) No time restriction contemplated by agreements- As to the contention that the arbitration clause cannot be enforced 5 years after termination of both contracts, the
language of the reinsurance contract on arbitration of any dispute between them which may arise before or after termination of the agreement is clear:
ARTICLE XII
"In the event of any dispute at any time arising out of or in any way connected with or relating to this Agreement , whether before or after the termination
of notice under the agreement, the same shall be referred to the decision of two arbitrators,
The retrocession agreement is also clear that all differences of whatever nature arising out of the agreement shall be submitted to a court of arbitration. No restriction
as to time was contemplated by the parties:
'All differences of whatever nature arising out of this Agreement shall be settled according to an equitable rather than a strictly legal interpretation of its
provisions. Such differences shall be submitted to a Court of Arbitration in London
26. Tuna Processing Inc. v. PHL Kingford, Inc., GR 185582, February 29, 2012, Perez, J., Second Division.
FACTS:
Kanemitsu Yamaoka (Licensor), co-patentee of a US Patent and Indonesian Patent, and 5 PHL tuna processors, including respondent Kingford (licensees), entered
into a MOA. They agreed therein that: 1) the parties shall establish (petitioner) Tuna Processing Inc. (TPI), a corporation established in the State of California, to
implement the MOA; 2) TPI shall be owned by the licensors and licensees (See text for other paragraphs of MOA). Due to events not mentioned in the petition, the
licensees, including Kingford, withdrew from petitioner TPI and reneged on their obligations. TPI submitted the dispute for arbitration in the International Centre for
Dispute Resolution in the State of California, US and won against Kingford. The tribunal awarded sums of money to TPI against Kingford.

To enforce the award, TPI filed a petition for confirmation, recognition, and enforcement of foreign arbitral award in RTC Makati. Kingford moved to dismiss. RTC
dismissed on the ground of lack of legal capacity of TPI to sue in PHL. Hence this Rule 45 petitoin.

ISSUE:
Whether TPI, foreign corporation not licensed to do business in PHL, can sue in PHL to enforce a foreign arbitral award.
HELD: YES.
The Corporation Code of PHL provides:
Sec. 133. Doing business without a license. — No foreign corporation transacting business in the Philippines without a license, or its successors or
assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines;
Pursuant to this, RTC dismissed the petition. TPI counters that it is entitled to seek recognition of the arbitral award under RA 9285, Convention on Recognition and
Enforcement of Foreign Arbitral Awards (New York Convention, 1958) and UNCITRAL Model Law on ICA, as none of these require the party seeking enforcement
to have legal capacity to sue. How do we reconcile Corpo Code with RA 9285, New York Convention, and Model Law?

1) General/special law- In Koruga v. Arcenas Jr, SC rejected the application of the Corporation Code and applied the New Central Bank Act (NCBA) since
Corporation Code is a general law applying to all types of corporations while NCBA regulates specifically banks and other financial institutions. Generalia
specialibus non derogant. In Hacienda Luisica Inc. v. Presidential Agrarian Reform Council, SC held: Corporation Code is the general law providing for the
formation and regulation of private corporatiosn while RA 6657 is the special law on agrarian reform.

1.1) ADR Act applies, special law- Following this, RA 9285, ADR Act of 2004, shall apply in this case as the Act, “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” 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.”

1.2) NY Convention, Model Law, form part of RA 9285- Since RA 9285, a municipal law, applies, we do not see the need to discuss compliance with international
obligations like New York Convention and Model Law. After all, both already form part of the law. Particularly, ADR Act incorporated the New York Convention by
specifically providing:
SEC. 42. Application of the New York Convention. — The New York Convention shall govern the recognition and enforcement of arbitral awards
covered by the said Convention.
xxx xxx xxx
SEC. 45. Rejection of a Foreign Arbitral Award. — A party to a foreign arbitration proceeding may oppose an application for recognition and
enforcement of the arbitral award in accordance with the procedural rules to be promulgated by the Supreme Court only on those grounds enumerated
under Article V of the New York Convention. Any other ground raised shall be disregarded by the regional trial court.

It expressly adopted the Model Law also:

Sec. 19. Adoption of the Model Law on International Commercial Arbitration. — International commercial arbitration shall be governed by the Model
Law on International Commercial Arbitration (the "Model Law") adopted by the United Nations Commission on International Trade Law on June 21,
1985

2) Incapacity to sue not one of the grounds to refuse recognition of award- A foreign corporation not licensed to do business in PHL has legal capacity to sue under
ADR Act of 2004. S45 of ADR Act of 2004 provides that the opposing party in an application for recognition/enforcement may only raise those grounds enumerated
under Art. V of the NY Convention:

Article V
1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the
competent authority where the recognition and enforcement is sought, proof that:
(a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid
under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or
(b) The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was
otherwise unable to present his case; or
(c) The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on
matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those
not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or
(d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement,
was not in accordance with the law of the country where the arbitration took place; or
(e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under
the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is
sought finds that:
(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be contrary to the public policy of that country.
Clearly, not one of these exclusive grounds touched on the capacity to sue of the party seeking recognition of the award.
2.1) Special ADR Rules supports this position- Special ADR Rules, Rule 13.1 provides that any 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.

2.2) Foreign corporation has capacity- It is in the best interest of justice that in the enforcement of a foreign arbitral award, we deny availment by the losing party of
the rule that bars foreign corporations not licensed to do business in PHL from maintaining a suit in our courts. On the matter of capacity to sue, a foreign arbitral
award should be respected not because it is favored over domestic laws and procedures, but because RA 9285 has erased any conflict of law question.

The Model Law prescribes substantially identical exclusive grounds for refusing recognition or enforcement (Art. 36).

c. Principle of Kompetenze-Kompetenz
27. Mabuhay Holdings Corporation v. Sembcorp Logistics, ltd., GR 212734, December 05, 2018, Tijam, J., First Division.
FACTS:
Petitioner Mabuhay and Infrastructure Development & Holdings Inc. (IDHI) are corporations organized under PH Laws. Respondent Sembcorp is a company
incorporated under Singapore Laws. Mabuhay and IDHI incorporated Water Jet Shipping Corporation(WJSC) to engage in the venture of carrying passengers on a
common carriage by inter-island fast ferry. They also incorporated Water Jet Netherlands Antilles (WJNA). Mabuhay, IDHI, and Sembcorp entered into a
Shareholders’ Agreement. Sembcorp decided to invest in said corporations and thus acquired shares in WJSC and WJNA.

Under the Agreement, Mabuhay and IDHI voluntarily agreed to jointly guarantee that Sembcorp would receive a minimum accounting return of US$929k
(Guaranteed Return) at the end of the 24th month after full disbursement of Sembcorp’s investment. The agreement has an arbitration clause:
19.1 This Agreement and the validity and performance thereof shall be governed by the laws of the Republic of the Philippines.
19.2 Any dispute, controversy or claim arising out of or relating to this Agreement, or a breach thereof, other than intra-corporate controversies, shall
be finally settled by arbitration in accordance with the rules of conciliation and arbitration of the International Chamber of Commerce by one arbitrator
with expertise in the matter at issue appointed in accordance with said rules.

Sembcorp fully paid its investment on Dec. 06, 1996. Audits of WJNA and WJSC were completed on January 8, 1999 which showed that WJSC and WJNA incurred
losses. Sembcorp requested payment of its Guaranteed Return from Mabuhay and IDHI. But Mabuhay failed to pay. Sembcorp filed a request for arbitration before
the International Court of Arbitration of the International Chamber of Commerce (ICC) seeking payment of $929k and damages etc. Dr. Chantara-Opakorn, appointed
by the ICC, issued a Final Award that: 1) The sole arbitrator Opakorn had jurisdiction over the dispute, 2) Half of the guaranteed return ($464k) must be paid by
Mabuhay, 3) Interest of 12% per annum on the $464k from the final award’s date.

Sembcorp filed a petition for recognition and enforcement of foreign arbitral award in RTC Makati. Mabuhay opposed (see HELD part for grounds relied upon). RTC
ruled that the final award could not be enforced. Sembcorp filed a notice of appeal under Rule 41. CA reversed. Hence this petition.

ISSUE:
Whether the Final Award must be recognized in PHL.
HELD: YES.
1) PH arbitration laws—ADR Act incorporating NY Convention and Model Law, its IRR, Special ADR Rules- PHL is a signatory to the 1958 NY Convention and
acceded thereto in 1967 Singapore became a contracting state in 1986. PHL also adopted UNCITRAL Model Law as governing law on ICA. RA 9285, ADR Act, S19
adoptes the Model Law to govern ICAs and S42 adopts the NY Convention to govern recognition and enforcement of arbitral awards, which shall be filed with RTCs
“in accordance with the rules of procedure to be promulgated by SC.” 5 years after ADR Act, DOJ issued its IRR and SC issued the Special ADR Rules. The IRR,
Special ADR Rules, the ADR Act incorporating the NY Convention and Model Law are our arbitration laws.
2) Agreed upon substantive/procedural law- As agreed upon by the parties under the arbitral clause in their agreement, the SUBSTANTIVE law of the contract is PH
law and the PROCEDURAL rules are the ICC Rules. During the filing of the request for arbitration, the ICC Rules in effect was the ICC Rules of Arbitration of
1998.

3) Special ADR Rules, not retroactive if vested rights may be impaired- Mabuhay claims that CA had no jurisdiction since Sembcorp filed a notice of appeal under
Rule 41, S2 and not a petition for review as required under Rule 19.12 of Special ADR Rules. But the notice of appeal was filed in 2008 and Special ADR Rules took
effect in 2009. ADR Act did not provide the proper remedy of appeal from RTC to CA. Special ADR Rules shall retroactively apply to all pending cases provided no
vested rights are impaired. Here, Sembcorp filed notice of appeal under S2, Rule 41, as this was the only applicable rule at that time. Sembcorp had a vested right to
due process in relying on this rule.

3.1) Exclusive grounds to refuse recognition of foreign award- The PHL adopts a policy in favor of arbitration. This policy is evidenced by the presumption in favor
of enforcement of a foreign arbitral award in Special ADR Rules:
Rule 13.11. Court action. —It is presumed that a foreign arbitral award was made and released in due course of arbitration and is subject to enforcement
by the court.
Xxx The court shall not disturb the arbitral tribunal's determination of facts and/or interpretation of law.
Under Art. V of NY Convention, the grounds to refuse recognition of a foreign arbitral award are:
Xxx
(c) The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, xxx.
(d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, xxx.
2. xxx.
(b) The recognition or enforcement of the award would be contrary to the public policy of that country.
These are essentially the same grounds under S36 of Model Law. The list is exclusive. S45 of ADR Act states:
SEC. 45. Rejection of a Foreign Arbitral Award. — A party to a foreign arbitration proceeding may oppose an application for recognition and
enforcement of the arbitral award in accordance with the procedural rules to be promulgated by the Supreme Court only on those grounds enumerated
under Article V of the New York Convention. Any other ground raised shall be disregarded by the regional trial court.
Mabuhay failed to establish any of these grounds.

4) Appointment of arbitrator was under ICC Rules- The first ground of Mabuhay is Art. V (d) of NY Convention on the composition of the arbitral authority. It claims
that the parties stipulated that the sole arbitrator should have “expertise in the matter at issue” and since they agreed that the agreement shall be governed by PH law,
such expertise means expertise in PHL Law. Dr. Opakorn, a Thai national, does not have any training in PHL law.

But the Agreement provides that the arbitrator with expertise on the matter shall be appointed in accordance with the ICC Rules. The ICC is thus the appointing
authority agreed upon by the parties. The “appointing authority” is the regular arbitration institution under whose rule the arbitration is agreed to be conducted. The
ICC Arbitration Rules of 1998 states:
5. The sole arbitrator or the chairman of the Arbitral Tribunal shall be of a nationality other than those of the parties. Xxx
In accordance with these rules, Dr. Chantara-Opakorn was appointed.

4.1) Procedure agreed upon includes appointment- Rule 2.3 of Special ADR Rules provides that the parties are free to agree on the procedure to be followed in the
conduct of arbitral proceedings. The procedure to be followed on the appointment of arbitrator are among such procedural rules.

4.2) Mabuhay able to challenge appointment- Under Rule 7.2 of the Special ADR Rules, a challenge to the appointment of an arbitrator may be raised in court only
when the appointing authority fails or refuses to act on the challenge within such period as may be allowed under the applicable rule or in the absence thereof, within
thirty (30) days from receipt of the request. This is clearly not the case for Mabuhay as it was able to challenge the appointment of Dr. Chantara- Opakorn in
accordance with Article 11 of the ICC Rules, but the ICC Court rejected the same.
5) Kompetenz-Kompetenz- The next ground is Art. V (1)(c). Mabuhay argues that the dispute is intra-corporate which is expressly excluded from the scope of disputes
arbitrable under the Agreement (a)ny dispute, controversy or claim arising out of or relating to this Agreement, or breach thereof, other than intra- corporate
controversies, shall be finally settled by arbitration.)

CA correctly applied the Kompetenz-Kompetenz principle under Rule 2.2, the implementation of which is expounded in Rule 2.4 of Special ADR Rules:
Rule 2.2. The Special ADR Rules recognize the principle of competence- competence, which means that the arbitral tribunal may initially rule on its
own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement or any condition precedent to the filing of
a request for arbitration.
Rule 2.4. Policy implementing competence-competence principle. — The arbitral tribunal shall be accorded the first opportunity or competence to rule
on the issue of whether or not it has the competence or jurisdiction to decide a dispute submitted to it for decision, including any objection with respect to
the existence or validity of the arbitration agreement. When a court is asked to rule upon issue/s affecting the competence or jurisdiction of an arbitral
tribunal in a dispute brought before it, either before or after the arbitral tribunal is constituted, the court must exercise judicial restraint and defer to the
competence or jurisdiction of the arbitral tribunal by allowing the arbitral tribunal the first opportunity to rule upon such issues.
5.1) Courts must respect tribunal’s finding of fact/interpretation of law- Among the settled issues in the Final Award of Dr. Opakorn is whether the dispute is an intra-
corporate controversy. Dr. Opakorn ruled that it is not as there was no transfer of shares from IDHI to the claimant. Special ADR Rules provides that in resolving the
petition for recognition of foreign arbitral award, the court shall not disturb the arbitral tribunal’s determination of facts/interpretation of law. RTC could not
rule on the issue of whether the dispute is intra-corporate.

6) Definition of Public Policy; narrow approach adopted- The next ground is Art. V(2)(b) of the NY Convention (public policy). Neither NY Convention or Model
Law defines “public policy”. Most arbitral jurisdictions adopt a narrow/restrictive approach in defining public policy pursuant to the pro-enforcement policy of NY
Convention. The public policy exception is thus a “safety valve in those exceptional circumstances when it would be impossible for a legal system to recognize an
award without abandoning the very fundaments on which it is based.”

In an old case (Gabriel v. Monte de Piedad), Justice Laurel elucidated on “public policy” for purposes of declaring a contract void:
“A court, in order to declare a contract void as against public policy, must find that the contract as to the consideration or thing to be done, has a tendency
to injure the public, is against the public good, or contravenes some established interests of society, or is inconsistent with sound policy and good morals,
or tends clearly to undermine the security of individual rights, whether of personal liability or of private property. “
In Ferrazzini v. Gsell, an older case, it was held:
By “public policy” xxx is intended that principle of the law which holds that no subject or citizen can lawfully do that which has a tendency to be
injurious to the public or against the public good, xxx.
Pursuant to state policy in favor of arbitration, SC adopts the narrow approach. The illegality/immoraility of the award must reach a threshold such that its
enforcement would be against our state’s fundamental tenets of justice and morality, or would be blatantly injurious to the public or interests of the society.

6.1) Not all violations of law is contrary to public policy under narrow approach- Mabuhay claims that it entered into a joint venture akin to a partnership with
Sembcorp. The payment of guaranteed return is a violation of Art. 1799 of NCC as it shields Sembcorp from sharing in the losses. Thus, the final award’s enforcement
is contrary to public policy as it upholds a void stipulation. But the restrictive approach implies that not all violations of law may be deemed contrary to public
policy. At any rate, the use of a joint venture corporation allows the co-venturers to take full advantage of the limited liability feature of the corporate vehicle which is
not present in a formal partnership arrangement. Art. 1799 is inapplicable.

6.2) 12% annual interest in award, not contrary to public policy- Mabuhay argues that the 12% annual interest is contrary to PH law. But mere incompatibility of a
foreign award with domestic mandatory rules on interest rates is not a breach of public policy. The 12% interest is not unreasonably high as to violate our fundamental
notions of justice.

d. Confidential Information
28. DFA v. BCA International Corporation, GR 225051, July 19, 2017, Peralta, J., Second Div, (See Case #1)

28.1 DFA v. BCA International Corporation, GR 210858, June 29, 2016, Carpio, J., Second Division. (See Case 1.1)
HELD:
4.1) The disclosure of information covered by the deliberative process privilege to a court arbitrator will defeat the policy bases and purpose of the privilege.

6) Disclosure of confidential information cannot be compelled under the agreement- The agreement between the parties provides:
Section 20.02 None of the parties shall, at any time, before or after the expiration or sooner termination of this Amended BOT Agreement,  without the
consent of the other party, divulge xxx any of the contents of this Amended BOT Agreement or any information relating to the negotiations
concerning the operations, contracts, commercial or financial arrangements or affair[s] of the other parties hereto.
Section 20.03 The restrictions imposed in Section 20.02 herein shall not apply to the disclosure of any information:
xxxx
C. To a court arbitrator or administrative tribunal the course of proceedings before it to which the disclosing party is party; xxx
S20.02 merely allows, with the consent of the other party, disclosure by a party to a tribunal of the contents of the amended BOT agreement or information relating to
the negotiations. There is no express waiver of information forming prt of DFA’s predecisional deliberative or decision-making process. S20.03 only allows a party, if
it chooses, without the consent of the other party, to disclose to the tribunal privileged information in such party’s possession. But a party cannot be compelled by the
other to disclose privileged information to the tribunal where such privileged information is in its possession and not in the possession of the party seeking disclosure.

6.1) Deliberative process privilege cannot be waived- There is a public policy involved in a claim of deliberative process privilege- the policy of open, frank
discussion between subordinate and chief concerning administrative action. Rights cannot be waived if it is contrary to law, public order, public policy, morals, or
good customs, or prejudicial to a third person with a right recognized by law. Thus, deliberative process privilege cannot be waived.

29. Federal Express Corporation v. Airfreight 2100, GR 216600, November 21, 2016, Mendoza, J., Second Division.
FACTS:
FedEx lost its International Freight Forwarder’s (IFF) license to engage in international freight forwarding in PHL. So, it executed various Global Service Program
(GSP) contracts with Air21. Under the GSP arrangement, the packages sent by FedEx customers from abroad would be picked up at a Philippine airport and delivered
by Air21 to its respective consignees. Conversely, packages from Philippine clients would be delivered by Air21 to the airport and turned over to FedEx for shipment
to consignees abroad. But in implementing the GSP contracts, issues relating to money remittance, VAT, fuel charge, trucking costs, interests, and penalties ensued
between the parties. FedEx and Air21 agreed to submit themselves to arbitration before the PH Dispute Resolution Center (PDRC).

Jennings, Holmes (of FedEx) and Ross (VP operations, FedEx) executed their statements as witnesses of FedEx, deposing that FedEx’s IFF license was suspended
pending a case in court filed by Merit International Inc. and Ace Logistics, Inc, both freight forwarding companies, questioning the issuance of the IFF to FedEx. They
averred that Ace and Merit were owned or controlled by Air21 employees or persons connected with the Lina Group of Companies, including Air 21.

Jennings, in his cross-examination, said that Merit and Ace were Air21’s proxies. In re-direct, he said that Merit and Ace were just very small companies with
meager resources, yet they were able to finance and file a case to oppose the grant of IFF to FedEx. Jennings also said that one of Ace’s directors was a friend of Lina.

Thus, Lina for himself and on behalf of Air21, filed a complaint for grave slander against Jennings in the Taguig City Prosecutor’s office. Later, FedEx and Jennings,
petitioners, filed their petition for issuance of a confidentiality/protective order with application for order of protection in RTC, alleging that all information and
documents related to the arbitration proceedings were confidential. Meanwhile, the tribunal rendered an award in favor of FedEx.
RTC denid FedEx’s petition, saying that the arbitration documents and statements were not confidential information since these are not related in any way to the
subject under arbitration. CA affirmed, saying that Jenning’s declarations were not confidential as they were not related to the subject of arbitration as the
proceedings revolved around the parties’ claims for sum of money. Hence this petition.

ISSUE:
Whether Jenning’s statements in the arbitration proceedings are confidential information such that they cannot be disclosed in the criminal case for grave slander.
HELD: YES.
1. Confidential information- S3(h) of RA 9285, ADR Act, defines confidential information:
"Confidential information" means any information, relative to the subject of mediation or arbitration , expressly intended by the source not to be
disclosed, or obtained under circumstances that would create a reasonable expectation on behalf of the source that the information shall not be disclosed.
It shall include (1) communication, oral or written, made in a dispute resolution proceedings, including any memoranda, notes or work product of the
neutral party or non-party participant, as defined in this Act; (2) an oral or written statement made or which occurs during mediation or for purposes of
considering, conducting, participating, initiating, continuing of reconvening mediation or retaining a mediator; and (3) pleadings, motions manifestations,
witness statements, reports filed or submitted in an arbitration or for expert evaluation.
This list is not exclusive as long as they satisfy the requirements of express/implied confidentiality.

2) Ross, Holmes, Jennings testimony/written statements are confidential- Rule 10.1 of Special ADR Rules allows “a party, counsel, or witness who disclosed or was
compelled to disclose information relative to the subject of ADR under circumstances that would create a reasonable expectation xxx that the information shall be kept
confidential xxx the right to prevent such information from being further disclosed without the express written consent of the source or the party who made the
disclosure.” Thus, the rules on confidentiality and protective orders apply when:
1. An ADR proceeding is pending;
2. A party, counsel or witness disclosed information or was otherwise compelled to disclose information;
3. The disclosure was made under circumstances that would create a reasonable expectation, on behalf of the source, that the information shall be kept
confidential;
4. The source of the information or the party who made the disclosure has the right to prevent such information from being disclosed;
5. The source of the information or the party who made the disclosure has not given his express consent to any disclosure; and
6. The applicant would be materially prejudiced by an unauthorized disclosure of the information obtained, or to be obtained, during the ADR
proceeding.
The written statements of witnesses Ross, Holmes, and Jennings, and the latter’s oral testimony in the April 25, 2013 arbitration hearing, both fall under S3(b) [1] and
[3]. Both parties and the tribunal also agreed to the Terms of Reference (TOR) that the arbitration proceedings “should be kept strictly confidential as provided in S23
of ADR Act and Art. 25-A of PDRCI Arbitration rules (Rules) xxx.” ADR Act and the Rules repeatedly use “shall” which is one of mandatory character.

2.1) General rule—confidential- Thus, the general rule is that information disclosed by a party or witness in an ADR proceeding is considered privileged and
confidential.

Rule 10.8 of Special ADR Rules also provides:

Rule 10.8. Court action. — If the court finds the petition or motion meritorious, it shall issue an order enjoining a person or persons from divulging
confidential information.
In resolving the petition or motion, the courts shall be guided by the following principles applicable to all ADR proceedings: Confidential information
shall not be subject to discovery and shall be inadmissible in any adversarial proceeding, whether judicial or quasi judicial. Xxx.
Art. 5.42 of IRR of the ADR Act (also S23 of ADR Act) also echoes that arbitration proceedings, records, evidence and the arbitral award and other confidential
information are privileged and confidential and shall not be published except 1) with the consent of the parties; or 2) for the limited purpose of disclosing to the
court relevant documents where resort to the court is allowed. The presence of these criteria must be apparent. Otherwise, the general rule should be applied. Here,
only a perceived imputation of wrongdoing was alleged by respondents.

3) Relevance of statements best left to arbitrator’s judgment; statements were connected to issue- RTC and CA did not consider the declarations in the witness
statements and testimony to be related to the subject of arbitration and denied the confidentiality order application. SC does not agree.

The phrase” relative to the subject of mediation or arbitration” need not be strictly confined to the discussion of the core issues in the arbitral dispute . “Relative”
simply means “connected to,” which means the parties in arbitration are encouraged to discuss openly their grievances. An ADR proceeding was not designed to be
strictly technical or legally confined at all times.

Here, when Jennings was asked by arbitrator Panga to expound on how the opposition of Ace and Merit could be related to the ongoing arbitration, Jennings replied
that, to his mind, it was indicative of the leverage that Air21 had over FedEx as Air21 was able to withhold large sums of money. The relevance or materiality of
said statements should be best left to the arbitrator’s sound judgment. But even if the statements were not fundamental to the issues, nonetheless they were still
connected to and propounded by a witness who relied on the confidentiality of the proceedings.

4) Intent behind arbitration- Arbitration, being an ADR proceeding, is primarily designed to be a prompt, economical and amicable forum for the resolution of
disputes. It guarantees confidentiality in its processes to encourage parties to ventilate their claims or disputes in a less formal, but spontaneous manner. The very soul
of an arbitration proceeding would be rendered useless if it would be simply used as an avenue for evidence gathering or an entrapment mechanism to lure the other
unsuspecting party into conveying information that could be potentially used against him in another forum or in court. the RTC and the CA failed to consider the fact
that an arbitration proceeding is essentially a unique proceeding that is non-litigious in character where the parties are bound by a different set of rules as clearly
encapsulated under the Special ADR Rules.

e. Principle of Separability
30. Dale Strickland v. Ernst & Young LLP, GR 193782, August 1, 2018, Jardeleza, J., First Division.
FACTS:
National Home Mortgage Finance Corporation (NHMFC) and Punongbayan & Araullo (PA) entered into a Financial Advisory Services Agreement (FASA) for
liquidation of NHMFC’s Unified Home Lending Program (UHLP). PA was then member of respondent global company EYLLP. PA confirmed to NHMFC its
engagement as exclusive financial advisor for the UHLP Project.

Strickland was a partner of EYLLP seconded to respondent Ernst & Young Asia Pacific Financial Solutions (EYAPFS) who was listed in the FASA as member of the
engagement team.Strickland played a role in negotiating FASA between PA and NHMFC. On June 6, 2002, EYLLP wrote PA of the termination of its membership in
EYLLP, but the working relationship among the parties continued. EYLLP assigned Strickland to Manila as partner.

In July 2004, notice was given to NHMFC of PA’s intention to remove Strickland from NHMFC engagement team due to Strickland’s resignation from
EYLLP/EYAPFS. But since NHMFC was intent on retaining Strickland’s services despite his separation from EYLLP and EYAPFS, the parties negotiated to define
Strickland’s possible continued participation in UHLP.

PA had met with NHMFC president where PA accepted NHMFC’s proposal that NHMFC will hire Strickland for a nominal compensation so that Strickland can
continue to participate in the project. PA drew up a draft agreement and submitted it to both NHMFC and Strickland for their review. Conflict arose on Strickland’s
actual participation in the project among PA, NHMFC, and Strickland as reflected in the proposed revisions to the “Draft Financial Advisory Services” initially
prepared by PA. PA objected to Strictland’s proposed amendments on the terms of compensation which now contemplated PA’s engaged of Strickland as
subcontractor for the closing of the UHLP Project.
Strickland filed a complaint against EYAPFS, PA, and NHMFC, praying for P18M as equitable compensation for services rendered. EYLLP and EYAPFS moved to
refer to arbitration. RTC held that the dispute is domestic and not international nor commercial, so referral to US pursuant to the inoperative arbitration clause is
uncalled for. CA reversed, referring the dispute between Strickland and EYLLP to arbitration, and ordering EYLLP be dropped as defendant.

Thus, PA moved to suspend proceedings in RTC. But RTC denied, saying that CA referred the dispute between Strickland and EYLLP only to arbitration since PA is
not a party thereto. CA reversed, ordering RTC to suspend its proceedings. Hence these consolidated petitions by Strickland.

ISSUE:
Whether the partnership agreement’s presentation as an actionable document complied with R8, S7.
HELD: YES.
Strickland claims that CA’s referral to arbitration of the dispute is wrong since EYLLP failed to properly allege the partnership agreement as actionable document
under R8, S7. But EYLLP, while initially quoting only the provision of the partnership agreement on dispute resolution, eventually submitted a copy thereof,
complying with R8, S7 ultimately:
Sec. 7. Action or defense based on document. — Whenever an action or defense is based upon a written instrument or document, the substance of such
instrument or document shall be set forth in the pleading, and the original or a copy thereof shall be attached to the pleading as an exhibit, which shall be
deemed to be a part of the pleading, or said copy may with like effect be set forth in the pleading.

1) Separability doctrine- Thus, EYLLP ultimately complied with R8, S7 given that Strickland himself does not even deny the partnership agreement nor the
arbitration clause. In Cargill PHL Inc. v. San Fernando Regala Trading, Inc., we discussed the nature of an arbitration clause as a contract in itself and the continued
referral to arbitration despite a party’s repudiation of the main contract:

“The validity of the contract containing the agreement to submit to arbitration does not affect the applicability of the arbitration clause itself. A contrary ruling would
suggest that a party's mere repudiation of the main contract is sufficient to avoid arbitration. That is exactly the situation that the separability doctrine seeks to avoid.
The doctrine of separability enunciates that an arbitration agreement is independent of the main, contract. The arbitration agreement is to be treated as a separate
agreement and the arbitration agreement does not automatically terminate when the contract of which it is a part comes to an end.

1.1) R8, S7 complied with; arbitration clause not specifically denied- Here, we consider the Partnership Agreement which provides for alternative dispute resolution.
Since the arbitration clause is in itself a contract, the setting forth of its provisions in EYLLP’s answer and motion to refer to arbitration, and the actual submission
by EYLLP of the partnership agreement, complies with S7, R8 which Strickland should have specifically deined.

2) Commercial relationships covered by our arbitration laws are purely private and contractual in nature. Commercial arbitration is a purely private system of
adjudication facilitated by private citizens which we have consistently recognized as valid. Thus, we agree with CA’s ruling and its application of our commercial
arbitration laws:

2.1) Dispute is international- “To determine the applicable law, the nature of arbitration sought to be undertaken must be looked at. ADR Act defines domestic
arbitration negatively by saying that it is one that is not international as defined in the Model Law. Art. 1(3) of Model Law provides that an arbitration is international
if:
(b) one of the following places is situated outside the State in which the parties have their places of business: (i) the place of arbitration if determined in,
or pursuant to, the arbitration agreement; (ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the
place with which the subject-matter of the dispute is most closely connected.
The arbitration in this case is international for falling under Art. 1(3)(b)(ii) of Model Law. The place of business of EYLLP is in USA. It is in PHL that the services
for which Strickland seeks remuneration were rendered.

2.2) Dispute is commercial- For Model Law to apply, the arbitration should also be commercial. The explanatory footnote to Art.1(1) of Model Law explains that
“commercial” should be given a wide interpretation as to cover matters arising from all relationships of a commercial nature, contractual or not. Relationships of a
commercial nature, it states, includes:
"any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing;
construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture
and other forms of industrial or business co-operation; carriage of goods or passengers by air, sea, rail or road.
Thus, “Commercial” is broad enough to cover a partnership.” (Strickland’s insistence on PH courts to primarily adjudicate his claims of tortious conduct, and not
commercial arbitration *is thus wrong.)

CA thus correctly referred the dispute to arbitration.

3) PA is agent of EYLLP- PA is an agent of EYLLP when it executed, as PH member of EYLLP, the FASA with NHMFC for UHLP project. In two documents, PA
represented EYLLP/EYAPFS in the FASA:
In the April 15, 2002 letter of PA to Strickland: “PA acted as the contracting party on behalf of EYAPFS xxx.” This fact of agency relationship between PA and
EYLLP cannot be avoided by Strickland given Arts. 1868 and 1873 of NCC (Art. 1873- if a person specifically informs another xxx that he has given a power of
attorney to a third person xxx.). Thus, PA cannot sue or be sued on the contract of employment between Strickland and EYAPFS.

4) PA bound by arbitration agreement in Partnership Agreement- That PA is not signatory to the Partnership Agreement containing the arbitration clause is of no
moment. It is applicable to PA and effectively stays the proceedings against it. In BF Corporation v. CA, we held: “A contract need not be contained in a single
writing. It may be collected from several different writings xxx.”

31. Cargill PHL, Inc. v. San Fernando Regala Trading, Inc., GR 175404, January 31, 2011, Peralta, J., Second Division. (See case #17)

f. Court Assistance in Arbitration

32. Aboitiz Transport System Corporation v. Gothong, GR 198226, July 18, 2014, Perlas-Bernabe, J., Second Division.
FACTS:
Aboitiz Shipping Corporation (ASC), Carlos A. Gothong Lines, Inc. (CAGLI), and William Lines, Inc. (WLI), principally owned by the Aboitiz, Gothong, and
Chiongbian families, entered into an Agreement, signed by Aboitiz for ASC, Gothong for CAGLI, and respondent Chiongbian for WLI. ASC and CAGLI agreed to
transfer their shipping assets to WLI in exchange for WLI shares. WLI would run the merged shipping business and be renamed “WG&A, Inc.” S11.06 of the
Agreement provides that disputes under the agreement shall be settled by arbitration under RA 876.

An attachment to the Agreement was a letter written by Chiongbian to Gothong, saying that WLI committed to acquire from CAGLI’s inventory certain spare parts
and materials not exceeding P400M. A valuation of CAGLI’s inventory was done and showed it to be P514M. thereafter, WLI received inventory valued at P558M,
but it only paid CAGLI P400M as agreed upon. In 2002, Chiongbian and Gothong families sold their interests in WLI/WG&A to the Aboitiz family. Aboitiz Equity
Ventures (AEV) agreed to purchase WLI/WG&A shares of the 2 families. WLI/WG&A’s corporate name was changed to Aboitiz Transport System Corporation
(ATSC, petitioner).

In 2008, CAGLI sent a letter demanding ATSC to pay the excess inventory it delivered to WLI amounting to P158M. CAGLI also demanded AEV and Chiongbian to
refer the dispute to arbitration. AEV countered that the excess inventory was already returned. Thus, CAGLI filed a complaint in RTC against Chiongbian, ATSC,
ASC, to compel them to submit to arbitration.

RTC issued an order, directing CAGLI, Chiongbian, ATSC, and ASC to submit to arbitration. CAGLI filed a notice of dismissal, averring that it decided to withdraw
its complaint due to the fact that the opposing parties had not filed their responsive pleadings. RTC granted and ordered the case dismissed. ATSC and ASC’s MR was
denied. ATSC had also moved to exclude Chiongbian from the arbitration proceedings, but RTC denied, saying that the motion is moot due to confirmation of the
notice of dismissal. Hence this petition.

ISSUE:
1) Whether the grant of the notice of dismissal was proper.
2) Whether Chiongbian msut be included in the arbitration proceedings.
HELD:
1) NO. S6, RA 876, enforcement of arbitration agreement, court does not rule on merits- The nature of the complaint filed by CAGLI in RTC is for the enforcement of
an arbitration agreement governed by S6, RA 876:
If the finding be that no agreement in writing providing for arbitration was made, or that there is no default in the proceeding thereunder, the proceeding
shall be dismissed. If the finding be that a written provision for arbitration was made and there is a default in proceeding thereunder, an order shall be
made summarily directing the parties to proceed with the arbitration in accordance with the terms thereof.
In Gonzales v. Climax Mining, Ltd, the special proceeding in S6 was held to be the procedural mechanism for the enforcement of the contract to arbitrate. RA 876
explicitly confines the court’s authority only to pass upon the issue of whether there is or there is no agreement in writing providing for arbitration . If there is, the
court shall order the parties to proceed with arbitration. Otherwise, the proceeding shall be dismissed. The duty of the courts is not to resolve the merits of the
parties’ claims but only to determine if they should proceed to arbitration or not.

1.1) RTC erred in granting notice of dismissal- Here, the primary relief sought by CAGLI’s complaint, to compel the parties to submit to arbitration, has already been
granted by RTC in its Feb. 26, 2010 order. Such partakes of a judgment on the merits of the complaint for enforcement of the arbitration agreement. Upon the
rendition of a judgment or final order, the period "before service of the answer or of a motion for summary judgment," mentioned in S1 R17 of RoC when a notice of
dismissal may be filed by the plaintiff, no longer applies. The notice of dismissal should no longer be entertained.

2) NO. Chiongbian not a party to the agreement- Only those parties who have agreed to submit a controversy to arbitration may be compelled to submit to arbitration.
Here, S11.06 of the Agreement embodies the arbitration agreement. The 3 parties thereto and necessarily to the arbitration agreement are: ASC, CAGLI, and
WLI/WG&A/ATSC. Contracts like the arbitration agreement take effect only between the parties, their assigns and heirs. Respondent Chiongbian, having merely
physically signed the agreement as representative of WLI, is not a party thereto nor is he an assignee or heir of any party. Thus, he cannot be included in the
arbitration proceedings.

33. Home Bankers Savings and Trust Company v. CA, GR 115412, November 19, 1999, Buena, J., Second Division (See case #3)

34. DFA v. BCA International Corporation, GR 225051, July 19, 2017, Peralta, J., Second Div, (See case #1)

34.1 DFA v. BCA International Corporation, GR 210858, June 29, 2016, Carpio, J., Second Division. (See case #1.1)

35. Transfield PHL, Inc. v. Luzon Hydro Corporation, GR 146717, May 19, 2006, Tinga, J., Special Second Division.
FACTS:
Luzon Hydro Corporation (LHC) claims that Transfield PHL, Inc. (TPI) is guilty of forum shopping when it filed these suits:
1) Civil Case 332 in RTC for confirmation, recognition, and enforcement of third partial award in ICC Case 11264, TPI v. LHC;
2) ICC Case 11264 filed in the International Court of Arbitration, International Chamber of Commerce (ICC), a request for arbitration pursuant to the
Turnkey Contract between TPI and LHC;
3) GR 146717, TPI v. LHC, an appeal by certiorari from CA-GR 61901, which is a petition for review of Civil Case 1312 wherein TPI claimed that
LHC’s call on the securities was premature. Case 1312 is also a complaint for injunction with prayer for TRO or WPI.
ISSUE:
Whether the petition for WPI with RTC while the international arbitration was pending was proper.
HELD: YES.
1) Forum Shopping not present- For forum shopping to exist, there must be: 1) identity of parties, or at least such parties as represent the same interests in both
actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two preceding particulars is such that
any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration.

There is no identity of causes of action between the arbitration case, this petition, and Civil Case 04-332. ICC Case 11264 was filed to determine the primary issue of
whether the delays in the construction project were excused delays which would render TPI’s claims for extension of time to finish the project valid. Civil Case 1312
is to enjoin LHC from calling on the securities and respondent banks, New Zealand Banking Group and Security Bank, from transferring or paying the securities in
case LHC calls them.

Neither is there identity of parties. The ICC case involves TPI and LHC only as parties to the Turnkey Contract. This petition includes Security bank and ANZ Bank
sought to be enjoined from releasing the funds of the letter of credit. It would be ineffectual to ask ICC to issue writs of preliminary injunction against ANZ Bank
and Security Bank as these are not parties to the arbitration case, and the ICC tribunal would not be able to compel LHC to obey.

2) Provisional reliefs from courts, available during arbitration- The pendency of arbitral proceedings does not foreclose resort to the courts for provisional reliefs.
The ICC Rules, which governs the parties’ arbitral dispute, allows a party to apply to a judicial authority for interim or conservatory measures. S14, RA 876
recognizes the right of any party to petition the court to take measures to safeguard or conserve any matter subject of the dispute in arbitration. RA 9285
allows the filing of provisional or interim measures with the regular courts whenever the arbitral tribunal has no power to act or to act effectively.

3) Petition to enforce partial award premature; no order to pay therein- New York Convention’s applicability is confirmed in S42 of RA 9285. This provides that the
application for recognition and enforcement of foreign arbitral awards shall be filed in RTC. But while TPI’s resort to RTC for recognition and enforcement of Third
Partial Award is sanctioned by NY Convention and RA 9285, the application for enforcement was premature since the Third Partial Award had no order for payment
or return of the proceeds of the securities.

The Final Award issued by ICC awarded US$24M, including TPI’s claim of $17M for return of the securities from LHC. That the proceeds of securities was included
shows that ICC intended to make a final determination only in the Final Award, not in previous partial awards.