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ARBIT (CIAC Case Digest)

LM POWER vs. CAPITOL INDUSTRIAL conflict as regards to interpretation and implementation of this agreement
which cannot be settled between respondent and petitioner amicably shall be
Facts: settled by means of arbitration. The resolution of the dispute between the
parties herein requires a referral to the provisions of their agreement. Within
This is a Petition for Review on Certiorari filed by the petitioner LM Power
the scope of the arbitration clause are discrepancies as to the amount of
against Respondent Capitol Industrial seeking to set aside the decision of CA.
advances and billable accomplishments, the application of the provision on
Petitioner LM Power Engineering Corporation and Respondent Capitol termination, and the consequent set-off of expenses.
Industrial Construction Groups Inc. entered into a Subcontract Agreement
With respect to the disputes on the take-over/termination and the expenses
involving electrical work at the Third Port of Zamboanga. Due to the inability of
incurred by respondent in the take-over, the SC ruled that the agreement
the petitioner to procure materials, Capitol Industial took over some of the work
provides specific provisions that any delay, expenses and any other acts in
contracted to the former. After the completion of the contract, petitioner billed
violation to such agreement, the respondent can terminate and can set off the
respondent in the amount of P6, 711,813.90 but the respondent refused to pay.
amount it incurred in the completion of the contract.
Petitioner filed with the RTC of Makati a Complaint for the collection of the
amount representing the alleged balance due it under the subcontract.
Respondent filed a Motion to Dismiss, alleging that the Complaint was SC tackled also that theres no need for the prior request for arbitration by the
premature, due to the absence of prior recourse to arbitration. parties with the Construction Industry Arbitration Commission (CIAC) in order
for it to acquire jurisdiction. Because pursuant to Section 1 of Article III of the
RTC denied the Motion on the ground that the dispute did not involve the
new Rules of Procedure Governing Construction Arbitration, when a
interpretation or the implementation of the Agreement and was not covered by
contract contains a clause for the submission of a future controversy to
the arbitral clause and ruled in favor of the petitioner.
arbitration, it is not necessary for the parties to enter into a submission
Respondent appealed to the CA, the latterreversed the decision of the RTC and agreement before the claimant may invoke the jurisdiction of CIAC.
ordered the referral of the case to arbitration. Furthermore, the arbitral clause in the agreement is a commitment on the part
of the parties to submit to arbitration the disputes covered therein. Because that
Hence, this Petition. clause is binding, they are expected to abide by it in good faith.

ISSUE: Since a complaint with the RTC has been filed without prior recourse to
arbitration, under RA 876 (Arbitration Law) the proper procedure is to request
WON there is a need for the prior arbitration before filing of the complaint with the stay or suspension of such action in order to settle the dispute with the
the court. CIAC.



SC ruled that in the case at hand it involves technical discrepancies that are
better left to an arbitral body that has expertise in the subject matter. Moreover,
the agreement between the parties contains arbitral clause that any dispute or
ARBIT (CIAC Case Digest)
under Executive Order No. 1008 (1985), the CIAC had in fact acquired original
and exclusive jurisdiction over these issues.
Heunghwa Industry Co., Ltd. v. DJ Builders Corporation, G.R. No. In section 4.2 of the CIAC Rules, the failure despite due notice which amounts to
169095, December 8, 2008 a refusal of the Respondent to arbitrate, shall not stay the proceedings
Facts: notwithstanding the absence or lack of participation of the Respondent. In such
Heunghwa Industry Co., Ltd. (petitioner) is was able to secure a contract with case, CIAC shall appoint the arbitrator/s in accordance with these Rules.
the Department of Public Works and Highways (DPWH) to construct the Roxas- Arbitration proceedings shall continue, and the award shall be made after
Langogan Road in Palawan. receiving the evidence of the Claimant. Therefore, the proceedings cannot then
Petitioner entered into a subcontract agreement with respondent DJ Builders be voided merely because of the non-participation of petitioner. Section 4.2 of
Corporation to do earthwork, sub base course and box culvert of said project. the CIAC Rules is clear and it leaves no room for interpretation. Therefore,
The agreement contained an arbitration clause. The agreed price was not fully petitioner's prayer that the case be remanded to CIAC in order that it may be
paid, hence, respondent filed before the Regional Trial Court (RTC) for "Breach given an opportunity to present evidence is untenable. Petitioner had its chance
of Contract, Collection of Sum of Money with Application for Preliminary and lost it, more importantly so, by its own choice. This Court will not afford a
Injunction, Preliminary Attachment, and Prayer for Temporary Restraining relief that is apparently inconsistent with the law.
Order and Damages".
Petitioner averred that it was not obliged to pay respondent because the latter
caused the stoppage of work. Petitioner further claimed that it failed to collect
from the DPWH due to respondent's poor equipment performance. Parties
submit specific issues, such as manpower and equipment standby time,
unrecouped mobilization expenses, retention, discrepancy of billings, and price
escalation for fuel and oil usage. The said motion was granted by the RTC.
Petitioner, filed with the RTC a motion to withdraw the Order which referred
the case to the CIAC, claiming it never authorized the referral. Respondent
opposed the motion contending that petitioner was already estopped from
asking for the recall of the Order.
Issue: whether or not the CIAC or the RTC has the jurisdiction over the case.

CIAC has jurisdiction over the case. The CIAC original and exclusive jurisdiction
over the construction dispute was the agreement of the parties and not the
Court's referral order. The CIAC aptly ruled that the recall of the referral order
by the RTC did not deprive the CIAC of the jurisdiction it had already acquired.
The position of CIAC is anchored on Executive Order No. 1008 (1985) which
created CIAC and vested in it "original and exclusive jurisdiction" over
construction disputes in construction projects in the Philippines provided the
parties agreed to submit such disputes to arbitration. The basis of the Court
referral is precisely the agreement of the parties in court, and that, by this
agreement as well as by the court referral of the specified issues to arbitration,
ARBIT (CIAC Case Digest)
LICOMCEN INC vs Foundation Specialist The CIAC ruled in favor of FSI, which decision was upheld with some
modification by the Court of Appeals. Both parties moved for reconsideration,
In a Decision promulgated last April 4, 2011, the Philippine Supreme Court which was denied. On appeal, the Supreme Court upheld the Court of
favored a liberal reading of an agreement to submit a dispute to arbitration Appeals decision with modification and affirmed that the CIAC properly
before the Construction Industry Arbitration Commission (CIAC), ruling that acquired jurisdiction over the parties dispute.
an arbitration clause in a construction contract should be interpreted in its
widest signification to enable the CIAC to acquire jurisdiction over a Expansive interpretation of arbitration clause
construction claim.
The Supreme Court ruled that the CIACs jurisdiction cannot be limited by the
The ruling was rendered in the consolidated case of Licomcen, Inc. vs. parties stipulation that only disputes in connection with or arising out of the
Foundation Specialists, Inc., G.R. Nos. 167022 and 169678. The dispute execution of the Works arearbitrable before the said agency. According to
arose between mall developer Licomcen, Inc. and contractor Foundation the Supreme Court, the mere fact that the parties incorporated an arbitration
Specialists, Inc. (FSI) over the suspension of certain works and the payment clause in their contract ipso facto vested the CIAC with jurisdiction over any
of billings and other amounts. Licomcen and FSI had a Construction construction controversy or claim between the parties.
Agreement, with General Conditions of Contract (GCC), whereby FSI
undertook to construct and install bored piles foundation for the LCC Citimall The Supreme Court also added that the parties did not intend to limit resort
project in Legazpi City. to arbitration only to disputes relating to physical construction activities,
holding that an arbitration clause pursuant to E.O 1008 [Construction
Immediately after signing the agreement, FSI began work on the project but Industry Arbitration Law] should be interpreted at its widest signification. The
in January 1998, Licomcen ordered it to halt construction due to an Tribunal liberally applied the parties arbitration clause so that FSIs money
administrative case filed against officials of the City Government of Legazpi claims were considered connected with or arising out of construction
and Licomcen before the Ombudsman. The suspension was formalized activities, thereby making such claims arbitrable.
through a letter of Licomcens engineering consultant, E.S. de Castro &
Associates (ESCA), to FSI on January 19, 1998. In its reply letters, FSI CIAC jurisdiction not subject to condition precedent
claimed payment for work and materials. ESCA rejected FSIs claims in a
On the principle that the CIACs jurisdiction can neither be enlarged nor
letter dated March 24, 1998.
diminished by the parties, the Supreme Court also held that such jurisdiction
Three years later, FSI sent a final demand letter to Licomcen for payment of cannot be subject to a condition precedent. Hence, even if FSI failed to
its claims. As this letter was ignored, FSI filed a request for arbitration with timely contest Licomcens denial of its money claims by filing a proper notice
the CIAC in October 2002, claiming upaid billings, costs, unrealized profit, of arbitration within 30 days from the denial, the Supreme Court ruled that the
attorneys fees and interest. Licomcen contested the request, arguing, CIAC acquired jurisdiction of the parties dispute due to the mere presence of
among others, that (a) the claims were non-arbitrable because the arbitration an arbitration clause in their construction contract.
clause provides for the arbitration of disputes in connection with, or arising
out of the execution of the Works, but FSIs money claims do not involve a
dispute as to the execution of the Works since they do not involve an issue
as to physical construction activities; and (b) FSI failed to comply with the
condition precedent that a dispute must first be referred to Licomcen for
resolution, and such resolution may only be assailed within 30 days from
receipt thereof through a notice to contest through arbitration.
ARBIT (CIAC Case Digest)
ARBIT (CIAC Case Digest)
Fort Bonifaciovs Domingo
Facts: Petitioner, a domestic corporation duly organized under Philippine
laws, is engaged in the real estate development business. Respondent is the Ruling: RTC has jurisdiction over civil case no. 06-0200-cfm. According to
assignee of L and M Maxco Specialist Engineering Construction (LMM the Court, it is an elementary rule of procedural law that jurisdiction of the
Construction) of its receivables from petitioner. court over the subject matter is determined by the allegations of the
Petitioner entered into a Trade Contract with LMM Construction for partial complaint, irrespective of whether or not the plaintiff is entitled to recover
structural and architectural works on one of its projects, the Bonifacio Ridge upon all or some of the claims asserted therein. As a necessary
Condominium. According to the said Contract, petitioner had the right to consequence, the jurisdiction of the court cannot be made to depend upon
withhold the retention money equivalent to 5% of the contract price for a the defenses set up in the answer or upon the motion to dismiss; for
period of one year after the completion of the project. otherwise, the question of jurisdiction would almost entirely depend upon the
Due to the defect and delay in the work of LMM Construction on the defendant. What determines the jurisdiction of the court is the nature of the
condominium project, petitioner unilaterally terminated the Trade action pleaded as appearing from the allegations in the complaint. The
Contract and hired another contractor to finish the rest of the work left averments therein and the character of the relief sought are the ones to be
undone by LMM Construction. Despite the pre-termination of the Trade consulted.
Contract, petitioner was liable to pay LMM Construction a fraction of the
contract price in proportion to the works already performed by the latter. A scrupulous examination of the aforementioned allegations in respondents
On 30 April 2005, petitioner received a letter dated 18 April 2005 from Complaint unveils the fact that his cause of action springs not from a violation
respondent inquiring on the retention money supposedly due to LMM of the provisions of the Trade Contract, but from the non-payment of the
Construction and informing petitioner that a portion of the amount receivable monetary obligation of LMM Construction to him. What respondent puts in
by LMM Construction therefrom was already assigned to him as evidenced issue before the RTC is the purportedly arbitrary exercise of discretion by the
by the Deed of Assignment executed by LMM Construction in respondents petitioner in giving preference to the claims of the other creditors of LMM
favor on 28 February 2005. LMM Construction assigned its receivables from Construction over the receivables of the latter.
petitioner to respondent to settle the alleged unpaid obligation of LMM
Construction to respondent amounting to P804,068.21. Petitioner Respondents claim is not even construction-related at all. Petitioners
acknowledged that LMM Construction did have receivables still with insistence on the application of the arbitration clause of the Trade Contract to
petitioner, however it still failed to pay the said amount to respondent. respondent is clearly anchored on an erroneous premise that respondent is
seeking to enforce a right under the same. Again, the right to the receivables
This prompted respondent to file a Complaint for collection of sum of money, of LMM Construction from petitioner under the Trade Contract is not being
against both LMM Construction and petitioner, docketed as Civil Case No. impugned herein. In fact, petitioner readily conceded that LMM Construction
06-0200-CFM before the RTC of Pasay City, Branch 109. still had receivables due from petitioner, and respondent did not even have to
refer to a single provision in the Trade Contract to assert his claim. What
Instead of filing an Answer, petitioner filed a Motion to Dismiss Civil Case No. respondent is demanding is that a portion of such receivables amounting
06-0200-CFM on the ground of lack of jurisdiction over the subject to P804,068.21 should have been paid to him first before the other creditors
matter. Petitioner argued that since respondent merely stepped into the of LMM Construction, which, clearly, does not require the CIACs expertise
shoes of LMM Construction as its assignor, it was the CIAC and not the and technical knowledge of construction.
regular courts that had jurisdiction over the dispute as provided in the Trade
Contract. RTC denied the Motion to Dismiss, CA affirmed said order.
ARBIT (CIAC Case Digest)
documents and it argued that the claims alleged in petitioner's complaint are
not disputes arising from interpretation of contract documents, hence, the
William Golangco Construction Corporation v. Ray Burton CIAC cannot assume jurisdiction over the case, is tenuous.
Development Corporation, G.R. No. 163582, August 9, 2010 The contract between herein parties contained an arbitration clause which
Facts: mean that parties agreed to submit disputes arising by reason of differences
Ray Burton Development Corporation (RBDC) and William Golangco in interpretation of the contract to a Board of Arbitrators the composition of
Construction Corporation (WGCC) entered into a Contract for the which is mutually agreed upon by the parties, and, as a last resort, any other
construction of the Elizabeth Place (Office/Residential Condominium). dispute which had not been resolved by the Board of Arbitrators shall be
WGCC filed a complaint with a request for arbitration with the Construction submitted to the Construction Arbitration Authority created by the
Industry Arbitration Commission (CIAC). In its complaint, private respondent government, which is no other than the CIAC. Moreover, other matters not
prayed that CIAC render judgment ordering petitioner to pay private dealt with by provisions of the contract or by special agreements shall be
respondent the amount of, to wit: governed by provisions of the Construction Industry Arbitration Law, or
1. P24,703,132.44 for the unpaid balance on the contract price; Executive Order No. 1008.
2. P10,602,670.25 for the unpaid balance on the labor cost adjustment; Petitioner's claims that it is entitled to payment for several items under their
3. P9,264,503.70 for the unpaid balance of additive works; contract, which claims are, in turn, refuted by respondent, involves a "dispute
4. P2,865,615.10 for extended overhead expenses; arising from differences in interpretation of the contract.
5. P1,395,364.01 for materials cost adjustment and trade contractors' utilities Under Section 1, Article III of the CIAC Rules, an arbitration clause in a
expenses; construction contract shall be deemed as an agreement to submit an existing
6. P4,835,933.95 for interest charges on unpaid overdue billings on labor or future controversy to CIAC jurisdiction, "notwithstanding the reference to a
cost adjustment and change orders. different arbitration institution or arbitral body in such contract x xx."
or for a total of Fifty Three Million Six Hundred Sixty-Seven Thousand Two Elementary is the rule that when laws or rules are clear, it is incumbent on
Hundred Nineteen and 45/xx (P53,667,219.45) and interest charges based the court to apply them. When the law (or rule) is unambiguous and
on the prevailing bank rates on the foregoing amount from March 1, 2002 unequivocal, application, not interpretation thereof, is imperative.
and until such time as the same shall be fully paid. It bears to emphasize that the mere existence of an arbitration clause in the
RBDC filed a Motion to Dismiss the aforesaid complaint on the ground of lack construction contract is considered by law as an agreement by the parties to
of jurisdiction. It is petitioner's contention that the CIAC acquires jurisdiction submit existing or future controversies between them to CIAC jurisdiction,
over disputes arising from or connected with construction contracts only without any qualification or condition precedent. To affirm a condition
when the parties to the contract agree to submit the same to voluntary precedent in the construction contract, which would effectively suspend the
arbitration. In the contract between petitioner and private respondent, jurisdiction of the CIAC until compliance therewith, would be in conflict with
petitioner claimed that only disputes by reason of differences in interpretation the recognized intention of the law and rules to automatically vest CIAC with
of the contract documents shall be deemed subject to arbitration. jurisdiction over a dispute should the construction contract contain an
Issue: whether or not CIAC has jurisdiction over the case. arbitration clause.
Held: CIAC had jurisdiction over the dispute between herein parties Moreover, the CIAC was created in recognition of the contribution of the
The CIAC has original and exclusive jurisdiction over disputes arising from, construction industry to national development goals. Realizing that delays in
or connected with, contracts entered into by parties involved in construction the resolution of construction industry disputes would also hold up the
in the Philippines and all that is needed for the CIAC to acquire jurisdiction is development of the country, Executive Order No. 1008 expressly mandates
for the parties to agree to submit the same to voluntary arbitration. the CIAC to expeditiously settle construction industry disputes and, for this
Respondent's contention, that the only disputes it agreed to submit to purpose, vests in the CIAC original and exclusive jurisdiction over disputes
voluntary arbitration are those arising from interpretation of contract
ARBIT (CIAC Case Digest)
arising from, or connected with, contracts entered into by the parties involved
in construction in the Philippines. ISSUE:
Thus, there is no question that in this case, the CIAC properly took WON erred in finding Prudentialsolidarily liable with JMarc for damages.
cognizance of petitioner's complaint as it had jurisdiction over the same.
G.R. Nos. 152505-06 September 13, 2007 It is not disputed that Prudential entered into a suretyship contract with
PRUDENTIAL GUARANTEE and ASSURANCE, INC., petitioner, JMarc. Section 175 of the Insurance Code defines a suretyship as "a
vs.EQUINOX LAND CORPORATION, respondent. contract or agreement whereby a party, called the suretyship, guarantees the
performance by another party, called the principal or obligor, of an obligation
FACTS: or undertaking in favor of a third party, called the obligee. It includes official
Sometime in 1996, Equinox Land Corporation (Equinox), respondent, recognizances, stipulations, bonds, or undertakings issued under Act 536, as
decided to construct five (5) additional floors to its existing building, the amended." Corollarily, Article 2047 of the Civil Code provides that suretyship
Eastgate Centre. It then sent invitations to bid to various building contractors. arises upon the solidary binding of a person deemed the surety with the
Four (4) building contractors, including JMarc Construction & Development principal debtor for the purpose of fulfilling an obligation.
Corporation (JMarc), responded. SC held that while a surety and a guarantor are alike in that each promises
Finding the bid of JMarc to be the most advantageous, Equinox offered the to answer for the debt or default of another, the surety assumes liability as a
construction project to it. On February 22, 1997, JMarc accepted the offer. regular party to the undertaking and hence its obligation is primary. SC
Two days later, Equinox formally awarded to JMarc the contract to build the reiterated the rule that while a contract of surety is secondary only to a valid
extension for a consideration of P37,000,000.00. On February 24, 1997, principal obligation, the suretys liability to the creditor is said to be direct,
JMarc submitted to Equinox two (2) bonds, namely: (1) a surety bond issued primary, and absolute. In other words, the surety is directly and equally
by Prudential Guarantee and Assurance, Inc. (Prudential), herein petitioner, bound with the principal. Thus, Prudential is barred from disclaiming that its
in the amount of P9,250,000.00 to guarantee the unliquidated portion of the liability with JMarc is solidary. Petition Is denied.
advance payment payable to JMarc; and (2) a performance bond likewise
issued by Prudential in the amount of P7,400,000.00 to guarantee JMarcs
faithful performance of its obligations under the construction agreement.
Under the terms of the contract, JMarc would supply all the labor, materials,
tools, equipment, and supervision required to complete the project.
JMarc did not adhere to the terms of the contract. Faced with the problem of
delay, Equinox formally gave JMarc one final chance to take remedial steps
in order to finish the project on time. However, JMarc failed to undertake any
corrective measure. Consequently, on July 10, 1997, Equinox terminated its
contract with JMarc and took over the project. On the same date, Equinox
sent Prudential a letter claiming relief from JMarcs violations of the contract
Equinox filed a complaint with the RTC for sum of money and damages
against JMarc and Prudential. Marc alleged that Equinox has no valid
ground for terminating their contract. For its part, Prudential denied Equinoxs
claims and instituted a cross-claim against JMarc for any judgment that
might be rendered against its bonds. CA ruled in favor of Equinox.
ARBIT (CIAC Case Digest)
AIDA QUIAMBAO, respondents. HELD: Executive Order No. 1008 entitled, "Construction Industry Arbitration
Law" provided for an arbitration mechanism for the speedy resolution of
FACTS : Petitioner COORDINATED GROUP, INC. (CGI) is a corporation construction disputes other than by court litigation. It recognized the role of
engaged in the construction business, with petitioner-spouses ROBERTO the construction industry in the countrys economic progress as it utilizes a
and EVELYN DAVID as its President and Treasurer, respectively. large segment of the labor force and contributes substantially to the gross
respondent-spouses NARCISO and AIDA QUIAMBAO engaged the services national product of the country. Thus, E.O. No. 1008 vests on the CIAC
of petitioner CGI to design and construct a five-storey concrete original and exclusive jurisdiction over disputes arising from or connected
office/residential building on their land in Tondo, Manila. The Design/Build with construction contracts entered into by parties who have agreed to
Contract of the parties provided that: submit their case to voluntary arbitration. Section 19 of E.O. No. 1008
provides that its arbitral award shall be appealable to the Supreme Court only
(a) petitioner CGI shall prepare the working drawings for the construction on questions of law.
project; There is a question of law when the doubt or difference in a given case
(b) respondents shall pay petitioner CGI the sum of Seven Million Three arises as to what the law is on a certain set of facts, and there is a question
Hundred Nine Thousand Eight Hundred Twenty-One and 51/100 Pesos of fact when the doubt arises as to the truth or falsity of the alleged facts.
(P7,309,821.51) for the construction of the building, including the costs of
labor, materials and equipment, and Two Hundred Thousand Pesos In the case at bar, it is readily apparent that petitioners are raising questions
(P200,000.00) for the cost of the design; and of fact. In their first assigned error, petitioners claim that at the time of
(c) the construction of the building shall be completed within nine (9) months rescission, they had completed 80% of the construction work and still have
after securing the building permit. 15 days to finish the project. They likewise insist that they constructed the
building in accordance with the contract and any modification on the plan
The completion of the construction was initially scheduled on or before July was with the consent of the respondents. The second assigned error likewise
16, 1998 but was extended to November 15, 1998 upon agreement of the involves a question of fact. It is contended that petitioner-spouses David
parties but petitioners failed to follow the specifications and plans as cannot be held jointly and severally liable with petitioner CGI in the payment
previously agreed upon. Respondents demanded the correction of the errors of the arbitral award as they are merely its corporate officers
but petitioners failed to act on their complaint. Consequently, respondents
rescinded the contract on October 31, 1998, after paying 74.84% of the cost Clearly, the case at bar does not raise any genuine issue of law. We reiterate
of construction the rule that factual findings of construction arbitrators are final and
conclusive and not reviewable by this Court on appeal, except when the
Respondents then engaged the services of another contractor, RRA and petitioner proves affirmatively that: (1) the award was procured by corruption,
Associates, It was found that petitioners revised and deviated from the fraud or other undue means; (2) there was evident partiality or corruption of
structural plan of the building without notice to or approval by the the arbitrators or of any of them; (3) the arbitrators were guilty of misconduct
respondents. in refusing to postpone the hearing upon sufficient cause shown, or in
refusing to hear evidence pertinent and material to the controversy; (4) one
Respondents filed a case for breach of contract against petitioners before the or more of the arbitrators were disqualified to act as such under section nine
Regional Trial Court (RTC) of Manila. At the pre-trial conference, the parties of Republic Act No. 876 and willfully refrained from disclosing such
agreed to submit the case for arbitration to CIAC. The RTC of Manila then disqualifications or of any other misbehavior by which the rights of any party
dismissed the case and transmitted its records to the CIAC. have been materially prejudiced; or (5) the arbitrators exceeded their powers,
The arbitrator rendered judgment against petitioners. Petitioners appealed to or so imperfectly executed them, that a mutual, final and definite award upon
the Court of Appeals which affirmed the arbitrators Decision but deleted the the subject matter submitted to them was not made.12 Petitioners failed to
award for lost rentals show that any of these exceptions applies to the case at bar.
ARBIT (CIAC Case Digest)
On September 12, 1995, [P]etitionerPhilrock filed its Motion to Dismiss,
G.R. No. 132848-49 June 26, 2001 PHILROCK, INC., petitioner, vs. alleging therein that the CIAC had lost jurisdiction to hear the arbitration case
CONSTRUCTION INDUSTRY ARBITRATION COMMISSION and Spouses due to the parties' withdrawal of their consent to arbitrate. The motion was
VICENTE and NELIA CID, respondents. denied. public respondent ordered the parties to appear before it on
November 28, 1995 for the continuation of the arbitral proceedings, and on
FACTS : Private respondents, filed a Complaint for damages against February 7, 1996, public respondent directed [P]etitionerPhilrock to set two
Philrock and seven of its officers and engineers with the Regional Trial Court hearing dates in the month of February to present its evidence and to pay all
of Quezon City, Branch 82. The trial court issued an Order dismissing the fees assessed by it, otherwise Philrock would be deemed to have waived its
case and referring the same to the CIAC because the Cid spouses and right to present evidence
Philrock had filed an Agreement to Arbitrate with the CIAC. Preliminary
conferences were held among the parties and their appointed arbitrators. At Judgment is rendered in favor of the Claimant, directing Respondent to pay.
these conferences, disagreements arose as to: Before the CA, petitioner filed a Petition for Review, docketed as CA-GR SP
1) whether moral and exemplary damages and tort should be included as an No. 42443, contesting the jurisdiction of the CIAC and assailing the propriety
issue along with breach of contract, and of the monetary awards in favor of respondent spouses. This Petition was
2) whether the seven officers and engineers of Philrock who are not parties consolidated by the CA with CA-GR SP No. 39781, a Petition for Certiorari
to the Agreement to Arbitrate should be included in the arbitration earlier elevated by petitioner questioning the jurisdiction of the CIAC.
No common ground could be reached by the parties, hence, on April 2, 1994, ISSUE : Whether or not the CIAC could take jurisdiction over the case of
both the Cid spouses and Philrock requested that the case be remanded to Respondent Cid spouses against Petitioner Philrock after the case had been
the trial court. dismissed by both the RTC and the CIAC.

On June 13, 1995, The trial court declared that it no longer had jurisdiction HELD : Section 4 of Executive Order 1008 expressly vests in the CIAC
over the case and ordered the records of the case to be remanded anew to original and exclusive jurisdiction over disputes arising from or connected
the CIAC for arbitral proceedings. the CIAC resumed conducting preliminary with construction contracts entered into by parties that have agreed to submit
conferences. On August 21, 1995, herein [P]etitionerPhilrock requested to their dispute to voluntary arbitration. It is undisputed that the parties
suspend the proceedings until the court clarified its ruling in the Order dated submitted themselves to the jurisdiction of the Commission by virtue of their
June 13, 1995 Agreement to Arbitrate dated November 24, 1993. Signatories to the
Agreement were Atty. Ismael J. Andres and Perry Y. Uy (president of
Petioner :Philrock argued that said Order was based on a mistaken premise Philippine Rock Products, Inc.) for petitioner, and Nelia G. Cid and Atty.
that 'the proceedings in the CIAC fell through because of the refusal of Esteban A. Bautista for respondent spouses
Philrock to include the issue of damages therein,' whereas the true reason
for the withdrawal of the case from the CIAC was due to Philrock's opposition
to the inclusion of its seven officers and engineers, who did not give their Petitioner claims, on the other hand, that this Agreement was withdrawn by
consent to arbitration, as party defendants respondents on April 8, 1994, because of the exclusion of the seven
engineers of petitioners in the arbitration case. This contention is untenable.
Respondent : manifested that she was willing to exclude the seven officers First, private respondents removed the obstacle to the continuation of the
and engineers of Philrock as parties to the case so as to facilitate or expedite arbitration, precisely by withdrawing their objection to the exclusion of the
the proceedings. seven engineers. Second, petitioner continued participating in the arbitration
even after the CIAC Order had been issued. Finally, as pointed out by the
the Arbitral Tribunal denied Philrock's request for the suspension of the solicitor general, petitioner maneuvered to avoid the RTCs final resolution of
proceedings. The parties then proceeded to finalize, approve and sign the the dispute by arguing that the regular court also lost jurisdiction after the
Terms of Reference. Philrock's counsel and representative, Atty. Pericles C. arbitral tribunals April 13, 1994 Order referring the case back to the RTC.
Consunji affixed his signature to said Terms of Reference which stated that After submitting itself to arbitration proceedings and actively participating
'the parties agree that their differences be settled by an Arbitral Tribunal therein, petitioner is estopped from assailing the jurisdiction of the CIAC,
merely because the latter rendered an adverse decision.
ARBIT (CIAC Case Digest)

G.R. No. 148267 August 8, 2002 ARMANDO C. CARPIO, petitioner, vs. In Pearson, what was under review was the ruling of the CFI to take
SULU RESOURCES DEVELOPMENT CORPORATION, respondent. cognizance of the case which had been earlier decided by the MAB, not the
MAB Decision itself which was promulgated by the CA under Rule 43. The
FACTS : A petition was filed by respondent Sulu Resources Development present petitioner seeks a review of the latter.
Corporation for Mines Production Sharing Agreement (MPSA). Petitioner
Armando C. Carpio filed an opposition/adverse claim thereto, alleging, inter Pearson, however, should be understood in the light of other equally relevant
alia, that his landholdings in Cupang and Antipolo, Rizal will be covered by jurisprudence. In Fabian v. Desierto, the Court clarified that appeals from
respondents claim, thus he enjoys a preferential right to explore and extract judgments and final orders of quasi-judicial agencies are now required to be
the quarry resources on his properties. brought to the CA, under the requirements and conditions set forth in Rule
43. This Rule was adopted precisely to provide a uniform rule of appellate
the Panel of Arbitrators of the Mines and Geo-Sciences Bureau of the DENR procedure from quasi-judicial agencies
rendered a Resolution dated September 26, 1996, upholding petitioners
opposition/adverse claim. Factual controversies are usually involved in administrative actions; and the
CA is prepared to handle such issues because, unlike this Court, it is
Respondent appealed the foregoing Resolution to the Mines Adjudication mandated to rule on questions of fact. In Metro Construction, we observed
Board. Meanwhile, petitioner filed a motion to dismiss appeal on the ground that not only did the CA have appellate jurisdiction over CIAC decisions and
of respondents failure to comply with the requirements of the New Mining orders, but the review of such decisions included questions of fact and law.
Acts Implementing Rules and Regulations. On June 20, 1997, the Mines At the very least when factual findings of the MAB are challenged or alleged
Adjudication Board rendered the assailed Order dismissing petitioners to have been made in grave abuse of discretion as in the present case, the
opposition/adverse claim. Petitioner filed a motion for reconsideration of said CA may review them, consistent with the constitutional duty of the judiciary.
Order which was denied by the Board
To summarize, there are sufficient legal footings authorizing a review of the
Petioner appealed to CA. the CA relying in the case of Pearson v. MAB Decision under Rule 43 of the Rules of Court
Intermediate Appellate Court ruled that it did not have jurisdiction to review
the Decision of the Mines Adjudication Board (MAB). The adjudication of first Section 79 of RA No. 7942 provides that decisions of the MAB may be
conflicting mining claims is completely administrative in nature. reviewed by this Court on a "petition for review by certiorari." This provision is
obviously an expansion of the Courts appellate jurisdiction, an expansion to
ISSUE : WON appeals from the Decision or Final Orders of the Mines which this Court has not consented. Indiscriminate enactment of legislation
Adjudication Board should be made directly to the Supreme Court as enlarging the appellate jurisdiction of this Court would unnecessarily burden
contended by the respondent and the Court of Appeals, or such appeals be it
first made to the Court of Appeals as contended by herein petitioner
Second when the Supreme Court, in the exercise of its rule-making power,
HELD : Petitioner submits that appeals from the decisions of the MAB should transfers to the CA pending cases involving a review of a quasi-judicial
be filed with the CA. the CA ruled and respondent agrees that the settlement bodys decisions, such transfer relates only to procedure; hence, it does not
of disputes involving rights to mining areas and overlapping or conflicting impair the substantive and vested rights of the parties. The aggrieved partys
claim is a purely administrative matter, over which the MAB has appellate right to appeal is preserved; what is changed is only the procedure by which
jurisdiction. The CA refused to take jurisdiction over the case because, under the appeal is to be made or decided
Section 79 of the Philippine Mining Act of 1995, petitions for review of MAB
decisions are to be brought directly to the Supreme Court Third the Revised Rules of Civil Procedure included Rule 43 to provide a
uniform rule on appeals from quasi-judicial agencies.
In the case at bar, petitioner went to the CA through a Petition for Review on
Certiorari under Rule 43, seeking a reversal of the MAB Decision. Given the Fourth the Court realizes that under Batas Pambansa (BP) Blg. 129 as
difference in the reason for and the mode of appeal, it is obvious that amended by RA No. 7902 factual controversies are usually involved in
Pearson is not applicable here.
ARBIT (CIAC Case Digest)
decisions of quasi-judicial bodies; and the CA, which is likewise tasked to
resolve questions of fact, has more elbow room to resolve them

Fifth he judicial policy of observing the hierarchy of courts dictates that direct
resort from administrative agencies to this Court will not be entertained,
unless the redress desired cannot be obtained from the appropriate lower
tribunals, or unless exceptional and compelling circumstances justify
availment of a remedy falling within and calling for the exercise of our primary

Consistent with these rulings and legal bases, we therefore hold that Section
79 of RA 7942 is likewise to be understood as having been modified by
Circular No. 1-91, BP Blg. 129 as amended by RA 7902, Revised
Administrative Circular 1-95, and Rule 43 of the Rules of Court. In brief,
appeals from decisions of the MAB shall be taken to the CA through petitions
for review in accordance with the provisions of Rule 43 of the 1997 Rules of
ARBIT (CIAC Case Digest)


NO. 175048)
Petitioner herein, Excellent Quality Apparel, entered into a contract with
Multi-Rich Builders for the construction of a garment factory within the CPEZ.
The duration of the project was for a maximum of 5 months and included in
the contract is an arbitration clause that any dispute among the parties shall
be submitted to an Arbitration Committee for its resolution. Respondent, Win
Multi-Rich Builders filed a complaint for sum of money against petitioner, to
which the latter then filed an Omnibus Motion questioning the jurisdiction of
the trial court and pointing out the presence of an Arbitration Clause in their
contract. Petitioner also moved to dismiss the case since respondent herein
is neither a contractor nor a party to the contract. Both the trial court and CA
found in favor of respondent herein. Hence the present petition.
Whether or not the RTC have jurisdiction over the case notwithstanding the
presence of an arbitration clause in the contract.
The petition is granted. Section 4 of EO 1008 provides for the jurisdiction of
the CIAC, and excluded only from the coverage of this law are disputes from
employer-employee relationships which shall be governed by the Labor
Code. EO 1008 does not distinguish between claims involving payment of
money or not. The CIAC acquires jurisdiction over a construction contract by
the mere fact that the parties agreed to submit to voluntary arbitration. The
law doesnt preclude parties from stipulating a preferred forum or arbitral
body but they may not divest the CIAC of jurisdiction as provided by law.
Clearly, the RTC should not have taken cognizance of the collection suit. The
presence of the arbitration clause vested jurisdiction to the CIAC over all
construction disputes between petitioner and Multi-Rich. The RTC does not
have jurisdiction.
ARBIT (CIAC Case Digest)
merely to delay the satisfaction of the judgment. Any lower court or tribunal
DSM Construction and Development Corp. vs CA and Megaworld Globus that trifles with the execution of a final and executory judgment of the
Asia Inc. (G.R. No. 166993. December 19, 2005) Supreme Court flirts with insulting the highest court of the land. While we do
31MAY not diminish the availability of judicial remedies to the execution of final
DSM CONSTRUCTION AND DEVELOPMENT CORPORATION, petitioner, judgments of this Court, as may be sanctioned under the Rules of Court,
vs. such actions could only prosper if they have basis in fact and in law. Any
COURT OF APPEALS and MEGAWORLD GLOBUS ASIA, court or tribunal that entertains such baseless actions designed to thwart the
INC., respondents. execution of final judgments acts with grave abuse of discretion tantamount
Ponente: PUNO to lack of jurisdiction. It is the positive duty of every court of the land to give
FACTS: full recognition and effect to final and executory decisions, much less those
[P]etitioner and respondent entered into agreements for the construction of a rendered by the Supreme Court.
condominium project owned by respondent called The Salcedo Park, with The abuse of discretion amounting to lack or excess of jurisdiction in this
petitioner as contractor. In the course of the projects construction, case was made manifest by the fact that the appellate court not only took
differences with respect to billings arose between the parties. Petitioner thus cognizance of the case and issued the assailed restraining order. It
filed a complaint for compulsory arbitration before the CIAC claiming eventually decided the case in petitioners (respondent herein) favor as well
payment for approximately P97 Million as the outstanding balance due from notwithstanding the dearth of any basis for doing so.
respondent pursuant to the agreements. The CIAC rendered a decision
partially granting both petitioners and respondents claims in favor of
petitioner. This award was affirmed by the Court of Appeals. Thereafter, the
Supreme Court promulgated its Decision affirming the judgment of the Court
of Appeals and lifting the TRO that was then still in effect.It became final and
executory. Petitioner centers on attempts, regrettably entertained by
respondent Court of Appeals, to thwart the execution of a final and executory
decision of the Supreme Court.
Whether or not the Court of Appeals gravely abused its discretion when it
issued a Resolution enjoining the enforcement of Alias Writ of Execution.
YES. Petition was granted. The CIAC is ordered to proceed with the
execution of its Decision.
Rule 1, Section 6 of the Rules of Court provides that the Rules shall be
liberally construed in order to promote their objective of securing a just,
speedy and inexpensive disposition of every action and proceeding. We have
at times relaxed procedural rules in the interest of substantial justice.
But from the outset, it bears stressing that the subject of petitioner and
respondents petitions is the execution of a final judgment was affirmed by no
less than this Court. This being so, the appellate court should have been
doubly careful about entertaining an obviously dilatory petition intended