G.R. No.

143581             January 7, 2008 KOGIES instituted an application for Arbitration before

Korean Commercial Arbitration Board (KCAB) pursuant
KOREA TECHNOLOGIES CO., LTD. to arbitration clause, they also filed complaint for
vs.
specific performance before the RTC against PGSM.
HON. ALBERTO A. LERMA, in his capacity as
Presiding Judge of Branch 256 of Regional Trial KOGIES alleged that:
Court of Muntinlupa City, and PACIFIC GENERAL
STEEL MANUFACTURING CORPORATION - PGSM Violated the arbitration clause in their
contract when it unilaterally rescind the
Facts: contract.
Petitioner KOGIES is a Korean corp which is engaged in PGSM answered that:
the supply and installation of LPG cylinder
manufacturing plan, while private respo. PGSM, is a - The arbitration clause is null and void for being
domestic corp. against public policy as it ousts the local court of
jurisdiction over the controversy.
PGSM and KOGIES entered into a contract wherein
KOGIES agreed to set up LPG cylinder manufacturing RTC – ruled that the arbitration clause is invalid for it is
plant in Carmona Cavite, this contract was executed in intended to oust the trial court or any court jurisdiction
the Philippines. They agreed that KOGIES will install and over any dispute that may arise between the parties.
initiate operation of the plant for which PGSM will pay
CA – affirmed the decision of RTC.
KOGIES total of USD 1,530,000. Later on, PGSM entered
into contract of lease with WORTH, for the use of the Issue: WON the arbitration clause is null and void.
latter’s property and warehouse to house the LPG
Ruling:
manufacturing plant.
NO, the arbitration clause is valid considering that it was
Then after installation of the plant, the initial operation
mutually and voluntarily agreed upon by the parties and
cannot be conducted due to financial difficulties of
there was no showing that the said clause is contrary to
PGSM, thus forcing the parties to agree that KOGIES
law, against morals, good customs, public order or
already completed and complied with the terms and
public policy, hence, there’s no reason why the
conditions of the contract. PGSM issued 2 postdated
arbitration clause should not be respected and
check in favor of KOGIES for payment of the balance,
complied with by both parties.
however, such checks were dishonored for the reason
of ‘payment stopped’, with that KOGIES demanded The arbitration clause stipulates that the arbitration
PGSM to pay the balance and threatened them to file a must be done in Seoul, Korea in accordance with KCAB
criminal case for violation of BP22. Instead of settling rules, and that the award is final and binding – this is
the balance, PGSM (thru wife of pres) complained that not contrary to public policy as alleged by PGSM. SC
KOGIES deliver different brand of hydraulic press as held that the said clause is valid, in this jurisdiction
agreed upon, and informed KOGIES that they will arbitration has been held valid and constitutional, since
cancelling the contract for violation of the contract and it helps the court in unclogging judicial dockets and it is
that they will dismantle and transfer the machineries inexpensive, speedy and amicable method of settling is
and equipment in the Carmona plant. encouraged by SC.
PGSM filed estafa case against KOGIES before Office of The said clause does not deprive or oust our courts of
Public Prosecutor. jurisdiction. PGSM is bound to submit to the foreign
arbitration in accordance with the contract, however,
KOGIES wrote and informed PGSM that they cannot
their interest are duly protected by the law because the
unilaterally rescind the contract for violation of contract
award that may be rendered by KCAB is subject to the
and insisted that their disputes should be settled by
confirmation of RTC before it can be enforced, the
arbitration as agreed upon in Art. 15 (arbitration clause)
foreign award is not absolute and without exceptions,
of their contract.
this is in accordance with UNCITRAL Model Law and as
incorporated in RA 9285.
Having said that the arbitration clause is valid, hence, BCA manifested to file an Amended Statement of Claims
the unilateral rescission of PGSM is improper and illegal, wherein it interposed that in the event that specific
being bound to arbitration, party may not unilaterally performance is no longer possible, then DFA shall pay to
rescind or terminate the contract for whatever cause them 1.6M, however, later on, BCA filed a new Motion
without first resorting to arbitration. With that the trial to Admit Attached Amended Statement of Claims,
court gravely abused its discretion in granting PGSM’s wherein, it increases the actual damages to 390M.
motion for inspection, since the arbitration body (KCAB)
DFA objected both motions of BCA and averred that
has the primary jurisdiction over the subject matter.
belated filing violates their right to due process and will
But SC sustain the order of RTC in denying the issuance prejudice their interest and that Arbitral Tribunal has no
of injunction, with that PGSM will be able to dismantle jurisdiction over the alternative relief sought by BCA.
and transfer the equipment and machineries of the
Arbitral Tribunal issued Procedural Order 11, granting
plant in Carmona. SC ratiocinated that:
BCA’s Motion to Admit Attached Amended Statement of
- Even though the KCAB has jurisdiction and Claims on the premise that BCA will no longer present
pendency of arbitral proceeding does not additional evidence to prove their bigger claim. Later
foreclose resort to the court for provisional on, Arbitral Tribunal issued Procedural Order 12,
reliefs. Arbitration law (RA 876) recognizes the wherein it directed the parties to submit additional
rights of any party to petition the court to take documentary evidence is support of their position.
measure to safeguard and/or conserve any
With that, DFA filed petition for certiorari before SC
matter which is the subject of the dispute in
with application for issuance of TRO and/or writ of
arbitration.
preliminary injunction, seeking to annul and set aside
- The equipment and machineries are in the
Procedure Order Nos. 11 and 12.
possession of PGSM, it has the right to protect
and preserve such in the best way. Issue: WON the petition filed is proper.
- Maintain the equipment and machineries in
WORTH’s property is not to the best interest of Ruling:
PGSM considering that the plant is non- NO, SC dismiss the petition for failure to observe rules
operational but they are still paying the lease on court intervention allowed by RA 9285 and Special
therein. ADR Rules (Rule 19.36 and Rule 19.37), in the pending
arbitration proceedings of the case.

G.R. No. 225051, July 19, 2017 The Court first held that Arbitration laws, particularly RA
DEPARTMENT OF FOREIGN AFFAIRS (DFA) 876, RA 9285 and its IRR, and Special ADR Rules apply in
vs. this case, since the parties did not designate the
BCA INTERNATIONAL CORPORATION & AD HOC applicable law and the agreement was perfected in the
ARBITRAL TRIBUNAL. Philippines. IRR of RA 9285 provides that arbitral
tribunal shall decide the dispute in accordance with law
Facts: chosen by the parties, in the absence thereof, Philippine
law shall apply.
In an Amended Build-Operate-Transfer (BOT)
Agreement, DFA awarded the Machine Readable In accordance with RA 9285, court intervention is
Passport and Visa Project to BCA, however, in the allowed only in 3 instances: (1) to request an interim
course of implementing the project, conflict arose and measure of protection, (2) judicial review of arbitral
DFA sought to terminate the Agreement. awards by RTC, and (3) appeal from RTC decisions on
arbitral awards to CA. Furthermore, Special ADR Rules
With that, BCA opposed the termination and filed a provides that review by SC of an appeal by certiorari is
Request for Arbitration, hence, Arbitral Tribunal was not a matter of right.
constituted. BCA sought to nullify and setting aside the
Notice of Termination of DFA, including its demand to
them to pay liquidated damages.
In this case, appeal by certiorari is not from final order RTC – denied the motion but reconsider it later on
of CA or RTC but from interlocutory order of the Arbitral and deferred to resolve the motion to
Tribunal, hence, the petition must be dismissed. dismiss/suspend.

CA – granted the motion to suspend and ordered

PETITIONER to refer its claims for arbitration.
G.R. No. 87958               April 26, 1990 Issue: WON the PETITIONER is bound to submit to
arbitration.
NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURG, PA/AMERICAN INTERNATIONAL Ruling:
UNDERWRITER (PHIL.) INC. YES, SC affirmed the decision of CA.
vs.
STOLT-NIELSEN PHILIPPINES, INC. (carrier) and Contrary to the allegation of PETITIONER, they are
COURT OF APPEALS bound to the Charter Party, as subrogee of SHIPPER,
considering that the Bill of Lading categorically
Facts: incorporates by reference the terms of the Charter
[NOTE: BILL OF LADING – A contract between a carrier and a shipper Party. It is settled law that the charter may be made
for the transportation of goods. A receipt issued by a carrier to a part of the contract under which the goods are carried
shipper for goods received for transportation. Evidence of title to the
goods in case of a dispute.]
by appropriate reference in the Bill of Lading.

United Coconut Chemicals (SHIPPER) shipped As found out by CA, PETITIONER cannot feign
404.774 metric tons of distilled fatty acid on board of ignorance of the arbitration clause because it was
MT Stolt Sceptre tanker owned by PRIVATE RESPO already charged with notice of existence of the charter
Stolt Nielsen (Carrier) from Batangas, consigned to due to the incorporation by reference of it to Bill of
Niewe Matex at Rotterdam. The said shipment was Lading. By subrogation, PETITIONER became privy
insured by PETITIONER National Union Fire to the Charter Party as fully as the SHIPPER because
Insurance. as subrogee it merely stepped into the shoes of the
SHIPPER.
The Bill of Lading issued by PRIVATE RESPO
contained a general statement of incorporation of the Arbitration as alternative mode of settling dispute as
terms of Charter Party between Shipper and Parcels long been recognized and accepted in our jurisdiction.
Tanker. Foreign arbitration as a system of settling commercial
disputes of an international character was likewise
Upon received of consignee of the shipment, it was recognized, when PH adhered to UNCITRAL.
found out that it was discoloured and totally Furthermore, considering that there was no showing
contaminated. PETITIONER indemnified the that the arbitration clause is null and void, inoperative
SHIPPER pursuant to the policy issued and after the or incapable of being performed, and there was no
claim of SHIPPER with PRIVATE RESPO was conflict pointed Charter Party and Bill of Lading,
denied. hence, it is valid, and referral to arbitration in New
York pursuant to arbitration clause is proper.
As subrogee of SHIPPER, PETITIONER filed suit
Therefore, suspension of civil case is indeed called
against PRIVATE RESPO before the RTC for
for.
recovery of sum 1.6M. PRIVATE RESPO filed a
motion to dismiss/suspend the proceedings on the
ground that the claim is arbitrable, hence, the court
has no jurisdiction and that the PETITIONER is bound G.R. No. 185582               February 29, 2012
to subject to the provision of Bill of Lading (where the TUNA PROCESSING, INC.
terms of Charter Party is incorporated), which vs.
provides the arbitration clause. PHILIPPINE KINGFORD, INC
PETITIONER object and contends that they are not
Facts:
legally bound to submit to arbitration because the
arbitration clause is void for being unreasonable and On 14 January 2003, Kanemitsu Yamaoka
unjust. (hereinafter referred to as the “licensor”), co-patentee
of U.S. Patent No. 5,484,619, Philippine Letters
Patent No. 31138, and Indonesian Patent No.
ID0003911 (collectively referred to as the “Yamaoka
Patent”), and five (5) Philippine tuna processors, Convention, or Model Law.. It is for this reason that
namely, Angel Seafood Corporation, East Asia Fish TPI has brought this matter before this most
Co., Inc., Mommy Gina Tuna Resources, Santa Cruz Honorable Court, as it [i]s imperative to clarify whether
Seafoods, Inc., and respondent Kingford (collectively the Philippines’ international obligations and State
referred to as the “sponsors”/”licensees”) entered into policy to strengthen arbitration as a means of dispute
a Memorandum of Agreement (MOA). The parties resolution may be defeated by misplaced technical
likewise executed a Supplemental Memorandum of considerations not found in the relevant laws.
Agreement dated 15 January 2003 and an Agreement
to Amend Memorandum of Agreement dated 14 July In several cases, this Court had the occasion to
2003. discuss the nature and applicability of the Corporation
Code of the Philippines, a general law, viz-a-viz other
Due to a series of events not mentioned in the special laws. Thus, in Koruga v. Arcenas, Jr., this
petition, the licensees, including respondent Kingford, Court rejected the application of the Corporation Code
withdrew from petitioner TPI and correspondingly and applied the New Central Bank Act. It ratiocinated:
reneged on their obligations. Petitioner submitted the Koruga’s invocation of the provisions of the
dispute for arbitration before the International Centre Corporation Code is misplaced. In an earlier case with
for Dispute Resolution in the State of California, similar antecedents, we ruled that:
United States and won the case against respondent.
“The Corporation Code, however, is a general law
To enforce the award, petitioner TPI filed on 10 applying to all types of corporations, while the New
October 2007 a Petition for Confirmation, Central Bank Act regulates specifically banks and
Recognition, and Enforcement of Foreign Arbitral other financial institutions, including the dissolution
Award before the RTC of Makati City. The petition and liquidation thereof. As between a general and
was raffled to Branch 150 presided by Judge Elmo M. special law, the latter shall prevail – generalia
Alameda. specialibus non derogant.” (Emphasis supplied)

At Branch 150, respondent Kingford filed a Motion to Without doubt, the Corporation Code is the general
Dismiss.16 After the court denied the motion for lack law providing for the formation, organization and
of merit, respondent sought for the inhibition of Judge regulation of private corporations. On the other hand,
Alameda and moved for the reconsideration of the RA 6657 is the special law on agrarian reform. As
order denying the motion. Judge Alameda inhibited between a general and special law, the latter shall
himself notwithstanding “[t]he unfounded allegations prevail— generalia specialibus non derogant.
and unsubstantiated assertions in the motion.” Judge
Cedrick O. Ruiz of Branch 61, to which the case was Following the same principle, the Alternative Dispute
re-raffled, in turn, granted respondent’s Motion for Resolution Act of 2004 shall apply in this case as
Reconsideration and dismissed the petition on the the Act, as its title –An Act to Institutionalize the Use
ground that the petitioner lacked legal capacity to sue of an Alternative Dispute Resolution System in the
in the Philippines. Philippines and to to Establish the Office for
Alternative Dispute Resolution, and for Other
Petitioner TPI now seeks to nullify, in this Purposes – would suggest, is a law especially
instant Petition for Review on Certiorari under Rule enacted “to actively promote party autonomy in the
45, the order of the trial court dismissing its Petition resolution of disputes or the freedom of the party to
for Confirmation, Recognition, and Enforcement of make their own arrangements to resolve their
Foreign Arbitral Award. disputes.” It specifically provides exclusive grounds
available to the party opposing an application for
Issue: WON a foreign corporation not licensed to do recognition and enforcement of the arbitral award.

business in the Philippines have the legal capacity to

Indeed, it is in the best interest of justice that in the
sue under the provisions of the Alternative Dispute enforecement of a foreign arbitral award, we deny
availment by the losing party of the rule that bars
Resolution Act of 2004?
foreign corporations not licensed to do business in the
Ruling: Philippines from maintaining a suit in our courts.
When a party enters into a contract containing a
YES, SC reversed and set aside the resolution of
foreign arbitration clause and, as in this case, in fact
RTC and remanded the case. submits itself to arbitration, it becomes bound by the
In the present case, enforcement has been effectively contract, by the arbitration and by the result of
refused on a ground not found in the the [Alternative arbitration, conceding thereby the capacity of the
Dispute Resolution Act of 2004], New York other party to enter into the contract, participate in the
arbitration and cause the implementation of the result. The two entered into MOA (after PETITIONER
Although not on all fours with the instant case, also
worthy to consider is the wisdom of then Associate filed unlawful detainer against RESPO),
Justice Flerida Ruth P. Romero in her Dissenting whereby RESPO undertook to pay PETITIONER
Opinion in Asset Privatization Trust v. Court of
Appeals, to wit: 14.7M for unpaid rent. They also entered into
15 year lease contract, PETITIONER also
xxx Arbitration, as an alternative mode of settlement,
is gaining adherents in legal and judicial circles here authorized RESPO to sublease the property and
and abroad. If its tested mechanism can simply be the contract included arbitration clause.
ignored by an aggrieved party, one who, it must be
stressed, voluntarily and actively participated in the RESPO sublease the property to CAPITOL.
arbitration proceedings from the very beginning, it will
Then, RESPO informed PETITIONER that it will
destroy the very essence of mutuality inherent in
consensual contracts. not renewing the lease. However, conflict arise
when CAPITOL did not vacate the premises
Clearly, on the matter of capacity to sue, a foreign
arbitral award should be respected not because it is even after the expiration of their sublease
favored over domestic laws and procedures, but
contract with RESPO and upon expiration
because Republic Act No. 9285 has certainly erased
any conflict of law question. RESPO and PETITIONER’s contract.
With the PETITIONER instituted Special
Finally, even assuming, only for the sake of argument,
that the court a quo correctly observed that the Model Proceeding before RTC for submission of
Law, not the New York Convention, governs the
subject arbitral award, petitioner may still seek existing controversy for arbitration, which
recognition and enforcement of the award in granted by RTC.
Philippine court, since the Model Law prescribes
substantially identical exclusive grounds for refusing Arbitral Tribunal was instituted, having 3
recognition or enforcement. arbitrators. The arbitral award ordered RESPO

Premises considered, petitioner TPI, although not to pay PETITIONER 8.2M for unpaid rent and
licensed to do business in the Philippines, may seek 46.8M for damages.
recognition and enforcement of the foreign arbitral
award in accordance with the provisions of After denial of MR of RESPO by tribunal, they
the Alternative Dispute Resolution Act of 2004. petitioned RTC to partially vacate or modify the
arbitral award.
RTC – ruled against the said motion and found
G.R. No. 204197, November 23, 2016
insufficient legal grounds under Sec. 24 and 25
FRUEHAUF ELECTRONICS PHILIPPINES of Arbitration Law to modify or vacate the
CORPORATION  award.
v. 
TECHNOLOGY ELECTRONICS ASSEMBLY RTC also refused to give due course to the
AND MANAGEMENT PACIFIC Notice of Appeal filed by RESPO, for the reason
CORPORATION
that ordinary appeal under Rule 41 is not the
Facts: proper mode of appeal against an order
PETITIONER leased several parcels of land in confirming the arbitral award.
Pasig to SIGNETICS, later on, SIGNETICS was RESPO filed Petition for Certiorari before the
bought by RESPONDENT. CA, arguing that:
 - Ordinary appeal is proper remedy - Pronouncement that losing party in
against confirmation of arbitral award by arbitration may avail 3 remedies such as
RTC. petition to vacate, petition for review
CA – ruled in favour of RESPO, and states that with CA under Rule 43 of ROC raising
mere filing of notice of appeal is sufficient since questions of fact and law or both, and
the issue raised in the appeal were not purely petition for certiorari under Rule 65, but
questions of law, it further held that, Sec. 29 of the said pronouncement is a mere obiter
Arbitration Law does not preclude the dictum.
aggrieved party to resort to other judicial - Even disregarding the obiter dicta
remedies. CA even revisited the merits of the character of said pronouncement, but
arbitral award and corrected the found errors the said case committed fallacy of
in law and facts. equivocation, where it equated the term
Issue: voluntary arbitrator (used in Rule 43,
WON CA is correct in setting aside the arbitral Sec. 1) with the term arbitrator/arbitral
award. tribunal. The terms are difference,
Ruling: because the first one is used in labour
NO, SC set aside CA’s decision and reinstated disputes, and it does not refer to
RTC’s order of confirming the arbitral award. arbitrator. In addition, Voluntary
arbitrators are clothed with quasi-
Firstly, SC states that arbitration is a judicial authority because of the
contractual and consensual body and it is relationship between capital and labor
purely private mode of dispute resolution and heavily impressed with public interest.
that it is confidential. Its contractual nature On the other hand, arbitrator in
affords the parties substantial autonomy over commercial relationships are purely
the proceedings. private and contractual in nature.
SC states that arbitral tribunal does not - The court also noted that there are body
exercise quasi-judicial powers, because quasi- listed in Rule 43 like the CIAC, it is
judicial or administrative adjudicatory power is considered as government agency
the power to hear and determine questions of attached to DTI and has quasi-judicial
facts and decide in accordance with standards power.
laid down by law itself, and it is exercised by
administrative agencies. Arbitral tribunal as Secondly, SC held that proper remedy from a
contractual and consensual body does not have final domestic arbitral award is petition to
any inherent power over the parties, it has no vacate, or to modify/correct the award
coercive writs or compulsory processes. SC not later than 30 days from receipt of
revisited ABS-CBN vs WINS, where it view that award. The court will only set aside or vacate
arbitral tribunal is quasi-judicial agencies, but the award merely on the ground enumerated
SC reiterated that:
under Sec. 24 of Arbitration Law and also by certiorari under Rule 45, but limited to
based on Art. 34 of UNCITRAL which are questions of law.
reproduced in IRR of ADR Act. In this case, the notice of appeal (ordinary
These grounds are not concerned with the appeal) made by RESPO is not proper, for
correctness of the award but they are more on there is no legal basis to support such appeal.
the validity of arbitration agreement or
regularity of the arbitral proceedings. Lastly, CA erred in reversing the arbitral award
Arbitral award is not appealable via Rule 43 and in ruling with the merits of the award,
because there is no statutory basis for an because it has no power to do so. In this case,
appeal from final award of arbitrators, there is no grounds to vacate the arbitral
arbitrators are not quasi-judicial bodies, and award, CA cannot reviewed the merits of the
Special ADR Rules specifically prohibit the filing award, and the alleged incorrectness of the
of appeal to question the merits of award. award is not sufficient ground to vacate the
The ground to correct or to modify an arbitral award. Even assuming that there was indeed
award pursuant to Rule 11.4, SPECIAL ADR an incorrectness with the award, it may be
RULES are: corrected by Arbitral Tribunal themselves.
Courts are precluded from disturbing the
a. Where there was an evident findings and interpretation of law of
miscalculation of figures or an evident
mistake in the description of any arbitrators, because they enjoy the
person, thing or property referred to in autonomy. Ruling otherwise may weakens our
the award; chanrobleslaw

alternative dispute resolution mechanisms.

b. Where the arbitrators have awarded
upon a matter not submitted to them,
G.R. No. 212734, December 05, 2018
not affecting the merits of the decision
MABUHAY HOLDINGS CORPORATION
upon the matter submitted;
VS.
chanrobleslaw

c. Where the arbitrators have omitted to SEMBCORP LOGISTICS LIMITED

resolve an issue submitted to them for
resolution; or Facts:
MABUHAY and IDHI are corporations duly organized
d. Where the award is imperfect in a
and existing under PH laws, while SEMBCORP a
matter of form not affecting the merits
of the controversy, and if it had been a corporation incorporated in Singapore.
commissioner's report, the defect could MABUHAY and IDHI incorporated WJSC (Water Jest
have been amended or disregarded by
the Court Shipping Corp) in the PH to engage in the venture of
carrying passengers on a common carriage by inter-
Thirdly, the proper remedy against an order
island fast ferry, they also incorporated WJNA (Water
confirming, vacating, correcting or modifying
Jest Netherlands Antilles in Netherlands. Then,
arbitral award, losing party may move for MR
MABUHAY, IDHI and SEMBCORP entered into
or appeal RTC’s ruling. Arbitration Law
Shareholders Agreement, and SEMBCORP decided
provides that an appeal may be through appeal
to invest in the said corporations.
Article 13 in their Agreement provides that MABUHAY Issue: WON RTC is correct in refusing to enforce the
and IDHI voluntarily agreed to jointly guarantee that Final Award.
SEMBCORP will receive a minimum return of Ruling:
US$929,875.50, and the agreement also provides NO, SC affirmed the decision of CA.
arbitration clause. [Firstly, SC held that the governing law as agreed by the
Conflict started when the audits revealed that WJSC parties under their arbitral clause will be Philippine Law
and WJNA incurred losses, and SEMBCORP for substantive law of contract and ICC rules for

demanded MABUHAY and IDHI to pay the guarantee procedural rules.

return. SEMBCORP even gave MABUHAY the Second, as to the jurisdiction, that CA has no jurisdiction

requested 3 months to settle its liability but still failed over the petition of Notice of Appeal because the proper
remedy is Petition for Review.
to do so, hence, SEMBCORP filed a request for
SC held that Special ADR Rules where it provides that
arbitration before ICC (International Chamber of
the remedy is Petition for Review took effect in 2009,
Commerce).
whereas, SEMBCORP’s notice of appeal was filed in
ICC through Dr. Chantara-Opakorn as sole arbitrator
2008, when ADR Act was already in effect, and in the
rendered the final award, ordered MABUHAY to pay
said Act, it did not specify the proper remedy from RTC
SEMBCORP half of Guarantee Return
to CA. Special ADR Rules cannot be retroactive apply to
(US$464,937.75) plus interest.
SEMBCORP, considering that when they filed notice of
SEMBCORP file a Petition for Recognition and appeal, they already acquire vested rights to due
Enforcement of Foreign Arbitral Award before RTC process when they rely on ADR Act.]
Makati. But MABUHAY opposed such and averred
that the said award is non-enforceable due to: As to the main issue, refusal of enforcement. SC held
- Award deals with conflict not falling within the that in our jurisdiction adopts a policy in favour of
terms of the submission to arbitration; arbitrations and there is a rule on PRESUMPTION IN
- Composition of arbitral authority was not in FAVOR OF ENFORCEMENT OF FOREIGN
accordance with the agreement; and ARBITRAL AWARD under Special ADR Rules.
- Recognition of the award is contrary to the However, Sec. 45 of ADR Act provides exemption to
public policy of the PH. the rules and the grounds are only those enumerated
RTC – dismissed the petition and ruled that the Award under Art. V of New York Convention.
could not be enforced, because the matter is an intra- Art V. states enforcement or recognition may be
corporate matter, since it is a mere contractual refused only if:
payment obligation of MABUHAY and IDHI and it has - The party furnishes to the competent authority
been rescinded and modified when there is merger or where the recognition is sought, proof that:
confusion of IDHI into SEMBCORP, and also held that o The agreement is invalid under the
the sole arbitrator lack expertise. law which the parties have subjected
CA – reversed and set aside the decision of RTC, and it;
held that court cannot disturb the arbitral tribunal’s o Party was not given proper notice as
determination of facts and interpretation of law. to the appointment of arbitrator or
arbitration proceedings or unable to
present his case;
 o The case or controversy not nature of claim by SEMBCORP is not intrinsically
contemplated by or not falling within connected with the regulation of the corporation, the
the terms of the submission of claim is based on the contract, wherein MABUHAY
arbitration; will pay Guarantee Return to SEMBCORP upon the
o Composition of arbitral authority or happening of specified event. SC held that the
procedure was not in accordance with determination of facts and interpretation laws by
parties’ agreement; and arbitral court in resolving the petition cannot be
o Award not yet become binding on the disturbed.
parties, or has been set aside or Third, as to the award is contrary to public policy.
suspended by competent authority of Public policy has not yet define in our jurisdiction and
the country. what is contrary to public policy in arbitration case, but

- If the authority in the country where SC mentioned the old case where Justice Laurel

recognition and enforcement is sought finds explained the term public policy (for the purpose of

that: declaring the contract void). Public policy is vague

o Subject matter of controversy is not and changeable in connotation, but if the contract has

capable of settlement by arbitration tendency to injure the public, is against public good,

under law of the country; or contravenes some established interest of society,

o It is contrary to public policy of that or inconsistent with sound policy and good morals, or

country. tends to undermine the security of individual rights, it

SC held that MABUHAY failed to establish any of is contrary to public policy.

the grounds for refusing enforcement and - Mabuhay contends that the award id contrary

recognition of foreign arbitral award. to public policy because Guarantee Return is

First, as to the sole arbitrator. Parties stipulated in violative of Civil Code, particularly partnership

their agreement that the sole arbitrator must be expert law, as it shields SEMBCORP from sharing

in the matter at issue, and it also provides that it shall the losses.

be appointed in accordance with ICC Rules. Hence, SC held that restrictive approach to public policy

when ICC appointed Dr. Chatara-Opakorn, it is valid, necessarily implies that not all violations of law may

and contrary to the contention of MABUHAY, the sole be deemed contrary to public policy. Also, it is not

arbitrator need not be expert in Philippine Law. When uncommon for the courts in Contracting States of New

the parties agreed to submit their dispute in York Convention to enforce awards which does not

international arbitration rules, they are deemed to conform to their domestic laws. In addition, the WJSN

have agreed to the procedure in appointing the and WJNA is not a partnership but a Joint Venture

arbitrator. In addition, ICC Court already rejected the Corporation, hence, MABUHAY erred in applying

challenge of MABUHAY to the appointment of DR. partnership law herein.

CHatara-Opakorn, hence, SC shall not entertain any - Mabuhay also argues that the 12% annual

challenge to the said appointment. interest is contrary to Philippine law, hence,

Second, as to the intra-corporate controversy. Dr. contrary to public policy.

Chatara-Opakorn held that the issue at hand is not an SC held that mere breach of foreign arbitral award

intra-corporate controversy considering that the with domestic mandatory rules on interest rates does
not amount to breach of public policy. Furthermore,
the 12% interest rate under the Final Award is not
unreasonably high or unconscionable.