REPUBLIC ACT NO. 876
AN ACT TO AUTHORIZE THE MAKING OF ARBITRATION AND SUBMISSION
AGREEMENTS, TO PROVIDE FOR THE APPOINTMENT OF ARBITRATORS
AND THE PROCEDURE FOR ARBITRATION IN CIVIL CONTROVERSIES, AND
FOR OTHER PURPOSES
Section 1. Short Title. - This Act shall be known as "The Arbitration Law."
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.
Such submission or contract may include question arising out of valuations,
appraisals or other controversies which may be collateral, incidental,
precedent or subsequent to any issue between the parties.
A controversy cannot be arbitrated where one of the parties to the
controversy is an infant, or a person judicially declared to be incompetent,
unless the appropriate court having jurisdiction approve a petition for
permission to submit such controversy to arbitration made by the general
guardian or guardian ad litem of the infant or of the incompetent.
But where a person capable of entering into a submission or contract has
knowingly entered into the same with a person incapable of so doing, the
objection on the ground of incapacity can be taken only in behalf of the
person so incapacitated.
Section 3. Controversies or cases not subject to the provisions of this Act. -
This Act shall not apply to controversies and to cases which are subject to
the jurisdiction of the Court of Industrial Relations or which have been
submitted to it as provided by Commonwealth Act Numbered One hundred
and three, as amended.
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 making of a contract or submission for arbitration described in section
two hereof, providing for arbitration of any controversy, shall be deemed a
consent of the parties to the jurisdiction of the Court of First Instance of the
province or city where any of the parties resides, to enforce such contract or
submission.
Section 5. Preliminary procedure. - An arbitration shall be instituted by:
(a) In the case of a contract to arbitrate future controversies by the service
by either party upon the other of a demand for arbitration in accordance
with the contract. Such demand shall be set forth the nature of the
controversy, the amount involved, if any, and the relief sought, together
with a true copy of the contract providing for arbitration. The demand shall
be served upon any party either in person or by registered mail. In the event
that the contract between the parties provides for the appointment of a
single arbitrator, the demand shall be set forth a specific time within which
the parties shall agree upon such arbitrator. If the contract between the
parties provides for the appointment of three arbitrators, one to be
selected by each party, the demand shall name the arbitrator appointed by
the party making the demand; and shall require that the party upon whom
the demand is made shall within fifteen days after receipt thereof advise in
writing the party making such demand of the name of the person appointed
by the second party; such notice shall require that the two arbitrators so
appointed must agree upon the third arbitrator within ten days from the
date of such notice.
(b) In the event that one party defaults in answering the demand, the
aggrieved party may file with the Clerk of the Court of First Instance having
jurisdiction over the parties, a copy of the demand for arbitration under the
contract to arbitrate, with a notice that the original demand was sent by
registered mail or delivered in person to the party against whom the claim is
asserted. Such demand shall set forth the nature of the controversy, the
amount involved, if any, and the relief sought, and shall be accompanied by
a true copy of the contract providing for arbitration.
(c) In the case of the submission of an existing controversy by the filing
with the Clerk of the Court of First Instance having jurisdiction, of the
submission agreement, setting forth the nature of the controversy, and the
amount involved, if any. Such submission may be filed by any party and shall
be duly executed by both parties.
(d) In the event that one party neglects, fails or refuses to arbitrate under
a submission agreement, the aggrieved party shall follow the procedure
prescribed in subparagraphs (a) and (b) of this section.
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. Five
days notice in writing of the hearing of such application shall be served
either personally or by registered mail upon the party in default. 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.
The court shall decide all motions, petitions or applications filed under the
provisions of this Act, within ten days after such motions, petitions, or
applications have been heard by it.
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.
Section 8. Appointment of arbitrators. - If, in the contract for arbitration or
in the submission described in section two, provision is made for a method
of naming or appointing an arbitrator or arbitrators, such method shall be
followed; but if no method be provided therein the Court of First Instance
shall designate an arbitrator or arbitrators.
The Court of First Instance shall appoint an arbitrator or arbitrators, as the
case may be, in the following instances:
(a) If the parties to the contract or submission are unable to agree upon a
single arbitrator; or
(b) If an arbitrator appointed by the parties is unwilling or unable to serve,
and his successor has not been appointed in the manner in which he was
appointed; or
(c) If either party to the contract fails or refuses to name his arbitrator
within fifteen days after receipt of the demand for arbitration; or
(d) If the arbitrators appointed by each party to the contract, or appointed
by one party to the contract and by the proper Court, shall fail to agree
upon or to select the third arbitrator.
(e) The court shall, in its discretion appoint one or three arbitrators,
according to the importance of the controversy involved in any of the
preceding cases in which the agreement is silent as to the number of
arbitrators.
(f) Arbitrators appointed under this section shall either accept or decline
their appointments within seven days of the receipt of their appointments.
In case of declination or the failure of an arbitrator or arbitrators to duly
accept their appointments the parties or the court, as the case may be, shall
proceed to appoint a substitute or substitutes for the arbitrator or
arbitrators who decline or failed to accept his or their appointments.
Section 9. Appointment of additional arbitrators. - Where a submission or
contract provides that two or more arbitrators therein designated or to be
thereafter appointed by the parties, may select or appoint a person as an
additional arbitrator, the selection or appointment must be in writing. Such
additional arbitrator must sit with the original arbitrators upon the hearing.
Section 10. Qualifications of arbitrators. - Any person appointed to serve
as an arbitrator must be of legal age, in full-enjoyment of his civil rights and
know how to read and write. No person appointed to served as an
arbitrator shall be related by blood or marriage within the sixth degree to
either party to the controversy. No person shall serve as an arbitrator in any
proceeding if he has or has had financial, fiduciary or other interest in the
controversy or cause to be decided or in the result of the proceeding, or has
any personal bias, which might prejudice the right of any party to a fair and
impartial award.
No party shall select as an arbitrator any person to act as his champion or to
advocate his cause.
If, after appointment but before or during hearing, a person appointed to
serve as an arbitrator shall discover any circumstances likely to create a
presumption of bias, or which he believes might disqualify him as an
impartial arbitrator, the arbitrator shall immediately disclose such
information to the parties. Thereafter the parties may agree in writing:
(a) to waive the presumptive disqualifying circumstances; or
(b) to declare the office of such arbitrator vacant. Any such vacancy shall
be filled in the same manner as the original appointment was made.
Section 11. Challenge of arbitrators. - The arbitrators may be challenged
only for the reasons mentioned in the preceding section which may have
arisen after the arbitration agreement or were unknown at the time of
arbitration.
The challenge shall be made before them.
If they do not yield to the challenge, the challenging party may renew the
challenge before the Court of First Instance of the province or city in which
the challenged arbitrator, or, any of them, if there be more than one,
resides. While the challenging incident is discussed before the court, the
hearing or arbitration shall be suspended, and it shall be continued
immediately after the court has delivered an order on the challenging
incident.
Section 12. Procedure by arbitrators. - Subject to the terms of the
submission or contract, if any are specified therein, are arbitrators selected
as prescribed herein must, within five days after appointment if the parties
to the controversy reside within the same city or province, or within fifteen
days after appointment if the parties reside in different provinces, set a time
and place for the hearing of the matters submitted to them, and must cause
notice thereof to be given to each of the parties. The hearing can be
postponed or adjourned by the arbitrators only by agreement of the parties;
otherwise, adjournment may be ordered by the arbitrators upon their own
motion only at the hearing and for good and sufficient cause. No
adjournment shall extend the hearing beyond the day fixed in the
submission or contract for rendering the award, unless the time so fixed is
extended by the written agreement of the parties to the submission or
contract or their attorneys, or unless the parties have continued with the
arbitration without objection to such adjournment.
The hearing may proceed in the absence of any party who, after due notice,
fails to be present at such hearing or fails to obtain an adjournment thereof.
An award shall not be made solely on the default of a party. The arbitrators
shall require the other party to submit such evidence as they may require
for making an award.
No one other than a party to said arbitration, or a person in the regular
employ of such party duly authorized in writing by said party, or a practicing
attorney-at-law, shall be permitted by the arbitrators to represent before
him or them any party to the arbitration. Any party desiring to be
represented by counsel shall notify the other party or parties of such
intention at least five days prior to the hearing.
The arbitrators shall arrange for the taking of a stenographic record of the
testimony when such a record is requested by one or more parties, and
when payment of the cost thereof is assumed by such party or parties.
Persons having a direct interest in the controversy which is the subject of
arbitration shall have the right to attend any hearing; but the attendance of
any other person shall be at the discretion of the arbitrators.
Section 13. Oath of arbitrators. - Before hearing any testimony, arbitrators
must be sworn, by any officer authorized by law to administer an oath,
faithfully and fairly to hear and examine the matters in controversy and to
make a just award according to the best of their ability and understanding.
Arbitrators shall have the power to administer the oaths to all witnesses
requiring them to tell the whole truth and nothing but the truth in any
testimony which they may give in any arbitration hearing. This oath shall be
required of every witness before any of his testimony is heard.
Section 14. Subpoena and subpoena duces tecum. - Arbitrators shall have
the power to require any person to attend a hearing as a witness. They shall
have the power to subpoena witnesses and documents when the relevancy
of the testimony and the materiality thereof has been demonstrated to the
arbitrators. Arbitrators may also require the retirement of any witness
during the testimony of any other witness. All of the arbitrators appointed
in any controversy must attend all the hearings in that matter and hear all
the allegations and proofs of the parties; but an award by the majority of
them is valid unless the concurrence of all of them is expressly required in
the submission or contract to arbitrate. The arbitrator or arbitrators shall
have the power at any time, before rendering the award, without prejudice
to the rights of any party to petition the court to take measures to
safeguard and/or conserve any matter which is the subject of the dispute in
arbitration.
Section 15. Hearing by arbitrators. - Arbitrators may, at the
commencement of the hearing, ask both parties for brief statements of the
issues in controversy and/or an agreed statement of facts. Thereafter the
parties may offer such evidence as they desire, and shall produce such
additional evidence as the arbitrators shall require or deem necessary to an
understanding and determination of the dispute. The arbitrators shall be
the sole judge of the relevancy and materiality of the evidence offered or
produced, and shall not be bound to conform to the Rules of Court
pertaining to evidence. Arbitrators shall receive as exhibits in evidence any
document which the parties may wish to submit and the exhibits shall be
properly identified at the time of submission. All exhibits shall remain in the
custody of the Clerk of Court during the course of the arbitration and shall
be returned to the parties at the time the award is made. The arbitrators
may make an ocular inspection of any matter or premises which are in
dispute, but such inspection shall be made only in the presence of all parties
to the arbitration, unless any party who shall have received notice thereof
fails to appear, in which event such inspection shall be made in the absence
of such party.
Section 16. Briefs. - At the close of the hearings, the arbitrators shall
specifically inquire of all parties whether they have any further proof or
witnesses to present; upon the receipt of a negative reply from all parties,
the arbitrators shall declare the hearing closed unless the parties have
signified an intention to file briefs. Then the hearing shall be closed by the
arbitrations after the receipt of briefs and/or reply briefs. Definite time limit
for the filing of such briefs must be fixed by the arbitrators at the close of
the hearing. Briefs may filed by the parties within fifteen days after the
close of the oral hearings; the reply briefs, if any, shall be filed within five
days following such fifteen-day period.
Section 17. Reopening of hearing. - The hearing may be reopened by the
arbitrators on their own motion or upon the request of any party, upon
good cause, shown at any time before the award is rendered. When
hearings are thus reopened the effective date for the closing of the hearings
shall be the date of the closing of the reopened hearing.
Section 18. Proceeding in lieu of hearing. - The parties to a submission or
contract to arbitrate may, by written agreement, submit their dispute to
arbitration by other than oral hearing. The parties may submit an agreed
statement of facts. They may also submit their respective contentions to the
duly appointed arbitrators in writing; this shall include a statement of facts,
together with all documentary proof. Parties may also submit a written
argument. Each party shall provide all other parties to the dispute with a
copy of all statements and documents submitted to the arbitrators. Each
party shall have an opportunity to reply in writing to any other party's
statements and proofs; but if such party fails to do so within seven days
after receipt of such statements and proofs, he shall be deemed to have
waived his right to reply. Upon the delivery to the arbitrators of all
statements and documents, together with any reply statements, the
arbitrators shall declare the proceedings in lieu of hearing closed.
Section 19. Time for rendering award. - Unless the parties shall have
stipulated by written agreement the time within which the arbitrators must
render their award, the written award of the arbitrators shall be rendered
within thirty days after the closing of the hearings or if the oral hearings
shall have been waived, within thirty days after the arbitrators shall have
declared such proceedings in lieu of hearing closed. This period may be
extended by mutual consent of the parties.alf-itc
Section 20. Form and contents of award. - The award must be made in
writing and signed and acknowledged by a majority of the arbitrators, if
more than one; and by the sole arbitrator, if there is only one. Each party
shall be furnished with a copy of the award. The arbitrators in their award
may grant any remedy or relief which they deem just and equitable and
within the scope of the agreement of the parties, which shall include, but
not be limited to, the specific performance of a contract.
In the event that the parties to an arbitration have, during the course of
such arbitration, settled their dispute, they may request of the arbitrators
that such settlement be embodied in an award which shall be signed by the
arbitrators. No arbitrator shall act as a mediator in any proceeding in which
he is acting as arbitrator; and all negotiations towards settlement of the
dispute must take place without the presence of the arbitrators.
The arbitrators shall have the power to decide only those matters which
have been submitted to them. The terms of the award shall be confined to
such disputes.
The arbitrators shall have the power to assess in their award the expenses
of any party against another party, when such assessment shall be deemed
necessary.
Section 21. Fees of arbitration. - The fees of the arbitrators shall be fifty
pesos per day unless the parties agree otherwise in writing prior to the
arbitration.
Section 22. Arbitration deemed a special proceeding. - Arbitration under a
contract or submission shall be deemed a special proceeding, of which the
court specified in the contract or submission, or if none be specified, the
Court of First Instance for the province or city in which one of the parties
resides or is doing business, or in which the arbitration was held, shall have
jurisdiction. Any application to the court, or a judge thereof, hereunder shall
be made in manner provided for the making and hearing of motions, except
as otherwise herein expressly provided.
Section 23. Confirmation of award. - At any time within one month after the
award is made, any party to the controversy which was arbitrated may
apply to the court having jurisdiction, as provided in section twenty-eight,
for an order confirming the award; and thereupon the court must grant
such order unless the award is vacated, modified or corrected, as prescribed
herein. Notice of such motion must be served upon the adverse party or his
attorney as prescribed by law for the service of such notice upon an
attorney in action in the same court.
Section 24. Grounds for vacating award. - In any one of the following cases,
the court must make an order vacating the award upon the petition of any
party to the controversy when such party proves affirmatively that in the
arbitration proceedings:
(a) The award was procured by corruption, fraud, or other undue means;
or
(b) That there was evident partiality or corruption in the arbitrators or any
of them; or
(c) That the arbitrators were guilty of misconduct in refusing to postpone
the hearing upon sufficient cause shown, or in refusing to hear evidence
pertinent and material to the controversy; that one or more of the
arbitrators was disqualified to act as such under section nine hereof, and
wilfully refrained from disclosing such disqualifications or of any other
misbehavior by which the rights of any party have been materially
prejudiced; or
(d) That the arbitrators exceeded their powers, or so imperfectly executed
them, that a mutual, final and definite award upon the subject matter
submitted to them was not made.
Where an award is vacated, the court, in its discretion, may direct a new
hearing either before the same arbitrators or before a new arbitrator or
arbitrators to be chosen in the manner provided in the submission or
contract for the selection of the original arbitrator or arbitrators, and any
provision limiting the time in which the arbitrators may make a decision
shall be deemed applicable to the new arbitration and to commence from
the date of the court's order.
Where the court vacates an award, costs, not exceeding fifty pesos and
disbursements may be awarded to the prevailing party and the payment
thereof may be enforced in like manner as the payment of costs upon the
motion in an action.
Section 25. Grounds for modifying or correcting award. - In any one of the
following cases, the court must make an order modifying or correcting the
award, upon the application of any party to the controversy which was
arbitrated:
(a) Where there was an evident miscalculation of figures, or an evident
mistake in the description of any person, thing or property referred to in the
award; or
(b) Where the arbitrators have awarded upon a matter not submitted to
them, not affecting the merits of the decision upon the matter submitted;
or
(c) Where the award is imperfect in a matter of form not affecting the
merits of the controversy, and if it had been a commissioner's report, the
defect could have been amended or disregarded by the court.
The order may modify and correct the award so as to effect the intent
thereof and promote justice between the parties.
Section 26. Motion to vacate, modify or correct award: when made. - Notice
of a motion to vacate, modify or correct the award must be served upon the
adverse party or his counsel within thirty days after award is filed or
delivered, as prescribed by law for the service upon an attorney in an
action.
Section 27. Judgment. - Upon the granting of an order confirming, modifying
or correcting an award, judgment may be entered in conformity therewith
in the court wherein said application was filed. Costs of the application and
the proceedings subsequent thereto may be awarded by the court in its
discretion. If awarded, the amount thereof must be included in the
judgment.
Section 28. Papers to accompany motion to confirm, modify, correct, or
vacate award. - The party moving for an order confirming, modifying,
correcting, or vacating an award, shall at the time that such motion is filed
with the court for the entry of judgment thereon also file the following
papers with the Clerk of Court;
(a) The submission, or contract to arbitrate; the appointment of the
arbitrator or arbitrators; and each written extension of the time, if any,
within which to make the award.
(b) A verified of the award.
(c) Each notice, affidavit, or other paper used upon the application to
confirm, modify, correct or vacate such award, and a copy of each of the
court upon such application.
The judgment shall be docketed as if it were rendered in an action.
The judgment so entered shall have the same force and effect in all
respects, as, and be subject to all the provisions relating to, a judgment in
an action; and it may be enforced as if it had been rendered in the court in
which it is entered.
Section 29. Appeals. - An appeal may be taken from an order made in a
proceeding under this Act, or from a judgment entered upon an award
through certiorari proceedings, but such appeals shall be limited to
questions of law. The proceedings upon such an appeal, including the
judgment thereon shall be governed by the Rules of Court in so far as they
are applicable.
Section 30. Death of party. - Where a party dies after making a submission
or a contract to arbitrate as prescribed in this Act, the proceedings may be
begun or continued upon the application of, or notice to, his executor or
administrator, or temporary administrator of his estate. In any such case,
the court may issue an order extending the time within which notice of a
motion to confirm, vacate, modify or correct an award must be served.
Upon confirming an award, where a party has died since it was filed or
delivered, the court must enter judgment in the name of the original party;
and the proceedings thereupon are the same as where a party dies after a
verdict.
Section 31. Repealing clause. - The provisions of chapters one and two, Title
XIV, of the Civil Code shall remain in force. All other laws and parts of laws
inconsistent with this Act are hereby repealed. If any provision of this Act
shall be held invalid the remainder that shall not be affected thereby.
Section 32. Effectivity. - This Act shall take effect six months after its
approval.
Approved: June 19, 1953
Cases:
Umbao v. Yap, G.R. No. L-8933, February 28, 1957
BENGZON, J.:
This is an appeal from the judgment of the Manila Court of First Instance
"ordering the defendant to pay to the plaintiff the sum of P2,298.97,
representing plaintiff's unpaid overtime pay while in defendant's employ,
plus P300 as attorney's fees, with interest on the amount first mentioned at
the rate of 6 per cent per annum from the date of the filing of the complaint
on November 4, 1954, until said amount has been paid in full. With costs
against the defendant."
The complaint sought enforcement of an arbitration award rendered by the
Wage Administration Service in pursuance of the arbitration agreement
signed by Silverio Umbao and Santiago Yap to settle their dispute regarding
unpaid wages claimed by the first as employee from the second as
employer.
The complaint alleged that in June 1954 both had agreed in writing to
"submit their case to the Wage Administration Service for investigation" and
"to abide by whatever decision (said) office may render on the case" which
"they recognized . . . to be final and conclusive." It also alleged, that proper
investigation had been conducted by Severo Puncan of the same Service,
who after hearing the parties and considering their evidence, declared in a
written report, respondent Yap to be liable for unpaid wages in the amount
of P2,998.97; that the award had been approved by Ruben Santos, Acting
Chief of the Service; and that Yap had refused to abide by and comply with
it. The pleading included a copy of the arbitration agreement and of the
award.
The defendant's answer did not deny the existence of the covenant and of
the award. But it questioned the enforceability of both, 1 contending mainly
that the Service had no legal authority to act as arbitration, that the
procedural requirements of Republic Act No. 602 had not been followed,
and that the provisions of Republic Act No. 876 known as the Arbitration Said act was obviously adopted to supplement-not to supplant-the New Civil
Law had been disregarded. Code on arbitration. It expressly declares that "the provisions of chapters
one and two, Title XIV, Book of the Civil Code the parties may select the
In view of the answer, the plaintiff asked for judgment on the pleadings.
arbitrator without court intervention. And section 8 of the Act impliedly
And the Court, nothing non-observance of the procedure outlined in
permits them to do so. There is nothing in Republic Act 876 requiring court
Republic Act No. 876, gave judgment for defendant. However upon motion
permission of knowledge or intervention before the arbitrator selected by
to reconsider, the judge seeing differently, held the arbitration agreements
the parties may perform his assigned work.
to be a contract obligatory on the parties under the provisions of the New
Civil Code Arts. 2042 et seq. Consequently he rendered judgment against True, there is section 5 of the Act which provides:
defendant, the dispositive part of which has been quoted above. Hence this
SEC. 5. Preliminary procedure. An arbitration shall be instituted by:
appeal.
(a) In the case of a contract to arbitrate future controversies by the service
Defendant argues that the New Civil Code does not apply, because
by either party upon the other of a demand for arbitration in accordance
arbitration only takes place where a covenant is entered into "whereby
with the contract. Such demand shall set forth the nature of the
parties litigant by making reciprocal concessions or agreements of facts,
controversy, the amount involved, if any, and the relief sought, together
avoid a litigation or put an end to one already commenced" which was not
with a true copy of the contract providing for arbitration. . . .
the case at bar. The argument evidently assumes that a compromise
agreement is the same as an arbitration agreement. Such assumption is (b) In the event that one party defaults in answering the demand, the
error: one is different from the other; they are treated in two separate aggrieved party may file with the Clerk of Court of First Instance having
chapters of the Code. jurisdiction over the parties, a copy of the demand for arbitration under the
contract to arbitrate, . . . .
Again appellant argues that the award should not be executed because the
arbitration had not been appointed in accordance with rules promulgated (c) In the case of the submission of an existing controversy by the filing with
by the Supreme Court, pursuant to Article 2046 of the New Civil Code. the clerk of the Court of First Instance having jurisdiction, of the submission
agreement, setting forth the nature of the controversy, and the amount
ART. 2046. The appointment of arbitrators and the procedure for arbitration
involved, if any. Such submission may be filed by any party and shall be duly
shall be governed by the provisions of such rules of court as the Supreme
executed by both parties.
Court shall promulgate.
(d) In the event that one party neglets, fails or refuses to arbitrate under a
No rules have been promulgated by this Court. However the Legislature
submission agreement, the aggrieved party shall follow the procedure
adopted such rules in Republic Act No. 876 known as "The Arbitration Law'
prescribed in subparagraphs (a) and (b) of this section.
effective December 1953.
Paragraph (c) seems, at first glance, to require the institution of court
The question then is: has this arbitration by the Service conformed with the
proceedings. But on second thought it will be preceived that court action is
Act? This brings up the appellant's first assignment of error he points out
needed when one party, after entering into the contract to arbitrate,
that no application had been filed in court for the appointment of the
neglets, fails or refuses to arbitrate as provided in paragraph (d) It may also
arbitrator under Republic Act No. 876, and the court had appointed Severo
be applied where the arbitrator has not been selected by the parties who
Puncan as such.
have agreed to arbitrate. The section does not mean there can be no
arbitration without a previous court actuation.
The case between herein litigants has not required court intervention from
the beginning, because they had named the arbitrator: the Administration
Service 2 and necessarily the proper officer, thereof, Severo Puncan. And this
defendant should not be permitted to question the authority of said officer
now, because he voluntarily submitted his evidence to him; and he only
turned around to deny such authority when the resultant verdict adversely
affected his pocket. He even appealed to the Secretary of Labor, and
without questioning Puncan's authority, pleaded for exoneration on the
merits.3
So much for court initiative, and arbitrator's appointment. As to the
arbitration proceedings, Republic Act No. 876 contains provisions about the
procedure to be adopted by arbitrators, their oath, the hearings, and the
form and content of the award. Even so, herein appellant asserted no
prejudicial departure therefrom.
As already stated. Republic Act No. 876 did not require court intervention
(in the case at bar) prior to the award of the arbitrator, no ground for it
having arisen, as the parties voluntarily took steps to carry out the
settlement process down to the arbiter's decision. It was only after such
award, when defendant refused to comply that judicial action became
necessary, thru the means afforded by the statute:
SEC. 23. Confirmation of award. At any time within one month after the
award is made, any party to the controversy which was arbitrated may
apply to the court having jurisdiction, as provided thereupon the court must
grant such order unless the award is vacated, modified or corrected, as
prescribed herein. . . .
SEC. 27. Judgment. Upon the granting of an order confirming, modifying
or correcting an award, judgment maybe entered in conformity therewith in
the court wherein said application was filed. . . . (Republic Act 876.) .
These provisions, we believe, apply whether or not the court intervened
from the very beginning.
Now then, examining the complaint and the judgment entered herein in the
light of the above directions, we find substantial conformity therewith; so
much so that defendant raised no issue on the same.
Wherefore, the judgment should be, and is hereby affirmed, with costs. So
ordered.
Continental Marble Corp. V. National Labor Relations Commission (Nlrc);,
Et Al., G.R. No. L-43825, May 9, 1988
PADILLA, J.:
In this petition for mandamus, prohibition and certiorari with preliminary
injunction, petitioners seek to annul and set aside the decision rendered by
the respondent Arbitrator Jose T. Collado, dated 29 December 1975, in
NLRC Case No. LR-6151, entitled: "Rodito Nasayao, complainant, versus
Continental Marble Corp. and Felipe David, respondents," and the
resolution issued by the respondent Commission, dated 7 May 1976, which
dismissed herein petitioners' appeal from said decision.
In his complaint before the NLRC, herein private respondent Rodito Nasayao
claimed that sometime in May 1974, he was appointed plant manager of
the petitioner corporation, with an alleged compensation of P3,000.00, a
month, or 25% of the monthly net income of the company, whichever is
greater, and when the company failed to pay his salary for the months of
May, June, and July 1974, Rodito Nasayao filed a complaint with the
National Labor Relations Commission, Branch IV, for the recovery of said
unpaid varies. The case was docketed therein as NLRC Case No. LR-6151.
Answering, the herein petitioners denied that Rodito Nasayao was
employed in the company as plant manager with a fixed monthly salary of
P3,000.00. They claimed that the undertaking agreed upon by the parties
was a joint venture, a sort of partnership, wherein Rodito Nasayao was to
keep the machinery in good working condition and, in return, he would get
the contracts from end-users for the installation of marble products, in
which the company would not interfere. In addition, private respondent
Nasayao was to receive an amount equivalent to 25% of the net profits that
the petitioner corporation would realize, should there be any. Petitioners
alleged that since there had been no profits during said period, private
respondent was not entitled to any amount.
The case was submitted for voluntary arbitration and the parties selected
the herein respondent Jose T. Collado as voluntary arbitrator. In the course
of the proceedings, however, the herein petitioners challenged the
arbitrator's capacity to try and decide the case fairly and judiciously and
asked him to desist from further hearing the case. But, the respondent
arbitrator refused. In due time, or on 29 December 1975, he rendered
judgment in favor of the complainant, ordering the herein petitioners to pay
Rodito Nasayao the amount of P9,000.00, within 10 days from notice. 1
Upon receipt of the decision, the herein petitioners appealed to the
National Labor Relations Commission on grounds that the labor arbiter
gravely abused his discretion in persisting to hear and decide the case
notwithstanding petitioners' request for him to desist therefrom: and that
the appealed decision is not supported by evidence. 2
On 18 March 1976, Rodito Nasayao filed a motion to dismiss the appeal on
the ground that the decision of the voluntary arbitrator is final,
unappealable, and immediately executory; 3 and, on 23 March 1976, he filed
a motion for the issuance of a writ of execution. 4
Acting on the motions, the respondent Commission, in a resolution dated 7
May 1976, dismissed the appeal on the ground that the decision appealed
from is final, unappealable and immediately executory, and ordered the
herein petitioners to comply with the decision of the voluntary arbitrator
within 10 days from receipt of the resolution. 5
The petitioners are before the Court in the present recourse. As prayed for,
the Court issued a temporary restraining order, restraining herein
respondents from enforcing and/or carrying out the questioned decision
and resolution. 6
The issue for resolution is whether or not the private respondent Rodito
Nasayao was employed as plant manager of petitioner Continental Marble
Corporation with a monthly salary of P3,000.00 or 25% of its monthly
income, whichever is greater, as claimed by said respondent, or entitled to
receive only an amount equivalent to 25% of net profits, if any, that the
company would realize, as contended by the petitioners.
The respondent arbitrator found that the agreement between the parties
was for the petitioner company to pay the private respondent, Rodito
Nasayao, a monthly salary of P3,000.00, and, consequently, ordered the
company to pay Rodito Nasayao the amount of P9,000.00 covering a period
of three (3) months, that is, May, June and July 1974.
The respondent Rodito Nasayao now contends that the judgment or award
of the voluntary arbitrator is final, unappealable and immediately
executory, and may not be reviewed by the Court. His contention is based
upon the provisions of Art. 262 of the Labor Code, as amended.
The petitioners, upon the other hand, maintain that "where there is patent
and manifest abuse of discretion, the rule on unappealability of awards of a
voluntary arbitrator becomes flexible and it is the inherent power of the
Courts to maintain the people's faith in the administration of justice." The
question of the finality and unappealability of a decision and/or award of a
voluntary arbitrator had been laid to rest in Oceanic Bic Division (FFW) vs.
Romero, 7 and reiterated in Mantrade FMMC Division Employees and
Workers Union vs. Bacungan. 8 The Court therein ruled that it can review the
decisions of voluntary arbitrators, thus-
We agree with the petitioner that the decisions of voluntary arbitrators
must be given the highest respect and as a general rule must be accorded a
certain measure of finality. This is especially true where the arbitrator
chosen by the parties enjoys the first rate credentials of Professor Flerida
Ruth Pineda Romero, Director of the U.P. Law Center and an academician of
unquestioned expertise in the field of Labor Law. It is not correct, however,
that this respect precludes the exercise of judicial review over their
decisions. Article 262 of the Labor Code making voluntary arbitration
awards final, inappealable, and executory except where the money claims
exceed P l 00,000.00 or 40% of paid-up capital of the employer or where
there is abuse of discretion or gross incompetence refers to appeals to the
National Labor Relations Commission and not to judicial review.
Inspite of statutory provisions making 'final' the decisions of certain
administrative agencies, we have taken cognizance of petitions questioning
these decisions where want of jurisdiction, grave abuse of discretion,
violation of due process, denial of substantial justice, or erroneous
interpretation of the law were brought to our attention. There is no
provision for appeal in the statute creating the Sandiganbayan but this has
not precluded us from examining decisions of this special court brought to
us in proper petitions. ...
The Court further said:
A voluntary arbitrator by the nature of her fucntions acts in quasi-judicial
capacity. There is no reason why herdecisions involving interpretation of
law should be beyond this Court's review. Administrative officials are
presumed to act in accordance with law and yet we do hesitate to pass
upon their work where a question of law is involved or where a showing of
abuse of authority or discretion in their official acts is properly raised in
petitions for certiorari.
The foregoing pronouncements find support in Section 29 of Republic Act
No. 876, otherwise known as the Arbitration Law, which provides:
Sec. 29. Appeals An appeal may be taken from an order made in a
proceeding under this Act, or from a judgment entered upon an award
through certiorari proceedings, but such appeals shall be limited to
questions of law. The proceedings upon such an appeal, including the
judgment thereon shall be governed by the Rules of Court in so far as they
are applicable.
9
The private respondent, Rodito Nasayao, in his Answer to the petition, also
claims that the case is premature for non-exhaustion of administrative
remedies. He contends that the decision of the respondent Commission
should have been first appealed by petitioners to the Secretary of Labor,
and, if they are not satisfied with his decision, to appeal to the President of
the Philippines, before resort is made to the Court.
The contention is without merit. The doctrine of exhaustion of
administrative remedies cannot be invoked in this case, as contended. In
the recent case of John Clement Consultants, Inc. versus National Labor
Relations Commission, 10 the Court said:
As is well known, no law provides for an appeal from decisions of the
National Labor Relations Commission; hence, there can be no review and
reversal on appeal by higher authority of its factual or legal conclusions.
When, however, it decides a case without or in excess of its jurisdiction, or
with grave abuse of discretion, the party thereby adversely affected may
obtain a review and nullification of that decision by this Court through the
extraordinary writ of certiorari. Since, in this case, it appears that the
Commission has indeed acted without jurisdiction and with grave abuse of
discretion in taking cognizance of a belated appeal sought to be taken from
a decision of Labor Arbiter and thereafter reversing it, the writ of certiorari
will issue to undo those acts, and do justice to the aggrieved party.
We also find no merit in the contention of Rodito Nasayao that only
questions of law, and not findings of fact of a voluntary arbitrator may be
reviewed by the Court, since the findings of fact of the voluntary arbitrator
are conclusive upon the Court.
While the Court has accorded great respect for, and finality to, findings of
fact of a voluntary arbitrator 11 and administrative agencies which have
acquired expertise in their respective fields, like the Labor Department and
the National Labor Relations Commission, 12 their findings of fact and the
conclusions drawn therefrom have to be supported by substantial evidence.
ln that instant case, the finding of the voluntary arbitrator that Rodito
Nasayao was an employee of the petitioner corporation is not supported by
the evidence or by the law.
On the other hand, we find the version of the petitioners to be more
plausible and in accord with human nature and the ordinary course of
things. As pointed out by the petitioners, it was illogical for them to hire the
private respondent Rodito Nasayao as plant manager with a monthly salary
of P3,000.00, an amount which they could ill-afford to pay, considering that
the business was losing, at the time he was hired, and that they were about
to close shop in a few months' time.
Besides, there is nothing in the record which would support the claim of
Rodito Nasayao that he was an employee of the petitioner corporation. He
was not included in the company payroll, nor in the list of company
employees furnished the Social Security System.
Most of all, the element of control is lacking. In Brotherhood Labor Unity
Movement in the Philippines vs. Zamora, 13 the Court enumerated the
factors in determining whether or not an employer-employee relationship
exists, to wit:
In determining the existence of an employer-employee relationship, the
elements that are generally considered are the following: (a) the selection
and engagement of the employee; (b) the payment of wages; (c) the power
of dismissal; and (d) the employer's power to control the employee with
respect to the means and methods by which the work is to be
accomplished. It is the so-called "control test" that is the most important
element (Investment Planning Corp. of the Phils. vs. The Social Security
System, 21 SCRA 924; Mafinco Trading Corp. v. Ople, supra, and Rosario
Brothers, Inc. v. Ople, 131 SCRA 72).<re||an1w>
In the instant case, it appears that the petitioners had no control over the
conduct of Rodito Nasayao in the performance of his work. He decided for
himself on what was to be done and worked at his own pleasure. He was
not subject to definite hours or conditions of work and, in turn, was
compensated according to the results of his own effort. He had a free hand
in running the company and its business, so much so, that the petitioner
Felipe David did not know, until very much later, that Rodito Nasayao had
collected old accounts receivables, not covered by their agreement, which
he converted to his own personal use. It was only after Rodito Nasayao had
abandoned the plant following discovery of his wrong- doings, that Felipe
David assumed management of the plant.
Absent the power to control the employee with respect to the means and
methods by which his work was to be accomplished, there was no
employer-employee relationship between the parties. Hence, there is no
basis for an award of unpaid salaries or wages to Rodito Nasayao.
WHEREFORE, the decision rendered by the respondent Jose T. Collado in
NLRC Case No. LR-6151, entitled: "Rodito Nasayao, complainant, versus
Continental Marble Corp. and Felipe David, respondents," on 29 December
1975, and the resolution issued by the respondent National Labor Relations
Commission in said case on 7 May 1976, are REVERSED and SET ASIDE and
another one entered DISMISSING private respondent's complaints. The
temporary restraning order heretofore isued by the Court is made
permanent. Without costs.
SO ORDERED.
Malayan Insurance Co., Inc. v. St. Francis Square Realty, G.R Nos. 198916-
17, 198920-21, 11 January 2016
Bases Conversion Development Authority, et al., v. DMCI Project
Developers, Inc., et al., G.R. No. 173137, 11 January 2016
ABS-CBN Broadcasting Corp. v. World Interactive Network Systems Japan
Co., Ltd., G.R. No. 169332, February 11, 2008
CORONA, J.:
This petition for review on certiorari under Rule 45 of the Rules of
Court seeks to set aside the February 16, 2005 decision and August 16, 2005
resolution of the Court of Appeals (CA) in CA-G.R. SP No. 81940.
On September 27, 1999, petitioner ABS-CBN Broadcasting
Corporation entered into a licensing agreement with respondent World
Interactive Network Systems (WINS) Japan Co., Ltd., a foreign corporation
licensed under the laws of Japan. Under the agreement, respondent was
granted the exclusive license to distribute and sublicense the distribution of
the television service known as The Filipino Channel (TFC) in Japan. By virtue
thereof, petitioner undertook to transmit the TFC programming signals to
respondent which the latter received through its decoders and distributed
to its subscribers.
A dispute arose between the parties when petitioner accused
respondent of inserting nine episodes of WINS WEEKLY, a weekly 35-minute
community news program for Filipinos in Japan, into the TFC programming
from March to May 2002. Petitioner claimed that these were unauthorized
insertions constituting a material breach of their agreement. Consequently,
on May 9, 2002, petitioner notified respondent of its intention to terminate
the agreement effective June 10, 2002.
Thereafter, respondent filed an arbitration suit pursuant to the
arbitration clause of its agreement with petitioner. It contended that the
airing of WINS WEEKLY was made with petitioner's prior approval. It also
alleged that petitioner only threatened to terminate their agreement
because it wanted to renegotiate the terms thereof to allow it to demand
higher fees. Respondent also prayed for damages for petitioner's alleged
grant of an exclusive distribution license to another entity, NHK (Japan
Broadcasting Corporation).
The parties appointed Professor Alfredo F. Tadiar to act as sole
arbitrator. They stipulated on the following issues in their terms of
reference (TOR):
1. Was the broadcast of WINS WEEKLY by the claimant duly authorized by
the respondent [herein petitioner]?
2. Did such broadcast constitute a material breach of the agreement that
is a ground for termination of the agreement in accordance with Section 13
(a) thereof?
3. If so, was the breach seasonably cured under the same contractual
provision of Section 13 (a)?
4. Which party is entitled to the payment of damages they claim and to
the other reliefs prayed for?
xxx xxx xxx
The arbitrator found in favor of respondent. He held that petitioner
gave its approval to respondent for the airing of WINS WEEKLY as shown by
a series of written exchanges between the parties. He also ruled that, had
there really been a material breach of the agreement, petitioner should
have terminated the same instead of sending a mere notice to terminate
said agreement. The arbitrator found that petitioner threatened to
terminate the agreement due to its desire to compel respondent to re-
negotiate the terms thereof for higher fees. He further stated that even if
respondent committed a breach of the agreement, the same was
seasonably cured. He then allowed respondent to recover temperate
damages, attorney's fees and one-half of the amount it paid as arbitrator's
fee.
Petitioner filed in the CA a petition for review under Rule 43 of the
Rules of Court or, in the alternative, a petition for certiorari under Rule 65 of
the same Rules, with application for temporary restraining order and writ of
preliminary injunction. It was docketed as CA-G.R. SP No. 81940. It alleged
serious errors of fact and law and/or grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of the arbitrator.
Respondent, on the other hand, filed a petition for confirmation of
arbitral award before the Regional Trial Court (RTC) of Quezon City, Branch
93, docketed as Civil Case No. Q-04-51822.
Consequently, petitioner filed a supplemental petition in the CA
seeking to enjoin the RTC of Quezon City from further proceeding with the
hearing of respondent's petition for confirmation of arbitral award. After
the petition was admitted by the appellate court, the RTC of Quezon City
issued an order holding in abeyance any further action on respondent's
petition as the assailed decision of the arbitrator had already become the
subject of an appeal in the CA. Respondent filed a motion for
reconsideration but no resolution has been issued by the lower court to
date.
On February 16, 2005, the CA rendered the assailed decision
dismissing ABS-CBNs petition for lack of jurisdiction. It stated that as the
TOR itself provided that the arbitrator's decision shall be final and
unappealable and that no motion for reconsideration shall be filed, then the
petition for review must fail. It ruled that it is the RTC which has jurisdiction
over questions relating to arbitration. It held that the only instance it can
exercise jurisdiction over an arbitral award is an appeal from the trial court's
decision confirming, vacating or modifying the arbitral award. It further
stated that a petition for certiorari under Rule 65 of the Rules of Court is
proper in arbitration cases only if the courts refuse or neglect to inquire into
the facts of an arbitrator's award. The dispositive portion of the CA decision
read:
WHEREFORE, the instant petition is hereby DISMISSED for lack of
jurisdiction. The application for a writ of injunction and temporary
restraining order is likewise DENIED. The Regional Trial Court of Quezon City
Branch 93 is directed to proceed with the trial for the Petition for
Confirmation of Arbitral Award.
SO ORDERED.
Petitioner moved for reconsideration. The same was denied. Hence,
this petition.
Petitioner contends that the CA, in effect, ruled that: (a) it should
have first filed a petition to vacate the award in the RTC and only in case of
denial could it elevate the matter to the CA via a petition for review under
Rule 43 and (b) the assailed decision implied that an aggrieved party to an
arbitral award does not have the option of directly filing a petition for
review under Rule 43 or a petition for certiorari under Rule 65 with the CA
even if the issues raised pertain to errors of fact and law or grave abuse of
discretion, as the case may be, and not dependent upon such grounds as
enumerated under Section 24 (petition to vacate an arbitral award) of RA
876 (the Arbitration Law). Petitioner alleged serious error on the part of the
CA.
The issue before us is whether or not an aggrieved party in a voluntary
arbitration dispute may avail of, directly in the CA, a petition for review
under Rule 43 or a petition for certiorari under Rule 65 of the Rules of Court,
instead of filing a petition to vacate the award in the RTC when the grounds
invoked to overturn the arbitrators decision are other than those for a
petition to vacate an arbitral award enumerated under RA 876.
RA 876 itself mandates that it is the Court of First Instance, now the RTC,
which has jurisdiction over questions relating to arbitration, such as a
petition to vacate an arbitral award.
Section 24 of RA 876 provides for the specific grounds for a petition
to vacate an award made by an arbitrator:
Sec. 24. Grounds for vacating award. - In any one of the following
cases, the court must make an order vacating the award upon the petition
of any party to the controversy when such party proves affirmatively that in
the arbitration proceedings:
(a) The award was procured by corruption, fraud, or other undue
means; or
(b) That there was evident partiality or corruption in the arbitrators
or any of them; or
(c) That the arbitrators were guilty of misconduct in refusing to
postpone the hearing upon sufficient cause shown, or in refusing to hear
evidence pertinent and material to the controversy; that one or more of the
arbitrators was disqualified to act as such under section nine hereof, and
willfully refrained from disclosing such disqualifications or of any other
misbehavior by which the rights of any party have been materially
prejudiced; or
(d) That the arbitrators exceeded their powers, or so imperfectly
executed them, that a mutual, final and definite award upon the subject
matter submitted to them was not made.
Based on the foregoing provisions, the law itself clearly provides that the
RTC must issue an order vacating an arbitral award only in any one of the . .
. cases enumerated therein. Under the legal maxim in statutory construction
expressio unius est exclusio alterius, the explicit mention of one thing in a
statute means the elimination of others not specifically mentioned. As RA
876 did not expressly provide for errors of fact and/or law and grave abuse
of discretion (proper grounds for a petition for review under Rule 43 and a
petition for certiorari under Rule 65, respectively) as grounds for
maintaining a petition to vacate an arbitral award in the RTC, it necessarily
follows that a party may not avail of the latter remedy on the grounds of
errors of fact and/or law or grave abuse of discretion to overturn an arbitral
award.
Adamson v. Court of Appeals gave ample warning that a petition to
vacate filed in the RTC which is not based on the grounds enumerated in
Section 24 of RA 876 should be dismissed. In that case, the trial court
vacated the arbitral award seemingly based on grounds included in Section
24 of RA 876 but a closer reading thereof revealed otherwise. On appeal,
the CA reversed the decision of the trial court and affirmed the arbitral
award. In affirming the CA, we held:
The Court of Appeals, in reversing the trial court's decision held that
the nullification of the decision of the Arbitration Committee was not based
on the grounds provided by the Arbitration Law and that xxx private
respondents (petitioners herein) have failed to substantiate with any
evidence their claim of partiality. Significantly, even as respondent judge
ruled against the arbitrator's award, he could not find fault with their
impartiality and integrity. Evidently, the nullification of the award rendered
at the case at bar was not made on the basis of any of the grounds provided
by law.
xxx xxx xxx
It is clear, therefore, that the award was vacated not because of
evident partiality of the arbitrators but because the latter interpreted the
contract in a way which was not favorable to herein petitioners and because
it considered that herein private respondents, by submitting the
controversy to arbitration, was seeking to renege on its obligations under
the contract.
xxx xxx xxx
It is clear then that the Court of Appeals reversed the trial court not
because the latter reviewed the arbitration award involved herein, but
because the respondent appellate court found that the trial court had no
legal basis for vacating the award. (Emphasis supplied).
In cases not falling under any of the aforementioned grounds to
vacate an award, the Court has already made several pronouncements that
a petition for review under Rule 43 or a petition for certiorari under Rule 65
may be availed of in the CA. Which one would depend on the grounds relied
upon by petitioner.
In Luzon Development Bank v. Association of Luzon Development
Bank Employees, the Court held that a voluntary arbitrator is properly
classified as a quasi-judicial instrumentality and is, thus, within the ambit of
Section 9 (3) of the Judiciary Reorganization Act, as amended. Under this
section, the Court of Appeals shall exercise:
xxx xxx xxx
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards or commissions, including the Securities
and Exchange Commission, the Employees Compensation Commission and
the Civil Service Commission, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution, the
Labor Code of the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of
the Judiciary Act of 1948. (Emphasis supplied)
As such, decisions handed down by voluntary arbitrators fall within
the exclusive appellate jurisdiction of the CA. This decision was taken into
consideration in approving Section 1 of Rule 43 of the Rules of Court. Thus:
SECTION 1. Scope. - This Rule shall apply to appeals from judgments
or final orders of the Court of Tax Appeals and from awards, judgments,
final orders or resolutions of or authorized by any quasi-judicial agency in
the exercise of its quasi-judicial functions. Among these agencies are the
Civil Service Commission, Central Board of Assessment Appeals, Securities
and Exchange Commission, Office of the President, Land Registration
Authority, Social Security Commission, Civil Aeronautics Board, Bureau of
Patents, Trademarks and Technology Transfer, National Electrification
Administration, Energy Regulatory Board, National Telecommunications
Commission, Department of Agrarian Reform under Republic Act Number
6657, Government Service Insurance System, Employees Compensation
Commission, Agricultural Inventions Board, Insurance Commission,
Philippine Atomic Energy Commission, Board of Investments, Construction
Industry Arbitration Commission, and voluntary arbitrators authorized by
law. (Emphasis supplied)
This rule was cited in Sevilla Trading Company v. Semana, Manila
Midtown Hotel v. Borromeo, and Nippon Paint Employees Union-Olalia v.
Court of Appeals. These cases held that the proper remedy from the adverse
decision of a voluntary arbitrator, if errors of fact and/or law are raised, is a
petition for review under Rule 43 of the Rules of Court. Thus, petitioner's
contention that it may avail of a petition for review under Rule 43 under the
circumstances of this case is correct.
As to petitioner's arguments that a petition for certiorari under Rule
65 may also be resorted to, we hold the same to be in accordance with the
Constitution and jurisprudence.
Section 1 of Article VIII of the 1987 Constitution provides that:
SECTION 1. The judicial power shall be vested in one Supreme Court
and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse
of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government. (Emphasis supplied)
 As may be gleaned from the above stated provision, it is well within
the power and jurisdiction of the Court to inquire whether any
instrumentality of the Government, such as a voluntary arbitrator, has
gravely abused its discretion in the exercise of its functions and
prerogatives. Any agreement stipulating that the decision of the arbitrator
shall be final and unappealable and that no further judicial recourse if either
party disagrees with the whole or any part of the arbitrator's award may be
availed of cannot be held to preclude in proper cases the power of judicial
review which is inherent in courts. We will not hesitate to review a
voluntary arbitrator's award where there is a showing of grave abuse of
authority or discretion and such is properly raised in a petition for certiorari
and there is no appeal, nor any plain, speedy remedy in the course of law.
Significantly, Insular Savings Bank v. Far East Bank and Trust Company
definitively outlined several judicial remedies an aggrieved party to an
arbitral award may undertake:
(1) a petition in the proper RTC to issue an order to vacate the
award on the grounds provided for in Section 24 of RA 876;
(2) a petition for review in the CA under Rule 43 of the Rules of
Court on questions of fact, of law, or mixed questions of fact and law; and
(3) a petition for certiorari under Rule 65 of the Rules of Court
should the arbitrator have acted without or in excess of his jurisdiction or
with grave abuse of discretion amounting to lack or excess of jurisdiction.
Nevertheless, although petitioners position on the judicial remedies
available to it was correct, we sustain the dismissal of its petition by the CA.
The remedy petitioner availed of, entitled alternative petition for review
under Rule 43 or petition for certiorari under Rule 65, was wrong.
Time and again, we have ruled that the remedies of appeal and
certiorari are mutually exclusive and not alternative or successive.
Proper issues that may be raised in a petition for review under Rule
43 pertain to errors of fact, law or mixed questions of fact and law. While a
petition for certiorari under Rule 65 should only limit itself to errors of
jurisdiction, that is, grave abuse of discretion amounting to a lack or excess
of jurisdiction. Moreover, it cannot be availed of where appeal is the proper
remedy or as a substitute for a lapsed appeal.
In the case at bar, the questions raised by petitioner in its
alternative petition before the CA were the following:
A. THE SOLE ARBITRATOR COMMITTED SERIOUS ERROR AND/OR
GRAVELY ABUSED HIS DISCRETION IN RULING THAT THE BROADCAST OF
WINS WEEKLY WAS DULY AUTHORIZED BY ABS-CBN.
B. THE SOLE ARBITRATOR COMMITTED SERIOUS ERROR AND/OR
GRAVELY ABUSED HIS DISCRETION IN RULING THAT THE UNAUTHORIZED
BROADCAST DID NOT CONSTITUTE MATERIAL BREACH OF THE AGREEMENT.
C. THE SOLE ARBITRATOR COMMITTED SERIOUS ERROR AND/OR
GRAVELY ABUSED HIS DISCRETION IN RULING THAT WINS SEASONABLY
CURED THE BREACH.
D. THE SOLE ARBITRATOR COMMITTED SERIOUS ERROR AND/OR
GRAVELY ABUSED HIS DISCRETION IN RULING THAT TEMPERATE DAMAGES
IN THE AMOUNT OF P1,166,955.00 MAY BE AWARDED TO WINS.
E. THE SOLE ARBITRATOR COMMITTED SERIOUS ERROR AND/OR
GRAVELY ABUSED HIS DISCRETION IN AWARDING ATTORNEY'S FEES IN THE
UNREASONABLE AMOUNT AND UNCONSCIONABLE AMOUNT OF
P850,000.00.
F. THE ERROR COMMITTED BY THE SOLE ARBITRATOR IS NOT A
SIMPLE ERROR OF JUDGMENT OR ABUSE OF DISCRETION. IT IS GRAVE
ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF
JURISDICTION.
A careful reading of the assigned errors reveals that the real issues
calling for the CA's resolution were less the alleged grave abuse of discretion
exercised by the arbitrator and more about the arbitrators appreciation of
the issues and evidence presented by the parties. Therefore, the issues
clearly fall under the classification of errors of fact and law questions which
may be passed upon by the CA via a petition for review under Rule 43.
Petitioner cleverly crafted its assignment of errors in such a way as to
straddle both judicial remedies, that is, by alleging serious errors of fact and
law (in which case a petition for review under Rule 43 would be proper) and
grave abuse of discretion (because of which a petition for certiorari under
Rule 65 would be permissible).

It must be emphasized that every lawyer should be familiar with the

distinctions between the two remedies for it is not the duty of the courts to
determine under which rule the petition should fall. Petitioner's ploy was
fatal to its cause. An appeal taken either to this Court or the CA by the
wrong or inappropriate mode shall be dismissed. Thus, the alternative
petition filed in the CA, being an inappropriate mode of appeal, should have
been dismissed outright by the CA.

WHEREFORE, the petition is hereby DENIED. The February 16, 2005

decision and August 16, 2005 resolution of the Court of Appeals in CA-G.R.
SP No. 81940 directing the Regional Trial Court of Quezon City, Branch 93 to
proceed with the trial of the petition for confirmation of arbitral award is
AFFIRMED.
Costs against petitioner. SO ORDERED.