Ruth Anne Miguel

Heirs of Salas vs Laperal

Facts:

Salas, Jr. was the registered owner of a vast tract of land in Lipa City, Batangas spanning 1,484,354 square meters. On May 15, 1987,
he entered into an Owner-Contractor Agreement 4 (hereinafter referred to as the Agreement) with respondent Laperal Realty
Corporation (hereinafter referred to as Laperal Realty) to render and provide complete (horizontal) construction services on his land.
On September 23, 1988, Salas, Jr. executed a Special Power of Attorney in favor of respondent Laperal Realty to exercise general
control, supervision and management of the sale of his land, for cash or on installment basis. On June 10, 1989, Salas, Jr. left his
home in the morning for a business trip to Nueva Ecija. He never returned. On August 6, 1996, Teresita Diaz Salas filed with the
Regional Trial Court of Makati City a verified petition for the declaration of presumptive death of her husband, Salas, Jr., who had
then been missing for more than seven (7) years. It was granted on December 12, 1996.

Respondent Laperal Realty subdivided the land of Salas, Jr. and sold subdivided portions thereof to respondents Rockway Real Estate
Corporation and South Ridge Village, Inc. on February 22, 1990; to respondent spouses Abrajano and Lava and Oscar Dacillo on June
27, 1991; and to respondents Eduardo Vacuna, Florante de la Cruz and Jesus Vicente Capalan on June 4, 1996 1996 (all of whom are
hereinafter referred to as respondent lot buyers).

On February 3, 1998, petitioners as heirs of Salas, Jr. filed in the Regional Trial Court of Lipa City a Complaint 6 for declaration of
nullity of sale, reconveyance, cancellation of contract, accounting and damages against herein respondents which was docketed as
Civil Case No. 98-0047.

On April 24, 1998, respondent Laperal Realty filed a Motion to Dismiss on the ground that petitioners failed to submit their grievance
to arbitration as required under Article VI of the Agreement which provides:

Art. VI. ARBITRATION.

All cases of dispute between CONTRACTOR and OWNER'S representative shall be referred to the committee represented by:

a.One representative of the OWNER; b.One representative of the CONTRACTOR and; c.One representative acceptable to both
OWNER and CONTRACTOR.

On May 5, 1998, respondent spouses Abrajano and Lava and respondent Dacillo filed a Joint Answer with Counterclaim and
Crossclaim 9 praying for dismissal of petitioners' Complaint for the same reason.

On August 9, 1998, the trial court issued the herein assailed Order dismissing petitioners' Complaint for non-compliance with the
foregoing arbitration clause.

The petitioners' causes of action for cancellation of contract and accounting are covered by the exception under the Arbitration Law.

Issue: whether or not failure to arbitrate is a ground for dismissal.

HELD: NO

In a catena of cases 11 inspired by Justice Malcolm's provocative dissent in Vega v. San Carlos Milling Co. 12, this Court
has recognized arbitration agreements as valid, binding, enforceable and not contrary to public policy so much so that
when there obtains a written provision for arbitration which is not complied with, the trial court should suspend the
proceedings and order the parties to proceed to arbitration in accordance with the terms of their agreement. Arbitration
is the "wave of the future" in dispute resolution. To brush aside a contractual agreement calling for arbitration in case of
disagreement between parties would be a step backward.

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HOME BANKERS SAVINGS AND TRUST COMPANY v COURT OF APPEALS and FAR EAST BANK &TRUST COMPANY

FACTS:

Victor Tancuan issued Home Bankers Savings and Trust Company (HBSTC) a check for 25,250,000.00 Pesos while Eugene
Arriesgrado issued Far & East Bank and Trust Company (FEBTC) checks for 8.6 Million pesos, 8.5 Million pesos and 8.1
Million pesos, respectively, the three checks amounting to 25,200,000 pesos. Tancuan and Arriesgrado exchanged each
others checks an deposited them with their respective banks for collection. When FEBTC presented Tancuans HBSTC
check for clearing, HBSTC dishonored it for being Drawn against insufficient funds. After that, HBSTC sent
Arriesgrados 3 FEBTC checks through the Philippine Clearing House Corporation (PCHC) to FEBTC but was returned for
being Drawn against insufficient funds. HBSTC received the notification of dishonor but refused to accept them and
instead returned them to FEBTC through PCHC for the reason Beyond Reglementary Period implying that HBSTC
already treated the 3 FEBTC checks as cleared and allowed the proceeds thereof to be withdrawn. FEBTC demanded
reimbursement for the returned checks and inquired form HBSTC whether it had permitted any withdrawal of funds
against the unfunded checks and if so, on what date. HBSTC refused to make any reimbursement.

FEBTC submitted the dispute for arbitration with PCHC. While the arbitration proceedings was still pending, FEBTC filed
and action for sum of money and damages with preliminary attachment against HBSTC, Robert Tancuan, Victor Tancuan
and Eugene Arriesgrado. HBTSC filed a motion to dismiss and said that the complaint stated no cause of action and that it
should be dismissed because it seeks to enforce an arbitral award which as yet does not exist.

ISSUE:

Whether or not FEBTC which commenced the arbitration proceeding under PCHC may subsequently file a
separate case in court over the same subject matter or arbitration despite the pendency of the arbitration to obtain the
provisional remedy of attachment against the bank, the adverse party in the arbitration proceeding

RULING:

No. Section 14 of the Arbitration Law allows any party to the proceeding to petition the court to take measures
to safeguard or conserve any matter which is the subject of the dispute. The civil action was not a simple case of money
claim since private respondent has included a prayer for a writ of preliminary attachment which is sanctioned by the
Arbitration Law (Sec 14). Also, the participants cannot bypass the arbitration process laid out by the body and seek relief
directly from the courts. In the case at bar, the private respondent has initiated arbitration proceedings as required by
the PCHC rules and regulations, and pending arbitration has sought relief from the trial court for measures to safeguard
the subject of the dispute.

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BF CORP VS CA

Facts:

BF Corporation v. CA, 288 SCRA 267 (1998)

Facts:

Petitioner and respondent Shangri-la Properties, Inc. entered into an agreement whereby the latter engaged the former
to construct the main structure of the "EDSA Plaza Project," a shopping mall complex in Mandaluyong. Petitioner
incurred delay in the construction work that SPI considered as "serious and substantial." On the other hand, according to
petitioner, the construction works "progressed in faithful compliance with the First Agreement until a fire broke out
damaging Phase I" of the Project. Hence, SPI proposed the re-negotiation of the agreement between them.

Petitioner and SPI entered into a written agreement denominated as "Agreement for the Execution of Builder's Work for
the EDSA Plaza Project." Said agreement would cover the construction work on said project as of May 1, 1991 until its
eventual completion. According to SPI, petitioner "failed to complete the construction works and abandoned the
project." This resulted in disagreements between the parties as regards their respective liabilities under the contract.

Petitioner filed with the RTC of Pasig a complaint for collection of the balance due under the construction agreement.
SPI and its co-defendants filed a motion to suspend proceedings instead of filing an answer. The motion was anchored on
defendants' allegation that the formal trade contract for the construction of the project provided for a clause requiring
prior resort to arbitration before judicial intervention could be invoked in any dispute arising from the contract.
Petitioner opposed said motion claiming that there was no formal contract between the parties although they entered
into an agreement defining their rights and obligations in undertaking the project.

Thereafter, upon a finding that an arbitration clause indeed exists, the lower court denied the motion to suspend
proceedings as the Conditions of Contract was not duly executed or signed by the parties, and the failure of the
defendants to submit any signed copy of the said document,.

The lower court then ruled that, assuming that the arbitration clause was valid and binding, still, it was "too late in the
day for defendants to invoke arbitration. Considering the fact that under the supposed Arbitration Clause invoked by
defendants, it is required that "Notice of the demand for arbitration of a dispute shall be filed in writing with the other
party . . . . in no case . . . . later than the time of final payment . . . "which apparently, had elapsed because defendants
have failed to file any written notice of any demand for arbitration during the said long period of one year and eight
months. The CA annulled the orders of the RTC.

Issue: WON a petition for certiorari is proper

Held:

Yes. The rule that the special civil action of certiorari may not be invoked as a substitute for the remedy of appeal. The
Court has likewise ruled that "certiorari will not be issued to cure errors in proceedings or correct erroneous conclusions
of law or fact. As long as a court acts within its jurisdiction, any alleged errors committed in the exercise of its jurisdiction
will amount to nothing more than errors of judgment which are reviewable by timely appeal and not by a special civil
action of certiorari."

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The question of jurisdiction, which is a question of law depends on the determination of the existence of the arbitration
clause, which is a question of fact. In the instant case, the lower court found that there exists an arbitration clause.
However, it ruled that in contemplation of law, said arbitration clause does not exist. It is that mode of appeal taken by
private respondents before the CA that is being questioned by the petitioners before this Court. But at the heart of said
issue is the question of whether there exists an Arbitration Clause because if an Arbitration Clause does not exist, then
private respondents took the wrong mode of appeal before the CA.

For this Court to be able to resolve the question of whether private respondents took the proper mode of appeal, which,
incidentally, is a question of law, then it has to answer the core issue of whether there exists an Arbitration Clause which,
admittedly, is a question of fact.

Moreover, where a rigid application of the rule that certiorari cannot be a substitute for appeal will result in a manifest
failure or miscarriage of justice, the provisions of the Rules of Court which are technical rules may be relaxed. As we shall
show hereunder, had the CA dismissed the petition for certiorari, the issue of whether or not an arbitration clause exists
in the contract would not have been resolved in accordance with evidence extant in the record of the case.
Consequently, this would have resulted in a judicial rejection of a contractual provision agreed by the parties to the
contract.

In the same vein, this Court holds that the question of the existence of the arbitration clause in the contract between
petitioner and private respondents is a legal issue that must be determined in this petition for review on certiorari.

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HI-PRECISION STEEL CENTER INC. v LIM KIM STEEL BUILDERS INC.

G.R No. 110434 December 13, 1993

FACTS:

Hi-Precision (Petitioner) entered into a contract with Steel Builders (Private Respondent) under which the latter as
Contractor was to complete a 21 Million Pesos construction project owned by Hi-Precision with a period of 153 days. The
said completion of the project was then moved, however, when the date came, only 75.8674% of the project was
actually completed. Petitioner attributed this non-completion to Steel Builders which allegedly incurred delays both
during the original contract and period of extension. On the other hand, the Steel Builders claimed that the said non-
completion of the project was either excusable or was due to Hi-Precisions own fault and issuance of change orders. The
said project was taken over and completed by Hi-Precision.

Steel Builders requested for an adjudication with CIAC (Public Respondent) and sought payment of its unpaid billings,
alleged unearned profits and other receivables. Hi-Precision on the other hand claimed for damages and reimbursement
of alleged additional costs. The CIAC formed an Arbitral Tribunal with 3 members and such tribunal rendered a decision
in favor of Steel Builders Inc ordering Hi-Precision to pay Steel Builders their claim. Hi-Precision then asks the court to set
aside the award on the basis of misapprehension of facts.

ISSUE:

Whether or not it was correct should set aside the ruling of the Arbitral Tribunal.

RULING:

No. The court said that it will not assist one or the other or even both parties in an effort to subvert or defeat the
objective for their private purposes and also, that it will not review the factual findings of an arbitral tribunal upon the
allegation that such body misapprehended facts. The court will not, therefore, permit the parties to relitigate before it
the issues of facts previously presented and argued before the Arbitral Tribunal, save only where a vey clear showing is
made that, in reaching its factual conclusions, the Arbitral Tribunal committed an error so hurtful to one party as to
constitute a grave abuse of discretion resulting on lack or loss of jurisdiction.

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LM POWER ENGINEERING COPORATION v CAPITOL INDUSTRIAL CONSTRUCTION GROUPS

G.R No. 141833 March 26 2003

FACTS:

LM Power Engineering Corporation (Petitioner) and Capitol Industrial Construction Groups (Respondent) entered into a
Subcontract Agreement involving electrical work at the Port of Zamboanga. Respondent then took over some of the work
contracted to Petitioner, It was alleged that the petitioner failed to finish it because of its inability to procure materials.

Upon completion of the task, Petitioner billed the respondent the amount of 6,711,813.90 pesos. Respondent
refused to pay and contested the accuracy of the amount of advances and billable accomplishments listed by the
petitioner. Respondent also took refuge in the termination clause agreement which allowed it to set off the cost of the
work that petitioner had failed to undertake (due to termination of take over).

Because of the dispute, the Petitioner filed a complaint foe collection of the balance due under the subcontract
agreement. However, instead of filing an answer, the respondent filed a Motion to Dismiss, alleging that the complaint
was premature because there was no prior recourse to arbitration. RTC denied the motion on the ground that the
dispute did not involve the interpretation or implementation of the agreement and was, therefore, not covered by the
arbitral clause. Also, the RTC ruled that the take over of some work items by the respondent was not equivalent to
termination but a mere modification of the subcontract.

ISSUE:

Whether or not there exists a dispute between petitioner and respondent regarding the interpretation and
implementation of the Sub-Contract Agreement that requires prior recourse to voluntary arbitration.

RULING:

Yes. The instant case involves technical discrepancies that are better left to an arbitral body that has expertise on
those areas. The Subcontract has the Arbitral clause stating that the parties agree that Any dispute or conflict as regards
to interpretation and implementation of this agreement which cannot be settled between the parties amicably shall be
settled by means of arbitration. Within the scope of the Arbitration clause are discrepancies as to the amount of
advances and billable accomplishments, the application of the provision on termination, and the consequent set-off
expenses. Also, there is no need for prior request for arbitration. As long as the parties agre to submit to voluntary
arbitration, regardless of what forum they may choose, their agreement will fall within the jurisdiction of the CIAC, such
that, even if they specifically choose another forum, the parties will not be precluded form electing to submit their
dispute