Chapter VI.I.

Extent of Court Intervention in Domestic Arbitration

56. Transfield Philippines, Inc. v Luzon Hydro Corporation, Australia And New Zealand Banking Group Limited and
Security Bank Corporation [G.R. NO. 146717: November 22, 2004

FACTS: Transfield as a contractor, undertook to construct a hydro-electric power station for LHC to be completed on or before
June 1 of 2000. To secure the performance of such obligation, the former opened 2 Letters of Credit from ANZ Banking Group
and Security Bank in favor of LHC. However, Transfield was unable to complete the project on the date stipulated.

Both parties filed before separate arbitration tribunals, International Chamber of Commerce (ICC) and Construction Industry
Arbitration Commission (CIAC) respectively, to resolve the issue. Pending the arbitration proceedings, Transfield filed a to the
Court a prayer for preliminary injunction to restrain the banks from releasing and preventing it from calling on the securities.
Court issued the TRO.

ISSUE: WON LHC has the right to go to Court and petition to call and draw on the securities before the resolution of petitioner's
and LHC's disputes by the appropriate tribunal.

RULING: YES. As a fundamental point, the pendency of arbitral proceedings does not foreclose resort to the Courts for
provisional reliefs. The Rules of the ICC, which governs party’s arbitral dispute, allows the application of a party to judicial
authority for interim or conservatory measures. In addition, RA 9285 (ADR Act) allows the filing of provisional or interim
measures with the courts whenever the arbitral tribunal has no power to act or to act effectively.