ABS-CBN BROADCASTING CORPORATION vs. WORLD INTERACTIVE NETWORK SYSTEMS (WINS) JAPAN CO., LTD. G.R. No. 169332.

February 11, 2008 FACTS:

September 27, 1999 petitioner entered into a licensing agreement with respondent WINS (a foreign corporation licensed under the laws of apan!" o #greement$ respondent was granted the e%clusi&e license to distribute and sublicense the distribution of the tele&ision ser&ice 'nown as ()he *ilipino +hannel( ()*+! in apan petitioner undertoo' to transmit the )*+ programming signals to respondent which the latter recei&ed through its decoders and distributed to its subscribers ,ispute arose between the parties when petitioner accused respondent of inserting 9 episodes of WINS W--./0, a wee'l1 23-minute communit1 news program for *ilipinos in apan, into the )*+ programming from 4arch to 4a1 2552 o 6etitioner contended that these were (unauthori7ed insertions( constituting a material breach of their agreement o 4a1 9, 2552 petitioner notified respondent of its intention to terminate the agreement effecti&e une 15, 2552 respondent filed an arbitration suit pursuant to the arbitration clause of its agreement with petitioner o 8espondent contended that$ the airing of WINS W--./0 was made with petitioner9s prior appro&al petitioner onl1 threatened to terminate their agreement because it wanted to renegotiate the terms thereof to allow it to demand higher fees 8espondent also pra1ed for damages for petitioner9s alleged grant of an e%clusi&e distribution license to another entit1, N:. ( apan ;roadcasting +orporation!" )he parties appointed 6rofessor #lfredo *" )adiar to act as sole arbitrator" o )he1 stipulated on the following issues in their terms of reference ()<8!$ 1"Was the broadcast of WINS W--./0 b1 the claimant dul1 authori7ed b1 the respondent =herein petitioner>? 2",id such broadcast constitute a material breach of the agreement that is a ground for termination of the agreement in accordance with Section 12 (a! thereof? 2"If so, was the breach seasonabl1 cured under the same contractual pro&ision of Section 12 (a!? @"Which part1 is entitled to the pa1ment of damages the1 claim and to the other reliefs pra1ed for? #rbitrator found in fa&or of respondent o *indings$ petitioner ga&e its appro&al to respondent for the airing of WINS W--./0 as shown b1 a series of written e%changes between the

parties had there reall1 been a material breach of the agreement, petitioner should ha&e terminated the same instead of sending a mere notice to terminate said agreement petitioner threatened to terminate the agreement due to its desire to compel respondent to re-negotiate the terms thereof for higher fees e&en if respondent committed a breach of the agreement, the same was seasonabl1 cured 8espondent was thus allowed to reco&er temperate damages, attorne19s fees and one-half of the amount it paid as arbitrator9s fee

):AS$ o #t the +# 6etitioner filed a petition for re&iew under 8ule @2 of the 8ules of +ourt or, in the alternati&e, a petition for certiorari under 8ule B3 of the same 8ules, with application for temporar1 restraining order and writ of preliminar1 inCunction It alleged serious errors of fact and law andDor gra&e abuse of discretion amounting to lac' or e%cess of Curisdiction on the part of the arbitrator" o 4eanwhile, at the 8)+ E+ ;92 8espondent, on the other hand, filed a petition for confirmation of arbitral award o petitioner filed a supplemental petition in the +# see'ing to enCoin the 8)+ of Eue7on +it1 from further proceeding with the hearing of respondent9s petition for confirmation of arbitral award o " #fter the petition was admitted b1 the appellate court, the 8)+ of Eue7on +it1 issued an order holding in abe1ance an1 further action on respondent9s petition as the assailed decision of the arbitrator had alread1 become the subCect of an appeal in the +# o 8espondent filed a 48 but no resolution has been issued b1 the lower court to date *ebruar1 1B, 2553 +# rendered the assailed decision dismissing #;S-+;N9s petition for lac' of Curisdiction o the )<8 itself pro&ided that the arbitrator9s decision shall be final and unappealable and that no motion for reconsideration shall be filed, then the petition for re&iew must fail o it is the 8)+ which has Curisdiction o&er Fuestions relating to arbitration o the onl1 instance it (+#! can e%ercise Curisdiction o&er an arbitral award is an appeal from the trial court9s decision confirming, &acating or modif1ing the arbitral award o petition for certiorari under 8ule B3 of the 8ules of +ourt is proper in arbitration cases onl1 if the courts refuse or neglect to inFuire into the facts of an arbitrator9s award nstant petition is hereb1 DISMISSED for lac' of CurisdictionG application for a writ of inCunction and temporar1 restraining order is li'ewise DENIED; RTC B93 directed to proceed with the trial for the 6etition for +onfirmation of #rbitral #ward 6etitioner 48G same was denied :-N+- ):IS 6-)I)I<N

ISSUE: WON 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 ! of the Rules of Court, instead of filing a petition to vacate the award in the R"C when the grounds invo#ed to overturn the arbitrator$s decision are other than those for a petition to vacate an arbitral award enumerated under RA %& ELD: RA %& mandates that it is the R"C, which has 'urisdiction over (uestions relating to arbitration, such as a petition to vacate an arbitral award) o *ection +4 of RA %& provides for the specific grounds for a petition to vacate an award made by an arbitrator,

*ec) +4)Grounds for vacating award. I! "!# $!% $& '(% &$))$*+!, -"s%s, '(% -$./' 0.s' 0"1% "! $/2%/ v"-"'+!, '(% "*"/2 upon the petition of any party to the controversy when such party proves affirmatively that in the arbitration proceedings, -a."he award was procured by corruption, fraud, or other undue means/ or -b."hat there was evident partiality or corruption in the arbitrators or any of them/ or -c."hat 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 dis(ualified to act as such under section nine hereof, and willfully refrained from disclosing such dis(ualifications or of any other misbehavior by which the rights of any party have been materially pre'udiced/ or -d."hat the arbitrators e0ceeded their powers, or so imperfectly e0ecuted them, that a mutual, final and definite award upon the sub'ect matter submitted to them was not made)

o )hus, the law itself clearl1 pro&ides that the 8)+ must issue an order &acating an arbitral award onl1 (in an1 one of the " " " cases( enumerated therein o expressio unius est exclusio alterius, the e%plicit mention of one thing in a statute means the elimination of others not specificall1 mentioned o 8# H7B did not e%pressl1 pro&ide for errors of fact andDor law and gra&e abuse of discretion (proper grounds for a petition for re&iew under 8ule @2 and a petition for certiorari under 8ule B3, respecti&el1! as grounds for maintaining a petition to &acate an arbitral award in the 8)+, it necessaril1 follows that a part1 ma1 not a&ail of the latter remed1 on the grounds of errors of fact andDor law or gra&e abuse of discretion to o&erturn an arbitral award Adamson v. Court of Appeals a petition to &acate filed in the 8)+ which is not based on the grounds enumerated in Section 2@ of 8# H7B should be dismissed o :ere, trial court &acated the arbitral award seemingl1 based on grounds

included in Section 2@ of 8# H7B but a closer reading thereof re&ealed otherwise o <n appeal, the +# re&ersed the decision of the trial court and affirmed the arbitral award o S+ affirmed +#$
"he Court of Appeals, in reversing the trial court$s decision held that the nullification of the decision of the Arbitration Committee was not based on the grounds provided by the Arbitration 1aw and that ) ) ) private respondents -petitioners herein. have failed to substantiate with any evidence their claim of partiality) *ignificantly, even as respondent 'udge ruled against the arbitrator$s award, he could not find fault with their impartiality and integrity) Ev+2%!')#, '(% !.))+&+-"'+$! $& '(% "*"/2 /%!2%/%2 "' '(% -"s% "' 3"/ *"s !$' 0"2% $! '(% 3"s+s $& "!# $& '(% ,/$.!2s 4/$v+2%2 3# )"*. A234C* 000 000 000 I' +s -)%"/, '(%/%&$/%, '("' '(% "*"/2 *"s v"-"'%2 !$' 3%-".s% $& %v+2%!' 4"/'+")+'# $& '(% "/3+'/"'$/s 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 see#ing to renege on its obligations under the contract) 000 000 000 3t is clear then that the C$./' $& A44%")s /%v%/s%2 '(% '/+") -$./' not because the latter reviewed the arbitration award involved herein, but 3%-".s% '(% /%s4$!2%!' "44%))"'% -$./' &$.!2 '("' '(% '/+") -$./' ("2 !$ )%,") 3"s+s &$/ v"-"'+!, '(% "*"/2. In cases not falling under an1 of the aforementioned grounds to &acate an award, the +ourt has alread1 made se&eral pronouncements that a petition for re&iew under 8ule @2 or a petition for certiorari under 8ule B3 ma1 be a&ailed of in the +#" Which one would depend on the grounds relied upon b1 petitioner Luzon Development Bank v. Association of Luzon Development Bank Employees +ourt held that a &oluntar1 arbitrator is properl1 classified as a (Fuasi-Cudicial instrumentalit1( and is, thus, within the ambit of Section 9 (2! of the udiciar1 8eorgani7ation #ct, as amended" Ander this section, the +ourt of #ppeals shall e%ercise$ 000 000 000 -3.20clusive appellate 'urisdiction over all final 'udgments, decisions, resolutions, orders or awards of Regional "rial Courts and (uasi5'udicial agencies,+!s'/.0%!'")+'+%s, boards or commissions, including the *ecurities and 20change Commission, the 2mployees$ Compensation Commission and the Civil *ervice Commission, e0cept those falling within the appellate 'urisdiction of the *upreme Court in accordance with the Constitution, the 1abor Code of the 6hilippines under 6residential 7ecree No) 44+, as amended, the provisions of this Act and of subparagraph -8. of the third paragraph and subparagraph -4. of the fourth paragraph of *ection 8& of the 9udiciary Act of 8:4%) -2mphasis supplied.

As such, decisions handed down by voluntary arbitrators fall within the e0clusive appellate 'urisdiction of the CA) "his decision was ta#en into consideration in approving *ection 8 of Rule 43 of the Rules of Court) "hus,

*2C) 8)!co"e. ; "his Rule shall apply to appeals from 'udgments or final orders of the Court of "a0 Appeals and from awards, 'udgments, final orders or resolutions of or authori<ed by any (uasi5'udicial agency in the e0ercise of its (uasi5 'udicial functions) Among these agencies are the Civil *ervice Commission, Central =oard of Assessment Appeals, *ecurities and 20change Commission, Office of the 6resident, 1and Registration Authority, *ocial *ecurity Commission, Civil Aeronautics =oard, =ureau of 6atents, "rademar#s and "echnology "ransfer, National 2lectrification Administration, 2nergy Regulatory =oard, National "elecommunications Commission, 7epartment of Agrarian Reform under Republic Act Number !&, >overnment *ervice 3nsurance *ystem, 2mployees Compensation Commission, Agricultural 3nventions =oard, 3nsurance Commission, 6hilippine Atomic 2nergy Commission, =oard of 3nvestments, Construction 3ndustry Arbitration Commission, andv$).!'"/# "/3+'/"'$/s ".'($/+5%2 3# )"*. -2mphasis supplied.

A lot of cases held 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 ar uments that a petition for certiorari under Rule !" may also be resorted to, we hold the same to be in accordance with the Constitution and #urisprudence o *ection 8 of Article ?333 of the 8:%& Constitution

*2C) 8)"he 'udicial power shall be vested in one *upreme Court and in such lower courts as may be established by law) J.2+-+") 4$*%/ +!-).2%s '(% 2.'# $& '(% -$./'s $& 6.s'+-% to settle actual controversies involving rights which are legally demandable and enforceable, and '$ 2%'%/0+!% *(%'(%/ $/ !$' '(%/% ("s 3%%! " ,/"v% "3.s% $& 2+s-/%'+$! "0$.!'+!, '$ )"-1 $/ %7-%ss $& 6./+s2+-'+$! $! '(% 4"/' $& "!# 3/"!-( $/ +!s'/.0%!'")+'# $& '(% G$v%/!0%!'

it is well within the power and 'urisdiction of the Court to in(uire whether any instrumentality of the >overnment, such as a voluntary arbitrator, has gravely abused its discretion in the e0ercise of its functions and prerogatives) Any agreement stipulating that @the decision of the arbitrator shall be final and unappealable@ and @that no further 'udicial recourse if either party disagrees with the whole or any part of the arbitrator$s award may be availed of@ cannot be held to preclude in proper cases the power of 'udicial review which is inherent in courts) We will not hesitate to review a voluntary arbitrator$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 #nsu$ar !avings %an& v. Far 'ast %an& and (rust )o*"any several 'udicial remedies an aggrieved party to an arbitral award may underta#e,

-8.a petition in the proper R"C to issue an order to vacate the award on the grounds provided for in *ection +4 of RA %& / -+.a petition for review in the CA under Rule 43 of the Rules of Court on (uestions of fact, of law, or mi0ed (uestions of fact and law/ and -3.a petition for certiorari under Rule ! of the Rules of Court should the arbitrator have acted without or in e0cess of his 'urisdiction or with grave abuse of discretion amounting to lac# or e0cess of 'urisdiction)

$evertheless, althou h petitioner's position on the #udicial 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 !",% was wron . o remedies of appeal and certiorari are mutually e0clusive and not alternative or successive R43& 6roper issues that may be raised in a petition for review under Rule 43 pertain to errors of fact, law or mi0ed (uestions of fact and law R!"& should only limit itself to errors of 'urisdiction, that is, grave abuse of discretion amounting to a lac# or e0cess of 'urisdiction / cannot be availed of where appeal is the proper remedy or as a substitute for a lapsed appeal)

Thus& o A careful reading of the assigned errors reveals that the real issues calling for the CA$s resolution were less the alleged grave abuse of discretion e0ercised by the arbitrator and more about the arbitrator$s appreciation of the issues and evidence presented by the parties "herefore, the issues clearly fall under the classification of errors of fact and law ; (uestions which may be passed upon by the CA via a petition for review under Rule 43

*C, o 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) 6etitioner$s ploy was fatal to its cause) An appeal ta#en either to this Court or the CA by the wrong or inappropriate mode shall be dismissed) the ")'%/!"'+v% petition filed in the CA, being an inappropriate mode of appeal, should have been dismissed outright by the CA)

A W42R2BOR2, the petition is hereby 72N327) "he Bebruary 8 , +CC! decision and August 8 , +CC! resolution of the Court of Appeals in CA5>)R) *6 No) %8:4C directing the Regional "rial Court of Due<on City, =ranch :3 to proceed with the trial of the petition for confirmation of arbitral award is ABB3RE27A