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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 HiPrecisions 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.

HOME BANKERS SAVINGS AND TRUST COMPANY v COURT OF APPEALS and FAR
EAST BANK &TRUST COMPANY
G.R No. 115412 November 19 1999
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.

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
before the CIAC because this right has been vested upon each party by the law.

RIZAL COMMERCIAL BANKING COPORATION v THE HONORABLE PACIFICO DE


CASTRO
G.R No. L-34548 November 29, 1988

FACTS:
In an action for recovery of unpaid tobacco deliveries, the presiding judge
rendered a decision ordering the defendants therein to pay jointly and severally,
Badoc Planters, Inc. within 48 hours the aggregate amount of P206,916.76, with
legal interests thereon.
The judge who rendered the decision issued a Writ of Execution addressed to
Special Sheriff Faustino Rigor, who then issued a Notice of Garnishment addressed
to the General Manager and/or Cashier of Rizal Commercial Banking Corporation
(RCBC), requesting a reply within 5 days to said garnishment as to any property
which the Philippine Virginia Tobacco Administration (hereinafter referred to as
"PVTA") might have in the possession or control of petitioner or of any debts owing
by the petitioner to said defendant.
Respondent PVTA filed a Motion for Reconsideration which was granted
setting aside the Orders of Execution and of Payment and the Writ of Execution and
ordering petitioner and BADOC to restore the account of PVTA with the said bank in
the same condition and state.
ISSUE:
Whether or not the PVTA funds may be garnished.
RULING:
The PVTA funds may be garnished. Republic Act No. 2265 created the PVTA as
an ordinary corporation with all the attributes of a corporate entity subject to the
provisions of the Corporation Law. Hence, it possesses the power "to sue and be
sued" and "to acquire and hold such assets and incur such liabilities resulting
directly from operations authorized by the provisions of this Act or as essential to
the proper conduct of such operations.
PVTA has been endowed with a personality distinct and separate from the
government which owns and controls it. Accordingly, this Court has heretofore
declared that the funds of the PVTA can be garnished since "funds of public
corporation which can sue and be sued were not exempt from garnishment"

METRO CONSTRUCTION, INC. vs. CHATHAM PROPERTIES, INC.


G.R. NO. 141897, September 24, 2001

FACTS:
Respondent, Chatham Properties, Inc. (CHATHAM) and petitioner, Metro Construction,
Inc. (MCI) entered into a contract for the construction of the multi-storey building known as the
Chatham House. The preliminary conference before the CIAC started in June 1998 and was
concluded a month after with the signing of the Terms of Reference (TOR) of the Case.
The CIAC rendered a decision for the adjudication of MCIs claims in order to collect
from CHATHAM the sum of money for the unpaid progress billings and other charges. The CIAC
listed up all the amounts due to MCI and added up and the total payment is deducted from
therein. The Tribunal did not consider the evidence that was presented to them by CHATHAM in
order to compute the amount that was due to MCI.
CHATHAM filed a petition for review with the Court of Appeals alleging that the CIAC
gravely erred when it did not consider all the pieces of evidence that were presented to them by
the respondents.
The Court of Appeals reversed the decision of the CIAC and claimed that MCI failed to
complete the project in pursuance to the construction agreement that was signed by the parties.
The MCI filed the instant petition for review to challenge the decision of the Court of
Appeals.

ISSUE:
Whether the Court of Appeals may reverse the decision of the Supreme Court.
RULING:
Yes, Under Sec. 1, 2, and 3 of Rule 43 of the 1997 Rules of Civil Procedure, Sec. 3 of
the Rules of Civil Procedure states that an appeal under the Rule may be taken to the Court of
Appeals within the period and in the manner provided there, whether the appeal involves
question of fact, of law, or mixed questions of fact and law while the latter included the CIAC in
its enumeration of the quasi-judicial agencies.
The right to appeal from judgments, awards, or final orders of the CIAC is granted in
E.O. No. 1008. The procedure for the exercise or application of this right was initially outlined in
E.O. No. 1008. While R. A. No. 7902 and circulars subsequently issued by the Supreme Court
and its amendments to the 1997 Rules on Procedure effectively modified the manner by which
the right to appeal ought to be exercised, nothing in these changes impaired vested rights.

PHILROCK INC. v CONSTRUCTION INDUSTRY ARBITRATION COMMISSION


G.R. No. 132848-49

FACTS:
The Cid spouses, herein private respondents, purchased ready-mix concrete from the
petitioner, PhilRock, Inc. The concrete delivered by the petitioner was found out to be of
substandard quality which resulted to the structures being built with such cement developing
cracks and honeycombs.
Thereafter, preliminary conferences were held among the parties and their appointed
arbitrators. At these conferences, disagreements arose as to whether moral and exemplary
damages and tort should be included as an issue along with breach of contract, and whether the
seven officers and engineers of Philrock who are not parties to the Agreement to Arbitrate
should be included in the arbitration proceedings. No common ground could be reached by the
parties.
Before the CA, petitioner filed a Petition for Review contesting the jurisdiction of the
CIAC and assailing the propriety of the monetary awards in favor of respondent spouses
ISSUE:
Whether or not the CIAC could take jurisdiction over the case of respondent spouses
and petitioner after it had been dismissed by both the RTC and CIAC.
RULING:
The petition has no merit. Section 4 of EO 1008 expressly vests in the CIAC original and
exclusive jurisdiction over disputes arising from or connected with construction contracts
entered into by parties that have agreed to submit their disputes to voluntary arbitration.
Especially since the parties submitted themselves to the jurisdiction of the Commission by virtue
of their Agreement to Arbitrate.
After submitting itself to arbitration proceedings and actively participating therein,
petitioner is estopped from assailing the jurisdiction of the CIAC, merely because the latter
rendered an adverse decision.

SEA-LAND SERVICE INC v COURT OF APPEALS


G.R No. 126212 March 2 2000
FACTS:
Sea-land service (petitioner) and A.P Moller/Maersk LINE (AMML/ private respondent)
both carriers of cargo in containerships as well as common carriers, entered into a contract
entitled Co-operation in the Pacific (Agreement), a vessel sharing agreement whereby they
mutually agree to purchase, share and exchange needed space for cargo in their respective
containerships. They could either be a Principal Carrier or a containership operator.
During the lifetime of the said agreement, Florex Iternational delivered to AMML cargo of
various foodstuffs. The corresponding Bill of Lading was issued to Florex by respondent AMML.
Pursuant to the agreement, AMML loaded the subject cargo on MS Sealand Pacer, a vessel
owned by Sea-land services. Therefore, in this agreement, AMML was the principal carrier while
Sea-land service was the containership operator.
The consignee refused to pay for the cargo alleging that delivery thereof was delayed.
Florex then filed a complaint against Maersk-Tabacalera Shipping Agency for reimbursement of
the value of the cargo. According to Florex, the cargo was received ony by the consignee on
June 28 1991 but was discharged June 5 1991. AMML filed its answer alleging that it was the
petitioner who should be liable. Accordingly, AMML filed a Third Party Complaint against Sealand service stating that whatever damages sustained by Florex were caused by petitioner
because they were the ones who actually received and transported Florexs cargo on its vessels
and unloaded them. Petitioner filed a Motion to Dismis on the fround of failure to state a cause
of action and also prayed for the dismissal of the Third Party Complaint in the ground that there
exists an arbitration agreement between it and respondent AMML.
ISSUE:
Whether or not the Third Party Complaint should be dismissed on the ground that there
exists and arbitration agreement between the parties.
RULING:
Yes. It is provided for in the agreement between the parties that whatever dispute there
may be between the Principal Carrier and the Containership Operator arising from the contracts
of carriage shall be governed by the provisions of the bills of lading deemed issued to the
Principal Carrier by the Containership Operator. The Third Party Complaint filed by AMML
against Sea-land service is a violation of their agreement.

MAGELLAN CAPITAL MANAGEMENT CORPORATION v ROLANDO M. ZOSA


G.R No. 129916 March 26 2001

FACTS:
Magellan Capital Holdings Corporation (MCHC) appointed Magellan Capital
Management Corporation (MCMC) as manager for the operation of its business and affair.
MCMC, MCHC and Rolando Zosa entered into an employment agreement designating Zosa as
Chief Executive Officer of MCHC. It is provided for in the Employment Agreement that the term
of Zosas ecmployment shall be co-terminous with the management agreement or until March
1996, unless sooner terminated.
Majority of the Board of Directors deided not to re-elect Zosa as President and Chief
Executive Officer on account of loss of trust and violation of the resolution issued by the
MCHCs board of directors and of the non-competition clause of the Employment Agreement.
Nevertheless, Zosa was elected to a new position as MCHCs Vice-Chairman/Chairman for New
Ventures Development.
Zosa communicated his resignation from his position of Vice-Chairman under the
Employment Agreement on the ground that the said position had less responsibility and scope
that President and Chief Executive Officer. He demanded that he be given termination benefits
as provided for in the Employment Agreement. MCHC did not accept the resignation for a good
reason and instead informed him tht the Employment Agreement is terminated for cause on
account of his breach of Section 12 thereof. Zosa was also advised that he shall have no further
rights under the agreement or any claims against the manager of the corporation except the
right to receive within 30 days the amounts stated in the Agreement. Zosa invoked the
Arbitration clause.
Zosa designated his brother (Atty. Francis Zosa) as his representative in the arbitration
panel while MCHC designated 2 representatives in the arbitration panel. However, instead of
submitting the dispute to arbitration, Zosa filed an action for damages against petitioners.
ISSUE:
Whether or not the court erred in voiding the arbitration clause as it would work injustice
to Zosa
RULING:
No. MCMC and MCHC represent the same interest. Though they are 2 corporations with
distinct personalities, they represent the same interest. Thus, it would be expected that they
would protect and preserve their own interest and neither would favor Zosas interest during the
arbitration. If the arbitration clause would be followed, MCMC would have 1 arbitrator, MCHC
would have another arbitrator, and Zosa would have 1. But MCMC is the manager of MCHC,
MCHC would naturally favor its employed. Thus, their 2 votes would win vs Zosas lone vote.