Unilateral rescission improper and illegal: Having ruled that the arbitration clause of the subject

contract is valid and binding on the parties, and not contrary to public policy; consequently, being bound
to the contract of arbitration, a party may not unilaterally rescind or terminate the contract for
whatever cause without first resorting to arbitration.

In addition, whatever findings and conclusions made by the RTC Branch Sheriff from the inspection
made on October 28, 1998, as ordered by the trial court on October 19, 1998, is of no worth as said
Sheriff is not technically competent to ascertain the actual status of the equipment and machineries as
installed in the plant.

RTC has interim jurisdiction to protect the rights of the parties: While the issue of the proper
installation of the equipment and machineries might well be under the primary jurisdiction of the
arbitral body to decide, yet the RTC under Sec. 28 of RA 9285 has jurisdiction to hear and grant interim
measures to protect vested rights of the parties

While the KCAB can rule on motions or petitions relating to the preservation or transfer of the
equipment and machineries as an interim measure, yet on hindsight, the July 23, 1998 Order of the RTC
allowing the transfer of the equipment and machineries given the non-recognition by the lower courts
of the arbitral clause, has accorded an interim measure of protection to PGSMC which would otherwise
been irreparably damaged. KOGIES is not unjustly prejudiced as it has already been paid a substantial
amount based on the contract. Moreover, KOGIES is amply protected by the arbitral action it has
instituted before the KCAB, the award of which can be enforced in our jurisdiction through the RTC.
Besides, by our decision, PGSMC is compelled to submit to arbitration pursuant to the valid arbitration
clause of its contract with KOGIES.

PGSMC to preserve the subject equipment and machineries: While PGSMC may have been granted the
right to dismantle and transfer the subject equipment and machineries, it does not have the right to
convey or dispose of the same considering the pending arbitral proceedings to settle the differences of
the parties. PGSMC therefore must preserve and maintain the subject equipment and machineries with
the diligence of a good father of a family until final resolution of the arbitral proceedings and
enforcement of the award, if any.

MCC INDUSTRIAL SALES CORPORATION, petitioner, vs.

SSANGYONG CORPORATION, respondents.

G.R. No. 170633; October 17, 2007

Facts:

Petitioner is engaged in the business of importing and wholesaling stainless steel products. One of its
suppliers is the responded, an international trading company with head office in Seoul, South Korea and
regional headquarters in Makati City, Philippines. The two corporations conducted business through
telephone calls and facsimile or telecopy transmissions. Respondent would send the pro forma invoices
containing the details of the steel product order to petitioner; if the latter conforms thereto, its
representative affixes his signature on the faxed copy and sends it back to the respondent, again by fax.

Respondent filed a civil action for damages due to breach of contract against petitioner before the
Regional Trial Court of Makati City. In its complaint, respondent alleged that defendants breached their
contract when they refused to open the letter of credit in the amount of US$170,000.00 for the
remaining 100MT of steel under Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2.

After respondent rested its case, petitioner filed a Demurrer to Evidence alleging that respondent failed
to present the original copies of the pro forma invoices on which the civil action was based. Petitioner
contends that the photocopies of the pro forma invoices presented by respondent Ssangyong to prove
the perfection of their supposed contract of sale are inadmissible in evidence and do not fall within the
ambit of R.A. No. 8792, because the law merely admits as the best evidence the original fax transmittal.
On the other hand, respondent posits that, from a reading of the law and the Rules on Electronic
Evidence, the original facsimile transmittal of the pro forma invoice is admissible in evidence since it is
an electronic document and, therefore, the best evidence under the law and the Rules. Respondent
further claims that the photocopies of these fax transmittals (specifically ST2-POSTS0401-1 and ST2-
POSTS0401-2) are admissible under the Rules on Evidence because the respondent sufficiently explained
the non-production of the original fax transmittals.

Issue:

Whether the print-out and/or photocopies of facsimile transmissions are electronic evidence and
admissible as such?

Held:

Electronic document shall be regarded as the equivalent of an original document under the Best
Evidence Rule, as long as it is a printout or output readable by sight or other means, showing to reflect
the data accurately. Thus, to be admissible in evidence as an electronic data message or to be
considered as the functional equivalent of an original document under the Best Evidence Rule, the
writing must foremost be an “electronic data message” or an “electronic document.

The Implementing Rules and Regulations (IRR) of R.A. No. 8792 defines the “Electronic Data Message”
refers to information generated, sent, received or stored by electronic, optical or similar means, but not
limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy.

The phrase “but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or
telecopy” in the IRR’s definition of “electronic data message” is copied from the Model Law on
Electronic Commerce adopted by the United Nations Commission on International Trade Law
(UNCITRAL), from which majority of the provisions of R.A. No. 8792 were taken. While Congress deleted
this phrase in the Electronic Commerce Act of 2000, the drafters of the IRR reinstated it. The deletion by
Congress of the said phrase is significant and pivotal.