*si sir pumuti hair…
*AUG 21: NINOY AQUINO DAY: NO CLASSES
-6 meetings
Allied Bank vs. CA
-same as associated bank in the sense that both are members of the PCHC
*WHY undergo arbitration proceedings first?
to ensure a uniformity of rulings relating to factual disputes involving checks and other negotiable instruments + provide mechanism for settling minor disputes among participating and member banks
Bloomfield Case
-not related to arbitration, but it mentioned (IN OBITER) that the law involved in the dispute provides for arbitration in case of disputes
Bloomfield academy: there was a case then about the quality of the construction of the bldg so school withheld the payment for the construction (when there was a strong typhoon, some of the rooms started dripping!!!) - di ba to sa torts na may nilipad na bubong???
-Constructor wanted to collect the whole payment, School refused, arguing that they shouldered payment for repairs.
-basta may kwento si sir about his experience with Bloomfield vs. J. Fernandez, hi s prof
TIP ni sir: if di ka pa prepared sa pleading mo, snail mail mo yung motion for extension of time!
QUESTION: Did you take the trouble to look at the alleged "arbitration clause"?
-where's the arbitration clause here???
SECTION 10: …"Every effort shall be exerted to reconcile possible differences. In case of disagreement, the alumni association of the school or any other impartial body of their choosing shall act as arbitrator."
this case implies that by statutory force, you might bind by arbitration. Do you agree?
No. Arbitration and other ADR methods are for party autonomy. - not really!
SIR: Law is a source of obligation, so this is binding.
e.g. PHILIPPINE MINING ACT: if a dispute arises out of the mining law, there is a panel of arbitrators taken from w/n DENR who would be the one who would resolve the dispute
If you fail to take advantage of the arbitration clause in the law, what would happen to your COA?
MTD, condition precedent?
...SIR: Depende daw sa phrasing! So no! (NOT AUTOMATIC NA CONDITION PRECEDENT SHA!)
MTD, lack of jurisdiction?
SIR Says that RTC has jurisdiction for this action which is incapable of pecuniary estimation
DAPAT DAW: MOTION TO STAY THE CIVIL ACTION under SEC7, RA876
*IF YOU ARE NOT CERTAIN THAT THE DISPUTE IS ARBITRABLE, FILE MOTION TO STAY THE CIVIL ACTION, NOT A MTD
Mindanao Portland Case
-role of courts in arbitration proceedings
-arb clause
"39. In the event of disagreement between the Owner and the Contractor in respect of the rights or obligations of either of the parties hereunder except the interpretation of the plans and specifications and questions concerning the sufficiency of materials, the time, sequence and method of performing the work, which questions are to be finally determined by the Engineer, they shall submit the matter to arbitration, the Owner choosing one arbitrator, the Contractor one, and the two so chosen shall select a third. The decision of such arbitrators or a majority of them shall be made in writing to both parties and when so made shall be binding upon the parties thereto."
Some commentators in arbitrators consider this clause a "Pathological Arbitration clause"
WHY: does not show right away what the arbitration dispute is
SC: this is an arbitrable dispute!
One of the claims by Mindanao is that it suffered damages due to the delay. So sabi ni sir, would not that fall under "The time, sequence and method of performing the work" so exempted?
DISSECTION of SC decision:
Since there obtains herein a written provision for arbitration as well as failure on respondent's part to comply therewith, the court a quo rightly ordered the parties to proceed to arbitration in accordance with the terms of their agreement (Sec. 6, Republic Act 876). Respondent's arguments touching upon the merits of the dispute are improperly raised herein.
- what prompted the SC to include the said statement?
Sir: Answer of mcdonough already included the defenses in the merits of the case. BUT SC Is not the proper forum for the ventilation of the dispute. Substance of the claim should be resolved before the arbitral panel.
THE MOST IMPORTANT STATEMENT IN THE CASE (and is always cited by sir):
"The duty of the court in this case is not to resolve the merits of the parties' claims but only to determine if they should proceed to arbitration or not. And although it has been ruled that a frivolous or patently baseless claim should not be ordered to arbitration, it is also recognized that the mere fact that a defense exists against a claim does not make it frivolous or baseless."
-recall NPC case. This makes it improper for CA to resolve the dispute
"What do you call the damages arising from the delay? In construction parlance, you call that "delay damages""
If the contract containing the arbitration clause is void ab inition, should the arbitration clause be void too?
Separability doctrine provides that the validity or invalidity of the CONTAINER CONTRACT does not affect the arbitration clause.
Puromines vs. CA
SIR AUTEA: "is that a short 'U' or long 'U'?"
AIDA: "Sir, para Pinoy, 'PURO' na lang"
-quoted the Mindanao case on the role of the courts
La Naval Case
In a petition for enforcement of the arbitration clause, the parties claimed damages.
Court held that the court would only conduct a summary procedure to determine WON the parties should undergo arbitration, NOT the resolution of damages. ACTION for DAMAGES should be determined in another case.
-same as Mindanao Case. DUTY is to determine if the parties should proceed to arbitration or not
Meralco vs. Pasay Transco
The Franchise of Meralco provides that the SC Justices, as arbitrators, would determine the charges that would be collected by Meralco for the use of its facilities.
Court held here that they cannot act as an arbitration panel. Arbitration is valid provided that there be relief available to go to courts. However, here, the final appeal of the arbitral award which the SC justice would be making, would be reviewable by the SC also. So weird! Also, acting as arbitrators is not a judicial function.
-policy of the courts on arbitration agreements: "The law calls for arbitration which represents a method of the parties' own choice. A submission to arbitration is a contract. The parties to an arbitration agreement may not oust the courts of jurisdiction of the matters submitted to arbitration. These are familiar rules which find support in articles 1820 and 1821 of the Civil Code. Citation of authority is hardly necessary, except that it should be recalled that in the Philippines, and in the United States for that matter, it has been held that a clause in a contract, providing that all matters in dispute between the parties shall be referred to arbitrators and to them alone, is contrary to public policy and cannot oust the courts of jurisdiction. "
So what if the arbitration clause provides that the arbitral award shall not be appealable (FINAL). Is this allowed?
YES, it is allowed. Appeal is a statutory right which can be waived by the parties. But there are provisions of law which cannot be waived. Even if the arbitration award provides that it shall not be appealable, if there are grounds that would constitute grounds for vacation of the award, then the aggrieved party may resort to the courts for the review of the arbitral award.
Uh-oh…have not read the following… :(
Fiesta World vs. Lindberg
Fiesta World and Lindberg entered into an agreement whereby Lindberg would construct a power plant and would provide power to the mall by Fiesta World. Fiesta World on the other hand would pay "energy fees". However, Fiesta World did not pay, alleging that Lindberg failed to properly assess the fees it collects. Lindberg filed an action to collect. Fiesta World alleges that there is an arb clause
Court held that arbitration should proceed.
If you file a motion to stay civil action or motion to suspend proceedings, and it is denied, can you appeal the order to CA? on what ground?
>>>petition for certiorari based on GAD?
…but isn't this an error of judgment, not of jurisdiction - so not a ground for certiorari?
Assignment last meeting:
Section 15. (1) All cases or matters filed after the effectivity of this Constitution must be decided or resolved within
twenty-four months from date of submission for the Supreme Court, and, unless reduced by the Supreme Court,
twelve months for all lower collegiate courts, and
three months for all other lower courts.
Del Monte USA vs. CA
MMI filed an action against Del Monte for allowing parallel importation of Del Monte goods when MMI had the sole authority to do so under their agreement. Del Monte alleged that there was an arbitration clause between the parties so it should undergo arbitration proceedings first.
Court held that although the dispute is arbitrable, it does not bind those who are not parties to the arbitration dispute. So the court would just resolve the dispute so as to prevent multiplicity of suits.
SIR: DO YOU AGREE WITH THE DECISION OF THE COURT?
Case is dangerous. Once another party is impleaded, no arbitration would occur. Court would still proceed with the case.
DA: suspend the proceedings so that the arbitration proceedings proceed as to those parties to the arbitration clause
Mr. VILLARDON: this is a case for torts (A20,21, 23), not for violation of the contract and the arbitration clause applies only when there's a dispute relating to the contract! Therefore, this should not be an arbitrable issue!
SIR to Mr. Villardon:
Art. 20. Every person who, contrary to law, willfully and negligently causes damage to another, shall indemnify the latter for the same.
Art. 21. Any person who willfully causes loss or damage to another in a manner that is contrary to morals, good custom or public policy shall compensate the latter for damages.
Art. 23. Even when an act or event causing damage to another's property was not due to the fault or negligence of the defendant, the latter shall be liable to indemnity, if through the act or event, he was benefited.
...Pero if no distributorship agreement in the first place, there would be no relationship between the parties, thus the dispute still arose from violation of the distributorship agreement.
MS. CORIJE: permissive joinder of parties: rights of the parties arose from the container contract. The court should have allowed the joinder of the other parties for complete relief
But di if permissive joinder of parties,
Ff up: On the point of multiplicity of suits? Is this ruling correct?
Arbitration is supposed to unclog court dockets precisely. By undergoing arbitration, easily resolve the dispute.
WAIT, what does "multiplicity of suits" mean? Basta alam ko ang ratio nito it wants to prevent conflicting rulings.
DA: arb parties undergo arbitration under Californian laws, and the other parties would be sued using Philippine laws
MAMA CHE: only applies when same COA. It does not really apply to the third parties impleaded because there is a different COA
Ff up: What would happen to the parties that did not sign the arbitration clause?
RICKY: drop them, then file a separate suit against them.
E di ganun din, magkakaso ka rin sa kanila??? E di meron paring kaso.
Take note of the arbitration clause. What came to mind?
12. GOVERNING LAW AND ARBITRATION4
This Agreement shall be governed by the laws of the State of California and/or, if applicable, the United States of America. All disputes arising out of or relating to this Agreement or the parties' relationship, including the termination thereof, shall be resolved by arbitration in the City of San Francisco, State of California, under the Rules of the American Arbitration Association. The arbitration panel shall consist of three members, one of whom shall be selected by DMC-USA, one of whom shall be selected by MMI, and third of whom shall be selected by the other two members and shall have relevant experience in the industry x x x x
--party autonomy. There is a selection of the venue (San Francisco), governing law (laws of the State of California), method of selection of arbitrators (1-1-1), rule of arbitration (Triple A)
-SC held that this arbitration clause is valid and constitutional and this dispute is arbitrable! Just the same, SC tossed backed the case because there were other parties involved.
SIR ON DEL MONTE CASE
Ratio decidendi of del monte case maraming binanggit na tama
Deviation lang on the implementation of what SC said: arb clause valid, dispute is arbitrable, BUT remand case to TC otherwise multiplicity of suits
SIR: refer case to arbitration because of section 25 of RA 9285: where a case (court case) involves multiple parties, some parties signatories while some not, then those who are parties should be referred to arbitration. Those who are not should continue to litigation.
Those who are parties to arb clause: madali yun, wala silang lusot eh.
Those who are not parties:
Who are the parties in this case:
Plaintiffs: MMI, SFA
MMI signed arb agreement so walang lusot
SFA (marketing arm) not a party to arb agreement
Lily Sy (CEO of MMI): may be considered an agent of MMI so pede arb agreement, in fact she was the one who signed in behalf of MMI
Defendants:
Del Monte: signed
Derby (managing director): may be considered an agent of Del Monte, signatory
Collins (regional director): may be considered an agent, or not
Hidalgo (head of credit services): same
Dewey (trademark owner): not signatory
There is no doubt that those who are parties must arbitrate!
So strikeout: if let others arbitrate, may pag-aawayan pa ba yung mga parties na di member ng arb agreement? WALA NA. WALA NA COA ANG SFA VS. THE INDIVIDUAL DEFENDANTS. Their COA would probably be only against MMI or Del Monte - SO WALANG MULTIPLICITY OF SUITS, WALANG MAG-AAWAY!
ON Dangerous ruling: yes, there is basis for that. Parties to arb agreement could easily evade the arb clause by impleading other parties who are not signatories to the arb agreement.
Del monte was the reason why there is SECTION 25 in the RA 9285! W/o it, DEL MONTE IS GOOD LAW UNTIL NOW.
"For the next Friday, celebrate Ninoy Aquino day!"
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