INSULAR
SAVINGS BANK, G.R. No. 141818
Petitioner,
Present:
Panganiban, C.J. (Chairperson),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
FAR
EAST BANK AND
TRUST
COMPANY, Promulgated:
Respondent.
June 22, 2006
x
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x
YNARES-SANTIAGO,
J.:
This
petition for review on certiorari[1]
assails the November 9, 1999 Order[2] of
the Regional Trial Court of Makati City, Branch 135, in Civil Case No. 92-145
which dismissed the petition for review for lack of jurisdiction and its
February 1, 2000 Order[3]
denying reconsideration thereof.
The
antecedent facts are as follows:
On
Meanwhile, on
WHEREFORE, the Court hereby orders:
(a) Home
Bankers & Trust Co. to produce and permit plaintiff to inspect, copy and/or
photograph the checking account deposit ledger of Victor Tancuan’s Account No.
1803-00605-3;
(b) The
Motions to Dismiss filed by all defendants denied, for lack of merit; and
(c) Proceedings
in this case against all defendants be suspended pending award/decision in the
arbitration proceedings against Home Bankers and Trust Co.
SO ORDERED.[9] (Emphasis
supplied)
The above Omnibus Order was amended
by the trial court in its
WHEREFORE, the Omnibus Order dated
(c) “Procedings
against Home Bankers and Trust Co. are suspended pending award/decision in the
arbitration proceedings while those against individual defendants be
immediately reinstated and continued.”
HBT and Tancuan’s separate Motions for
Reconsiderations are hereby denied, for lack of merit.
SO ORDERED.[11]
On
IN
VIEW OF ALL THE FOREGOING, judgment is hereby rendered in favor of the
plaintiff and against the defendant sentencing the latter to pay the plaintiff
the sum of P25.2 million as principal.
In view of the fact, however, that this amount was split between the
plaintiff and the defendant in the course of the proceedings, the amount to be
paid by the defendant to the plaintiff should only be P12,600,000.00 plus
interest on this latter amount at the rate of 12% per annum from February 11,
1992, the date when the total amount of P25.2 Million was split between
plaintiff and defendant up to the date of payment.
In
view of the facts found by the committee, no attorney’s fees nor other damages
are awarded.
SO
ORDERED.[13]
The
motion for reconsideration filed by petitioner was denied by the Arbitration
Committee.[14] Consequently, to appeal the decision of the Arbitration
Committee in Arbicom Case No. 91-069, petitioner filed a petition for review in the earlier case filed by respondent in Branch
135 of the RTC of
Both
parties filed several pleadings. On
On
Acting
on plaintiff Far East Bank and Trust Company’s “Motion To Dismiss Petition For
Review For Lack Of Jurisdiction”, considering that the petition for review is a
separate and distinct case, the same must comply with all the requirements for
filing initiatory pleadings for civil actions before this Court so that since
the commencement of the subject petition lacks the mandatory requirements
provided for, except the payment of docket fees, for lack of jurisdiction, the
petition for review is hereby dismissed.
SO
ORDERED.[22]
The
RTC denied petitioner’s motion for reconsideration,[23]
hence, this petition on the sole ground, to wit:
THE REGIONAL TRIAL COURT ERRED IN DISMISSING
THE PETITION OF PETITIONER FOR LACK OF JURISDICTION ON THE GROUND THAT IT
SHOULD HAVE BEEN DOCKETED AS A SEPARATE CASE.[24]
Petitioner
contends that Civil Case No. 92-145 was merely suspended to await the outcome
of the arbitration case pending before the PCHC. Thus, any petition questioning the decision of
the Arbitration Committee must be filed in Civil Case No. 92-145 and should not
be docketed as a separate action. Likewise,
petitioner avers that had it filed a separate action, “this would have resulted
in a multiplicity of suits, which is abhorred in procedure.”
Meanwhile respondent avers that the
RTC correctly dismissed the appeal from the award of private arbitrators since
there is no statutory basis for such appeal.
Respondent argues that petitioner’s claim that the parties by agreement
had conferred on the RTC appellate jurisdiction over decisions of private
arbitrators is erroneous because they cannot confer a non-existent jurisdiction
on the RTC or any court. Furthermore, the
petition for review filed by petitioner violated the rule on commencing an
original action under Section 5, Rule 1, and the raffle of cases under Section
2, Rule 20 of the Rules of Court, when it filed the same in Branch 135 of the
RTC of Makati where there was already a pending original action, i.e., Civil Case No. 92-145.
The petition lacks merit.
The Philippine Clearing House Corporation
was created to facilitate the clearing of checks of member banks. Among these member banks exists a compromissoire,[25]
or an arbitration agreement embedded in their contract wherein they consent
that any future dispute or controversy between its PCHC participants involving
any check would be submitted to the Arbitration Committee for arbitration. Petitioner and respondent are members of
PCHC, thus they underwent arbitration proceedings.
The PCHC has its own Rules of
Procedure for Arbitration (PCHC Rules).
However, this is governed by Republic Act No. 876, also known as The
Arbitration Law[26] and
supplemented by the Rules of Court.[27] Thus, we first thresh out the remedy of
petition for review availed of by the petitioner to appeal the order of the
Arbitration Committee.
Sections 23, 24 and 29 of The
Arbitration Law, and Section 13 of the PCHC Rules, provide:
SEC.
23. Confirmation of award. – At any time within one month after the award is
made, any party to the controversy which was arbitrated may apply to
the court having jurisdiction, as provided in Section 28, for an order
confirming the award; and thereupon the court must grant such order unless
the award is vacated, modified or corrected, as prescribed herein. Notice of such motion must be served upon the
adverse party or his attorney as prescribed by law for the service of such
notice upon an attorney in action in the same court.
SEC.
24. Grounds for vacating award. – In any one of the following cases, the court
must make an order vacating the award upon the petition of any party to the
controversy when such party proves affirmatively that in the arbitration
proceedings:
(a) The
award was procured by corruption, fraud or other undue means; or
(b) That
there was evident partiality or corruption in the arbitrators or any of them;
or
(c) That
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
disqualified to act as such under section nine hereof, and willfully refrained
from disclosing such disqualification or of any other misbehavior by which the
rights of any party have been materially prejudiced; or
(d) That
the arbitrators exceeded their powers, or so imperfectly executed them, that a
mutual, final and definite award upon the subject matter submitted to them was
not made.
x x x x
SEC.
25. Grounds for modifying or correcting award. – In any one of the following
cases, the court must make an order modifying or correcting the award, upon the
application of any party to the controversy which was arbitrated:
(a) Where
there was an evident miscalculation of figures, or an evident mistake in the
description of any person, thing or property referred to in the award; or
(b) Where
the arbitrators have awarded upon a matter not submitted to them, not affecting
the merits of the decision upon the matter submitted; or
(c) Where
the award is imperfect in a matter of form not affecting the merits of the
controversy, and if it had been a commissioner’s report, the defect could have
been amended or disregarded by the court.
The order may modify and correct the award so
as to effect the intent thereof and promote justice between the parties.
SEC.
29. Appeals. – An appeal may be taken from an order made in a proceeding
under this Act, or from judgment entered upon an award through certiorari
proceedings, but such appeals shall be limited to questions of law. The proceedings upon such an appeal,
including the judgment thereon shall be governed by the Rules of Court insofar
as they are applicable.
AMENDED
ARBITRATION RULES OF PROCEDURE OF PCHC
Sec.
13. – The findings of facts of the decision or award rendered by the
Arbitration Committee or by the sole Arbitrator as the case may be shall be
final and conclusive upon all the parties in said arbitration dispute. The decision or award of the Arbitration
Committee or of the Sole Arbitrator or of the Board of Directors, as the case
may be, shall be appealable only on questions of law to any of the
Regional Trial Courts in the National Capital Region where the Head Office of
any of the parties is located. The
appellant shall perfect his appeal by filing a notice of appeal to the
Arbitration Secretariat and filing a Petition with the Regional Trial Court of
the National Capital Region for the review of the decision or award of the
committee or sole arbitrator or of the Board of Directors, as the case may be,
within a non-extendible period of fifteen (15) days from and after its receipt
of the order denying or granting said motion for reconsideration or new trial
had been filed, within a non-extendible period of fifteen (15) days from and
after its receipt of the order denying or granting said motion for
reconsideration or of the decision rendered after the new trial if one had been
granted.
x x x x. (Emphasis supplied)
As provided in the PCHC Rules, the
findings of facts of the decision or award rendered by the Arbitration
Committee shall be final and conclusive upon all the parties in said
arbitration dispute.[28] Under Article 2044[29]
of the New Civil Code, the validity of any stipulation on the finality of the
arbitrators’ award or decision is recognized.
However, where the conditions described in Articles 2038,[30]
2039[31]
and 2040[32]
applicable to both compromises and arbitrations are obtaining, the arbitrators’
award may be annulled or rescinded.[33] Consequently, the decision of the Arbitration
Committee is subject to judicial review.
Furthermore, petitioner had several judicial
remedies available at its disposal after the Arbitration Committee denied its Motion
for Reconsideration. It may petition the
proper RTC to issue an order vacating the award on the grounds provided for
under Section 24 of the Arbitration Law.[34] Petitioner likewise has the option to file a
petition for review under Rule 43 of the Rules of Court with the Court of Appeals
on questions of fact, of law, or mixed questions of fact and law.[35] Lastly,
petitioner may file a petition for certiorari under Rule 65 of the Rules of
Court on the ground that the Arbitrator Committee acted without or in excess of
its jurisdiction or with grave abuse of discretion amounting to lack or excess
of jurisdiction. Since this case
involves acts or omissions of a quasi-judicial agency, the petition should be
filed in and cognizable only by the Court of Appeals.[36]
In
this instance, petitioner did not avail of any of the abovementioned remedies
available to it. Instead it filed a
petition for review with the RTC where Civil Case No. 92-145 is pending pursuant
to Section 13 of the PCHC Rules to sustain its action. Clearly, it erred in the procedure it chose
for judicial review of the arbitral award.
Having established that petitioner
failed to avail of the abovementioned remedies, we now discuss the issue of the
jurisdiction of the trial court with respect to the petition for review filed
by petitioner.
Jurisdiction is the authority to hear
and determine a cause - the right to act in a case.[37] Jurisdiction over the subject matter is the
power to hear and determine the general class to which the proceedings in
question belong. Jurisdiction over the subject matter is conferred by law and not by the consent or acquiescence of any or all of the
parties or by erroneous belief of the court that it exists.[38]
In the instant case, petitioner and
respondent have agreed that the PCHC Rules would govern in case of controversy. However, since the PCHC Rules came about only
as a result of an agreement between and among member banks of PCHC and not by
law, it cannot confer jurisdiction to the RTC.
Thus, the portion of the PCHC Rules granting jurisdiction to the RTC to
review arbitral awards, only on questions of law, cannot be given effect.
Consequently, the proper recourse of
petitioner from the denial of its motion for reconsideration by the Arbitration
Committee is to file either a motion to vacate the arbitral award with the RTC,
a petition for review with the Court of Appeals under Rule 43 of the Rules of
Court, or a petition for certiorari under Rule 65 of the Rules of Court. In the case at bar, petitioner filed a
petition for review with the RTC when the same should have been filed with the
Court of Appeals under Rule 43 of the Rules of Court. Thus, the RTC of Makati did not err in dismissing
the petition for review for lack of jurisdiction but not on the ground that petitioner
should have filed a separate case from Civil Case No. 92-145 but on the
necessity of filing the correct petition in the proper court. It is immaterial whether petitioner filed the
petition for review in Civil Case No. 92-145 as an appeal of the arbitral award
or whether it filed a separate case in the RTC, considering that the RTC will
only have jurisdiction over an arbitral award in cases of motions to vacate the
same. Otherwise, as elucidated herein,
the Court of Appeals retains jurisdiction in petitions for review or in
petitions for certiorari. Consequently,
petitioner’s arguments, with respect to the filing of separate action from
Civil Case No. 92-145 resulting in a multiplicity of suits, cannot be given due
course.
Alternative dispute resolution
methods or ADRs – like arbitration, mediation, negotiation and conciliation –
are encouraged by the Supreme Court. By
enabling parties to resolve their disputes amicably, they provide solutions
that are less time-consuming, less tedious, less confrontational, and more
productive of goodwill and lasting relationships.[39] It must be borne in mind that arbitration
proceedings are mainly governed by the Arbitration Law and suppletorily by the
Rules of Court.
WHEREFORE, in light of the foregoing, the
petition is DENIED. The November 9, 1999 Order of the Regional
Trial Court of Makati City, Branch 135, in Civil Case No. 92-145 which
dismissed the petition for review for lack of jurisdiction and the February 1,
2000 Order denying its reconsideration, are AFFIRMED.
SO ORDERED.
CONSUELO YNARES-SANTIAGO
Associate Justice
WE
CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ
ROMEO J. CALLEJO, SR.
Associate Justice Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
ARTEMIO
V. PANGANIBAN
Chief Justice
[1] Rollo, pp. 9-19.
[2]
[3]
[4]
The petitioner, now Insular Savings Bank, is the predecessor-in-interest of
Home Bankers Trust and Company.
[5] Rollo, pp. 69-78.
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[24]
[25]
Custodio Parlade, “Alternative Dispute Resolution Act of 2004”, 2004, p. 275.
[26] As
amended by Republic Act No. 9285 or the Alternative Dispute Resolution Act of
2004.
[27]
PCHC Amended Arbitration Rules of Procedure, Sec. 16.
[28]
[29]
Any stipulation that the arbitrators’ award or decision shall be final, is
valid, without prejudice to Articles 2038, 2039, and 2040.
[30] A
compromise in which there is mistake, fraud, violence, intimidation, undue
influence, or falsity of documents, is subject to the provisions of Article
1330 of this Code.
However, one of the parties cannot set up a mistake
of fact as against the other if the latter, by virtue of the compromise, has
withdrawn from a litigation already commenced.
[31]
When the parties compromise generally on all differences which they might have
with each other, the discovery of documents referring to one or more but not to
all of the questions settled shall not itself be a cause for annulment or
rescission of the compromise, unless said documents have been concealed by one
of the parties.
But the compromise may be annulled or rescinded if it
refers only to one thing to which one of the parties has no right, as shown by
the newly-discovered documents.
[32]
If after a litigation has been decided by a final judgment, a compromise should
be agreed upon, either or both parties being unaware of the existence of the
final judgment, the compromise may be rescinded.
Ignorance of a judgment which may be revoked or set
aside is not a valid ground for attacking a compromise.
[33] Chung Fu Industries (Phils.), Inc. v. Court
of Appeals, G.R. No. 96283, February 25, 1992, 206 SCRA 545, 554.
[34]
Section 41 of the Alternative Dispute Resolution Act of 2004 provides that the
grounds enumerated in Section 25 (this should be Section 24) of R.A. 876 are
exclusive. Any other ground raised
against a domestic arbitral award shall be disregarded by the Regional Trial
Court.
[35]
Rules of Court, Rule 43, Secs. 1 & 3.
[36]
Rules of Court, Rule 65, Sec. 4.
[37]
[38] Allied Domecq Phil., Inc. v. Villon,
G.R. No. 156264, September 30, 2004, 439 SCRA 667, 672-673.
[39]
LM Power Engineering Corp. v. Capitol Industrial Construction Groups, Inc., 447
Phil. 705, 707 (2003).