Republic of the
Supreme Court
|
CARGILL PHILIPPINES, INC.,
Petitioner, - versus - SAN
FERNANDO REGALA TRADING, INC., Respondent. |
G.R.
No. 175404 Present: CARPIO, J., Chairperson, NACHURA, PERALTA, ABAD, and MENDOZA, JJ. Promulgated: January 31, 2011 |
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PERALTA, J.:
Before
us is a petition for review on certiorari seeking to reverse and set
aside the Decision[1]
dated
The factual
antecedents are as follows:
On
On
ARBITRATION
Any dispute which the Buyer and
Seller may not be able to settle by mutual agreement shall be settled by
arbitration in the City of
that respondent must first comply
with the arbitration clause before resorting to court, thus, the RTC must
either dismiss the case or suspend the proceedings and direct the parties to
proceed with arbitration, pursuant to Sections 6[6]
and 7[7]
of Republic Act (R.A.) No. 876, or the
Arbitration Law.
Respondent
filed an Opposition, wherein it argued that the RTC has jurisdiction over the
action for rescission of contract and could not be changed by the subject
arbitration clause. It cited cases wherein arbitration clauses, such as the
subject clause in the contract, had been struck down as void for being contrary
to public policy since it provided that the arbitration award shall be final
and binding on both parties, thus, ousting the courts of jurisdiction.
In its Reply, petitioner maintained that the cited decisions
were already inapplicable, having been rendered prior to the effectivity of the
New Civil Code in 1950 and the Arbitration Law in 1953.
In its Rejoinder, respondent
argued that the arbitration clause relied upon by petitioner is invalid and
unenforceable, considering that the requirements imposed by the provisions of
the Arbitration Law had not been complied with.
By way of Sur-Rejoinder, petitioner contended that respondent
had even clarified that the issue boiled down to whether the arbitration clause
contained in the contract subject of the complaint is valid and enforceable;
that the arbitration clause did not violate any of the cited provisions of the
Arbitration Law.
On
Premises considered, defendant's “Motion To Dismiss/Suspend Proceedings and To Refer Controversy To Voluntary Arbitration” is hereby DENIED. Defendant is directed to file its answer within ten (10) days from receipt of a copy of this order.[9]
In
denying the motion, the RTC found that there was no clear basis for
petitioner's plea to dismiss the case, pursuant to Section 7 of the Arbitration
Law. The RTC said that the
provision directed the court concerned only to stay the action or proceeding
brought upon an issue arising out of an agreement providing for the arbitration
thereof, but did not impose the sanction of dismissal. However, the RTC did not find the suspension
of the proceedings warranted, since the Arbitration Law contemplates an
arbitration proceeding that must be conducted in the Philippines under the
jurisdiction and control of the RTC; and before an arbitrator who resides in
the country; and that the arbitral award is subject to court approval,
disapproval and modification, and that there must be an appeal from the
judgment of the RTC. The RTC found that
the arbitration clause in question contravened these procedures, i.e.,
the arbitration clause contemplated an arbitration proceeding in
Petitioner
filed its Motion for Reconsideration, which the RTC denied in an Order[10]
dated
Petitioner filed a petition for certiorari with the CA
raising the sole issue that the RTC acted in excess of jurisdiction or with
grave abuse of discretion in refusing to dismiss or at least suspend the
proceedings a quo, despite the fact that the party's agreement to
arbitrate had not been complied with.
Respondent
filed its Comment and Reply. The parties were then required to file their
respective Memoranda.
On
In denying the petition, the CA found that stipulation providing for arbitration in
contractual obligation is both valid and constitutional; that arbitration as an
alternative mode of dispute resolution has long been accepted in our
jurisdiction and expressly provided for in the Civil Code; that R.A. No. 876 (the Arbitration Law) also expressly
authorized the arbitration of domestic disputes. The CA found error in the RTC's holding that
Section 7 of R.A. No. 876 was inapplicable to arbitration clause simply because
the clause failed to comply with the requirements prescribed by the law. The CA found that there was nothing in the
Civil Code, or R.A. No. 876, that
require that arbitration proceedings must be conducted only in the
Notwithstanding
such findings, the CA still held that the case cannot be brought under the
Arbitration Law for the purpose of suspending the proceedings before the RTC,
since in its Motion to Dismiss/Suspend proceedings, petitioner alleged, as one
of the grounds thereof, that the subject
contract between the parties did not
exist or it was invalid; that the said contract bearing the arbitration clause
was never consummated by the parties, thus, it was proper that such issue be
first resolved by the court through an appropriate trial; that the issue
involved a question of fact that the RTC should first resolve. Arbitration is not proper when one of the
parties repudiated the existence or validity of the contract.
Petitioner's motion for reconsideration was denied in a
Resolution dated
Hence, this petition.
Petitioner alleges that the CA committed an
error of law in ruling that arbitration cannot proceed despite the fact that:
(a) it had ruled, in its assailed decision, that the arbitration clause is
valid, enforceable and binding on the parties; (b) the case of Gonzales v.
Climax Mining Ltd.[11]
is inapplicable here; (c) parties are generally allowed, under the Rules of
Court, to adopt several defenses, alternatively or hypothetically, even if
such
defenses are inconsistent with each
other; and (d) the complaint filed by respondent with the trial court is
premature.
Petitioner
alleges that the CA adopted inconsistent positions when it found the
arbitration clause between the parties as valid and enforceable and yet in the
same breath decreed that the arbitration cannot proceed because petitioner
assailed the existence of the entire agreement containing the arbitration
clause. Petitioner claims the
inapplicability of the cited Gonzales case decided in 2005, because in
the present case, it was respondent who had filed the complaint for rescission
and damages with the RTC, which based its cause of action against petitioner on
the alleged agreement dated July 11, 2006 between the parties; and that the
same agreement contained the arbitration clause sought to be enforced by
petitioner in this case. Thus, whether petitioner assails the genuineness and
due execution of the agreement, the fact remains that the agreement sued upon
provides for an arbitration clause; that respondent cannot use the provisions
favorable to him and completely disregard those that are unfavorable, such as
the arbitration clause.
Petitioner
contends that as the defendant in the RTC, it presented two alternative
defenses, i.e., the parties had not entered into any agreement upon
which respondent as plaintiff can sue upon; and, assuming that such agreement
existed, there was an arbitration clause that should be enforced, thus, the
dispute must first be submitted to arbitration before an action can be instituted
in court. Petitioner argues that under Section
1(j) of Rule 16 of the Rules of Court,
included as a ground to dismiss a complaint is when a condition
precedent for filing the complaint has not been complied with; and that
submission to arbitration when such has been agreed upon is one such condition
precedent. Petitioner submits that the
proceedings in the RTC must be dismissed, or at least suspended, and the
parties be ordered to proceed with arbitration.
On
March 12, 2007, petitioner filed a Manifestation[12]
saying that the CA's rationale in declining to order arbitration based on the 2005
Gonzales ruling had been modified upon a motion for reconsideration
decided in 2007; that the CA decision lost its legal basis, because it had been
ruled that the arbitration agreement can be implemented notwithstanding that
one of the parties thereto repudiated the contract which contained such
agreement based on the doctrine of separability.
In its Comment,
respondent argues that certiorari under Rule 65 is not the remedy
against an order denying a Motion to Dismiss/Suspend Proceedings and To Refer
Controversy to Voluntary Arbitration. It
claims that the Arbitration Law which petitioner invoked as basis for its
Motion prescribed, under its Section 29, a remedy, i.e., appeal by a
petition for review on certiorari under Rule 45. Respondent contends that the Gonzales case,
which was decided in 2007, is inapplicable in this case, especially as to the doctrine
of separability enunciated therein.
Respondent argues that even if the existence of the contract and the
arbitration clause is conceded, the decisions of the RTC and the CA declining
referral of the dispute between the parties to arbitration would still be
correct. This is so because respondent's complaint filed in Civil Case No.
98-1376 presents the principal issue of whether under the facts alleged in the
complaint, respondent is entitled to rescind its contract with petitioner and
for the latter to pay damages; that such issue constitutes a judicial question
or one that requires the exercise of judicial function and cannot be the
subject of arbitration.
Respondent
contends that Section 8 of the Rules of Court, which allowed a defendant to
adopt in the same action several defenses, alternatively or hypothetically,
even if such defenses are inconsistent with each other refers to allegations in
the pleadings, such as complaint, counterclaim, cross-claim, third-party
complaint, answer, but not to a motion to dismiss. Finally,
respondent claims that petitioner's argument is premised on the existence of a
contract with respondent containing a provision for arbitration. However, its reliance on the contract, which
it repudiates, is inappropriate.
In
its Reply, petitioner insists that respondent filed an action for rescission
and damages on the basis of the contract, thus, respondent admitted the existence
of all the provisions contained thereunder, including the arbitration clause;
that if respondent relies on said contract for its cause of action against
petitioner, it must also consider itself bound by the rest of the terms and
conditions contained thereunder notwithstanding
that respondent may find some provisions to be adverse to its position; that respondent’s
citation of the Gonzales case, decided in 2005, to show that the
validity of the contract cannot be the subject of the arbitration proceeding
and that it is the RTC which has the jurisdiction to resolve the situation
between the parties herein, is not correct since in the resolution of the
Gonzales' motion for reconsideration in 2007, it had been ruled that an
arbitration agreement is effective notwithstanding the fact that one of the
parties thereto repudiated the main contract which contained it.
We
first address the procedural issue raised by respondent that petitioner’s
petition for certiorari under Rule 65 filed in the CA against an RTC Order
denying a Motion to Dismiss/Suspend Proceedings and to Refer Controversy to
Voluntary Arbitration was a wrong remedy invoking Section 29 of R.A. No.
876, which provides:
Section 29.
x x x An appeal may be taken from an order made in a
proceeding under this Act, or from a judgment entered upon an award through certiorari
proceedings, but such appeals shall be limited to question of law. x x x.
To
support its argument, respondent cites the case of Gonzales v. Climax Mining
Ltd.[13]
(Gonzales case), wherein we ruled the impropriety of a petition for certiorari
under Rule 65 as a mode of appeal from an RTC Order directing the parties to
arbitration.
We find the cited case not in point.
In the Gonzales case,
Climax-Arimco filed before the RTC of Makati a petition to compel arbitration
under R.A. No. 876, pursuant to the arbitration clause found in the Addendum
Contract it entered with Gonzales. Judge Oscar Pimentel of the RTC of Makati
then directed the parties to arbitration proceedings. Gonzales filed a petition
for certiorari with Us contending
that Judge Pimentel acted with grave abuse of discretion in immediately
ordering the parties to proceed with arbitration despite the proper, valid and
timely raised argument in his Answer with counterclaim that the Addendum
Contract containing the arbitration clause was null and void. Climax-Arimco
assailed the mode of review availed of by Gonzales, citing Section 29 of R.A. No. 876 contending that certiorari
under Rule 65 can be availed of only if there was no appeal or any adequate
remedy in the ordinary course of law; that R.A. No. 876 provides for an appeal
from such order. We then ruled that Gonzales' petition for certiorari
should be dismissed as it was filed in lieu of an appeal by certiorari
which was the prescribed remedy under R.A. No. 876 and the petition was filed
far beyond the reglementary period.
We found that Gonzales’ petition for certiorari
raises a question of law, but not a question of jurisdiction; that Judge
Pimentel acted in accordance with the procedure prescribed in R.A. No. 876 when
he ordered Gonzales to proceed with arbitration and appointed a sole arbitrator
after making the determination that there was indeed an arbitration agreement.
It had been held that as long as a court acts within its jurisdiction and does
not gravely abuse its discretion in the exercise thereof, any supposed error
committed by it will amount to nothing more than an error of judgment
reviewable by a timely appeal and not assailable by a special civil action of certiorari.[14]
In this case, petitioner raises before
the CA the issue that the respondent Judge acted in excess of jurisdiction or
with grave abuse of discretion in refusing to dismiss, or at least suspend, the
proceedings a quo, despite the fact that the party’s agreement to
arbitrate had not been complied with. Notably,
the RTC found the existence of the arbitration clause, since it said in its
decision that “hardly disputed is the fact that the arbitration clause in
question contravenes several provisions of the Arbitration Law x x x and to
apply Section 7 of the Arbitration Law
to such an agreement would result in the disregard of the afore-cited sections
of the Arbitration Law and render them useless and mere surplusages.” However, notwithstanding the finding that an
arbitration agreement existed, the RTC denied petitioner's motion and directed
petitioner to file an answer.
In La Naval Drug
Corporation v. Court of Appeals,[15] it was held that R.A. No. 876 explicitly
confines the court’s authority only to the determination of whether or not
there is an agreement in writing providing for arbitration. In the affirmative, the statute ordains that
the court shall issue an order summarily directing the parties to proceed with
the arbitration in accordance with the terms thereof. If the court, upon the other hand, finds that
no such agreement exists, the proceedings shall be dismissed.
In issuing the Order
which denied petitioner's Motion to Dismiss/Suspend Proceedings and to Refer
Controversy to Voluntary Arbitration, the RTC went beyond its authority of
determining only the issue of whether or not there is an agreement in writing
providing for arbitration by directing petitioner to file an answer, instead of
ordering the parties to proceed to arbitration. In so doing, it acted in excess
of its jurisdiction and since there is no plain, speedy, and
adequate remedy in the ordinary course of law, petitioner’s resort to a
petition for certiorari is the proper remedy.
We now proceed to the
substantive issue of whether the CA erred in finding that this case cannot be
brought under the arbitration law for the purpose of suspending the proceedings
in the RTC.
We find merit in the petition.
Arbitration, as an
alternative mode of settling disputes, has long been recognized and accepted in
our jurisdiction.[16]
R.A. No. 876[17]
authorizes arbitration of domestic disputes. Foreign arbitration, as a system of settling
commercial disputes of an international character, is likewise recognized.[18] The enactment of R.A. No. 9285 on
A contract is required
for arbitration to take place and to be binding.[20] Submission to arbitration is a contract [21]
and a clause in a contract providing that all matters in dispute between the
parties shall be referred to arbitration is a contract.[22]
The
provision to submit to arbitration any dispute arising therefrom and the
relationship of the parties is part of the contract and is itself a contract.[23]
In this case, the
contract sued upon by respondent provides for an arbitration clause, to wit:
ARBITRATION
Any dispute which the Buyer and Seller may not be able to settle by mutual agreement shall be settled by arbitration in the City of New York before the American Arbitration Association, The Arbitration Award shall be final and binding on both parties.
The CA ruled that arbitration cannot be ordered in this case,
since petitioner alleged that the contract between the parties did not exist or
was invalid and arbitration is not proper when one of the parties repudiates
the existence or validity of the contract. Thus, said the CA:
Notwithstanding our ruling on the validity and enforceability of the assailed arbitration clause providing for foreign arbitration, it is our considered opinion that the case at bench still cannot be brought under the Arbitration Law for the purpose of suspending the proceedings before the trial court. We note that in its Motion to Dismiss/Suspend Proceedings, etc, petitioner Cargill alleged, as one of the grounds thereof, that the alleged contract between the parties do not legally exist or is invalid. As posited by petitioner, it is their contention that the said contract, bearing the arbitration clause, was never consummated by the parties. That being the case, it is but proper that such issue be first resolved by the court through an appropriate trial. The issue involves a question of fact that the trial court should first resolve.
Arbitration is not proper when one of the parties repudiates the existence or validity of the contract. Apropos is Gonzales v. Climax Mining Ltd., 452 SCRA 607, (G.R.No.161957), where the Supreme Court held that:
The
question of validity of the contract containing the agreement to submit to
arbitration will affect the applicability of the arbitration clause itself. A
party cannot rely on the contract and claim rights or obligations under it and
at the same time impugn its existence or validity. Indeed, litigants are
enjoined from taking inconsistent positions....
Consequently, the petitioner herein cannot claim that the contract was never consummated and, at the same time, invokes the arbitration clause provided for under the contract which it alleges to be non-existent or invalid. Petitioner claims that private respondent's complaint lacks a cause of action due to the absence of any valid contract between the parties. Apparently, the arbitration clause is being invoked merely as a fallback position. The petitioner must first adduce evidence in support of its claim that there is no valid contract between them and should the court a quo find the claim to be meritorious, the parties may then be spared the rigors and expenses that arbitration in a foreign land would surely entail.[24]
However, the Gonzales case,[25]
which the CA relied upon for not ordering arbitration, had been modified upon a
motion for reconsideration in this wise:
x x x The
adjudication of the petition in G.R. No. 167994 effectively modifies part of
the Decision dated
In
so ruling that the validity of the contract containing the arbitration
agreement does not affect the applicability of the arbitration clause itself,
we then applied the doctrine of separability, thus:
The doctrine of
separability, or severability as other writers call it, enunciates that an
arbitration agreement is independent of the main contract. The arbitration
agreement is to be treated as a separate agreement and the arbitration
agreement does not automatically terminate when the contract of which it is a
part comes to an end.
The separability of the
arbitration agreement is especially significant to the determination of whether
the invalidity of the main contract also nullifies the arbitration clause.
Indeed, the doctrine denotes that the invalidity of the main contract, also
referred to as the "container" contract, does not affect the validity
of the arbitration agreement. Irrespective of the fact that the main contract
is invalid, the arbitration clause/agreement still remains valid and
enforceable.[27]
Respondent argues that
the separability doctrine is not applicable in petitioner's case, since in the Gonzales
case, Climax-Arimco sought to enforce the arbitration clause of its
contract with Gonzales and the former's move was premised on the existence of a
valid contract; while Gonzales, who resisted the move of Climax-Arimco for
arbitration, did not deny the existence of the contract but merely assailed the
validity thereof on the ground of fraud and oppression. Respondent claims that in the case before Us,
petitioner who is the party insistent on arbitration also claimed in their
Motion to Dismiss/Suspend Proceedings that the contract sought by respondent to
be rescinded did not exist or was not consummated; thus, there is no room for
the application of the separability doctrine, since there is no container or
main contract or an arbitration clause to speak of.
We are not persuaded.
Applying the Gonzales
ruling, an arbitration agreement which forms part of the main contract shall
not be regarded as invalid or non-existent just because the main contract is
invalid or did not come into existence, since the arbitration agreement shall
be treated as a separate agreement independent of the main contract. To reiterate. a contrary ruling would suggest
that a party's mere repudiation of the main contract is sufficient to avoid
arbitration and that is exactly the situation that the separability doctrine
sought to avoid. Thus, we find that even the party who has repudiated the main
contract is not prevented from enforcing its arbitration clause.
Moreover, it is worthy to note that respondent
filed a complaint for rescission of contract and damages with the RTC. In so
doing, respondent alleged that a contract exists between respondent and
petitioner. It is that contract which provides for an arbitration clause which states
that “any dispute which the Buyer and Seller may not be able to settle by
mutual agreement shall be settled before the City of
Respondent
contends that assuming that the existence of the contract and the arbitration
clause is conceded, the CA's decision declining referral of the parties'
dispute to arbitration is still correct. It claims that its complaint in the RTC
presents the issue of whether under the facts alleged, it is entitled to
rescind the contract with damages; and that issue constitutes a judicial
question or one that requires the exercise of judicial function and cannot be
the subject of an arbitration proceeding. Respondent cites our ruling in Gonzales,
wherein we held that a panel of arbitrator is bereft of jurisdiction over the
complaint for declaration of nullity/or termination of the subject contracts on
the grounds of fraud and oppression attendant to the execution of the addendum contract
and the other contracts emanating from it, and that the complaint should have
been filed with the regular courts as it involved issues which are judicial in
nature.
Such
argument is misplaced and respondent cannot rely on the Gonzales case to
support its argument.
In
Gonzales, petitioner Gonzales filed a complaint before the Panel of
Arbitrators, Region II, Mines and Geosciences Bureau, of the Department of
Environment and Natural Resources (DENR) against respondents Climax- Mining
Ltd, Climax-Arimco and Australasian Philippines Mining Inc, seeking the
declaration of nullity or termination of the addendum contract and the other
contracts emanating from it on the grounds of fraud and oppression. The Panel
dismissed the complaint for lack of jurisdiction. However, the Panel, upon
petitioner's motion for reconsideration, ruled that it had jurisdiction over
the dispute maintaining that it was a mining dispute, since the subject
complaint arose from a contract between the parties which involved the
exploration and exploitation of minerals over the disputed area. Respondents
assailed the order of the Panel of Arbitrators via a petition for certiorari
before the CA. The CA granted the
petition and declared that the Panel of Arbitrators did not have jurisdiction
over the complaint, since its jurisdiction was limited to the resolution of
mining disputes, such as those which raised a question of fact or matter
requiring the technical knowledge and experience of mining authorities and not
when the complaint alleged fraud and oppression which called for the
interpretation and application of laws. The
CA further ruled that the petition should have been settled through arbitration
under R.A. No. 876 − the
Arbitration Law − as provided under the addendum contract.
On
a review on certiorari, we affirmed the CA’s finding that the Panel of
Arbitrators who, under R.A. No. 7942 of the Philippine Mining Act of 1995, has
exclusive and original jurisdiction to hear and decide mining disputes, such as
mining areas, mineral agreements, FTAAs or permits and surface owners,
occupants and claimholders/concessionaires, is bereft of jurisdiction over the
complaint for declaration of nullity of the addendum contract; thus, the
Panels' jurisdiction is limited only to those mining disputes which raised
question of facts or matters requiring the technical knowledge and experience
of mining authorities. We then said:
In Pearson v. Intermediate Appellate Court, this Court observed that the trend has been to make the adjudication of mining cases a purely administrative matter. Decisions of the Supreme Court on mining disputes have recognized a distinction between (1) the primary powers granted by pertinent provisions of law to the then Secretary of Agriculture and Natural Resources (and the bureau directors) of an executive or administrative nature, such as granting of license, permits, lease and contracts, or approving, rejecting, reinstating or canceling applications, or deciding conflicting applications, and (2) controversies or disagreements of civil or contractual nature between litigants which are questions of a judicial nature that may be adjudicated only by the courts of justice. This distinction is carried on even in Rep. Act No. 7942.[28]
We found that since the complaint filed before
the DENR Panel of Arbitrators charged respondents with disregarding and
ignoring the addendum contract, and acting in a fraudulent and oppressive
manner against petitioner, the complaint filed before the Panel was not a
dispute involving rights to mining areas, or was it a dispute involving
claimholders or concessionaires, but essentially judicial issues. We then said that the Panel of Arbitrators
did not have jurisdiction over such issue, since it does not involve the
application of technical knowledge and expertise relating to mining. It is in this context that we said that:
Arbitration
before the Panel of Arbitrators is proper only when there is a disagreement
between the parties as to some provisions of the contract between them, which
needs the interpretation and the application of that particular knowledge and
expertise possessed by members of that Panel.
It is not proper when one of the parties repudiates the existence or
validity of such contract or agreement on the ground of fraud or oppression as
in this case. The validity of the
contract cannot be subject of arbitration proceedings. Allegations of fraud and
duress in the execution of a contract are matters within the jurisdiction of
the ordinary courts of law. These questions are legal in nature and require the
application and interpretation of laws and jurisprudence which is necessarily a
judicial function.[29]
In
fact, We even clarified in our resolution on Gonzales’ motion for
reconsideration that “when we declared that the case should not be brought for
arbitration, it should be clarified that the case referred to is the case
actually filed by Gonzales before the DENR Panel of Arbitrators, which was for
the nullification of the main contract on the ground of fraud, as it had
already been determined that the case should have been brought before the
regular courts involving as it did judicial issues.” We made such clarification
in our resolution of the motion for reconsideration after ruling that the
parties in that case can proceed to arbitration under the Arbitration Law, as
provided under the Arbitration Clause in their Addendum Contract.
WHEREFORE, the petition
is GRANTED. The Decision dated
SO ORDERED.
DIOSDADO M. PERALTA
Associate
Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ANTONIO
EDUARDO B. NACHURA ROBERTO A.
ABAD
Associate Justice Associate Justice
JOSE CATRAL
Associate Justice
ATTESTATION
I attest that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
ANTONIO
T. CARPIO
Associate
Justice
Second Division, Chairperson
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution and the Division Chairperson’s
Attestation, I certify that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
RENATO
C. CORONA
Chief
Justice
[1] Penned
by Associate Justice Edgardo F. Sundiam, with Associate Justices Rodrigo V.
Cosico and Japar B. Dimaampao, concurring; rollo, pp. 32-45.
[2]
[3] Docketed as Civil Case No. 98-1376; raffled off to Branch 59.
[4] Rollo, pp. 61-70.
[5]
[6] Section 6. Hearing
by court. - A party aggrieved by the failure, neglect or refusal of another
to perform under an agreement in writing providing for arbitration may petition
the court for an order directing that such arbitration proceed in the manner
provided for in such agreement. Five days notice in writing of the hearing of
such application shall be served either personally or by registered mail upon
the party in default. The court shall hear the parties, and upon being
satisfied that the making of the agreement or such failure to comply therewith
is not in issue, shall make an order directing the parties to proceed to
arbitration in accordance with the terms of the agreement. If the making of the
agreement or default be in issue the court shall proceed to summarily hear such
issue. If the finding be that no agreement in writing providing for arbitration
was made, or that there is no default in the proceeding thereunder, the
proceeding shall be dismissed. If the finding be that a written provision for
arbitration was made and there is a default in proceeding thereunder, an order
shall be made summarily directing the parties to proceed with the arbitration
in accordance with the terms thereof.
The
court shall decide all motions, petitions or applications filed under the
provisions of this Act, within ten days after such motions, petitions, or
applications have been heard by it.
[7]
Sec. 7. Stay of civil action. - If any suit or proceeding be brought
upon an issue arising out of an agreement providing for the arbitration
thereof, the court in which such suit or proceeding is pending, upon being
satisfied that the issue involved in such suit or proceeding is referable to
arbitration, shall say the action or proceeding until an arbitration has been
had in accordance with the terms of the agreement; Provided that the applicant
for the stay is not in default in proceeding with such arbitration.
[8] Penned by Judge Lucia Violago Isnani; rollo, pp. 71-75.
[9]
[10] Records, pp. 113-115.
[11] G.R. No. 161957,
[12] Rollo, pp. 311-314.
[13] G.R.
Nos. 161957 & 167994,
[14]
[15] G.R.
No. 103200,
[16] Gonzales
v. Climax Mining Ltd., supra note 13, at 166.
[17]
An Act to Institutionalize the
Use of An Alternative Dispute Resolution System in the
[18] Gonzeles
v. Climax Mining Ltd., supra note 13.
[19]
[20]
[21]
[22]
[23]
[24] Rollo,
pp. 44-45. (Emphasis supplied.)
[25] Gonzales v. Climax Mining Ltd., supra note 11.
[26] Gonzales v. Climax Mining Ltd., supra note 13, at 172-173. (Emphasis supplied.)
[27]
[28] Gonzales v. Climax Mining Ltd., supra note 11, at 620.
[29]