Articles
This
section features articles and write-ups contributed by members of PDRCI. The opinions
and views expressed by the contributors are not necessarily the
opinions of PDRCI, its Officers and staff.
Philippine ArbitrationUpdates:
Fort Bonifacion Development Corporation v. Domingo,
G.R. No. 180765, February 27, 2009; 580 SCRA 397;
Fort Bonifacio Development Corporation v. Sorongon & Fong,
G.R. No. 176709, May 8, 2009, 587 SCRA 613
Abstract:
"The
receivables of a contractor from the project owner arising from work on
a construction project were assigned to a third person with notice to
the project owner. When the project owner refused to pay the assignee
because the assigned receivables were used to pay other creditors of
the assignor which creditors obtained writs of garnishment on such
receivables, it was held in Fort Bonifacio Development Corporation v.
Nicolas Domingo, that the Regional Trial Court, not the Construction
Industry Arbitration Commission [“CIAC”], had jurisdiction over the
complaint for payment of a sum of money filed by the assignee against
the project owner."
Read more...
HUTAMA-RSEA JOINT OPERATIONS, INC. v.
CITRA METRO MANILA TOLLWAYS CORPORATION
G.R. No. 180640, April 24, 2009 (3rd Div., Chico-Nazario, J.)
Both
parties are domestic corporations. The Respondent, Citra Metro
Manila Tollways Corporation [“Citra”] is the general
contractor and operator of the South Metro Manila Skyway Project [the
“Project”] The Petitioner, Hutama-RSEA Joint Operations, Inc.
[“Hutama”] was its subcontractor. Citra and Hutama are referred
to herein collectively as the “Parties”. On September 25, 1996,
the Parties entered into an Engineering Procurement Construction
Contract [the “Contract”] whereby Hutama would undertake the
construction of Stage 1 of the Project which stretched from the
junction of Buenjdia Avenue, Makati City, up to Bicutan Interchange,
Taguig City for a contract price of US$369,510,304.00.
Read more...
Equitable PCI Banking Corporation, et al v. RCBC Capital Corporation,
G.R. No. 182248, December 18, 2008; [Velasco, Jr., J.]
The
parties executed a Share Purchase Agreement “SPA”] ] whereby Equitable
PCI Banking Corporation [“Equitable”] and the individual stockholders
of Bankard, Inc,. [“Bankard”] as sellers [the “Sellers”] sold to the
RCBC Capital Corporation [“RCBC”] the Sellers’ interests in Bankard
representing 226,460,000 shares [the “Sold Shares”] for P1,786,
769,400. To expedite the purchase, RCBC agreed to dispense with the
conduct of a due diligence audit on the financial status of Bankard.
The Sellers, however, made representations and warranties concerning
the financial condition of Bankard and the SPA provided for remedies of
RCBC for breach of those warranties. The stipulated down payment was
made after which RCBC was given full management and operational control
of Bankard. Sometime thereafter, the parties amended the SPA to
include, among others, a provision that the remedy for a breach of the
Sellers’ representation and warranty under Section 5 (h) of the SPA
shall be available if the demand therefore is presented to the Sellers
in writing, supported by appropriate substantiation, on or before
December 31, 2000. By September 2000, the RCBC audit team which was
created for the purpose of auditing Bankard’s accounts had concluded
that the warranty under Section 5 (h) was correct. On December 28,
2000, RCBC paid the balance of the contract price.
Read more...
Luzon
Hydro Corporation v. Hon. Rommel O. Baybay, etc
and Transfield Philippines, Inc.,
CA-G.R. Sp. No. 94318, November 29, 2005
1.
The Validity of the Principle “Costs Follow The
Event”
Under Philippine Law.
An
arbitral tribunal in an ICC arbitration held in Singapore made a final
award granting, modifying or rejecting some of the claims and
counterclaims of the parties with the result that a net award of some
US$12 million was made in favor of Transfield Philippines,
Inc..[“TPI”]. In its Final Award, and on
the issue of costs, the
tribunal applied the principle of costs follow the event and directed
Luzon Hydro Corporation [“LHC”] to pay TPI direct
costs of the
arbitration because “TPI had to commence this arbitration in
order to
achieve the net flow of funds in its favour”. The tribunal
added that
“had the counterclaim ever topped the claim the Tribunal
would have
taken a different view. As to legal and other costs, the
tribunal said
that “it would be fair and reasonable in all the
circumstances of this
case to award to TPI a percentage of its legal and other
costs….In the
opinion of the Tribunal the appropriate percentage to take is
80%.”
Read
more...
Empire East Land Holdings, Inc.
v. Capitol Industrial Construction
Groups, Inc., G.R. No. 168074,
September 26, 2008
During
the construction period, changes in circumstances arose prompting the
parties to make adjustments in the initial terms of their contract.
These included deletion of items of work and the consequent reduction
of the contract a change in the completion date of the contract.
Empire East Land Holdings, Inc. [“Empire East”], the owner directed the
contractor, Capitol Industrial Construction Groups, Inc. [“Capitol”]
to reduce the monthly target accomplishment to P1 million worth of work
and up to one (1) floor only. In view of this, Capitol asked that the
topping-off be moved to a later date. It likewise requested a price
adjustment with respect to overhead and equipment expenses and
legislated labor cost. These requests were not acted upon by Empire
East. After the completion of the side trimmings and excavation of the
building’s foundation, Capitol demanded the payment of P2,248,507.70
and P1,805,225.90, respectively. Instead of paying the amount, Capitol
agreed with Empire East to reduce the claim for side trimming to
P900,000.00. Capitol’s claim for foundation excavation was not acted
upon. During the construction period, Empire East granted, on separate
occasions, Capitol’s request for payroll and material accommodations.
Read
more...
ABS-CBN Broadcasting Corporation v.
World Interactive Network Systems [WINS]
Japan Co., Ltd., G.R. No. 169332,
February 11, 2008
THE FACTS:
In
1999, ABS-CBN Broadcasting Corporation [“ABS-CBN”] granted
World Interactive Network Systems Japan Co., Ltd.
[“WINS”], an exclusive license to distribute and
sublicense the distribution of a television service known as “The
Filipino Channel” [“TFC”] in Japan [the Licensing
Agreement”]. In 2002, ABS-CBN, alleging breach, notified WINS of
its intention to terminate the Licensing Agreement. WINS commenced arbitration pursuant to the arbitration clause in the
Licensing Agreement alleging that ABS-CBN wanted to renegotiate the
terms thereof to allow it to demand higher fees. The sole arbitrator
thereafter appointed, after hearing, found in favor of WINS and ordered
ABS-CBN to pay damages.
Read more...
Equitable PCI Bank v. Judge Oscar Pimentel,
RCBC Capital Corporation, Sir Ian Barker
and Neil Kaplan,
CA-G.R. Sp. No. 93966, March 30, 2007:
THE FACTS:
A
dispute between Equitable PCI Bank [EPCI] and RCBC Capital Corporation
[RCBC] was submitted to arbitration under ICC Rules. The Philippines
was the place of arbitration. Two of the three members of the Tribunal,
Sir Ian Barker and Neil Kaplan, are foreigners and non-members of the
Philippine Bar. EPCI moved to disqualify Barker and Kaplan on the
ground that they are engaged in the practice of law in the Philippines
and are therefore ineligible to rule on the merits of the issues
raised in the arbitration. In a petition filed with the RTC of Makati,
Judge Pimentel held: that the arbitral tribunal which includes a former
justice of the Supreme Court and two foreign lawyers are not considered
to be engaged in the practice of law in the Philippines.
Read more...
Diesel Construction Co., Inc. v.
UPSI Property Holdings, Inc.
G.R. No. 154885; UPSI Property
Holdings, Inc. v. Diesel Construction Co.,
Inc. and FGU Insurance Corp.,
G.R. No. 154937, March 24, 2008
THE FACTS:
This is a construction arbitration case filed with the Construction
Industry Arbitration Commission [“CIAC”], initiated by
Diesel Construction Co., Inc. [“Diesel”] against UPSI
Property Holdings, Inc. [“UPSI”] for payment of the balance
of the contract price, damages and attorney’s fees. UPSI filed an
answer with counterclaim. The principal defense of UPSI was that Diesel
was guilty of delay for which it should be held liable for the payment
of liquidated damages. After hearing, the CIAC arbitral tribunal
found that the delays were attributable to UPSI and awarded to Diesel
the amount of P4,027,861.60 plus interest. UPSI appealed by petition
for review under Rule 43 of the Rules of Court to the Court of Appeals.
The appeals court partially reversed the Tribunal and found
Diesel guilty of inexcusable delay of 45 days for which it was held
liable for liquidated damages in the amount of P1,309,500.00 which
should be deducted from the unpaid balance of the contract price
amounting to P2,441,482.64.
Read more...
The case of Korea Technologies Co., Ltd. v.
Hon. Alberto A. Lerma and Pacific General
Steel Manufacturing Corporation,
G.R. No. 143581, Jan. 7, 2008.
THE FACTS:
Korea
Technologies Co., Ltd. [Korea Tech], a Korean corporation, entered into
a contract with Pacific General Steel Manufacturing Corporation
[Pacific General], a domestic corporation, whereby Korea Tech undertook
to ship and install in Pacific General’s site in Carmona, Cavite the
machinery and facilities necessary for manufacturing LPG cylinders, and
to initially operate the plant after it is installed. The plant, after
completion of installation, could not be operated by Pacific General
due to its financial difficulties affecting the supply of materials.
The last payments made by Pacific General to Korea Tech consisted of
postdated checks which were dishonored upon presentment. According to
Pacific General, it stopped payment because Korea Tech had delivered a
hydraulic press which was different in kind and of lower quality than
that agreed upon. Korea Tech also failed to deliver equipment parts
already paid for by it. It threatened to cancel the contract with Korea
Tech and dismantle the Carmona plant. Korea Tech initiated arbitration
before the Korea Commercial Arbitration Board [KCAB] in Seoul, Korea
and, at the same time, commenced a civil action before the Regional
Trial Court [the “trial court”] where it prayed that Pacific General be
restrained from dismantling the plant and equipment. Pacific General
opposed the application and argued that the arbitration clause was null
and void, being contrary to public policy as it ousts the local court
of jurisdiction. It also alleged that Korea Tech was not entitled to
the payment of the amount covered by the two checks, and that Korea
Tech was liable for damages.
Read more...
Should local courts
interfere with the
NAIA3 mess?
by: Mario E.
Valderrama
The Government had
already
abrogated the NAIA 3 contract. The Supreme Court sustained the
Government by ruling the contract void and the arbitration clause
unenforceable, with a concurring opinion saying that PIATCO is entitled
to reimbursement as a builder (see Agan, Jr. vs. PIATCO, 402 SCRA 612
[2003]).
That should be the end of the story.
Read more....
International
Commercial Arbitration: Its
Relevance in the Philippines
By: Eduardo
R. Ceniza
Introduction
While it is true that parties and arbitrators prefer to operate in a
sort of special chamber to avoid, as far as possible, national law or
national court rules, the fact remains that international commercial
arbitration cannot avoid the incidence and influence of national law.
For one thing, arbitration cannot take place totally without reference
to its venue and, necessarily, the national law of the venue. The lex
arbitri will certainly have an influence, if not a direct
bearing,
upon the procedural and other administrative aspects of the
arbitration. For another thing, arbitrators do not have power over
individuals or institutions who do not submit themselves to the
jurisdiction of the arbitral tribunal. Thus, to bind third parties, for
instance, to interim measures of protection, resort to the national
court for assistance becomes unavoidable. Therefore, while
international commercial arbitration may operate quite independently of
national law, the national law of the place of arbitration will always
be somewhere in the background. Indeed, national law provides the
contextual framework in which all international commercial arbitrations
take place.
Read more...
Interim
Measures: The Role of the Arbitral Tribunal and the Courts
by:
Eduardo R. Ceniza
A. Interim measures; nature in
general
The availability of interim measures can be critical to the
effectiveness of arbitration and to the continued viability of the
transaction. Indeed, in some cases, an arbitration may be an exercise
in futility if interim relief cannot be obtained rapidly, e.g., to
secure assets or to enjoin certain conduct......
Read more....
Why Litigate? Arbitrate!
by:
Custodio O.
Parlde
I.
Justice Delayed
is Justice Denied
The question is often asked whether there is not in fact a denial of
justice when civil disputes are resolved by a trial court for five (5)
years on the average. Trial court dockets are hopelessly clogged. There
are more cases being filed than are being resolved. In
addition,
more than 30% of the salas of trial judges are vacant. The salary of a
trial judge is not attractive enough to most lawyers. And yet as we
grow in population and our economy improves the number of commercial
transactions will correspondingly increase. An important
obstruction to the growth of business is the manner and speed by which
commercial disputes are resolved.
Read more....
©
2005 by Philippine Dispute Resolution Center, Inc. (PDRCI)
Please contact
us
for further information.
Steve's
web
templates |
