1. KOREA VS.

LERMA
Facts:
The parties entered into an installation and supply of LPG gas to be supplied
by the Korean Technology. An agreement for Arbitration was included in the contract
that any controversies arises, the same shall be filed in the Korea Commercial
Arbitration board. Korea and Philippines are both signatories to the United Nations
Commission on International Trade Law (UNCITRAL) in the New York Convention. The
respondent seeks to invalidate the Arbitration agreement.
Issue:
W/N the Article 15, arbitration clause was valid and binding.
HELD:
Established in this jurisdiction is the rule that the law of the place where the
contract is made governs. Lex loci contractus. The contract in this case was
perfected here in the Philippines. The arbitration clause was mutually and
voluntarily agreed upon by the parties. It has not been shown to be contrary to any
law, or against morals, good customs, public order, or public policy. There has been
no showing that the parties have not dealt with each other on equal footing. We find
no reason why the arbitration clause should not be respected and complied with by
both parties. Submission to arbitration is a contract and that a clause in a contract
providing that all matters in dispute between the parties shall be referred to
arbitration is a contract.
The arbitration clause which stipulates that the arbitration must be done in
Seoul, Korea in accordance with the Commercial Arbitration Rules of the KCAB, and
that the arbitral award is final and binding, is not contrary to public policy. For
domestic arbitration proceedings, we have particular agencies to arbitrate disputes
arising from contractual relations. In case a foreign arbitral body is chosen by the
parties, the arbitration rules of our domestic arbitration bodies would not be
applied. As signatory to the Arbitration Rules of the UNCITRAL Model Law on
International Commercial Arbitration41 of the United Nations Commission on
International Trade Law (UNCITRAL) in the New York Convention on June 21, 1985,
the Philippines committed itself to be bound by the Model Law. We have even
incorporated the Model Law in Republic Act No. (RA) 9285, otherwise known as the
Alternative Dispute Resolution Act of 2004 entitled An Act to Institutionalize the Use
While RA 9285 was passed only in 2004, it nonetheless applies in the instant
case since it is a procedural law which has a retroactive effect. Likewise, KOGIES
filed its application for arbitration before the KCAB on July 1, 1998 and it is still
pending because no arbitral award has yet been rendered. Thus, RA 9285 is
applicable to the instant case. Well-settled is the rule that procedural laws are

construed to be applicable to actions pending and undetermined at the time of their

passage, and are deemed retroactive in that sense and to that extent. As a general
rule, the retroactive application of procedural laws does not violate any personal
rights because no vested right has yet attached nor arisen from them. 42
Foreign arbitral awards must be confirmed by the RTC The recognition
and enforcement of such arbitral awards shall be filed with the Regional Trial
Court in accordance with the rules of procedure to be promulgated by the Supreme
Court. Said procedural rules shall provide that the party relying on the award or
applying for its enforcement shall file with the court the original or authenticated
copy of the award and the arbitration agreement. If the award or agreement is not
made in any of the official languages, the party shall supply a duly certified
translation thereof into any of such languages. The applicant shall establish that the
country in which foreign arbitration award was made in party to the New York
Convention.

2. INSULAR SAVINGS BANK VS. FAR EAST BANK

Facts:
An Arbitration before the Arbitration Committee (PCHC) was instituted by the
Parties. Meanwhile, the Petitioner while arbitration is ongoing, filed before the RTC
for Civil case involving collection of sum of money. Respondent alleged that
petitioner deviates from the Arbitration proceeding.
Issue:
W/N Petitioner violates the Arbitration proceeding.
HELD:
Yes. There is a violation by filing Civil case despite pendency of Arbitration.
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 204429 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 203931 and
204032 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.
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, petitioners 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.
3. HEUNGWHA vs. DJ Builders
Facts:
Parties entered into Construction agreement. The dispute involves whether
the CIAC has Jurisdiction over Construction agreements. (KOREAN party)
Issue: W/N CIAC has Jurisdiction.
HELD:
An arbitration clause in a construction contract or a submission to arbitration
of a construction dispute shall be deemed an agreement to submit an existing or

future controversy to CIAC jurisdiction, notwithstanding the reference to a different

arbitration institution or arbitral body in such contract or submission. When a
contract contains a clause for the submission of a future controversy to arbitration,
it is not necessary for the parties to enter into a submission agreement before the
claimant may invoke the jurisdiction of CIAC.
Under the present Rules of Procedure, for a particular construction contract to
fall within the jurisdiction of CIAC, it is merely required that the parties agree to
submit the same to voluntary arbitration. Unlike in the original version of Section 1,
as applied in the Tesco case, the law as it now stands does not provide that the
parties should agree to submit disputes arising from their agreement specifically to
the CIAC for the latter to acquire jurisdiction over the same. Rather, it is plain and
clear that as long as the parties agree to submit to voluntary arbitration, regardless
of what forum they may choose, their agreement will fall within the jurisdiction of
the CIAC, such that, even if they specifically choose another forum, the parties will
not be precluded from electing to submit their dispute before the CIAC because this
right has been vested upon each party by law, i.e., E.O. No. 1008.
Based on the foregoing, there are two acts which may vest the CIAC with
jurisdiction over a construction dispute. One is the presence of an arbitration clause
in a construction contract, and the other is the agreement by the parties to submit
the dispute to the CIAC.
The first act is applicable to the case at bar. The bare fact that the parties
incorporated an arbitration clause in their contract is sufficient to vest the CIAC with
jurisdiction over any construction controversy or claim between the parties. The rule
is explicit that the CIAC has jurisdiction notwithstanding any reference made to
another arbitral body.
It is well-settled that jurisdiction is conferred by law and cannot be waived by
agreement or acts of the parties. Thus, the contention of petitioner that it never
authorized its lawyer to submit the case for arbitration must likewise fail. Petitioner
argues that notwithstanding the presence of an arbitration clause, there must be a
subsequent consent by the parties to submit the case for arbitration. To stress, the
CIAC was already vested with jurisdiction the moment both parties agreed to
incorporate an arbitration clause in the sub-contract agreement. Thus, a subsequent
consent by the parties would be superfluous and unnecessary.
4. LICOMCEN vs. FOUNDATION SPECIALIST
Fact:
Parties engaged into Construction of Mall. The contract provides its own
Arbitration proceeding to govern any dispute arising therein.
Issue: W/N presence of Arbitration devoid CIACs jurisdiction.
HELD:

The mere existence of an arbitration clause in the construction contract is

considered by law as an agreement by the parties to submit existing or future
controversies between them to CIAC jurisdiction, without any qualification or
condition precedent. To affirm a condition precedent in the construction contract,
which would effectively suspend the jurisdiction of the CIAC until compliance
therewith, would be in conflict with the recognized intention of the law and rules to
automatically vest CIAC with jurisdiction over a dispute should the construction
contract contain an arbitration clause.48
The CIAC is given the original and exclusive jurisdiction over disputes arising
from, or connected with, contracts entered into by parties involved in construction
in the Philippines.49 This jurisdiction cannot be altered by stipulations restricting the
nature of construction disputes, appointing another arbitral body, or making that
bodys decision final and binding.
The jurisdiction of the CIAC to resolve the dispute between LICOMCEN and FSI
is, therefore, affirmed.
5. HUTAMA VS. CITRA MINA
Facts: petitioner and respondent entered into an Engineering Procurement Construction
Contract (EPCC) whereby petitioner would undertake the construction of Stage 1 of the Skyway
Project, which stretched from the junction of Buendia Avenue, Makati City, up to Bicutan
Interchange, Taguig City. As consideration for petitioners undertaking, respondent obliged itself
under the EPCC to pay the former a total amount of US$369,510,304.00.

Issue: W/N CIAC has Jurisdiction.

HELD:
The bare fact that the parties herein incorporated an arbitration clause in the EPCC is
sufficient to vest the CIAC with jurisdiction over any construction controversy or claim between
the parties.23 The arbitration clause in the construction contract ipso facto vested the CIAC with
jurisdiction.24 This rule applies, regardless of whether the parties specifically choose another
forum or make reference to another arbitral body.25 Since the jurisdiction of CIAC is conferred by
law, it cannot be subjected to any condition; nor can it be waived or diminished by the
stipulation, act or omission of the parties, as long as the parties agreed to submit their
construction contract dispute to arbitration, or if there is an arbitration clause in the construction
contract.26 The parties will not be precluded from electing to submit their dispute to CIAC,
because this right has been vested in each party by law

6. LM POWER ENGINEERING vs.

CAPITOL INDUSTRIAL CONSTRUCTION
Facts:

Petitioner LM Power Engineering Corporation and Respondent Capitol

Industrial Construction Groups Inc. entered into a "Subcontract Agreement"
involving electrical work at the Third Port of Zamboanga. Petitioner filed with the
Regional Trial Court (RTC) of Makati (Branch 141) a Complaint for the collection of
the amount representing the alleged balance due it under the Subcontract. Instead
of submitting an Answer, respondent filed a Motion to Dismiss alleging that the
Complaint was premature, because there was no prior recourse to arbitration.
Motion on the ground that the dispute did not involve the interpretation or the
implementation of the Agreement and was, therefore, not covered by the arbitral
clause.
Issue: W/N Arbitrable.
HELD:
In the case before us, the Subcontract has the following arbitral clause: The
Parties hereto agree that any dispute or conflict as regards to interpretation and
implementation of this Agreement which cannot be settled between respondent and
petitioner amicably shall be settled by means of arbitration. Clearly, the resolution
of the dispute between the parties herein requires a referral to the provisions of
their Agreement. Within the scope of the arbitration clause are discrepancies as to
the amount of advances and billable accomplishments, the application of the
provision on termination, and the consequent set-off of expenses.
Prior Request for Arbitration
According to petitioner, assuming arguendo that the dispute is arbitrable, the
failure to file a formal request for arbitration with the Construction Industry
Arbitration Commission (CIAC) precluded the latter from acquiring jurisdiction over
the question. To bolster its position, petitioner even cites our ruling in Tesco
Services Incorporated v. Vera.30 We are not persuaded.
Any party to a construction contract wishing to have recourse to arbitration
by the Construction Industry Arbitration Commission (CIAC) shall submit its Request
for Arbitration in sufficient copies to the Secretariat of the CIAC; PROVIDED, that in
the case of government construction contracts, all administrative remedies
available to the parties must have been exhausted within 90 days from the time the
dispute arose."
7. FORT BONIFACIO VS. DOMINGO
Facts:

A Construction agreement was entered. Dissatisfied with the work done, the
constructor was terminated. He filed before the court an action for sum of money
for the work done. Petitioner refused on ground that Court has no Jurisdiction.
Issue: Is the case Arbitrable?
HELD: COURT has Jurisdiction
The jurisdiction of the CIAC is limited to settling disputes arising among
contractors, developers and/or owners of construction projects. It does not include
the determination of who among the many creditors of the contractor should enjoy
preference in payment of its receivables from the developer/owner.
It is an elementary rule of procedural law that jurisdiction of the court over
the subject matter is determined by the allegations of the complaint, irrespective of
whether or not the plaintiff is entitled to recover upon all or some of the claims
asserted therein. As a necessary consequence, the jurisdiction of the court cannot
be made to depend upon the defenses set up in the answer or upon the motion to
dismiss; for otherwise, the question of jurisdiction would almost entirely depend
upon the defendant. What determines the jurisdiction of the court is the nature of
the action pleaded as appearing from the allegations in the complaint. The
averments therein and the character of the relief sought are the ones to be
consulted.9 Accordingly, the issues in the instant case can only be properly resolved
by an examination and evaluation of respondents allegations in his Complaint in
Civil Case No. 06-0200-CFM.
The adjudication of Civil Case No. 06-0200-CFM necessarily involves the
application of pertinent statutes and jurisprudence to matters such as obligations,
contracts of assignment, and, if appropriate, even preference of credits, a task more
suited for a trial court to carry out after a full-blown trial, than an arbitration body
specifically devoted to construction contracts.
This Court recognizes the laudable objective of voluntary arbitration to
provide a speedy and inexpensive method of settling disputes by allowing the
parties to avoid the formalities, delay, expense and aggravation which commonly
accompany ordinary litigation, especially litigation which goes through the entire
hierarchy of courts. It cannot, however, altogether surrender to arbitration those
cases, such as the one at bar, the extant facts of which plainly call for the exercise
of jurisdiction by the regular courts for their resolution.
8. GAMMON vs. METRO RAIL TRANSIT
Facts:

Construction agreement was entered into. Disagreement ensued prompting

Metro to award the contract to another Construction agency. Gammon filed a case
before the courts. Alleging that CIAC has no Jurisdiction since there was a novation
of contract.
Issue: Who has Jurisdiction?
HELD:
The jurisdiction of the CIAC may include but is not limited to violation of
specifications for materials and workmanship; violation of the terms of agreement;
interpretation and/or application of contractual provisions; amount of damages and
penalties; commencement time and delays; maintenance and defects; payment
default of employer or contractor and changes in contract cost.
Excluded from the coverage of this law are disputes arising from employeremployee relationships which shall continue to be covered by the Labor Code of the
Philippines.
In this case, the parties submitted themselves to the jurisdiction of the CIAC by
virtue of the arbitration clause
MRTDC, however, contends that the contract between the parties was novated by
subsequent NOAs/NTPs which changed the design of the podium structure and
reduced the contract price.
We do not agree. Novation is defined as the extinguishment of an obligation by the
substitution or change of the obligation by a subsequent one which terminates the
first, either by changing the object or principal conditions; substituting the person of
the debtor; or subrogating a third person in the rights of the creditor. 15 In order than
an obligation may be extinguished by another which substitutes the same, it is
imperative that it be so declared in unequivocal terms, or that the old and the new
obligations be on every point incompatible with each other. 16
Novation cannot be presumed. The animus novandi, whether partial or total, must
appear by the express agreement of the parties, or by their acts that are too clear
and unequivocal to be mistaken.17 Further, novation may either be extinctive or
modificatory. It is extinctive when an old obligation is terminated by the creation of
a new one that takes the place of the former. It is merely modificatory when the old
obligation subsists to the extent that it remains compatible with the amendatory
agreement.

9. GULANCO vs. BURTON

Facts:
Construction agreement was entered for the construction of Residential
and/or Commercial building. It provided arbitration contract.
Issue: W/N Arbitrable.
HELD:
Clearly, the subject matter of petitioner's claims arose from differences in
interpretation of the contract, and under the terms thereof, such disputes are
subject to voluntary arbitration. Since, under Section 4 of Executive Order No. 1008
the CIAC shall have original and exclusive jurisdiction over disputes arising from, or
connected with, contracts entered into by parties involved in construction in the
Philippines and all that is needed for the CIAC to acquire jurisdiction is for the
parties to agree to submit the same to voluntary arbitration, there can be no other
conclusion but that the CIAC had jurisdiction over petitioner's complaint.
Furthermore, Section 1, Article III of the CIAC Rules of Procedure Governing
Construction Arbitration (CIAC Rules) further provide that "[a]n arbitration clause in
a construction contract or a submission to arbitration of a construction dispute shall
be deemed an agreement to submit an existing or future controversy to CIAC
jurisdiction, notwithstanding the reference to a different arbitration institution or
arbitral body in such contract or submission." Thus, even if there is no showing that
petitioner previously brought its claims before a Board of Arbitrators constituted
under the terms of the contract, this circumstance would not divest the CIAC of
jurisdiction.
Failure to comply with the requirement that the petition be accompanied by a
duplicate original or certified true copy of the judgment, order, resolution or ruling
being challenged is sufficient ground for the dismissal of said petition.
Consequently, it cannot be said that the Court of Appeals acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in
dismissing the petition.

10.PRUDENTIAL VS. EQUINOX

Facts:

Construction agreement again. But the issue is ESTOPPEL. After invoking

CIACs Jurisdiction, one cannot deny it afterwards.
HELD:
As earlier mentioned, when Equinox lodged with the RTC its complaint for a
sum of money against JMarc and Prudential, the latter filed a motion to dismiss on
the ground of lack of jurisdiction, contending that since the case involves a
construction dispute, jurisdiction lies with CIAC. Prudentials motion was granted.
However, after the CIAC assumed jurisdiction over the case, Prudential again moved
for its dismissal, alleging that it is not a party to the construction contract between
Equinox and JMarc; and that the surety and performance bonds it issued are not
construction agreements.
After
having voluntarily invoked
before
the
RTC
the
jurisdiction
of
CIAC, Prudential is estopped to question its jurisdiction. As we held
in Lapanday Agricultural & Development Corporation v. Estita,5 the active
participation of a party in a case pending against him before a court or a quasijudicial body is tantamount to a recognition of that courts or quasi-judicial bodys
jurisdiction and a willingness to abide by the resolution of the case and will bar said
party from later on impugning the courts or quasi-judicial bodys jurisdiction.
11.SPOUSES DAVID vs. CIAC
Facts: Construction nsad. SUMO!!!
HELD:
Executive Order No. 1008 entitled, "Construction Industry Arbitration Law"
provided for an arbitration mechanism for the speedy resolution of construction
disputes other than by court litigation. It recognized the role of the construction
industry in the countrys economic progress as it utilizes a large segment of the
labor force and contributes substantially to the gross national product of the
country.6 Thus, E.O. No. 1008 vests on the Construction Industry Arbitration
Commission (CIAC) original and exclusive jurisdiction over disputes arising from or
connected with construction contracts entered into by parties who have agreed to
submit their case to voluntary arbitration. Section 19 of E.O. No. 1008 provides
that its arbitral award shall be appealable to the Supreme Court only on
questions of law.7
There is a question of law when the doubt or difference in a given case
arises as to what the law is on a certain set of facts, and there is a question of
fact when the doubt arises as to the truth or falsity of the alleged facts. 8Thus, for a
question to be one of law, it must not involve an examination of the probative value
of the evidence presented by the parties and there must be no doubt as to the
veracity or falsehood of the facts alleged.9

In the case at bar, it is readily apparent that petitioners are raising

questions of fact. In their first assigned error, petitioners claim that at the time of
rescission, they had completed 80% of the construction work and still have 15 days
to finish the project. They likewise insist that they constructed the building in
accordance with the contract and any modification on the plan was with the consent
of the respondents.
factual findings of construction arbitrators may be reviewed by this Court
when the petitioner proves affirmatively that: (1) the award was procured by
corruption, fraud or other undue means; (2) there was evident partiality or
corruption of the arbitrators or any of them; (3) the arbitrators were guilty of
misconduct in refusing to hear evidence pertinent and material to the controversy;
(4) one or more of the arbitrators were disqualified to act as such under Section
nine of Republic Act No. 876 and willfully refrained from disclosing such
disqualifications or of any other misbehavior by which the rights of any party have
been materially prejudiced; or (5) 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.
12.SHINRYO vs. RRN
Facts: Same Story. CIAC has Jurisdiction.
HELD:
It is settled that findings of fact of quasi-judicial bodies, which have acquired
expertise because their jurisdiction is confined to specific matters, are generally
accorded not only respect, but also finality, especially when affirmed by the Court of
Appeals. In particular, factual findings of construction arbitrators are final and
conclusive and not reviewable by this Court on appeal.

13.SUMMA vs. ROMAGO

DOCTRINE:
In administrative proceedings, technical rules of procedure and evidence shall
not be strictly applied. Administrative due process cannot be fully equated with due
process in its Judicial sense. CIAC rules explicitly direct CIAC arbitrators to use every
and all reasonable means to ascertain the facts in each case speedily and
objectively without regard to technicalities of law and procedure. All in the interest
of substantive due process.
14.METRO vs. CHATHAM

Doctrine:
Under Circular No. 1-91, appeals from the arbitral awards of the CIAC may be
brought to the Court of Appeals, and not to the Supreme Court alone. The grounds
for the appeal are likewise broadened to include appeals on questions of facts and
appeals involving mixed questions of fact and law.
The jurisdiction of the Court of Appeals over appeals from final orders or decisions
of the CIAC is further fortified by the amendments to B.P. Blg. 129, as introduced by
RA. No. 7902. With the amendments, the Court of Appeals is vested with appellate
jurisdiction over all final judgments, decisions, resolutions, orders or awards of
Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or
commissions, except "those within the appellate jurisdiction of the Supreme Court in
accordance with the Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948."

While, again, the CIAC was not specifically named in said provision, its
inclusion therein is irrefutable. The CIAC was not expressly covered in the
exclusion. Further, it is a quasi-judicial agency or instrumentality.