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G.R. No. 96283 February 25, 1992
CHUNG FU INDUSTRIES (PHILIPPINES) INC., its Directors and Officers namely:
HUANG KUO-CHANG, HUANG AN-CHUNG, JAMES J.R. CHEN, TRISTAN A.
CATINDIG, VICENTE B. AMADOR, ROCK A.C. HUANG, JEM S.C. HUANG, MARIA
TERESA SOLIVEN and VIRGILIO M. DEL ROSARIO, petitioners,
vs.
COURT OF APPEALS, HON. FRANCISCO X. VELEZ (Presiding Judge, Regional
Trail Court of Makati [Branch 57]) and ROBLECOR PHILIPPINES, INC.,
respondents.

Facts:
Petitioner Chung Fu entered into a construction agreement with Roblecor Phil. Inc.
for the corporation’s industrial factory with a total consideration of P42,000,000.00.
Also, said companies entered into 2 other ancillary construction contracts
amounting to P3,875,285.00 and P12,100,000.00. The said construction agreement
contained a stipulation that in the event of disputes arising from the performance of
the contract, such issue shall be submitted for resolution before a single arbitrator
chosen by the parties. However, Roblecor failed to complete the work despite the
extension of time provided by Chung Fu, which later on had to take over the said
construction. Roblecor then claimed for the unsatisfied account of P10,500,000 and
unpaid progress billings of P2,370,179.23 and filed a petition for the compulsory
arbitration with a prayer for a TRO, while Chung Fu prayed for the dismissal of such
petition. The RTC approved the arbitration agreement and Engr. Asuncion was latter
appointed as the sole arbitrator. He then ordered the petitioners to pay the
respondent contractor P16,108,801.00 and declared such award as final and
unappealable. Chung Fu moved to remand the case for further hearing but the lower
court denied the motion and granted the Confirmation of the award in favour of
Roblecor. Chung Fu elevated the case to the CA via a petition for certiorari but the
CA only assailed the resolution of the lower court assailing that the signatories of
the Arbitration Agreement are bound to observe the stipulations thereof for the
finality of the award.

Issue:
Whether or not the decision of the arbitrator shall be deemed final and
unappealable and beyond the ambit of the court’s power of judicial review.

Held:
No. As per Art 2044 of the Civil Code, the finality of the arbitrators award is not
absolute and without exceptions. It is also stated in Sections 24, 25 of the
Arbitration Law (R.A. 876, year 1953) that there are grounds for vacating, modifying
or rescinding an arbitrator’s award. Thus, if there are factual circumstances which
are referred to in the said provisions be present, judicial review of the award is
properly warranted. Also, even decisions of an administrative agency which are
declared as “final” are not exempt from judicial review when so warranted. That is
why a voluntary arbitrator, by the very nature of their function, acts in a quasi-
judicial capacity in deciding such cases, is not to be construed as beyond the scope
of the power of judicial review. The Court then provided that the lower court
committed grave abuse of discretion by not looking into the merits of the case
despite a prima facie showing of the existence of grounds warranting judicial
review. Finally, the case was remanded back to the court of origin for further
hearing.