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G.R. No. 196171

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RepublicofthePhilippines
SUPREMECOURT
Manila
FIRSTDIVISION
G.R.No.196171December10,2012
RCBCCAPITALCORPORATION,Petitioners,
vs.
BANCODEOROUNIBANK,INC.,Respondent.
XX
G.R.No.199238
BANCODEOROUNIBANK,INC.,Petitioner,
vs.
COURTOFAPPEALSandRCBCCAPITALCORPORATION,Respondents.
DECISION
VILLARAMA,JR.,J.:
BeforetheCourtaretwoconsolidatedpetitionsseparatelyfiledbythepartiesinanarbitrationcaseadministeredby
the International Chamber of CommerceInternational Court of Arbitration (ICCICA) pursuant to the arbitration
clauseintheircontract.
TheCase
InG.R.No.196171,apetitionforreviewunderRule45ofthe1997RulesofCivilProcedure,asamended,RCBC
CapitalCorporation(RCBC)seekstoreversetheCourtofAppeals(CA)Decision1datedDecember23,2010inCA
G.R.SPNo.113525whichreversedandsetasidetheJune24,2009Order2oftheRegionalTrialCourt(RTC)of
MakatiCity,Branch148inSPProc.CaseNo.M6046.
In G.R. No. 199238,a petition for certiorari under Rule 65, Banco De Oro Unibank, Inc. (BDO)assails the
Resolution3datedSeptember13,2011inCAG.R.SPNo.120888whichdeniedBDOsapplicationfortheissuance
of a stay order and/or temporary restraining order (TRO)/preliminary injunction against the implementation of the
Writ of Execution4 dated August 22, 2011 issued by the Makati City RTC, Branch 148 in SP Proc. Case No. M
6046.
FactualAntecedents
OnMay24,2000,RCBCenteredintoaSharePurchaseAgreement5(SPA)withEquitablePCIBank,Inc.(EPCIB),
George L. Go and the individual shareholders6 of Bankard, Inc. (Bankard) for the sale to RCBC of 226,460,000
shares(SubjectShares)ofBankard,constituting67%ofthelatterscapitalstock.Aftercompletingpaymentofthe
contractprice(P1,786,769,400),thecorrespondingdeedsofsaleoverthesubjectshareswereexecutedinJanuary
2001.
ThedisputebetweenthepartiesarosesometimeinMay2003whenRCBCinformedEPCIBandtheotherselling
shareholdersofanoverpaymentofthesubjectshares,claimingtherewasanoverstatementofvaluationofaccounts
amountingtoP478millionandthatthesellersviolatedtheirwarrantyunderSection5(g)oftheSPA.7
As no settlement was reached, RCBC commenced arbitration proceedings with the ICCICA in accordance with
Section10oftheSPAwhichstates:
Section10.Arbitration
Should there be any dispute arising between the parties relating to this Agreement including the interpretation or
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performance hereof which cannot be resolved by agreement of the parties within fifteen (15) days after written
noticebyapartytoanother,suchmattershallthenbefinallysettledbyarbitrationundertheRulesofConciliation
andArbitrationoftheInternationalChamberofCommerceinforceasofthetimeofarbitration,bythreearbitrators
appointed in accordance with such rules. The venue of arbitration shall be in Makati City, Philippines and the
arbitration proceedings shall be conducted in the English language. Substantive aspects of the dispute shall be
settled by applying the laws of the Philippines. The decision of the arbitrators shall be final and binding upon the
parties hereto and the expenses of arbitration (including without limitation the award of attorneys fees to the
prevailingparty)shallbepaidasthearbitratorsshalldetermine.8
In its Request for Arbitration9 dated May 12, 2004, Claimant RCBC charged Bankard with deviating from and
contravening generally accepted accounting principles and practices, due to which the financial statements of
Bankard prior to the stock purchase were far from fair and accurate, and resulted in the overpayment of P556
million.ForthisviolationofsellersrepresentationsandwarrantiesundertheSPA,RCBCsoughtitsrescission,as
wellaspaymentofactualdamagesintheamountofP573,132,110,legalinterestonthepurchasepriceuntilactual
restitution, moral damages and litigation and attorneys fees, with alternative prayer for award of damages in the
amountofatleastP809,796,082pluslegalinterest.
In their Answer,10 EPCIB, Go and the other selling individual shareholders (Respondents) denied RCBCs
allegationscontendingthatRCBCsclaimisoneforoverpaymentorpricereductionunderSection5(h)oftheSPA
which is already timebarred, the remedy of rescission is unavailable, and even assuming that rescission is
permittedbytheSPA,RCBCfailedtofileitsclaimwithinareasonabletime.TheyfurtherassertedthatRCBCisnot
entitledtoitsalternativeprayerfordamages,beingguiltyoflachesandfailingtosetoutthedetailsofthebreachas
requiredunderSection7oftheSPA.Acounterclaimforlitigationexpensesandcostsofarbitrationintheamountof
US$300,000,aswellasmoralandexemplarydamages,waslikewiseraisedbytheRespondents.
RCBCsubmittedaReply11totheaforesaidAnswer.
Subsequently,theArbitrationTribunalwasconstituted.Mr.NeilKaplanwasnominatedbyRCBCJusticeSantiago
M.Kapunan(aretiredMemberofthisCourt)wasnominatedbytheRespondentsandSirIanBarkerwasappointed
bytheICCICAasChairman.
On August 13, 2004, the ICCICA informed the parties that they are required to pay US$350,000 as advance on
costspursuanttoArticle30(3)oftheICCRulesofArbitration(ICCRules).RCBCpaiditsshareofUS$107,000,the
balance remaining after deducting payments of US$2,500 and US$65,000 it made earlier. Respondents share of
theadvanceoncostswasthusfixedatUS$175,000.
RespondentsfiledanApplicationforSeparateAdvancesonCosts12datedSeptember17,2004underArticle30(2)
of the ICC Rules, praying that the ICC fix separate advances on the cost of the parties respective claims and
counterclaims, instead of directing them to share equally on the advance cost of Claimants (RCBC) claim.
Respondentsdeemedthisadvancecostallocationtobeproper,pointingoutthatthetotalamountofRCBCsclaim
issubstantiallyhighermorethan40timesthetotalamountoftheircounterclaims,andthatitwouldbeunfairto
requirethemtoshareinthecostsofarbitratingwhatisessentiallyapriceissuethatisnowtimebarredunderthe
SPA.
OnSeptember20,2004,theICCICAinformedRespondentsthattheirapplicationforseparateadvancesoncosts
wasprematurependingtheexecutionoftheTermsofReference(TOR).13TheTORwassettledbythepartiesand
signedbytheChairmanandMembersoftheArbitralTribunalbyOctober11,2004.OnDecember3,2004,14 the
ICCICAdeniedtheapplicationforseparateadvancesoncostsandinvitedanewtheRespondentstopayitsshare
intheadvanceoncosts.However,despiteremindersfromtheICCICA,Respondentsrefusedtopaytheirsharein
the advance cost fixed by the ICCICA. On December 16, 2004, the ICCICA informed the parties that if
Respondents still failed to pay its share in the advance cost, it would apply Article 30(4) of the ICC Rules and
requesttheArbitrationTribunaltosuspenditsworkandsetanewtimelimit,andifsuchrequesteddepositremains
unpaidattheexpirythereof,thecounterclaimswouldbeconsideredwithdrawn.15
In a faxletter dated January 4, 2005, the ICCICA invited RCBC to pay the said amount in substitution of
Respondents.It also granted an extension until January 17, 2005 within which to pay the balance of the advance
cost(US$175,000).RCBCrepliedthatitwasnotwillingtoshouldertheshareofRespondentsintheadvanceon
costs but nevertheless requested for a clarification as to the effect of such refusal to substitute for
Respondentsshare.16
OnMarch10,2005,theICCICAinstructedtheArbitrationTribunaltosuspenditsworkandgrantedthepartiesa
finaltimelimitof15daystopaythebalanceoftheadvanceoncosts,failingwhichtheclaimsshallbeconsidered
withdrawn,withoutprejudicetotheirreintroductionatalaterdateinanotherproceeding.Thepartieswereadvised
thatifanyofthemobjectstothemeasure,itshouldmakearequestinwritingwithinsuchperiod.17Forthesame
reason of nonreceipt of the balance of the advance cost, the ICCICA issued Procedural Order No. 3 for the
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adjournment of the substantive hearings and granting the Respondents a twomonth extension within which to
submittheirbriefofevidenceandwitnesses.
RCBC objected to the cancellation of hearings, pointing out that Respondents have been given ample time and
opportunitytosubmittheirbriefofevidenceandprepareforthehearingsandthattheirrequestforpostponement
servesnootherpurposebuttodelaytheproceedings.ItallegedthatRespondentsunjustifiedrefusaltopaytheir
shareintheadvanceoncostswarrantsarulingthattheyhaveloststandingtoparticipateintheproceedings.Itthus
prayedthatRespondentsbedeclaredasindefault,thesubstantivehearingsbeconductedasoriginallyscheduled,
andRCBCbeallowedtosubmitrebuttalevidenceandadditionalwitnessstatements.18
On December 15, 2005, the ICCICA notified the parties of its decision to increase the advances on costs from
US$350,000 to US$450,000 subject to later readjustments, and again invited the Respondents to pay the
US$100,000incrementwithin30daysfromnotice.Respondents,however,refusedtopaytheincrement,insisting
that RCBC should bear the cost of prosecuting its own claim and that compelling the Respondents to fund such
prosecution is inequitable. Respondents reiterated that it was willing to pay the advance on costs for their
counterclaim.19
On December 27, 2005, the ICCICA advised that it was not possible to fix separate advances on costs as
explainedinitsDecember3,2004letter,andagaininvitedRespondentstopaytheirshareintheadvanceoncosts.
RespondentsresponsecontainedintheletterdatedJanuary6,2006wasstillthesame:itwaswillingtopayonly
theseparateadvanceoncostsoftheircounterclaim.20InviewofRespondentscontinuingrefusaltopayitsequal
share in the advance on costs and increment, RCBC wrote the ICCICA stating that the latter should compel the
Respondents to pay as otherwise RCBC will be prejudiced and the inaction of the ICCICA and the Arbitration
Tribunalwilldetractfromtheeffectivenessofarbitrationasameansofsettlingdisputes.InaccordancewithArticle
30(4)oftheICCRules,RCBCreiterateditsrequesttodeclaretheRespondentsasindefaultwithoutanypersonality
toparticipateintheproceedingsnotonlywithrespecttotheircounterclaimsbutalsototheclaimofRCBC.21
ChairmanIanBarker,inaletterdatedJanuary25,2006,statedinpart:
xxxx
2.TheTribunalhasnopowerundertheICCRulestoordertheRespondentstopaytheadvanceon
costs sought by the ICC or to give the Claimant any relief against the Respondents refusal to pay.
TheICCRulesdifferfrom,forexample,theRulesoftheLCIA(Article24.3)whichenablesapartypayingthe
shareofcostswhichtheotherpartyhasrefusedtopay,torecover"thatamountasadebtimmediatelydue
fromthedefaultingparty."
3.TheonlysanctionundertheICCRulesiscontainedwithinArticle30(4).Wherearequestforanadvance
oncostshasnotbeencompliedwith,afterconsultationwiththeTribunal,theSecretaryGeneralmaydirect
theTribunaltosuspenditswork.Afterexpiryofatimelimit,allclaimsandcounterclaimsarethenconsidered
aswithdrawn.ThisprovisioncannotassistaClaimantwhoisanxioustolitigateitsclaim.SuchaClaimanthas
topaythesumsrequested(includingtheRespondentsshare)ifitwishesthearbitrationtoproceed.
4.ItmaybepossibleforaClaimantinthecourseofthearbitralhearing(orwhenevercostsarebeing
consideredbytheTribunal)tomakesubmissionsbasedonthefailureoftheRespondentstopaytheir
shareofthecostsadvance.Whatrelief,ifany,wouldhavetobethendeterminedbytheTribunalafter
havingheardsubmissionsfromtheRespondents.
5.IshouldbepleasediftheClaimantwilladvisetheTribunalofitsintentioninrelationtothecostsadvance.If
thecostsarenotpaid,thearbitrationcannotproceed.22(Italicsintheoriginalemphasissupplied)
RCBC paid the additional US$100,000 under the second assessment to avert suspension of the Arbitration
Tribunalsproceedings.
Uponthecommencementofthehearings,theArbitrationTribunaldecidedthathearingswillbeinitiallyconfinedto
issuesofliability(liabilityphase)whilethesubstantialissueswillbeheardonalaterdate(quantumphase).
Meanwhile, EPCIBs corporate name was officially changed to Banco De Oro (BDO)EPCIB after its merger with
BDOwasdulyapprovedbytheSecuritiesandExchangeCommission.Assuch,BDOassumedalltheobligations
andliabilitiesofEPCIBundertheSPA.
OnSeptember27,2007,theArbitrationTribunalrenderedaPartialAward23(FirstPartialAward)inICCICACase
No.13290/MS/JB/JEM,asfollows:
15AWARDANDDIRECTIONS
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15.1TheTribunalmakesthefollowingdeclarationsbywayofPartialAward:
(a)TheClaimantsclaimisnottimebarredundertheprovisionsofthisSPA.
(b) The Claimant is not estopped by its conduct or the equitable doctrine of laches from pursuing its
claim.
(c) As detailed in the Partial Award, the Claimant has established the following breaches by the
Respondentsofclause5(g)oftheSPA:
i)theassets,revenueandnetworthofBankardwereoverstatedbyreasonofitspolicyonand
recognitionofLatePaymentFees
ii) reported receivables were higher than their realisable values by reason of the bucketing
method,thusoverstatingBankardsassetsand
iii) the relevant Bankard statements were inadequate and misleading in that their disclosures
caused readers to be misinformed about Bankards accounting policies on revenue and
receivables.
(d)SubjecttoproofoflosstheClaimantisentitledtodamagesfortheforegoingbreaches.
(e)TheClaimantisnotentitledtorescissionoftheSPA.
(f)Allotherissues,includinganyissuerelatingtocosts,willbedealtwithinafurtherorfinal
award.
15.2AfurtherProceduralOrderwillbenecessarysubsequenttothedeliveryofthisPartialAwardtodealwith
thedeterminationofquantumandinparticular,whetherthereshouldbeanExpertappointedbytheTribunal
underArticle20(4)oftheICCRulestoassisttheTribunalinthisregard.
15.3ThisAwardisdeliveredbyamajorityoftheTribunal(SirIanBarkerandMr.Kaplan).JusticeKapunanis
unable to agree with the majoritys conclusion on the claim of estoppel brought by the Respondents.24
(Emphasissupplied)
On October 26, 2007, RCBC filed with the Makati City RTC, Branch 148 (SP Proc. Case No. M6046)amotion to
confirmtheFirstPartialAward,whileRespondentsfiledamotiontovacatethesame.
ICCICA by letter25 dated October 12, 2007 increased the advance on costs from US$450,000 to US$580,000.
Underthisthirdassessment,RCBCpaidUS$130,000asitsshareontheincrement.Respondentsdeclinedtopay
its adjudged total share of US$290,000 on account of its filing in the RTC of a motion to vacate the First Partial
Award.26TheICCICAtheninvitedRCBCtosubstituteforRespondentsinpayingthebalanceofUS$130,000by
December21,2007.27RCBCcompliedwiththerequest,makingitstotalpaymentsintheamountofUS$580,000.28
While RCBC paid Respondents share in the increment (US$130,000), it reiterated its plea that Respondents be
declaredasindefaultandthecounterclaimsdeemedaswithdrawn.29
ChairmanBarkersletterdatedDecember18,2007statesinpart:
xxxx
8.ContrarytotheComplainantsview,theTribunalhasnojurisdictiontodeclarethattheRespondentshave
norighttoparticipateintheproceedingsconcerningtheclaim.Article30(4)oftheICCRulesappliesonlyto
anycounterclaimoftheRespondents.
9.TheTribunalinterpretstheClaimantslatestletterasanapplicationbytheClaimanttotheTribunal
fortheissueofapartialawardagainsttheRespondentsinrespectoftheirfailuretopaytheirshareof
theICCsrequestsforadvanceoncosts.
10. I should be grateful if the Claimant would confirm that this is the situation. If so, the Claimant should
propose a timetable for which written submissions should be made by both parties. This is an application
whichcanbeconsideredbytheTribunalonwrittensubmissions.30(Emphasissupplied)
RCBC,inaletterdatedDecember26,2007,confirmedtheArbitrationTribunalsinterpretationthatitwasapplying
forapartialawardagainstRespondentsfailuretopaytheirshareintheadvanceoncosts.31
Meanwhile,onJanuary8,2008,theMakatiCityRTC,Branch148issuedanorderinSPProc.CaseNo.M6046
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confirmingtheFirstPartialAwardanddenyingRespondentsseparatemotionstovacateandtosuspendandinhibit
Barker and Kaplan. Respondents motion for reconsideration was likewise denied. Respondents directly filed with
thisCourtapetitionforreviewoncertiorariunderRule45,docketedasG.R.No.182248andentitledEquitablePCI
Banking Corporation v. RCBC Capital Corporation.32 In our Decision dated December 18, 2008, we denied the
petitionandaffirmedtheRTCsrulingconfirmingtheFirstPartialAward.
OnJanuary18,2008,theArbitrationTribunalsetatimetableforthefilingofsubmissionbythepartiesonwhetherit
shouldissueaSecondPartialAwardinrespectoftheRespondentsrefusaltopayanadvanceoncoststotheICC
ICA.
In compliance, RCBC filed on February 7, 2008an Application for Reimbursement of Advance on Costs Paid,
praying for the issuance of a partial award directing the Respondents to reimburse its payment in the amount of
US$290,000representingRespondentsshareintheAdvanceonCostsandtoconsiderRespondentscounterclaim
foractualdamagesintheamountofUS$300,000,andmoralandexemplarydamagesaswithdrawnfortheirfailure
topaytheirequalshareintheadvanceoncosts.RCBCinvokedtheplaintermsofArticle30(2)and(3)tostressthe
liabilityofRespondentstoshareequallyinpayingtheadvanceoncostswheretheArbitrationTribunalhasfixedthe
same.33
Respondents,ontheotherhand,filedtheirOpposition34tothesaidapplicationallegingthattheArbitrationTribunal
has lost its objectivity in an unnecessary litigation over the payment of Respondents share in the advance costs.
TheypointedoutthatRCBCslettermerelyaskedthatRespondentsbedeclaredasindefaultfortheirfailuretopay
advance costs but the Arbitration Tribunal, while denying the request offered an alternative to RCBC: a Partial
AwardforRespondentsshareintheadvancecostsevenifitwasclearfromthelanguageofRCBCsDecember11,
2007 letter that it had no intention of litigating for the advance costs. Chairman Barker, after ruling earlier that it
cannot grant RCBCs request to declare the Respondents as having no right to participate in the proceedings
concerningtheclaim,interpretedRCBCsletterasanapplicationfortheArbitrationTribunaltoissueapartialaward
inrespectofsuchrefusalofRespondentstopaytheirshareintheadvanceoncosts,andsubsequentlydirectedthe
parties to make submissions on the matter.Aside from violating their right to due process and to be heard by an
impartial tribunal, Respondents also argued that in issuing the award for advance cost, the ArbitrationTribunal
decidedanissuebeyondthetermsoftheTOR.
Respondents also emphasized that the parties agreed on a twopart arbitration: the first part of the Tribunals
proceedingswoulddetermineRespondentsliability,ifany,forallegedviolationofSection5(g)and(h)oftheSPA
and the second part of the proceedings would determine the amounts owed by one party to another as a
consequenceofafindingofliabilityorlackthereof.Anawardfor"reimbursementofadvancesforcosts"clearlyfalls
outside the scope of either proceedings. Neither can the Tribunal justify such proceedings under Article 23 of the
ICC Rules (Conservatory and Interim Measures) because that provision does not contemplate an award for the
reimbursementofadvanceoncostsinarbitrationcases.Respondentsfurtherassertedthatsincetheadvanceson
costs have been paid by the Claimant (RCBC), the main claim and counterclaim may both be heard by the
ArbitrationTribunal.
InhisletterdatedMarch13,2008,ChairmanBarkeradvisedtheparties,asfollows:
1.TheTribunalacknowledgestheRespondentsresponsetotheClaimantsapplicationforaPartialAward,
basedontheRespondentsfailuretopaytheirshareofthecosts,asrequestedbytheICC.
2.TheTribunalnotesthatneitherpartyhasreferredtoanarticlebyMat[t]hewSecombonthisvery
subjectwhichappearsintheICCBulletinVol.14No.1(Spring2003).Toassistbothsidesandtoensure
that the Tribunal does not consider material on which the parties have not been given an opportunity to
address,Iattachacopyofthisarticle,whichalsocontainsreferencetootherscholarlyworksonthesubject.
3. The Tribunal will give each party seven days within which to submit further written comments as a
consequenceofbeingalertedtotheaboveauthorities.35(Additionalemphasissupplied)
Thepartiescompliedbysubmittingtheirrespectivecomments.
RCBCrefutedRespondentsallegationofpartialityonthepartofChairmanBarkerandreiteratedtheprayerinits
application for reimbursement of advance on costs paid to the ICCICA. RCBC contended that based on Mr.
Secombsarticle,whetherthe"contractual"or"provisionalmeasures"approachisapplied,theArbitrationTribunalis
vestedwithjurisdictionandauthoritytorenderanawardwithrespecttosaidreimbursementofadvancecostpaidby
thenondefaultingparty.36
Respondents, on the other hand, maintained that RCBCs application for reimbursement of advance cost has no
basisundertheICCRules.Theycontendedthatnomanifestinjusticecanbeinferredfromanactofapartypaying
for the share of the defaulting party as this scenario is allowed by the ICC Rules. Neither can a partial award for
advancecostbejustifiedunderthe"contractualapproach"sincethematterofcostsforarbitrationisbetweenthe
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ICCandtheparties,nottheArbitrationTribunalandtheparties.Anarbitrationtribunalcanissuedecisionsoncosts
onlyforthosecostsnotfixedbytheICC.37
RespondentsreiteratedtheirpositionthatArticle30(3)envisionsasituationwherebyapartywouldrefusetopayits
shareontheadvanceoncostsandprovidesaremedytherefortheotherparty"shallbefreetopaythewholeof
the advance on costs." Such partys reimbursement for payments of the defaulting partys share depends on the
finalarbitralawardwherethepartyliableforcostswouldbedetermined.Thisistheonlyremedyprovidedbythe
ICCRules.38
OnMay28,2008,theArbitrationTribunalrenderedtheSecondPartialAward,39asfollows:
7AWARD
7.1 Having read and considered the submissions of both parties, the Tribunal AWARDS, DECLARES AND
ORDERSasfollows:
(a)TheRespondentsareforthwithtopaytotheClaimantthesumofUS$290,000.
(b)TheRespondentscounterclaimistobeconsideredaswithdrawn.
(c)Allotherquestions,includinginterestandcosts,willbedealtwithinasubsequentaward.40
TheabovepartialawardwasreceivedbyRCBCandRespondentsonJune12,2008.
OnJuly11,2008,EPCIBfiledaMotiontoVacateSecondPartialAward41intheMakatiCityRTC,Branch148(SP
Proc. Case No. M6046). On July 10, 2008, RCBC filed in the same court a Motion to Confirm Second Partial
Award.42
EPCIB raised the following grounds for vacating the Second Partial Award: (a) the award is void ab initio having
beenrenderedbythearbitratorswhoexceededtheirpoweroractedwithoutitand(b)theawardwasprocuredby
unduemeansorissuedwithevidentpartialityorattendedbymisbehavioronthepartoftheTribunalwhichresulted
inamaterialprejudicetotherightsoftheRespondents.EPCIBarguedthatthereisnoexpressagreementeitherin
theSPAortheICCRulesforsuchrightofreimbursement.Thereislikewisenoimpliedagreementbecausefromthe
ICCRules,theonlyinferenceisthatthepartiesagreedtoawaitthedispositionsoncostsliabilityintheFinalAward,
notbefore.
On the ruling of the Arbitration Tribunal that Respondents application for costs are not counterclaims, EPCIB
asserted that this is contrary to Philippine law as it is basic in our jurisdiction that counterclaims for litigation
expenses, moral and exemplary damages are proper counterclaims, which rule should be recognized in view of
Section10oftheSPAwhichprovidesthat"substantiveaspectsofthedisputeshallbesettledbyapplyingthelaws
ofthePhilippines."Finally,EPCIBtakesissuewithChairmanBarkersinterpretationofRCBCsDecember11,2007
letter as an application for a partial award for reimbursement of the substituted payments. Such conduct of
ChairmanBarkerisprejudicialandproveshisevidentpartialityinfavorofRCBC.
RCBC filed its Opposition,43 asserting that the Arbitration Tribunal had jurisdiction to consider Respondents
counterclaimaswithdrawn,thesamehavingbeenabandonedbynotpresentinganycomputationorsubstantiation
byevidence,theironlycomputationrelatesonlytoattorneysfeeswhicharesimplycostoflitigationproperlybrought
attheconclusionofthearbitration.ItalsopointedoutthattheArbitrationTribunalwasempoweredbytheparties
arbitralclausetodeterminethemannerofpaymentofexpensesofarbitration,andthattheSecondPartialAward
wasbasedonauthoritiesandtreatisesonthemandatoryandcontractualnatureoftheobligationtopayadvanceson
costs.
InitsReply,44EPCIBcontendedthatRCBChadtheoptiontoagreetoitsproposalforseparateadvancesoncosts
butdecidedagainstitRCBCsactofpayingthebalanceoftheadvancecostinsubstitutionofEPCIBwasforthe
purposeofhavingEPCIBdefaultedandthelatterscounterclaimwithdrawn.Havingagreedtofinancethearbitration
untilitscompletion,RCBCisnotentitledtoimmediatereimbursementoftheamountitpaidinsubstitutionofEPCIB
under an interim award, as its right to a partial or total reimbursement will have to be determined under the final
award. EPCIB asserted that the matter of reimbursement of advance cost paid cannot be said to have properly
arisen during arbitration. EPCIB reiterated that Chairman Barkers interpretation of RCBCs December 11, 2007
letterasanapplicationforinterimawardforreimbursementistantamounttoapromisethattheawardwillbeissued
induecourse.
After a further exchange of pleadings, and other motions seeking relief from the court in connection with the
arbitrationproceedings(quantumphase),theMakatiCityRTC,Branch148issuedtheOrder45datedJune24,2009
confirmingtheSecondPartialAwardanddenyingEPCIBsmotiontovacatethesame.Saidcourtheldthatsincethe
partiesagreedtosubmitanydisputeundertheSPAtoarbitrationandtobeboundbytheICCRules,theyarealso
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boundtopayinequalsharestheadvanceoncostsasprovidedinArticle30(2)and(3).ItnotedthatRCBCwas
forcedtopaytheshareofEPCIBinsubstitutionofthelattertopreventasuspensionofthearbitrationproceedings,
while EPCIBs nonpayment seems more like a scheme to delay such proceedings. On the Arbitration Tribunals
rulingonEPCIBscounterclaim,noerrorwascommittedinconsideringitwithdrawnforfailureofEPCIBtoquantify
and substantiate it with supporting evidence. As to EPCIBs claim for attorneys fees, the RTC agreed that these
shouldbebroughtonlyatthecloseofarbitration.
EPCIBmovedtoreconsidertheJune24,2009OrderandforthevoluntaryinhibitionofthePresidingJudge(Judge
OscarB.Pimentel)onthegroundthatEPCIBsnewcounselrepresentedanotherclientinanothercasebeforehim
inwhichsaidcounselassailedhisconductandhadlikewisesoughthisinhibition.Bothmotionsweredeniedinthe
JointOrder46datedMarch23,2010.
OnApril14,2010,EPCIBfiledintheCAapetitionforreview47withapplicationforTROand/orwritofpreliminary
injunction (CAG.R. SP No. 113525) in accordance with Rule 19, Section 4 of the Special Rules of Court on
AlternativeDisputeResolution48(SpecialADRRules).EPCIBassailedtheMakatiCityRTC,Branch148indenying
itsmotiontovacatetheSecondPartialAwarddespite(a)saidawardhavingbeenrenderedinexcessofjurisdiction
orpower,andcontrarytopublicpolicy(b)thefactthatitwasissuedwithevidentpartialityandseriousmisconduct
(c) the award deals with a dispute not contemplated within the terms of submission to arbitration or beyond the
scopeofsuchsubmission,whichthereforeoughttobevacatedpursuanttoArticle34oftheUNCITRALModelLaw
and(d)thePresidingJudgehavingexhibitedbiasandprejudiceagainstBDOanditscounselasconfirmedbyhis
pronouncementsintheJointOrderdatedMarch23,2010inwhich,insteadofrecusinghimself,heimputedmalice
andunethicalconductintheentryofappearanceofBeloGozonElmaAsuncionandLucilaLawOfficesinSPProc.
CaseNo.M6046,whichwarrantshisvoluntaryinhibition.
Meanwhile,onJune16,2010,theArbitrationTribunalissuedtheFinalAward,49asfollows:
15AWARD
15.1TheTribunalbyamajority(SirIanBarker&Mr.Kaplan)awards,declaresandadjudgesasfollows:
(a)theRespondentsaretopaydamagestotheClaimantforbreachofthesaleandpurchaseagreementfor
BankardsharesinthesumofP348,736,920.29.
(b) The Respondents are to pay to the Claimant the sum of US$880,000 in respect of the costs of the
arbitrationasfixedbytheICCCourt.
(c)TheRespondentsaretopaytotheClaimantthesumofUS$582,936.56forthefeesandexpensesofMr.
Best.
(d)TheRespondentsaretopaytotheClaimanttheirexpensesofthearbitrationasfollows:
(i)ExpertsfeesP7,082,788.55
(ii)CostsofwithoutprejudicemeetingP22,571.45
(iii)CostsofarbitrationhearingsP553,420.66
(iv)CostsoftranscriptionserviceP483,597.26
TotalP8,144,377.62
(e)TheRespondentsaretopaytotheClaimantthesumofP7,000,000forpartyandpartylegalcosts.
(f)TheCounterclaimsoftheRespondentsarealldismissed.
(g)AllclaimsoftheClaimantaredismissed,otherthanthosereferredtoabove.
15.2JusticeKapunandoesnotagreewiththemajorityofthemembersoftheTribunalandhasissuedadissenting
opinion.HehasrefusedtosignthisAward.50
OnJuly1,2010BDOfiledintheMakatiCityRTCaPetitiontoVacateFinalAwardAdCautelam,51docketedasSP
Proc.CaseNo.M6995,whichwasraffledtoBranch65.
On July 28, 2010, RCBC filed with the Makati City RTC, Branch 148 (SP Proc. Case No. M6046) a Motion to
ConfirmFinalAward.52BDOfileditsOppositionWithMotiontoDismiss53ongroundsthataPetitiontoVacateFinal
AwardAdCautelamhadalreadybeenfiledinSPProc.CaseNo.M6995.BDOalsopointedoutthatRCBCdidnot
filetherequiredpetitionbutinsteadfiledameremotionwhichdidnotgothroughtheprocessofrafflingtoaproper
branchoftheRTCofMakatiCityandthepaymentoftherequireddocket/filingfees.EvenassumingthatBranch148
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hasjurisdictionoverRCBCsmotiontoconfirmfinalaward,BDOassertedthatRCBChadfiledbeforetheArbitration
Tribunal an Application for Correction and Interpretation of Award under Article 29 of the ICC Rules, which is
irreconcilable with its Motion to Confirm Final Award before said court. Hence, the Motion to Confirm Award was
filedprecipitately.
On August 18, 2010, RCBC filed an Omnibus Motion in SP Proc. Case No. M6995 (Branch 65) praying for the
dismissalofBDOsPetitiontoVacateFinalAwardorthetransferofthesametoBranch148forconsolidationwith
SPProc.CaseNo.M6046.RCBCcontendedthatBDOsfilingofitspetitionwithanothercourtisablatantviolation
of the Special ADR Rules and is merely a subterfuge to commit forumshopping. BDO filed its Opposition to the
OmnibusMotion.54
OnOctober28,2010,Branch65issuedaResolution55denyingRCBCsomnibusmotionanddirectingtheservice
ofthepetitiontoRCBCforthelattersfilingofacommentthereon.RCBCsmotionforreconsiderationwaslikewise
deniedinthesaidcourtsOrderdatedDecember15,2010.RCBCthenfileditsOppositiontothePetitiontoVacate
FinalAwardAdCautelam.
Meanwhile, on November 10, 2010, Branch 148 (SP Proc. Case No. M6046) issued an Order56 confirming the
FinalAward"subjecttothecorrection/interpretationthereofbytheArbitralTribunalpursuanttotheICCRulesand
theUNCITRALModelLaw,"anddenyingBDOsOppositionwithMotiontoDismiss.
On December 30, 2010, George L. Go, in his personal capacity and as attorneyinfact of the other listed
shareholders of Bankard, Inc. in the SPA (Individual Shareholders), filed a petition in the CA, CAG.R. SP No.
117451, seeking to set aside the abovecited November 10, 2010 Order and to enjoin Branch 148 from further
proceedinginSPProc.CaseNo.M6046.ByDecision57datedJune15,2011,theCAdismissedthesaidpetition.
Their motion for reconsideration of the said decision was likewise denied by the CA in its Resolution58 dated
December14,2011.
OnDecember23,2010,theCArendereditsDecisioninCAG.R.SPNo.113525,thedispositiveportionofwhich
states:
WHEREFORE,premisesconsidered,thefollowingareherebyREVERSEDandSETASIDE:
1.theOrderdatedJune24,2009issuedinSPProc.CaseNo.M6046bytheRegionalTrialCourtofMakati
City, Branch 148, insofar as it denied the Motion to Vacate Second Partial Award dated July 8, 2008 and
grantedtheMotiontoConfirmSecondPartialAwarddatedJuly10,2008
2.theJointOrderdatedMarch23,2010issuedinSPProc.CaseNo.M6046bytheRegionalTrialCourtof
MakatiCity,Branch148,insofarasitdeniedtheMotionForReconsiderationdatedJuly28,2009relativeto
themotionsconcerningtheSecondPartialAwardimmediatelymentionedaboveand
3. the Second Partial Award dated May 28, 2008 issued in International Chamber of Commerce Court of
ArbitrationReferenceNo.13290/MS/JB/JEM.
SOORDERED.59
RCBCfiledamotionforreconsiderationbuttheCAdeniedthesameinitsResolution60datedMarch16,2011.On
April6,2011,itfiledapetitionforreviewoncertiorariinthisCourt(G.R.No.196171).
OnFebruary25,2011,Branch65renderedaDecision61inSPProc.CaseNo.M6995,asfollows:
WHEREFORE, premises considered, the Final Award dated June 16, 2010 in ICC Ref. No. 13290/MS/JB/JEM is
herebyVACATEDwithcostagainsttherespondent.
SOORDERED.62
InSPProc.CaseNo.M6046,Branch148issuedanOrder63datedAugust8,2011resolvingthefollowingmotions:
(1) Motion for Reconsideration filed by BDO, Go and Individual Shareholders of the November 10, 2010 Order
confirmingtheFinalAward(2)RCBCsOmnibusMotiontoexpungethemotionforreconsiderationfiledbyGoand
IndividualShareholders,andforexecutionoftheFinalAward(3)MotionforExecutionfiledbyRCBCagainstBDO
(4)BDOsMotionforLeavetoFileSupplementtotheMotionforReconsiderationand(5)MotionforInhibitionfiled
byGoandIndividualShareholders.SaidOrderdecreed:
WHEREFORE,premisesconsidered,itisherebyORDERED,towit:
1. Banco De Oros Motion for Reconsideration, Motion for Leave to File Supplement to Motion for
Reconsideration,andMotiontoInhibitareDENIEDforlackofmerit.
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2. RCBC Capitals Motion to Expunge, Motion to Execute against Mr. George L. Go and the Bankard
Shareholders,andtheMotiontoExecuteagainstBancoDeOroareherebyGRANTED.
3.ThedamagesawardedtoRCBCCapitalCorporationintheamountofPhP348,736,920.29issubjecttoan
interest of 6% per annum reckoned from the date of RCBC Capitals extrajudicial demand or from May 5,
2003untiltheconfirmationoftheFinalAward.Likewise,thiscompoundedamountissubjectto12%interest
per annum from the date of the confirmation of the Final Award until its satisfaction. The costs of the
arbitration amounting to US$880,000.00, the fees and expenses of Mr. Best amounting to US$582,936.56,
theClaimantsexpensesofthearbitrationamountingtoPhP8,144,377.62,andthepartyandpartylegalcosts
amounting to PhP7,000,000.00 all ruled in favor of RCBC Capital Corporation in the Final Award of the
Arbitral Tribunal dated June 16, 2010 are subject to 12% legal interest per annum, also reckoned from the
dateoftheconfirmationoftheFinalAwarduntilitssatisfaction.
4. Pursuant to Section 40 of R.A. No. 9285, otherwise known as the Alternative Dispute Resolution Act of
2004inrelationtoRule39oftheRulesofCourt,sincetheFinalAwardhavebeenconfirmed,thesameshall
be enforced in the same manner as final and executory decisions of the Regional Trial Court, let a writ of
executionbeissuedcommandingtheSherifftoenforcethisinstantOrderconfirmingthisCourtsOrderdated
November10,2010thatjudiciallyconfirmedtheJune16,2010FinalAward.
SOORDERED.64
Immediately thereafter, RCBC filed an Urgent Motion for Issuance of a Writ of Execution.65 On August 22, 2011,
afterapprovingtheexecutionbond,Branch148issuedaWritofExecutionfortheimplementationofthesaidcourts
"OrderdatedAugust8,2011confirmingtheNovember10,2010OrderthatjudiciallyconfirmedtheJune16,2010
FinalAwardxxx."66
BDOthenfiledintheCA,a"PetitionforReview(WithApplicationforaStayOrderorTemporaryRestrainingOrder
and/orWritofPreliminaryInjunction,"docketedasCAG.R.SPNo.120888.BDOsoughttoreverseandsetaside
the Orders dated November 10, 2010 and August 8, 2011, and any writ of execution issued pursuant thereto, as
wellastheFinalAwarddatedJune16,2010issuedbytheArbitrationTribunal.
InitsUrgentOmnibusMotion67toresolvetheapplicationforastayorderand/orTRO/writofpreliminaryinjunction,
and to quash the Writ of Execution dated August 22, 2011 and lift the Notices of Garnishment dated August 22,
2011,BDOarguedthattheassailedordersofexecution(WritofExecutionandNoticeofGarnishment)wereissued
withindecenthasteanddespitethenoncompliancewiththeproceduresinSpecialADRRulesoftheNovember10,
2010OrderconfirmingtheFinalAward.BDOwasnotgivensufficienttimetorespondtothedemandforpaymentor
to elect the method of satisfaction of the judgment debt or the property to be levied upon. In any case, with the
postingofabondbyBDO,Branch148hasnojurisdictiontoimplementtheappealedordersasitwouldpreempt
theCAfromexercisingitsreviewunderRule19oftheSpecialADRRulesafterBDOhadperfecteditsappeal.BDO
stressedthatthebondpostedbyRCBCwasforameaslysumofP3,000,000.00tocauseexecutionpendingappeal
of a monetary award that may reach P631,429,345.29. RCBC also failed to adduce evidence of "good cause" or
"goodreason"tojustifydiscretionaryexecutionunderSection2(a),Rule39oftheRulesofCourt.
BDO further contended that the writ of execution should be quashed for having been issued with grave abuse of
discretion amounting to lack or excess of jurisdiction as Branch 148 modified the Final Award at the time of
executionbyimposingthepaymentofintereststhoughnonewasprovidedthereinnorintheOrderconfirmingthe
same.
DuringthependencyofCAG.R.SPNo.120888,Branch148continuedwithexecutionproceedingsandonmotion
by RCBC designated/deputized additional sheriffs to replace Sheriff Flora who was supposedly physically
indisposed.68 These court personnel went to the offices/branches of BDO attempting to serve notices of
garnishmentandtolevythefurniture,fixturesandequipment.
OnSeptember12,2011,BDOfiledaVeryUrgentMotiontoLiftLevyandForLeavetoPostCounterBond69before
Branch148prayingfortheliftingofthelevyofBDOPrivateBank,Inc.(BPBI)sharesandthecancellationofthe
executionsalethereofscheduledonSeptember15,2011,whichwassetforhearingonSeptember14,2011.BDO
claimedthatthelevywasinvalidbecauseitwasservedbytheRTCSheriffsnottotheauthorizedrepresentativesof
BPBI,asprovidedunderSection9(b),Rule39inrelationtoSection7,Rule57oftheRulesofCourtstatingthata
noticeoflevyonsharesofstockmustbeservedtothepresidentormanagingagentofthecompanywhichissued
theshares.However,BDOwasadvisedbycourtstaffthatJudgeSarabiawasonleaveandthecasecouldnotbe
setforhearing.
In its Opposition to BDOs application for injunctive relief, RCBC prayed for its outright denial as BDOs petition
raises questions of fact and/or law which call for the CA to substitute its judgment with that of the Arbitration
Tribunal,inpatentviolationofapplicablerulesofproceduregoverningdomesticarbitrationandbeyondtheappellate
courtsjurisdiction.RCBCassertedthatBDOsapplicationhasbecomemootandacademicasthewritofexecution
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was already implemented and/or enforced. It also contended that BDO has no clear and unmistakable right to
warrantinjunctivereliefbecausetheissueofjurisdictionwasalreadyruleduponinCAG.R.SPNo.117451which
dismissedthepetitionfiledbyGoandtheIndividualShareholdersofBankardquestioningtheauthorityofBranch
148overRCBCsmotiontoconfirmtheFinalAwarddespitetheearlierfilingbyBDOinanotherbranchoftheRTC
(Branch65)ofapetitiontovacatethesaidaward.
OnSeptember13,2011,BDO,toavertthesaleoftheBPBIsharesscheduledonSeptember15,2011andprevent
further disruption in the operations of BDO and BPBI, paid under protest by tendering a Managers Check in the
amountofP637,941,185.55,whichwasacceptedbyRCBCasfullandcompletesatisfactionofthewritofexecution.
BDOmanifestedbeforeBranch148thatsuchpaymentwasmadewithoutprejudicetoitsappealbeforetheCA.70
On even date, the CA denied BDOs application for a stay order and/or TRO/preliminary injunction for non
compliance with Rule 19.25 of the Special ADR Rules. The CA ruled that BDO failed to show the existence of a
clear right to be protected and that the acts sought to be enjoined violated any right. Neither was BDO able to
demonstratethattheinjurytobesufferedbyitisirreparableornotsusceptibletomathematicalcomputation.
BDO did not file a motion for reconsideration and directly filed with this Court a petition for certiorari with urgent
applicationforwritofpreliminarymandatoryinjunction(G.R.No.199238).
ThePetitions
InG.R.No.196171,RCBCsetforththefollowinggroundsforthereversaloftheCADecisiondatedDecember23,
2010:
I.
THECOURTOFAPPEALSACTEDCONTRARYTOLAWANDPRIORRULINGSOFTHISHONORABLE
COURT AND COMMITTED REVERSIBLE ERROR IN VACATING THE SECOND PARTIAL AWARD ON
THE BASIS OF CHAIRMAN BARKERS ALLEGED PARTIALITY, WHICH IT CLAIMS IS INDICATIVE OF
BIAS CONSIDERING THAT THE ALLEGATIONS CONTAINED IN BDO/EPCIBS PETITION FALL SHORT
OF THE JURISPRUDENTIAL REQUIREMENT THAT THE SAME BE SUPPORTED BY CLEAR AND
CONVINCINGEVIDENCE.
II.
THECOURTOFAPPEALSACTEDCONTRARYTOLAWANDPRIORRULINGSOFTHISHONORABLE
COURT AND COMMITTED REVERSIBLE ERROR WHEN IT REVERSED THE ARBITRAL TRIBUNALS
FINDINGS OF FACT AND LAW IN THE SECOND PARTIAL AWARD IN PATENT CONTRAVENTION OF
THE SPECIAL ADR RULES WHICH EXPRESSLY PROHIBITS THE COURTS, IN AN APPLICATION TO
VACATE AN ARBITRAL AWARD, FROM DISTURBING THE FINDINGS OF FACT AND/OR
INTERPRE[TA]TIONOFLAWOFTHEARBITRALTRIBUNAL.71
BDOraisesthefollowingargumentsinG.R.No.199238:
THECOURTOFAPPEALSCOMMITTEDGRAVEABUSEOFDISCRETIONAMOUNTINGTOLACKOREXCESS
OF JURISDICTION IN PERFUNCTORILY DENYING PETITIONER BDOS APPLICATION FOR STAY ORDER,
AND/OR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION DESPITE THE EXISTENCE
ANDCONCURRENCEOFALLTHEELEMENTSFORTHEISSUANCEOFSAIDPROVISIONALRELIEFS
A. PETITIONER BDO HAS CLEAR AND UNMISTAKABLE RIGHTS TO BE PROTECTED BY THE
ISSUANCEOFTHEINJUNCTIVERELIEFPRAYEDFOR,WHICH,HOWEVER,WEREDISREGARDEDBY
PUBLIC RESPONDENT WHEN IT DENIED PETITIONER BDOS PRAYER FOR ISSUANCE OF A STAY
ORDERAND/ORTRO
B. PETITIONER BDOS RIGHT TO DUE PROCESS AND EQUAL PROTECTION OF THE LAW WAS
GROSSLY VIOLATED BY THE RTCMAKATI CITY BRANCH 148, THE DEPUTIZED SHERIFFS AND
RESPONDENT RCBC CAPITAL, WHICH VIOLATION WAS AIDED BY PUBLIC RESPONDENTS
INACTIONONANDEVENTUALDENIALOFTHEPRAYERFORSTAYORDERAND/ORTRO
C. DUE TO THE ACTS AND ORDERS OF RTC BRANCH 148, PETITIONER BDO SUFFERED
IRREPARABLE DAMAGE AND INJURY, AND THERE WAS DIRE AND URGENT NECESSITY FOR THE
ISSUANCE OF THE INJUNCTIVE RELIEF PRAYED FOR WHICH PUBLIC RESPONDENT DENIED IN
GRAVEABUSEOFDISCRETION72
Essentially,theissuestoberesolvedare:(1)whetherthereislegalgroundtovacatetheSecondPartialAwardand
(2)whetherBDOisentitledtoinjunctivereliefinconnectionwiththeexecutionproceedingsinSPProc.CaseNo.M
6046.
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IntheirTOR,thepartiesagreedonthegoverninglawandrulesasfollows:
LawstobeApplied
13 The Tribunal shall determine the issues to be resolved in accordance with the laws of the Republic of the
Philippines.
ProceduretobeApplied
14TheproceedingsbeforetheTribunalshallbegovernedbytheICCRulesofArbitration(1January1998)andthe
lawcurrentlyapplicabletoarbitrationintheRepublicofthePhilippines.73
AsstatedinthePartialAwarddatedSeptember27,2007,althoughthepartiesprovidedinSection10oftheSPA
that the arbitration shall be conducted under the ICC Rules, it was nevertheless arbitration under Philippine law
sincethepartiesarebothresidentsofthiscountry.TheprovisionsofRepublicActNo.87674(RA876),asamended
byRepublicActNo.928575(RA9285)principallyappliedinthearbitrationbetweenthehereinparties.76
ThepertinentprovisionsofR.A.9285provide:
SEC.40.ConfirmationofAward.TheconfirmationofadomesticarbitralawardshallbegovernedbySection23
ofR.A.876.
Adomesticarbitralawardwhenconfirmedshallbeenforcedinthesamemannerasfinalandexecutorydecisionsof
theRegionalTrialCourt.
The confirmation of a domestic award shall be made by the regional trial court in accordance with the Rules of
ProceduretobepromulgatedbytheSupremeCourt.
xxxx
SEC.41.VacationAward.Apartytoadomesticarbitrationmayquestionthearbitralawardwiththeappropriate
regionaltrialcourtinaccordancewiththerulesofproceduretobepromulgatedbytheSupremeCourtonlyonthose
grounds enumerated in Section 25 of Republic Act No. 876. Any other ground raised against a domestic arbitral
awardshallbedisregardedbytheregionaltrialcourt.
Rule11.4oftheSpecialADRRulessetsforththegroundsforvacatinganarbitralaward:
Rule 11.4. Grounds.(A) To vacate an arbitral award. The arbitral award may be vacated on the following
grounds:
a.Thearbitralawardwasprocuredthroughcorruption,fraudorotherunduemeans
b.Therewasevidentpartialityorcorruptioninthearbitraltribunaloranyofitsmembers
c.Thearbitraltribunalwasguiltyofmisconductoranyformofmisbehaviorthathasmateriallyprejudicedthe
rightsofanypartysuchasrefusingtopostponeahearinguponsufficientcauseshownortohearevidence
pertinentandmaterialtothecontroversy
d. One or more of the arbitrators was disqualified to act as such under the law and willfully refrained from
disclosingsuchdisqualificationor
e.Thearbitraltribunalexceededitspowers,orsoimperfectlyexecutedthem,suchthatacomplete,final
anddefiniteawarduponthesubjectmattersubmittedtothemwasnotmade.
Theawardmayalsobevacatedonanyorallofthefollowinggrounds:
a. The arbitration agreement did not exist, or is invalid for any ground for the revocation of a contract or is
otherwiseunenforceableor
b.Apartytoarbitrationisaminororapersonjudiciallydeclaredtobeincompetent.
xxxx
In deciding the petition to vacate the arbitral award, the court shall disregard any other ground than those
enumeratedabove.(Emphasissupplied)
JudicialReview
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Attheoutset,itmustbestatedthatareviewbroughttothisCourtundertheSpecialADRRulesisnotamatterof
right. Rule 19.36 of said Rules specified the conditions for the exercise of this Courts discretionary review of the
CAsdecision.
Rule 19.36.Review discretionary.A review by the Supreme Court is not a matter of right, but of sound judicial
discretion, which will be granted only for serious and compelling reasons resulting in grave prejudice to the
aggrieved party. The following, while neither controlling nor fully measuring the courts discretion, indicate the
serious and compelling, and necessarily, restrictive nature of the grounds that will warrant the exercise of the
SupremeCourtsdiscretionarypowers,whentheCourtofAppeals:
a.FailedtoapplytheapplicablestandardortestforjudicialreviewprescribedintheseSpecialADR
Rulesinarrivingatitsdecisionresultinginsubstantialprejudicetotheaggrievedparty
b.Erredinupholdingafinalorderordecisiondespitethelackofjurisdictionofthecourtthatrenderedsuch
finalorderordecision
c. Failed to apply any provision, principle, policy or rule contained in these Special ADR Rules resulting in
substantialprejudicetotheaggrievedpartyand
d. Committed an error so egregious and harmful to a party as to amount to an undeniable excess of
jurisdiction.
ThemerefactthatthepetitionerdisagreeswiththeCourtofAppealsdeterminationofquestionsoffact,oflawor
bothquestionsoffactandlaw,shallnotwarranttheexerciseoftheSupremeCourtsdiscretionarypower.Theerror
imputedtotheCourtofAppealsmustbegroundeduponanyoftheaboveprescribedgroundsforreviewor
becloselyanalogousthereto.
AmeregeneralallegationthattheCourtofAppealshascommittedseriousandsubstantialerrororthatithasacted
withgraveabuseofdiscretionresultinginsubstantialprejudicetothepetitionerwithoutindicatingwithspecificitythe
natureofsucherrororabuseofdiscretionandtheseriousprejudicesufferedbythepetitioneronaccountthereof,
shallconstitutesufficientgroundfortheSupremeCourttodismissoutrightthepetition.(Emphasissupplied)
The applicable standard for judicial review of arbitral awards in this jurisdiction is set forth in Rule 19.10 which
states:
Rule19.10.RuleonjudicialreviewonarbitrationinthePhilippines.Asageneralrule,thecourtcanonlyvacateor
set aside the decision of an arbitral tribunal upon a clear showing that the award suffers from any of the
infirmitiesorgroundsforvacatinganarbitralawardunderSection24ofRepublicActNo.876orunderRule
34oftheModelLawin a domestic arbitration, or for setting aside an award in an international arbitration under
Article34oftheModelLaw,orforsuchothergroundsprovidedundertheseSpecialRules.
xxxx
Thecourtshallnotsetasideorvacatetheawardofthearbitraltribunalmerelyonthegroundthatthearbitraltribunal
committed errors of fact, or of law, or of fact and law, as the court cannot substitute its judgment for that of the
arbitraltribunal.(Emphasissupplied)
The above rule embodied the stricter standard in deciding appeals from arbitral awards established by
jurisprudence.InthecaseofAssetPrivatizationTrustv.CourtofAppeals,77thisCourtheld:
Asarule,theawardofanarbitratorcannotbesetasideformereerrorsofjudgmenteitherastothelaworastothe
facts.Courtsarewithoutpowertoamendoroverrulemerelybecauseofdisagreementwithmattersoflaworfacts
determinedbythearbitrators.Theywillnotreviewthefindingsoflawandfactcontainedinanaward,andwillnot
undertake to substitute their judgment for that of the arbitrators, since any other rule would make an award the
commencement,nottheend,oflitigation.Errorsoflawandfact,oranerroneousdecisionofmatterssubmittedtothe
judgment of the arbitrators, are insufficient to invalidate an award fairly and honestly made. Judicial review of an
arbitrationis,thus,morelimitedthanjudicialreviewofatrial.78
Accordingly,weexaminethemeritsofthepetitionbeforeussolelyonthestatutorygroundraisedforvacatingthe
SecondPartialAward:evidentpartiality,pursuanttoSection24(b)oftheArbitrationLaw(RA876)andRule11.4
(b)oftheSpecialADRRules.
EvidentPartiality
Evidentpartialityisnotdefinedinourarbitrationlaws.Asoneofthegroundsforvacatinganarbitralawardunderthe
Federal Arbitration Act (FAA) in the United States (US), the term "encompasses both an arbitrators explicit bias
toward one party and an arbitrators inferred bias when an arbitrator fails to disclose relevant information to the
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parties."79
Fromarecentdecision80oftheCourtofAppealsofOregon,wequoteabriefdiscussionofthecommonmeaningof
evidentpartiality:
To determine the meaning of "evident partiality," we begin with the terms themselves. The common meaning of
"partiality"is"theinclinationtofavoroneside."WebstersThirdNewInt'lDictionary1646(unabridgeded2002)
seealsoid.(defining "partial" as "inclined to favor one party in a cause or one side of a question more than the
other:biased,predisposed"(formattinginoriginal))."Inclination,"inturn,means"aparticulardispositionofmindor
character:propensity,bent"or"atendencytoaparticularaspect,state,character,oraction."Id.at1143(formatting
inoriginal)seealsoid.(defining"inclined"as"havinginclination,disposition,ortendency").
Thecommonmeaningof"evident"is"capableofbeingperceivedesp[ecially]bysight:distinctlyvisible:beingin
evidence : discernable[] * * * clear to the understanding : obvious, manifest, apparent."Id. at 789 (formatting in
original)seealsoid.(stating that synonyms of "evident" include "apparent, patent, manifest, plain, clear, distinct,
obvious, [and] palpable" and that, "[s]ince evident rather naturally suggests evidence, it may imply the
existence of signs and indications that must lead to an identification or inference" (formatting in original)).
(Emphasissupplied)
Evidentpartialityinitscommondefinitionthusimplies"theexistenceofsignsandindicationsthatmustleadtoan
identificationorinference"ofpartiality.81Despitetheincreasingadoptionofarbitrationinmanyjurisdictions,there
seemstobenoestablishedstandardfordeterminingtheexistenceofevidentpartiality.IntheUS,evidentpartiality
"continues to be the subject of somewhat conflicting and inconsistent judicial interpretation when an arbitrators
failuretodisclosepriordealingsisatissue."82
ThefirstcasetodelineatethestandardofevidentpartialityinarbitrationproceedingswasCommonwealthCoatings
Corp.v.ContinentalCasualtyCo.,etal.83decidedbytheUSSupremeCourtin1968.TheCourtthereinaddressed
theissueofwhethertherequirementofimpartialityappliestoanarbitrationproceeding.Thepluralityopinionwritten
byJusticeBlacklaiddowntherulethatthearbitratorsmustdisclosetotheparties"anydealingsthatmightcreate
animpressionofpossiblebias,"84andthatunderlyingsuchstandardis"thepremisethatanytribunalpermittedby
lawtotrycasesandcontroversiesnotonlymustbeunbiasedbutalsomustavoideventheappearanceofbias."85
In a separate concurring opinion, Justice White joined by Justice Marshall, remarked that "[t]he Court does not
decidetodaythatarbitratorsaretobeheldtothestandardsofjudicialdecorumofArticleIIIjudges,orindeedofany
judges."86 He opined that arbitrators should not automatically be disqualified from an arbitration proceeding
becauseofabusinessrelationshipwherebothpartiesareawareoftherelationshipinadvance,orwheretheparties
are unaware of the circumstances but the relationship is trivial. However, in the event that the arbitrator has a
"substantialinterest"inthetransactionathand,suchinformationmustbedisclosed.
Subsequent cases decided by the US Court of Appeals Circuit Courts adopted different approaches, given the
imprecisestandardofevidentpartialityinCommonwealthCoatings.
InMoreliteConstructionCorp.v.NewYorkDistrictCouncilCarpentersBenefitFunds,87theSecondCircuitreversed
thejudgmentofthedistrictcourtandremandedwithinstructionstovacatethearbitratorsaward,holdingthatthe
existence of a fatherson relationship between the arbitrator and the president of appellee union provided strong
evidence of partiality and was unfair to appellant construction contractor. After examining prior decisions in the
Circuit,thecourtconcludedthat
xxxwecannotcountenancethepromulgationofastandardforpartialityasinsurmountableas"proofofactualbias"
astheliteralwordsofSection10mightsuggest.Biasisalwaysdifficult,andindeedoftenimpossible,to"prove."
Unlessanarbitratorpubliclyannounceshispartiality,orisoverheardinamomentofprivateadmission,itisdifficult
to imagine how "proof" would be obtained. Such a standard, we fear, occasionally would require that we enforce
awardsinsituationsthatareclearlyrepugnanttooursenseoffairness,yetdonotyield"proof"ofanything.
Ifthestandardof"appearanceofbias"istoolowfortheinvocationofSection10,and"proofofactualbias"
toohigh,withwhatareweleft?Profoundlyawareofthecompetingforcesthathavealreadybeendiscussed,we
hold that "evident partiality" within the meaning of 9 U.S.C. 10 will be found where a reasonable person
would have to conclude that an arbitrator was partial to one party to the arbitration.x x x88 (Emphasis
supplied)
In Apperson v. Fleet Carrier Corporation,89 the Sixth Circuit agreed with the Morelite courts analysis, and
accordinglyheldthattoinvalidateanarbitrationawardonthegroundsofbias,thechallengingpartymustshowthat
"areasonablepersonwouldhavetoconcludethatanarbitratorwaspartial"totheotherpartytothearbitration.
This"myriadofjudicialinterpretationsandapproachestoevidentpartiality"resultedinalackofauniformstandard,
leaving the courts "to examine evident partiality on a casebycase basis."90 The case at bar does not present a
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nondisclosureissuebutconductallegedlyshowinganarbitratorspartialitytooneoftheparties.
EPCIB/BDO, in moving to vacate the Second Partial Award claimed that the Arbitration Tribunal exceeded its
powersindecidingtheissueofadvancecostnotcontemplatedintheTOR,andthatChairmanBarkeractedwith
evidentpartialityinmakingsuchaward.TheRTCheldthatBDOfailedtosubstantiatetheseallegations.Onappeal,
the CA likewise found that the Arbitration Tribunal did not go beyond the submission of the parties because the
phrasing of the scope of the agreed issues in the TOR ("[t]he issues to be determined by the Tribunal are those
issuesarisingfromthesaidRequestforArbitration,AnswerandReplyandsuchotherissuesasmayproperlyarise
during the arbitration")is broad enough to accommodate a finding on the liability and the repercussions of BDOs
failure to share in the advances on costs. Section 10 of the SPA also gave the Arbitration Tribunal authority to
decidehowthecostsshouldbeapportionedbetweenthem.
However,theCAfoundfactualsupportinBDOschargeofpartiality,thus:
On the issue on evident partiality, the rationale in the American case of Commonwealth Coatings Corp. v.
ContinentalCas.Co.appears to be very prudent. In Commonwealth,the United States Supreme Court reasoned
that courts "shouldbe even more scrupulous to safeguard the impartiality of arbitrators than judges, since the
formerhavecompletelyfreereintodecidethelawaswellasthefacts,andarenotsubjecttoappellatereview"in
general.Thistakenintoaccount,theCourtappliesthestandarddemandedoftheconductofmagistratesby
analogy. After all, the ICC Rules require that an arbitral tribunal should act fairly and impartially. Hence, an
arbitrators conduct should be beyond reproach and suspicion. His acts should be free from the
appearancesofimpropriety.
AnexaminationofthecircumstancesclaimedtobeillustrativeofChairmanBarkerspartialityisindicativeofbias.
Although RCBC had repeatedly asked for reimbursement and the withdrawal of BDOs counterclaims prior to
ChairmanBarkersDecember18,2007letter,itisbafflingwhyitisonlyinthesaidletterthatRCBCsprayerwas
given a complexion of being an application for a partial award. To the Court, the said letter signaled a
preconceivedcourseofactionthatthereliefprayedforbyRCBCwillbegranted.
That there was an action to be taken beforehand is confirmed by Chairman Barkers furnishing the parties with a
copy of the Secomb article. This article ultimately favored RCBC by advancing its cause. Chairman Barker
makesitappearthatheintendedgoodtobedoneindoingsobutdueprocessdictatesthecoldneutralityof
impartiality. This means that "it is not enough[that] cases [be decided] without bias and favoritism. Nor is it
sufficient thatprepossessions [be rid of]. [A]ctuations should moreover inspire that belief." These put into the
equation,thefurnishingoftheSecombarticlefurthermarredthetrustreposedinChairmanBarker.Thesuspicionof
hispartialityonthesubjectmatterdeepened.Specifically,hisactestablishedthathehadpreformedopinions.
ChairmanBarkersprovidingofcopiesofthesaidtextiseasilyinterpretablethathehadprejudgedthematterbefore
him. In any case, the Secomb article tackled bases upon which the Second Partial Award was founded. The
subject article reflected in advance the disposition of the ICC arbitral tribunal. The award can definitely be
viewedasanaffirmationthatthebasesintheSecombarticlewereadoptedearlieron.TotheCourt,actuationsof
arbitrators, like the language of judges, "must be guarded and measured lest the best of intentions be
misconstrued."
xxxx91(Emphasissupplied)
We affirm the foregoing findings and conclusion of the appellate court save for its reference to the obiter in
CommonwealthCoatingsthatarbitratorsareheldtothesamestandardofconductimposedonjudges.Instead,the
Courtadoptsthereasonableimpressionofpartialitystandard,whichrequiresashowingthatareasonableperson
would have to conclude that an arbitrator was partial to the other party to the arbitration. Such interest or bias,
moreover,"mustbedirect,definiteandcapableofdemonstrationratherthanremote,uncertain,orspeculative."92
When a claim of arbitrators evident partiality is made, "the court must ascertain from such record as is available
whetherthearbitratorsconductwassobiasedandprejudicedastodestroyfundamentalfairness."93
Applyingtheforegoingstandard,weagreewiththeCAinfindingthatChairmanBarkersactoffurnishingtheparties
withcopiesofMatthewSecombsarticle,consideringtheattendantcircumstances,isindicativeofpartialitysuchthat
areasonablemanwouldhavetoconcludethathewasfavoringtheClaimant,RCBC.Evenbeforetheissuanceof
theSecondPartialAwardforthereimbursementofadvancecostspaidbyRCBC,ChairmanBarkerexhibitedstrong
inclinationtograntsuchrelieftoRCBC,notwithstandinghiscategoricalrulingthattheArbitrationTribunal"hasno
powerundertheICCRulestoordertheRespondentstopaytheadvanceoncostssoughtbytheICCortogivethe
Claimantany relief against the Respondents refusal to pay."94 That Chairman Barker was predisposed to grant
relieftoRCBCwasshownbyhisactofinterpretingRCBCsletter,whichmerelyreiterateditspleatodeclarethe
Respondents in default and consider all counterclaims withdrawn as what the ICC Rules provide as an
application to the Arbitration Tribunal to issue a partial award in respect of BDOs failure to share in the advance
costs. It must be noted that RCBC in said letter did not contemplate the issuance of a partial order, despite
Chairman Barkers previous letter which mentioned the possibility of granting relief upon the parties making
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submissions to the Arbitration Tribunal. Expectedly, in compliance with Chairman Barkers December 18, 2007
letter,RCBCformallyappliedfortheissuanceofapartialawardorderingBDOtopayitsshareintheadvancecosts.
Mr. Secombs article, "Awards and Orders Dealing With the Advance on Costs in ICC Arbitration: Theoretical
Questions and Practical Problems"95 specifically dealt with the situation when one of the parties to international
commercialarbitrationrefusestopayitsshareontheadvanceoncosts.Afterabriefdiscussionoftheprovisionsof
ICCRulesdealingwithadvanceoncosts,whichdidnotprovideforissuanceofapartialawardtocompelpayment
bythedefaultingparty,theauthorstated:
4.Aswecansee,theRuleshavecertainmechanismstodealwithdefaultingparties.Occasionally,however,parties
havesoughttouseothermethodstotackletheproblemofapartyrefusingtopayitspartoftheadvanceoncosts.
Thesehaveincludedseekinganorderorawardfromthearbitraltribunalcondemningthedefaultingpartytopayits
shareoftheadvanceoncosts. Suchapplicationsarethesubjectofthisarticle.96
1wphi1

Byfurnishingthepartieswithacopyofthisarticle,ChairmanBarkerpracticallyarmedRCBCwithsupportinglegal
arguments under the "contractual approach" discussed by Secomb. True enough, RCBC in its Application for
ReimbursementofAdvanceCostsPaidutilizedsaidapproachasitsingularlyfocusedonArticle30(3)97oftheICC
RulesandfiercelyarguedthatBDOwascontractuallyboundtoshareintheadvancecostsfixedbytheICC.98But
whether under the "contractual approach" or "provisional approach" (an application must be treated as an interim
measureofprotectionunderArticle23[1]ratherthanenforcementofacontractualobligation),bothtreatedinthe
Secomb article, RCBC succeeded in availing of a remedy which was not expressly allowed by the Rules but in
practice has been resorted to by parties in international commercial arbitration proceedings. It may also be
mentionedthattheauthor,MatthewSecomb,isamemberoftheICCSecretariatandthe"Counselinchargeofthe
file", as in fact he signed some early communications on behalf of the ICC Secretariat pertaining to the advance
costs fixed by the ICC.99 This bolstered the impression that Chairman Barker was predisposed to grant relief to
RCBCbyissuingapartialaward.
Indeed, fairness dictates that Chairman Barker refrainfrom suggesting to or directing RCBC towards a course of
actiontoadvancethelatterscause,byprovidingitwithlegalargumentscontainedinanarticlewrittenbyalawyer
who serves at the ICC Secretariat and was involved or had participation insofar as the actions or
recommendationsoftheICCinthecase.Thoughdonepurportedlytoassistbothparties,ChairmanBarkersact
clearly violated Article 15 of the ICC Rules declaring that "[i]n all cases, the Arbitral Tribunal shall act fairly and
impartially and ensure that each party has a reasonable opportunity to present its case." Having prejudged the
matterindispute,ChairmanBarkerhadlosthisobjectivityintheissuanceoftheSecondPartialAward.
In fine, we hold that the CA did not err in concluding that the article ultimately favored RCBC as it reflected in
advancethedispositionoftheArbitralTribunal,aswellas"signalledapreconceivedcourseofactionthattherelief
prayedforbyRCBCwillbegranted."ThisconclusionisfurtherconfirmedbytheArbitralTribunalspronouncements
initsSecondPartialAwardwhichnotonlyadoptedthe"contractualapproach"butevencitedSecombsarticlealong
withotherreferences,thus:
6.1ItappearstotheTribunalthattheissueposedbythisapplicationisessentiallyacontractualone.xxx
xxxx
6.5MatthewSecomb,consideredthesepointsinthearticlein14ICCBulletinNo.1(2003)whichwassenttothe
parties.AtPara.19,thelearnedauthorquotedfromanICCTribunal(CaseNo.11330)asfollows:
"The Arbitral Tribunal concludes that the partiesin arbitrations conducted under the ICC Rules have a mutually
bindingobligationtopaytheadvanceoncostsasdeterminedbytheICCCourt,basedonArticle303ICCRules
whichbyreferenceformspartofthepartiesagreementtoarbitrationundersuchRules."100
TheCourt,however,mustclarifythatthemeritsofthepartiesargumentsastotheproprietyoftheissuanceofthe
Second Partial Award are not in issue here. Courts are generally without power to amend or overrule merely
becauseofdisagreementwithmattersoflaworfactsdeterminedbythearbitrators.Theywillnotreviewthefindings
oflawandfactcontainedinanaward,andwillnotundertaketosubstitutetheirjudgmentforthatofthearbitrators.A
contraryrulewouldmakeanarbitrationawardthecommencement,nottheend,oflitigation.101Itisthefindingof
evident partiality which constitutes legal ground for vacating the Second Partial Award and not the Arbitration
TribunalsapplicationoftheICCRulesadoptingthe"contractualapproach"tackledinSecombsarticle.
Alternative dispute resolution methods or ADRs like arbitration, mediation, negotiation and conciliation are
encouragedbythisCourt.Byenablingpartiestoresolvetheirdisputesamicably,theyprovidesolutionsthatareless
timeconsuming, less tedious, less confrontational, and more productive of goodwill and lasting relationship.102
Institutionalization of ADR was envisioned as "an important means to achieve speedy and impartial justice and
declog court dockets."103 The most important feature of arbitration, and indeed, the key to its success, is the
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publics confidence and trust in the integrity of the process.104 For this reason, the law authorizes vacating an
arbitralawardwhenthereisevidentpartialityinthearbitrators.
InjunctionAgainstExecutionOfArbitralAward
Beforeaninjunctivewritcanbeissued,itisessentialthatthefollowingrequisitesarepresent:(1)theremustbea
rightinesseortheexistenceofarighttobeprotectedand(2)theactagainstwhichinjunctiontobedirectedisa
violationofsuchright.Theonusprobandiis on movant to show that there exists a right to be protected, which is
directlythreatenedbytheactsoughttobeenjoined.Further,theremustbeashowingthattheinvasionoftheright
is material and substantial and that there is an urgent and paramount necessity for the writ to prevent a serious
damage.105
Rule19.22oftheSpecialADRRulesstates:
Rule19.22.Effectofappeal.Theappealshallnotstaytheaward,judgment,finalorderorresolutionsoughttobe
reviewedunlesstheCourtofAppealsdirectsotherwiseuponsuchtermsasitmaydeemjust.
WefindnoreversibleerrororgraveabuseofdiscretionintheCAsdenialoftheapplicationforstayorderorTRO
uponitsfindingthatBDOfailedtoestablishtheexistenceofaclearlegalrighttoenjoinexecutionoftheFinalAward
confirmedbytheMakatiCityRTC,Branch148,pendingresolutionofitsappeal.Itwouldbeprematuretoaddresson
themeritstheissuesraisedbyBDOinthepresentpetitionconsideringthattheCAstillhastodecideonthevalidity
ofsaidcourt'sordersconfirmingtheFinalAward.Butmoreimportant,sinceBOOhadalreadypaidP637,941,185.55
m manager's check, albeit under protest, and which payment was accepted by RCBC as full and complete
satisfactionofthewritofexecution,thereisnomoreacttobeenjoined.
Settled is the rule that injunctive reliefs are preservative remedies for the protection of substantive rights and
interests. Injunction is not a cause of action in itself, but merely a provisional remedy, an adjunct to a main suit.
Whentheactsoughttobeenjoinedhasbecomefaitaccompli,theprayerforprovisionalremedyshouldbedenied.
106

Thus,theCourtruledinGov.Looyuko107thatwhentheeventssoughttobepreventedbyinjunctionorprohibition
havealreadyhappened,nothingmorecouldbeenjoinedorprohibited.Indeed,itisauniversalprincipleoflawthat
aninjunctionwillnotissuetorestraintheperformanceofanactalreadydone.Thisissoforthesimplereasonthat
nothingmorecanbedoneinreferencethereto.Awritofinjunctionbecomesmootandacademicaftertheactsought
tobeenjoinedhasalreadybeenconsummated.
WHEREFORE,premisesconsidered,thepetitionmG.R.No.199238isDENIED.TheResolutiondatedSeptember
13,2011oftheCourtofAppealsinCAG.R.SPNo.120888isAFFIRMED.
ThepetitioninG.R.No.196171isDENIED.TheDecisiondatedDecember23,2010oftheCourtofAppealsinCA
G.R.SPNo.113525isherebyAFFIRMED.
SOORDERED.
MARTINS.VILLARAMA,JR.
AssociateJustice
WECONCUR:
MARIALOURDESP.A.SERENO
ChiefJustice
Chairperson
TERESITAJ.LEONARDODECASTRO
AssociateJustice

LUCASP.BERSAMIN
AssociateJustice

BIENVENIDOL.REYES
AssociateJustice
CERTIFICATION
PursuanttoSection13,ArticleVIIIoftheConstitution,IcertifythattheconclusionsintheaboveDecisionhadbeen
reachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourt'sDivision.
MARIALOURDESP.A.SERENO
ChiefJustice
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Footnotes
1Rollo(G.R.No.196171),Vol.I,pp.4865.PennedbyAssociateJusticeFloritoS.MacalinowithAssociate

JusticesJuanQ.Enriquez,Jr.andRamonM.Bato,Jr.concurring.
2Id.at974988.PennedbyJudgeOscarB.Pimentel.
3Rollo(G.R.No.199238),Vol.I,pp.6668.PennedbyAssociateJusticeEstelaM.PerlasBernabe(nowa

MemberofthisCourt)withAssociateJusticesSesinandoE.VillonandElihuA.Ybaezconcurring.
4Rollo(G.R.No.199238),Vol.II,pp.12031206.
5Rollo(G.R.No.196171),Vol.I,pp.71106.
6Id.at174175.TheListedIndividualShareholdersatthetimeoftheclaimwere:PCIBank,RogelioS.Chua,

FerdinandMartinG.Romualdez,FedericoC.Pascual,LeopoldoS.Veroy,WilfridoV.Vergara,EdilbertoV.
Javier,AnthonyF.Conway,ReneJ.Buenaventura,PatrickD.Go,GenevieveW.J.Go,OscarP.LopezDee,
RomuladU.DyTang,GloriaL.TanClimaco,WalterC.Wessmer,AntonioN.Cotoco,andvariousnumbered
EPCIBTrustAccounts.
7Id.at115116.
8Id.at89.
9Id.at118134.
10Id.at248267.
11Id.at284305.
12Id.at163167.
13Id.at170171.
14CArollo(CAG.R.SPNo.113525),Vol.I,pp.258259.
15Id.at260261.
16Rollo(G.R.No.196171),Vol.I,pp.404405.
17Id.at411412.
18Id.at414417.
19Id.at423424,433434.
20Id.at429434.
21Id.at436439.
22CArollo(CAG.R.SPNo.113525),Vol.I,p.276.
23Id.at282411.
24Id.at409410.
25Rollo(G.R.No.196171),Vol.I,pp.563566.
26Id.at572573.
27Id.at577578.

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28Id.at590.
29Id.at586.
30CArollo(CAG.R.SPNo.113525),Vol.I,p.452.
31Id.,Vol.III,p.1610.
32G.R.No.182248,December18,2008,574SCRA858.
33Rollo(G.R.No.196171),Vol.I,pp.606612.
34Id.at614624.
35Id.at626.
36Id.at641651.
37Id.at661664.
38Id.at665.
39Id.at672687.
40 Id. at 686. Justice Santiago M. Kapunan signed the Second Partial Award with notation "subject to my

previousopinion."
41Id.at700723.
42Id.at692698.
43Id.at725742.
44Id.at744760.
45Id.at974988.
46Id.at10971102.
47Id.at11041171.
48 A.M. No. 071108SC which took effect on October 30, 2009 following its publication in three (3)

newspapersofgeneralcirculation.
49Rollo(G.R.No.199238),Vol.I,pp.70161.
50Id.at160.
51Id.at217390.
52Rollo(G.R.No.199238),Vol.II,pp.932948.
53Id.at949974.
54CArollo(CAG.R.SPNo.117451),Vol.IV,p.1985,1988.
55Id.at19851996.
56Rollo(G.R.No.199238),Vol.II,pp.10751083.
57CArollo(CAG.R.SPNo.117451),Vol.V,pp.24552476.PennedbyAssociateJusticeMagdangalM.De

LeonandconcurredinbyAssociateJusticesMarioV.LopezandSocorroB.Inting.
58Id.(nopagination).
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59Rollo(G.R.No.196171),Vol.I,pp.6465.
60Id.at6869.
61Rollo(G.R.No.199238),Vol.II,pp.908931.
62Id.at931.
63Id.at11741191.
64Id.at1191.
65Id.at11941201.
66Id.at12031206.
67Id.at15071540.
68Id.at1586.
69Id.at16021618.
70Id.at16411649.
71Rollo(G.R.No.196171),Vol.I,p.25.
72Rollo(G.R.No.199238),Vol.I,pp.2930.
73CArollo(CAG.R.SPNo.113525),Vol.I,pp.246247.
74 AN ACT TO AUTHORIZE THE MAKING OF ARBITRATION AND SUBMISSION AGREEMENTS, TO

PROVIDEFORTHEAPPOINTMENTOFARBITRATORSANDTHEPROCEDUREFORARBITRATIONIN
CIVILCONTROVERSIES,ANDFOROTHERPURPOSES,otherwiseknownas"TheArbitrationLaw."
75"AlternativeDisputeResolutionActof2004,"approvedonApril2,2004.
76Sec.32ofRA9285providesthat"[d]omesticarbitrationshallcontinuetobegovernedbyRepublicActNo.

876,xxx."
77G.R.No.121171,December29,1998,300SCRA579.
78Id.at601602.
79Windsor,KathrynA.(2012)"DefiningArbitratorEvidentPartiality:TheCatch22ofCommercialLitigation

Disputes," Seton Hall Circuit Review: Vol.

http://erepository.law.shu.edu/circuit_review/vol6/iss1/7.

6:

Iss.

1,

Article

7.

Available

at

80PrimeProperties,Inc.v.LeonardJamesLeahy,234Ore.App.439,445.ArguedandsubmittedonAugust

25,2009.
81Id.
82NewDevelopmentsontheStandardforFinding"EvidentPartiality"byHowardS.SuskinandSuzanneJ.

Prysak, Jenner & Block LLP, Bloomberg Law Reports, Vol. 2, No. 7, August 2006. Accessed at
http://www.jenner.com/library/publications/7677.
83393U.S.145.DecidedonNovember18,1968.
84Id.at149.
85Id.at150.
86Id.
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87748F.2d79.DecidedonNovember5,1984.
88Id.at84.
89879F.2d1344,1358.DecidedonJuly13,1989.
90Windsor,KathrynA.,supranote79at216.
91Rollo(G.R.No.196171),Vol.I,pp.6162.
92Tamariv.BacheHalseyStuart,Inc.,619F.2d1196,1200(7thCir.1980).
93CatzAmericanCo.,Inc.v.PearlGrangeFruitExchangeInc.,292F.Supp.549,551552(S.D.N.Y.1968).
94Rollo(G.R.No.196171),Vol.I,p.442.Italicssupplied.
95Id.at628639.PublishedintheInternationalCourtofArbitrationBulletin,Vol.14/No.1Spring2003.
96Id.at629.
97 (3) The advance on costs fixed by the Court shall be payable in equal shares by the Claimant and the

Respondent. Any provisional advance paid on the basis of Article 30(1) will be considered as a partial
paymentthereof.However,anypartyshallbefreetopaythewholeoftheadvanceoncostsinrespectofthe
principal claim or the counterclaim should the other party fail to pay its share. When the Court has set
separate advances on costs in accordance with Article 30(2), each of the parties shall pay the advance on
costscorrespondingtoitsclaims.
98Rollo(G.R.No.196171),Vol.I,pp.632633.
99Id.at136137,145146.
10Id.at683684.
101NationalPowerCorporationv.AlonzoLegasto,G.R.No.148318,November22,2004,443SCRA342,

359.
102InsularSavingsBankv.FarEastBankandTrustCompany,G.R.No.141818,June22,2006,492SCRA

145,158,citingLM Power Engineering Corp. v. Capitol Industrial Construction Groups, Inc., 447 Phil. 705,
707(2003).
103Sec.2,R.A.9285.
104Windsor,supranote79at192.
105EuropeanResourcesandTechnologies,Inc.v.IngenieuburoBirkhahn+Nolte,Ingeniurgesellschaftmbh,

G.R.No.159586,July26,2004,435SCRA246,259,citingPhilippineSinterCorporationv.CagayanElectric
Power and Light Co., Inc., G.R. No. 127371, April 25, 2002, 381 SCRA 582, 591 and Gustilo v. Real, Sr.,
A.M.No.MTJ001250,February28,2001,353SCRA1,9.
106 Bernardez v. Commission on Elections, G.R No. 190382, March 9, 2010, 614 SCRA 810, 820, citing

Cane/andSugarCorporationv.Alan.G.R.No.142896,September12,2007,533SCRA28,37.
107 G.R. No". 147923, 147962, 154035, October 26, 2007, 537 SCRA 445, 479, as cited in Bernardez

vCommissiononElections,id.
TheLawphilProjectArellanoLawFoundation

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