Topic of the Case : Interim Measures in Arbitration

Title of the Case : Transfield Philippines Inc. vs. Luzon Hydro Corporation
(LHC)
Citation of the Case: G.R 146717

Facts:

The controversy arises when Transfield Philippines (Petitioner) failed to comply

to its contracted obligation from Luzon Hydro Corporation (Respondent). Petitioner and
respondent entered into a contract from which Transfield Philippines agreed to
construct, on a turnkey basis, a 70-Megawatt hydro-electric power station. Transfield
was given the sole responsibility for the design, construction, commissioning, testing
and completion of the project. Under the agreements of the turnkey contract it provides
the period for which the project is to be completed and allows for the petitioner to claim
extensions of time (EOT) and furthermore in case of dispute, the parties are bound to
settle their differences through mediation, conciliation. In order to guarantee the
performance of the petitioner, two standby-letters of credit were required to be opened
as a Securities. During the construction of the plant. Transfield requested for extension
of time due to typhoon, however respondent didnt give due course to the requested
EOT but it was referred to the arbitration committee. Pending the resolution in the
Arbitration Committee as to whether or not petitioner is entitled to extension of time,
LHC demanded on the standby letters of credit because petitioner failed to comply its
obligation. However, such demand was object by the Petitioner on the ground that there
is still pending arbitration on their request for extension of time, hence petitioner went to
the court to sought for injunctive relief.

Issue:

Whether or not the pendency of arbitral proceedings forecloses resort to

provisional reliefs.

Ruling:

As a fundamental point, the pendency of arbitral proceedings does not foreclose

resort to the courts for provisional reliefs. The rules of the ICC, which governs the
parties arbitral dispute, allows the application of a party to judicial authority for interim or
conservatory measures. Likewise, Section 14 of RA 879 recognizes the rights of any
party to petition to the court to take measures to safeguard and/or conserve any matter
which is the subject of the dispute in arbitration. In addition, RA 9285 otherwise known
as the Alternative Dispute Resolution Act of 2004, allows the filing of provisional or
interim measures with the regular courts whenever the arbitral tribunal has no power to
act or to act effectively.