LUZON DEVELOPMENT BANK V.

ASSOCIATION OF LDB EMPLOYEES

G.R. 120319 – October 6, 1995
J. Romero

Topic: General Concepts

Doctrine: The CA shall exercise exclusive appellate jurisdiction over final judgments and decisions made by
quasi-judicial instrumentalities.
Petitioners: Luzon Development Bank (LDB)
Respondents: Association of LDB Employees (ALDBE) and Atty. Ester Garcia in her capacity as Voluntary
Arbitrator

Case Summary: An arbitration case between LDB and ALDBE was decided on by the Voluntary Arbitrator
Atty. Ester Garcia. Said decision was in favor of the ALDBE, and so the bank filed a petition for certiorari
directly to the SC to set aside said decision. The SC ruled that voluntary arbitrators or a panel of such
arbitrators are likened to a “quasi-judicial instrumentality.” On decisions and awards by quasi-judicial
instrumentalities, the CA has concurrent appellate jurisdiction with the SC, so because of this, the SC referred
the case back to the CA for a proper disposition of the case.

Facts:
 There was an arbitration case between LDB and ALDBE on whether or not the company violated a
CBA provision and the MOA dated April 1994 regarding promotions
o At a conference, the parties agreed on the submission of their respective position papers
o Atty. Ester Garcia in her capacity as Voluntary Arbitrator (VA) received ALDBE’s paper on
January 18, 1995
 LDB failed to submit a paper despite reminders from the VA to do so
o May 24, 1995: Without LDB’s position paper, the VA rendered a decision:
 “WHEREFORE, finding is hereby made that the bank has NOT adhered to the CBA
provision nor the MOA on promotion…”
o Because of the decision from the VA, LDB filed a petition for certiorari and prohibition seeking
to set aside the decision of the VA
 In labor law context:
o Arbitration is the reference of a labor dispute to an impartial third person for determination on
the basis of evidence and arguments presented by such parties
 Arbitration is either compulsory or voluntary
o Compulsory arbitration: A system whereby the parties to a dispute are compelled by the
government to forego their right to strike and are compelled to accept the resolution of their
dispute through arbitration by a third party
 A disinterested third party comes up with a decision that is final and binding on the
parties, and such third party is normally appointed by the government
o Voluntary arbitration: A referral of a dispute by the parties, pursuant to a voluntary arbitration
clause in their collective agreement
 An impartial third person makes a decision and said decision is binding and final
 Pursuant to said agreement, the parties have chosen a mutually acceptable arbitrator
who shall hear and decide the case
 The parties mutually agreed to be bound by said arbitrator’s decision
 In the PH context:
o The parties CBA are required to include provisions for a machinery for the resolution of
grievances arising from the interpretation or implementation of the CBA or company personnel
arising from the interpretation or implementation of the CBA or company personnel policies
 For this purpose, the parties to a CBA shall name and designate the VA or a panel of
arbitrators, or include a procedure for their selection, preferably from those accredited
by the National Conciliation and Mediation Board
o Art. 261 of the LC provides for exclusive original jurisdiction of such VA or panel over (1)
interpretation or implementation of the CBA, and (2) interpretation or enforcement of company
personnel policies
 o Art. 252 of the LC authorizes them, but ONLY UPON AGREEMENT OF THE PARTIES, to
exercise jurisdiction over other labor disputes
o Art. 217 of the LC states that the labor arbiter has jurisdiction over the ff. cases:
 Unfair labor practices; termination disputes; if accompanied with a claim for
reinstatement; those cases which involve wages, rates of pay, hours of work, and other
terms and conditions of employment; claims for damages arising from EER relations;
cases arising from a disputes regarding legality of strikes and lockouts; EXCEPT
claims for Employees compensation, SSS, Medicare and maternity benefits, all other
claims arising from EER involving an amount exceeding P5,000 regardless of whether
accompanied with a claim for reinstatement
o Based on the laws stated above, jurisdiction conferred by law on a VA or a panel is quite limited
compared to that of the labor arbiter and the appellate jurisdiction of the NLRC
o The law states that “the award or decision of the VA… shall be final and executory after 10
calendar days from receipt of the copy of the award or decision by the parties”
 On the other hand, “the decision, awards, or orders of the LA are final and executory
unless appealed to the Commission within 10 calendar days from receipt…”
o Hence, while there is an express mode of appeal from decisions of the Labor Arbiter, RA 6715
is silent with respect to appeals from decisions of VA or its panel
 Past practice shows that decision by VA is more often than not elevated to SC on a
petition for certiorari  in effect, equating the VA with the NLRC and CA  this is
illogical and imposes an unnecessary burden upon the SC

Issues + Held:
1. Which Court has jurisdiction for the appellate review of adjudications of quasi-judicial entities –
Supreme Court
 Sec. 9 of BP 129, as amended by RA 1902 states that the COURT OF APPEALS SHALL EXERCISE:
o (B) Exclusive appellate jurisdiction over all final judgments and decisions of RTCs and quasi-
judicial agencies, instrumentalities, boards, the SEC, and the CSC, except those falling within
the exclusive jurisdiction of the SC in accordance with the Constitution, Labor Code, and the
Judiciary Act of 1948
 Assuming arguendo that the VA or the panel may not be strictly considered as a “quasi-judicial agency”,
we can comprehend that is within the concept of a “quasi-judicial instrumentality”
o A quasi-judicial instrumentality is anything used as a means or agency
o Governmental agency or instrumentality are synonymous in the sense that either them is a
means by which a government acts, or by which a certain government act or functions is
performed
o The word “instrumentality” with respect to a state, contemplates an authority to which the state
delegates governmental power for the performance of a state function
o The VA no less performs a state function pursuant to a governmental power delegated to him
under the provisions in the LC, and therefore, he falls within the contemplation of the term
“instrumentality”
 Having said this, the decision or award of the VA or the panel should likewise be appealable to the CA
 In the same vein, under Sec. 22 of RA 876, the Arbitration Law, arbitration is deemed a special
proceeding of which the court specified in the contract or submission, or if none be specified, the RTC
for the province or city in which one of the parties resides or is doing business, or in which the arbitration
is held, shall have jurisdiction
o In effect, this equates the decision of the VA with that of the RTC
o Therefore, in the petition for certiorari from that award or decision of the VA, the CA must be
deemed to have concurrent jurisdiction with the SC
 As a matter of policy, the case shall be remanded to the CA for proper disposition

Ruling: Refer the case to the CA