UP v Walfrido Delos Angeles

8/3/2019 UP v Walfrido Delos Angeles

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Korea Technologies v LermaFacts:

Petitioner Korea (KOGIES) is engagedin the supply and installation of LPGcylinder manufacturing plants

Respondent, PGSMC is a domesticcorp

Both executed a contract whereKOGIES would set up a manufacturingplant while PGSMC would pay about$1,224,000 for machineries and$306,000 for installation

PGSMC also entered into a leasecontract with Worth

The machineries were delivered byKOGIES

However initial operations could notbe conducted as PGSMC encounteredfinancial problems but was able to

pay for the machines PGSMC issued to checks to cover for

the installation but both checksbounced bec payment was stopped.

KOGIES sent a demand letterthreatening criminal action

PGSMC complained that KOGIESdelivered a different brand from whatwas agreed; the checks were actuallyfunded but payments were stoppedbecause of this reason.

PGSMC informed KOGIES that it wasterminating the contract becauseKOGIES altered the quantity andlowered the quality of the equipment;It would dismantle and transfer themachineries

PGSMC then filed an estafa caseagainst KOGIES

KOGIES wrote PGSMC that it could notunilaterally rescind the contract nordismantle the facilities on imaginedviolations of KOGIES. Insisted on

settling dispute via arbitration asagreed upon in the arbitration clauseof the contract

PGSMC wrote back and stillthreatened to dismantle

This prompted KOGIES to institute anApplication for arbitration on theKorean Commercial Arbitration Board(KCAB)

KOGIES filed a complaint for specificperformance in RTC Muntinlupa. Italleged that PGSMC had conflictingreasons for the stopped payment andPGSMC cannot simply rescind thecontract.

PGSMC averred that the arbitration

clause was null and void because itousts the local courts of jurisdictionover the controversy

RTC: Ruled in favor of PGSMC; There is noreason to restrain PGSMC from dismantlingthe machineries

PGSMC filed a Motion for Inspection todetermine the alterations of quantityand lowering of quality

RTC: Ruled in favor of PGSMC granted the

motion for inspection and denied KOGIESMR

While waiting for the resolution of theMR pn the granting of motion ofinspection, KOGIES went to CA

RTC: Ruled on the issue and decided againstKOGIES; directed sheriff to conductinspection

Kogies informed CA about the RTC

order and claimed that the sheriffdidnt have the technical skills toascertain the facts required

The sheriff submitted his reportedand found that the machineries werenot fully installed

CA; AFFIRMED RTC and declared thearbitration clause to be against publicpolicy; the machineries were already fullypaid

ISSUE 1 Procedural2 WON the arbitration clause was valid

SC: 1 I will skip on the procedural issues

2. Article 15 of the contract on arbitration isnot null and void.


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Lex loci contractus the contract wasperfected here in the Phils therefore,our laws govern.

The clause was mutually andvoluntarily agreed upon; it is notcontrary to law, or against moral

In Gonzales vs Climax it was held

that: submission to arbitration is acontract and that a clause providingthat all matters in dispute shall bereferred to arbitration is a contract.

ARBITRATION CLAUSE IS NOTONTRARY TO PUBLIC POLICY theclause provides that arbitration bedone in Korea and that the arbitralaward is binding

RA 9285 incorporated the UNCITRALModel Law to which we are asignatory. For domestic arbitration,

we have particular agencies toarbitrate disputes arising fromcontractual relations. In case of aforeign arbitral body is chosen, weare committed to the Model Law

Among the pertinent features of RA9285 applying and incorporating theUNCITRAL Law are:

1. RTC must refer to arbitration inproper cases

2. Foreign arbitral awards mustbe confirmed by RTC they are

binding but not immediatelyenforceable. Sec 35 of UNCITRAL Law stipulates thatthe arbitral award to berecognized by a competentcourt for enforcement; It isclear that foreign arbitralawards when confirmed by theRTC are deemed not as a

judgment of a foreign court butas a foreign arbitral award, andwhen confirmed, are enforced

as final and executor decisionsof our courts of law.

3. RTC has jurisdiction to reviewforeign arbitral awards to setaside, reject or vacate aforeign award; Foreign awardswhile binding do not oust thecourts of jurisdiction as they

are not absolute and withoutexceptions as they are still

judicially reviewable4. Grounds for judicial review

different in domestic andforeign awards

5. RTC decision of assailedforeign award appealable tothe CA and thereafter SC

PGSMC has remedies to protect itsinterest

Unilateral rescission improper aparty may not unilaterally rescind thecontract for whatever cause withoutfirst resorting to arbitration

In this case, there was ACOMMITMENT TO ARBITRATE

There was grave abuse of discretionin allowing the inspection of things as

the matter should be subject toarbitration; besides, sheriff is nottechnically competent

RTC still has interim jurisdiction toprotect the rights of the parties it isnot incompatible with an arbitrationagreement to prevent fromirreparable loss

Interim measure (UNCITRAL) is anytemporary measure to maintainstatus quo, preserve asset, preserveevidence

Pendency of arbitral proceedingsdoes not foreclose resort to courts forprovisional measures

HELD: PARTLY GRANTEDParties are ordered to submit themselves toarbitrationPGSMC is allowed to dismantle

UP v Walfrido Delos AngelesF:

The land in question is a grant ofendowment to UP.

UP an ALUMCO entere into a loggingagreement extenible by 5 yrs to cutan collect timber from the land inconsideration of payment to UP ofroyalties, forest fees


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ALUMCO incurred an unpaid accountof php 219,362.94, several demandswere made by UP

After receiving a notice to rescind thelogging agreement, ALUMCOexecuted an Acknowledgement ofDebt and Proposed manner of

payments which was approved by thePresident of UP, it had a stipulationthat should ALUMCO fail in itsobligation, UP has the right to rescindthe agreement without the necessityof any judicial suit

ALUMCO continued with theoperations but failed to pay again

UP informed ALUMCO that it hadconsidered the agreement ineffectivean file a case against ALUMCO in CFI(QC) for collection or payment

Before the issuance of the preliminaryinjunction, UP took on anotherconcessionaire for the logging ops byadvertising an invitation to bidwhich was eventually awarded to StaClara

ALUMCO filed motions to dischargethe writsof attachment and preliminjunction but were denied by CT

ALUMCO filed another petition toenjoin UP from conducting biding andawarding rights to another company

UP received the order after itconcluded its contract with STa Clara

On motion of ALUMCO and Jose Rico,the CT declared UP in contempt andin the same order prohibited StaClara from exercising its loggingrights

UPs MR DENIED

ALUMCO gave several excuses as towhy it failed on its obligation Itsformer general manager, Cesar Guy

did not turn over management; thelogs turned out to be rotten;

It also contended the UPs unilateralrescission of the contract without a ctorder was invalid

ISSUE: WON UP can treat its contract withALUMCO rescinded and may disregard thesame

SC: Ruled IFO of UP

It was ALUMCO that expresslystipulated in the Acknowledgement ofDebt that UP has the right to rescindthe contract without the necessity of

judicial suit

Such stipulation in connection withArt 1191 of the civil code is valid:THERE IS NOTHING IN THE LAW THATPROHIBIT THE PARTIES FROMENTERING INTO AGREEMENT THATVIOLATION OF THE TERMS OFCONTRACT WOULD CAUSECANCELLATION THEREOF EVENWITHOUT COURT INTERVENTION(Froilan V Pan Oriental Shipping)

The party who deems the contractviolated may consider it rescinded

and act accordingly, without previouscourt action, but it proceeds at itsown risk. FOR IT IS ONLY THE FINAL

JUDGMENT OF THE CORRESPONDNGCOURT THAT WILL CONCLUSIVELYSETTLE WHETHER THE ACTION TAKENWAS OR WAS NOT CORRECT IN LAW.

The contracting party who finds itselfinjured must file a suit; in case ofabuse and error by rescinder, theother party is not barred fromquestioning the act in court

Besides, ALUMCOs excuses for notbeing able to pay is not sufficient.

HELD: Writ of Certiorari granted. LOWERCOURTS ORDER SET ASIDE

Mindanao Portland v McDonoughF:

Mindanao Portland and McDonoughexecuted a contract for theconstruction for a dry Portland

In a separate contract, Turnbull incwas engaged to design and manageconstruction of the plant, superviseconstruction etc

Alterations were made during theprogress of the construction so anextension for termination of projectwas initially agreed


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Respondent completed the project in1962 except the delivery of certainspare parts

Differences later arose. Petitionerclaimed from respondent damagesfor 2M bec of the delay in the projectscompletion.

Mc (Respondent) in turn asked formore than 450,000 for losses to costof extra work

A conference was held bet MindanaoPort (Petitioner) and Turnbull Inc andRespondent on the other but nosatisfactory results were reached

Petitioner sent respondent letters toarbitrate invoking the provision intheir contract regarding arbitration ofdisputes

Instead of answering said invitations,

Respondent with Turnbulls approval,submitted to Petitioner for paymentits final statement of work and askedfor the unpaid balance

Petitioner filed with CFI to compelRespondent to arbitrate ; It averredthat the deletions and additional tothe plans and specifications wereagreed upon during the progress ofthe construction, that disagreementarose bec of the cost of the additionalwork to be done and respondents

deviation from some agreedspecifications

Respondent filed answer and deniedthat there were disagreement. Itsclaim of 403,700 was not disputedand that claims for damages shouldbe resolved by Turnbull pursuant tothe exception in the arbitration clauseof the construction contract

Lower Ct: found that the Dispute betweenthe parties should be submitted toarbitration pursuant to par 39 of saidcontract

Respondent appealed to SC

ISSUE: WON the parties are duty bound tosubmit to arbitration

In the provision of the contract onArbitration of disagreements thereare questions to be determined bythe engineer, respondents contentthat there is no showing of disagreement

SC: the fact of disagreement has beendetermined by the court below upon thestipulation of facts and documentaryevidence

The duty of the court in this case isnot to resolve the merits of the claimsbut to determine if they shouldproceed to arbitration.

HELD: SUBMIT TO ARBITRATION

La Naval v CA, YaoFacts:

Yao alleged interference and dilatorytactics vs La Naval in theimplementation of the Arbitrationagreement in the contract of lease

Yao owns a commercial bldg. leasedby La Naval

La Naval exercised its option to leasethe same bldg. for another 5 yrs butthey disagreed on the rate

Yao, through notice expressed his

intent to submit to arbitration asprovided for in their contract of lease

Yao appointed Alamarez and LaNaval, Sabile but the confirmation ofthe 3rd arbitrator was held inabeyance bec the same should bedecided by the BOD of La naval

Yao prayed for the summary hearingand for Sabile and Alamarez toproceed with arbitration

LaNaval: the petition is prematurebec Yao hasnt formally requiredarbitrators to agree on the 3rd within10 days of notice (KASALANAN ni

YAO)

Yao filed an amended petition forenforcement of arbitration agreementwith damages praying that La Navalpay interest on unpaid rents


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Respondent CT admitted theamended petition

CT announced that the 2 arbotratorschose Narciso as 3rd arbit and orderedparties to submit their position paper

CA agreed with petitioner that ct maydetermine the issue of whether the litigants

should proceed or not to arbitration, butpetitioner is in estoppel from questioningthe competence of the ct to hear and decidethe summary proceedings having itself filedits own counterclaim

Lack of jurisdiction over the person of thedefendant may be waived expressly orimpliedly. When the defendant voluntarilyappears, he is deemed to have submittedhimself to the juris of the ct. Where thedefendant invoked an affirmative relief, he

is deemd to have submitted himself to the juris of the ct. VOLUNTARY APPEARNCECURES DEFECTS OF SUMMONS

Doctrine of estoppel: to avoid clearinjustice

CA must refrain from taking up claimsof the contending parties

MAGELLAN V ZOSAN:F: Magellan Holdings appointed MagellanCapital as manager of its operations

MH and MC entered into am elpoymentcontract with Zosa (Pres and CEO)

The employment agreement states thethe term of Zosa is co terminous with themanagement agreement or soonerterminated; grounds of termination areprovided

MCs BoD decided not to re electrespondent Zosa as Pres on account ofloss of trust and confidence violation ofresolution issued by MC and of the non-competition clause

However, Zosa was elected as MCs ViceChair for New Ventures

Zosa communicated his resignation asVice Chair on the ground that the positionhas less responsibility. He demanded fortermination benefits

MC did not accept the resignation ofZosa for good reason but instead theagreement is terminated for a cause

Zosa invoked the arbitration clause ofthe agreement

Zosa designate his bro as rep in panelwhile MH designated Atty Fojas and MH

Atty Quiason. Instead of submitting to arbitration,Zosa filed an action for damages vs MCand MH before RTC Cebu

RTC: Denied the Motion to Dismiss of MCand MH

1. The validity of the arbitrationprovisioncan only be determined aftertrial on the merits

2. The amount of damages falls withinthe jurisdiction f RTC

MR Denied It directed petitioners to file

responsive leading

MC and MH filed a petition with CA

CA: Gave due course to petition anddirected RTC to resolve issue on the validityof arbitration clauseDenied Motion for Reconsideration

RTC: in compliance with the CA decision

rendered a decision declaring the arbitrationclause partially void and of no effect in sofar as the composition of the panel ofarbitrators

ISSUE: 1.WON SEC has jurisdiction? NO

SC: 1. SEC doesnt have jurisdiction. Itdoesnt involve lection/appointment ofofficers

When the CA affirmed he trial courtsassumption of jurisdiction over the case

has become law of the case

Oil and Natural Gas vs CA

Oil is a foreign corp (India) dulyorganized in the Phils

Conflict between Oil and Pacific hasroots in a contract entered into by


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both. Pacific to supply oil well cementand Oil to pay

But there was delay in the delivery.Oil had already paid. There was also adispute as to the lcass of the material

Oil informed Pacific that it wasreferring its claim to an arbitrator

(sole arbitrator appointed to memberof the commission, venue ofarbitration shall be in India)

The chosen arbitrator Malhotraresolved for Pacific to pay andreimburse expenditure

TO enable Oil to execute the award, itfiled a petition for the

UP v Walfrido Delos Angeles

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