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ALTERNATIVE DISPUTE RESOLUTION SY 2015-2016

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A contrary ruling would suggest that a party's mere repudiation of the main

contract is sufficient to avoid arbitration. That is exactly the situation that theseparability doctrine, as well as jurisprudence applying it, seeks to avoid.

The doctrine of separability enunciates that an arbitration agreement isindependent of the main contract. The arbitration agreement is to be treated asa separate agreement and the arbitration agreement does not automaticallyterminate when the contract of which it is a part comes to an end.

The separability of the arbitration agreement is especially significant to thedetermination of whether the invalidity of the main contract also nullifies thearbitration clause.

The doctrine denotes that the invalidity of the main contract, also referred to asthe "container" contract, does not affect the validity of the arbitration agreement.Irrespective of the fact that the main contract is invalid, the arbitrationclause/agreement still remains valid and enforceable.


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Civil Case No. 92-145 is pending pursuant to Section 13 of the PCHC Rules to

sustain its action. Clearly, it erred in the procedure it chose for judicial review ofthe arbitral award.

Jurisdiction over the subject matter is conferred by law and not by the consent oracquiescence of any or all of the parties or by erroneous belief of the court that itexists.

PCHC Rules came about only as a result of an agreement between andamong member banks of PCHC and not by law, it cannot confer jurisdiction tothe RTC. Thus, the portion of the PCHC Rules granting jurisdiction to the RTC toreview arbitral awards, only on questions of law, cannot be given effect.

In the case at bar, petitioner filed a petition for review with the RTCwhen the same should have been filed with the Court of Appeals under Rule 43of the Rules of Court. Thus, the RTC of Makati did not err in dismissing thepetition for review for lack of jurisdiction but not on the ground that petitionershould have filed a separate case from Civil Case No. 92-145 but on thenecessity of filing the correct petition in the proper court.It is immaterial whether petitioner filed the petition for review as an appeal of the

arbitral award or as a separate case in the RTC. RTC will only have jurisdictionover an arbitral award in cases of motions to vacate the same.

Alternative dispute resolution methods or ADRs – like arbitration,mediation, negotiation and conciliation – are encouraged by the Supreme Court.By enabling parties to resolve their disputes amicably, they provide solutions thatare less time-consuming, less tedious, less confrontational, and more productiveof goodwill and lasting relationships. It must be borne in mind that arbitrationproceedings are mainly governed by the Arbitration Law and suppletorily by the

Rules of Court.


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or ADRs – like arbitration, mediation, negotiation and conciliation – are

encouraged by SC.By enabling the parties to resolve their disputes amicably, they provide solutionsthat are less time-consuming, less tedious, less confrontational, and moreproductive of goodwill and lasting relationships.

NOTES:NOTES:NOTES:NOTES:

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The proper procedure to enable an arbitration panel to resolve theparties’ dispute pursuant to their Contract is for the trial court to stay theproceedings. After the arbitration proceeding has been pursued andcompleted, then the trial court may confirm the award made by thearbitration panel

ARBITRATION LAWARBITRATION LAWARBITRATION LAWARBITRATION LAW

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The Arbitration Law (RA 876) was approved on June 19, 1953 and wasadopted to supplement the NCC’s provisions on arbitration.

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Prior to its approval, SC has countenanced the settlement of disputesthrough arbitration.

- Its potentials as one of the alternative dispute resolution methods thatare now rightfully vaunted as ‘the wave of the future’ in internationalrelations

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To brush aside such agreement providing for arbitration in case of

disputes between the parties would be a step backward.

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