ADR Jurisprudence SECOND DIVISION TUNA PROCESSING,INC.,Petitioner, -versus- PHILIPPINEKINGFORD, INC.,Respondent. G.R. No. 185582 Present CARPIO, J.,Chairperson,BRION,PEREZ,SERENO, andREES, JJ. Pro!u"#ated$ %e&ruar' (), (*+( D E C I S I O N PERE!, J.$ Can a ,orei#n corporation not "icensed to do &usiness in the Phi"ippines, &ut -hichco""ects ro'a"ties ,ro! entities in the Phi"ippines, sue here to en,orce a ,orei#n ar&itra"a-ard. In this Petition for Review on Certiorari under Rule 45,/+0 petitioner 1unaProcessin#, Inc. 21PI3, a ,orei#n corporation not "icensed to do &usiness in thePhi"ippines, pra's that the Reso"ution/(0 dated (+ Nove!&er (**4 o, the Re#iona" 1ria"Court 2R1C3 o, 5a6ati Cit' &e dec"ared void and the case &e re!anded to the R1C,or,urther proceedin#s.In the assai"ed Reso"ution, the R1C dis!issed petitioners Petition forConfirmation, Recognition, and Enforcement of Foreign Arbitral Award/70 a#ainstrespondent Phi"ippine 8in#,ord, Inc. 28in#,ord3, a corporation du"' or#ani9ed ande:istin# underthe "a-s o,the Phi"ippines,/;0 on the #roundthat petitioner"ac6ed "e#a"capacit' to sue./0 and,ive 2 and the Reso"ution/(0 dated Nove!&er +7, (**> o, theCourt o, Appea"s 2CA3 in CA @.R. SP No. -ith petitioner, -herein it -as a#reed upon that respondent-ou"dpurchase ,ro!petitioner +(,*** !etrictonso, 1hai"and ori#incane&"ac6strap!o"asses at the price o, =SJ+)( per !etric tonG that the de"iver' o, the !o"asses -as to&e !ade inJanuar'A%e&ruar'+))Bandpa'!ent -as to&e !ade &'!eans o, anIrrevoca&"e ?etter o, Credit pa'a&"e at si#ht, to &e opened &' Septe!&er +G thatso!eti!e prior to Septe!&er +, the parties a#reed that instead o,Januar'A%e&ruar' +))B, the de"iver' -ou"d &e !ade in Apri"A5a' +))B and that pa'!ent-ou"d &e &'anIrrevoca&"e ?etter o, Credit pa'a&"e at si#ht, to&e openeduponpetitionerKs advice.Petitioner, as se""er, ,ai"ed to co!p"' -ith its o&"i#ations under thecontract, despite de!ands ,ro! respondent, thus, the "atter pra'ed ,or rescission o, thecontract and pa'!ent o, da!a#es.On Ju"' (;, +))4, petitioner ,i"ed a 5otion to Dis!issASuspend Proceedin#s and 1o Re,erControvers' to Io"untar' Ar&itration,/;0 -herein it ar#ued that the a""e#ed contract&et-eentheparties,dated Ju"'++, +))>,-asneverconsu!!ated&ecauserespondentnever returned the proposed a#ree!ent &earin# its -ritten acceptance or con,or!it' nordid respondent open the Irrevoca&"e ?etter o, Credit at si#ht. Petitioner contended that thecontrovers'&et-eentheparties-as-hetherornot thea""e#edcontract &et-eentheparties -as "e#a""' in e:istence and the R1C -as not the proper ,oru! to venti"ate suchissue. It c"ai!ed that the contract contained an ar&itration c"ause, to -it$ ARBI1RA1ION An' dispute -hich the Bu'er and Se""er !a' not &e a&"e to sett"e &' !utua"a#ree!ent sha"" &e sett"ed &' ar&itration in the Cit' o, Ne- or6 &e,ore theA!erican Ar&itration Association. 1he Ar&itration A-ard sha"" &e ,ina" and&indin# on &oth parties.//>0 andB/B0 o, Repu&"ic Act2R.A.3 No. 4B>, or the Ar&itration ?a-. Respondent ,i"ed an Opposition, -herein it ar#ued that the R1C has Curisdiction over theaction,orrescissiono, contract andcou"dnot &echan#ed&'thesu&Cect ar&itrationc"ause. It citedcases -hereinar&itrationc"auses, suchas the su&Cect c"ause inthecontract, had&eenstruc6do-nas void,or &ein#contrar'topu&"icpo"ic'sinceitprovidedthat thear&itrationa-ardsha"" &e,ina" and&indin#on&othparties, thus,oustin# the courts o, Curisdiction.InitsRep"',petitioner!aintainedthat theciteddecisions-erea"read'inapp"ica&"e,havin#&eenrenderedpriortothee,,ectivit'o,theNe-Civi" Codein+), that reDuire that ar&itrationproceedin#s !ust &econductedon"'inthe Phi"ippines andthear&itrators shou"d&ePhi"ippine residents. It a"so ,ound that the R1C ru"in# e,,ective"' inva"idated not on"' thedisputed ar&itration c"ause, &ut a"" other a#ree!ents -hich provide ,or ,orei#n ar&itration.1he CA did not ,ind i""e#a" or a#ainst pu&"ic po"ic' the ar&itration c"ause so as to render itnu"" and void or ine,,ectua".Not-ithstandin# such ,indin#s, the CA sti"" he"d that the case cannot &e &rou#ht under theAr&itration ?a- ,or the purpose o, suspendin# the proceedin#s &e,ore the R1C, since inits5otiontoDis!issASuspendproceedin#s, petitionera""e#ed, asoneo,the#roundsthereo,, that the su&Cect contract &et-een the parties did not e:ist or it -as inva"idG thatthe said contract &earin# the ar&itration c"ause -as never consu!!ated &' the parties,thus, it -as proper that such issue &e ,irst reso"ved &' the court throu#h an appropriatetria"G that the issue invo"ved a Duestion o, ,act that the R1C shou"d ,irstreso"ve. Ar&itrationisnot proper-henoneo,thepartiesrepudiatedthee:istenceorva"idit' o, the contract. PetitionerKs !otion ,or reconsideration -as denied in a Reso"ution dated Nove!&er +7,(**>. Hence, this petition. Petitioner a""e#es that the CA co!!itted an error o, "a- in ru"in# that ar&itrationcannot proceeddespitethe,act that$ 2a3it hadru"ed, initsassai"eddecision, that thear&itration c"ause is va"id, en,orcea&"e and &indin# on the partiesG 2&3 the caseo, 6on.ale! v. Clima7 (ining )td./++0 is inapp"ica&"e hereG 2c3 parties are #enera""'a""o-ed, under the Ru"es o, Court, to adopt severa" de,enses, a"ternative"' orh'pothetica""', even i, suchde,enses are inconsistent -ith each otherG and 2d3 the co!p"aint ,i"ed &' respondent -iththe tria" court is pre!ature. Petitioner a""e#es that the CA adopted inconsistent positions -hen it ,ound the ar&itrationc"ause &et-een the parties as va"id and en,orcea&"e and 'et in the sa!e &reath decreedthat the ar&itration cannot proceed &ecause petitioner assai"ed the e:istence o, the entirea#ree!ent containin#thear&itration c"ause. Petitioner c"ai!sthe inapp"ica&i"it' o, thecited 6on.ale! case decided in (**< ,i"ed in the CA a#ainst an R1C Order den'in# a 5otion toDis!issASuspend Proceedin#s and to Re,er Controvers' to Io"untar' Ar&itration -as a-ron# re!ed' invo6in# Section () o, R.A. No. 4B>, -hich provides$ Section (). : : : An appea" !a' &e ta6en ,ro! an order !ade in a proceedin# underthis Act, or ,ro! a Cud#!ent entered upon an a-ardthrou#h certiorari proceedin#s, &ut such appea"s sha"" &e "i!ited toDuestion o, "a-. : : :. 1osupportitsar#u!ent, respondentcitesthecaseo, 6on.ale!v.Clima7(ining)td./+70 2@on9a"es case3, -herein -e ru"ed the i!propriet' o, a petition ,or certiorari underRu"e >< as a !ode o, appea" ,ro! an R1C Order directin# the parties to ar&itration.Ee ,ind the cited case not in point. In the 6on.ale! case, C"i!a:-Ari!co ,i"ed &e,ore the R1C o, 5a6ati a petition to co!pe"ar&itration under R.A. No. 4B>, pursuant to the ar&itration c"ause ,ound in the Addendu!Contract it entered-ith@on9a"es. Jud#eOscarPi!ente" o,theR1Co,5a6ati thendirected the parties to ar&itration proceedin#s. @on9a"es ,i"ed a petition ,orcertiorari -ith=s contendin# that Jud#e Pi!ente" acted -ith #rave a&use o, discretion in i!!ediate"'orderin# the parties to proceed -ith ar&itration despite the proper, va"id and ti!e"' raisedar#u!ent in his Ans-er -ith counterc"ai! that the Addendu! Contract containin# thear&itration c"ause -as nu"" and void. C"i!a:-Ari!co assai"ed the !ode o, revie- avai"edo, &' @on9a"es, citin# Section () o, R.A. No. 4B> contendin# that certiorari under Ru"e>< can &e avai"ed o, on"' i, there -as no appea" or an' adeDuate re!ed' in the ordinar'course o, "a-G that R.A. No. 4B> provides ,or an appea" ,ro! such order. Ee then ru"edthat @on9a"esK petition,or certiorari shou"d&edis!issedasit -as,i"edin"ieuo,anappea" &' certiorari -hich-as the prescri&edre!ed'under R.A. No. 4B>andthepetition -as ,i"ed ,ar &e'ond the re#"e!entar' period.Ee ,ound that @on9a"es petition ,or certiorari raises a Duestion o, "a-, &ut not a Duestiono, CurisdictionG that Jud#e Pi!ente" acted in accordance -ith the procedure prescri&ed inR.A. No. 4B> -hen he ordered @on9a"es to proceed -ith ar&itration and appointed a so"ear&itrator a,ter !a6in# the deter!ination that there -as indeed an ar&itration a#ree!ent.It had &een he"d that as "on# as a court acts -ithin its Curisdiction and does not #rave"'a&useitsdiscretioninthee:ercisethereo,, an'supposederrorco!!itted&'it -i""a!ount to nothin# !ore than an error o, Cud#!ent revie-a&"e &' a ti!e"' appea" and notassai"a&"e &' a specia" civi" action o, certiorari./+;0In this case, petitioner raises &e,ore the CA the issue that the respondent Jud#e acted ine:cess o, Curisdiction or -ith #rave a&use o, discretion in re,usin# to dis!iss, or at "eastsuspend, the proceedin#s a quo, despite the ,act that the part's a#ree!ent to ar&itrate hadnot &een co!p"ied -ith. Nota&"', the R1C ,ound the e:istence o, the ar&itration c"ause,since it said in its decision that hard"' disputed is the ,act that the ar&itration c"ause inDuestion contravenes severa" provisions o, the Ar&itration ?a- : : : and to app"' SectionB o, the Ar&itration ?a- to such an a#ree!ent -ou"d resu"t in the disre#ard o, the a,ore-cited sections o, the Ar&itration ?a- and render the! use"ess and !eresurp"usa#es.Ho-ever, not-ithstandin# the ,indin# that an ar&itration a#ree!ent e:isted,the R1C denied petitionerKs !otion and directed petitioner to ,i"e an ans-er.In )a %aval "rug Corporation v. Court of Appeal!,/++)58. Hen$e, 1e no1 .o-( t.#t t.e ,#-+(+tA o0 t.e $ontr#$t $ont#+n+n&t.e #&ree/ent to s')/+t to #r)+tr#t+on (oes not #00e$t t.e #22-+$#)+-+tAo0 t.e #r)+tr#t+on $-#'se +tse-0. A $ontr#rA r'-+n& 1o'-( s'&&est t.#t #2#rtACs/erere2'(+#t+ono0 t.e/#+n$ontr#$t +ss'00+$+ent to#,o+(#r)+tr#t+on. T.#t +s eB#$t-A t.e s+t'#t+on t.#t t.e se2#r#)+-+tA (o$tr+ne,#s 1e-- #s *'r+s2r'(en$e #22-A+n& +t, see%s to #,o+(. Ee add that -hen it-as dec"ared in @.R. No. +>+)0 In so ru"in# that the va"idit' o, the contract containin# the ar&itration a#ree!ent does nota,,ect theapp"ica&i"it'o,thear&itrationc"auseitse",, -ethenapp"iedthedoctrineo,separa&i"it', thus$1he doctrine o, separa&i"it', or severa&i"it' as other -riters ca"" it,enunciates that an ar&itration a#ree!ent is independent o, the !aincontract. 1he ar&itration a#ree!ent is to &e treated as a separate a#ree!entandthear&itrationa#ree!entdoesnotauto!atica""'ter!inate-henthecontract o, -hich it is a part co!es to an end.1he separa&i"it' o, the ar&itration a#ree!ent is especia""' si#ni,icant to thedeter!ination o, -hether the inva"idit' o, the !ain contract a"so nu""i,iesthe ar&itration c"ause. Indeed, the doctrine denotes that the inva"idit' o, the!ain contract, a"so re,erred to as the LcontainerL contract, does not a,,ecttheva"idit'o,thear&itrationa#ree!ent. Irrespectiveo,the,actthatthe!ain contract is inva"id, the ar&itration c"auseAa#ree!ent sti"" re!ains va"idand en,orcea&"e./(B0 Respondent ar#ues that the separa&i"it' doctrine is not app"ica&"e in petitionerKscase, since in the 6on.ale! case, C"i!a:-Ari!co sou#ht to en,orce the ar&itration c"auseo, its contract -ith @on9a"es and the ,or!erKs !ove -as pre!ised on the e:istence o, ava"id contractG -hi"e @on9a"es, -ho resisted the !ove o, C"i!a:-Ari!co ,or ar&itration,did not den' the e:istence o, the contract &ut !ere"' assai"ed the va"idit' thereo, on the#round o, ,raud and oppression. Respondent c"ai!s that in the case &e,ore =s, petitioner-ho is the part' insistent on ar&itration a"so c"ai!ed in their 5otion to Dis!issASuspendProceedin#s that the contract sou#ht &' respondent to &e rescinded did not e:ist or -asnot consu!!atedG thus, there is no roo! ,or the app"ication o, the separa&i"it' doctrine,since there is no container or !ain contract or an ar&itration c"ause to spea6 o,.Ee are not persuaded.App"'in# the 6on.ale! ru"in#, an ar&itration a#ree!ent -hich ,or!s part o, the!aincontract sha"" not &ere#ardedasinva"idor non-e:istent Cust &ecausethe!aincontract is inva"id or did not co!e into e:istence, since the ar&itration a#ree!ent sha"" &etreated as a separate a#ree!ent independent o, the !ain contract. 1o reiterate. a contrar'ru"in# -ou"d su##est that a part'Ks !ere repudiation o, the !ain contract is su,,icient toavoid ar&itration and that is e:act"' the situation that the separa&i"it' doctrine sou#ht toavoid.1hus,-e,indthateventhepart'-hohasrepudiatedthe!aincontractisnotprevented ,ro! en,orcin# its ar&itration c"ause.5oreover, it is -orth' to note that respondent ,i"ed a co!p"aint ,or rescission o,contract and da!a#es -ith the R1C. In so doin#, respondent a""e#ed that a contract e:ists&et-een respondent and petitioner. It is that contract -hich provides ,or an ar&itrationc"ause -hich states that an' dispute -hich the Bu'er and Se""er !a' not &e a&"e to sett"e&'!utua" a#ree!ent sha"" &esett"ed&e,oretheCit'o, Ne-or6 &'theA!ericanAr&itration Association. 1he ar&itration a#ree!ent c"ear"' e:pressed the partiesK intentionthat an' dispute &et-een the! as &u'er and se""er shou"d &e re,erred to ar&itration. It is,or the ar&itrator and not the courts to decide -hether a contract &et-een the parties e:istsor is va"id.Respondent contends that assu!in# that the e:istence o, the contract and the ar&itrationc"ause is conceded, the CAKs decision dec"inin# re,erra" o, the partiesK dispute toar&itration is sti"" correct. It c"ai!s that its co!p"aint in the R1C presents the issue o,-hether under the ,acts a""e#ed, it is entit"ed to rescind the contract -ith da!a#esG andthat issueconstitutesaCudicia" Duestionor onethat reDuiresthee:erciseo, Cudicia",unctionandcannot &ethesu&Cecto,anar&itrationproceedin#. Respondentcitesourru"in# in6on.ale!, -herein -e he"d that a pane" o, ar&itrator is &ere,t o, Curisdiction overtheco!p"aint ,ordec"arationo,nu""it'Aorter!inationo,thesu&Cect contractsonthe#rounds o, ,raud and oppression attendant to the e:ecution o, the addendu! contract andthe other contracts e!anatin# ,ro! it, and that the co!p"aint shou"d have &een ,i"ed -iththe re#u"ar courts as it invo"ved issues -hich are Cudicia" in nature.Such ar#u!ent is !isp"aced and respondent cannot re"' on the 6on.ale! case to supportits ar#u!ent.In 6on.ale!, petitioner @on9a"es ,i"ed a co!p"aint &e,ore the Pane" o, Ar&itrators, Re#ionII, 5ines and@eosciences Bureau, o, the Depart!ent o, Environ!ent andNatura"Resources 2DENR3 a#ainst respondents C"i!a:- 5inin# ?td, C"i!a:-Ari!co andAustra"asian Phi"ippines 5inin# Inc, see6in# the dec"aration o, nu""it' or ter!ination o,the addendu! contract and the other contracts e!anatin# ,ro! it on the #rounds o, ,raudand oppression. 1he Pane" dis!issed the co!p"aint ,or "ac6 o, Curisdiction. Ho-ever, thePane", upon petitionerKs !otion ,or reconsideration, ru"ed that it had Curisdiction over thedispute !aintainin# that it -as a !inin# dispute, since the su&Cect co!p"aint arose ,ro! acontract &et-een the parties -hich invo"ved the e:p"oration and e:p"oitation o, !inera"sover the disputed area. Respondents assai"ed the order o, the Pane" o, Ar&itrators via apetition ,or certiorari &e,ore the CA. 1he CA #ranted the petition and dec"ared that thePane" o, Ar&itrators did not have Curisdiction over the co!p"aint, since its Curisdiction -as"i!ited to the reso"ution o, !inin# disputes, such as those -hich raised a Duestion o, ,actor !atter reDuirin# the technica" 6no-"ed#e and e:perience o, !inin# authorities and not-hen the co!p"aint a""e#ed ,raud and oppression -hich ca""ed ,or the interpretation andapp"icationo, "a-s. 1heCA,urther ru"edthat thepetitionshou"dhave&eensett"edthrou#h ar&itration under R.A. No. 4B> M the Ar&itration ?a- M as provided under theaddendu! contract.On a revie- on certiorari, -e a,,ir!ed the CAs ,indin# that the Pane" o, Ar&itrators -ho,under R.A. No. B);( o, the Phi"ippine 5inin# Act o, +)). It a"so ar#ued that the POAcannot &e considered as a court under theconte!p"ation o, RA 4B> and that Curisprudence sa'in# that there !ust &e prior resort toar&itration &e,ore ,i"in# a case -ith the courts is inapp"ica&"e to the instant case as thePOA is itse", a"read' en#a#ed in ar&itration. On this issue, -e ru"e ,or Ben#uet.Sec. ( o, RA 4B> e"ucidates the scope o, ar&itration$ Section (. Per!on! and matter! !ub3ect to arbitration.T1o or /ore2ersons or2#rt+es /#As')/+t tot.e#r)+tr#t+ono0 oneor/ore#r)+tr#tors #nA $ontro,ersA eB+st+n& )et1een t.e/ #t t.e t+/e o0 t.es')/+ss+on #n( 1.+$. /#A )e t.e s')*e$t o0 #n #$t+on, or t.e 2#rt+esto #nA $ontr#$t /#A +n s'$. $ontr#$t #&ree to sett-e )A #r)+tr#t+on #$ontro,ersA t.ere#0ter #r+s+n& )et1een t.e/. S'$. s')/+ss+on or$ontr#$t s.#-- )e ,#-+(, en0or$e#)-e #n( +rre,o$#)-e, s#,e '2on s'$.&ro'n(s #s eB+st #t -#1 0or t.e re,o$#t+on o0 #nA $ontr#$t. Such su&!ission or contract !a' inc"ude Duestion/s0 arisin# out o,va"uations, appraisa"s or other controversies -hich!a'&e co""atera",incidenta", precedent or su&seDuent to an'issue &et-een the parties.2E!phasis supp"ied.3 In RA )(4< or the A"ternative Dispute Reso"ution Act o, (**;, the Con#ress reiterated thee,,icac' o, ar&itration as an a"ternative !ode o, dispute reso"ution &' statin# in Sec. 7(thereo, that do!estic ar&itration sha"" sti"" &e #overned &' RA 4B>. C"ear"', a contractua"stipu"ationthat reDuirespriorresort tovo"untar'ar&itration&e,orethepartiescan#odirect"'tocourt isnot i""e#a" andisin,act pro!oted&'theState. 1hus, petitionercorrect"' cites severa" cases -here&' ar&itration c"auses have &een uphe"d &' this Court./(+0 5oreover, thecontentionthat RA B);(prevai"soverRA 4B>presupposesacon,"ict&et-eenthet-o"a-s. Suchisnot thecasehere. 1oreiterate, avai"!ent o,vo"untar'ar&itration &e,ore resort is !ade to the courts or Duasi-Cudicia" a#encies o, the#overn!ent is a va"id contractua" stipu"ation that !ust &e adhered to &' the parties. Asstated in Secs. > and B o, RA 4B>$ Section>. +earingb1court.A2#rtA#&&r+e,e()At.e0#+-'re,ne&-e$t or re0's#- o0 #not.er to 2er0or/'n(er #n#&ree/ent +n1r+t+n& 2ro,+(+n& 0or #r)+tr#t+on /#A 2et+t+on t.e $o'rt 0or #n or(er(+re$t+n& t.#t s'$. #r)+tr#t+on 2ro$ee( +n t.e /#nner 2ro,+(e( 0or +ns'$.#&ree/ent. %ive da's notice in-ritin#o, the hearin#o, suchapp"ication sha"" &e served either persona""' or &' re#istered !ai" upon thepart'inde,au"t. T.e $o'rt s.#-- .e#rt.e 2#rt+es, #n('2on)e+n&s#t+s0+e( t.#t t.e /#%+n& o0 t.e #&ree/ent or s'$. 0#+-'re to $o/2-At.ere1+t. +s not +n +ss'e, s.#-- /#%e #n or(er (+re$t+n& t.e 2#rt+es to2ro$ee( to #r)+tr#t+on +n #$$or(#n$e 1+t. t.e ter/s o0 t.e #&ree/ent.I0 t.e /#%+n& o0 t.e #&ree/ent or (e0#'-t )e +n +ss'e t.e $o'rt s.#--2ro$ee(to s'//#r+-A .e#r s'$.+ss'e. I0 t.e 0+n(+n& )e t.#t no#&ree/ent +n1r+t+n&2ro,+(+n&0or#r)+tr#t+on1#s /#(e, ort.#tt.ere +s no (e0#'-t +n t.e 2ro$ee(+n& t.ere'n(er, t.e 2ro$ee(+n& s.#--)e (+s/+sse(. I0 t.e 0+n(+n& )e t.#t # 1r+tten 2ro,+s+on 0or #r)+tr#t+on1#s /#(e #n( t.ere +s # (e0#'-t +n 2ro$ee(+n& t.ere'n(er, #n or(ers.#-- )e/#(es'//#r+-A(+re$t+n&t.e2#rt+esto2ro$ee(1+t.t.e#r)+tr#t+on +n #$$or(#n$e 1+t. t.e ter/s t.ereo0. : : : : Section B. 0ta1 of civil action.I, an' suit or proceedin# &e &rou#htuponanissuearisin#outo,ana#ree!ent providin#,orthear&itrationthereo,, the court in -hich such suit or proceedin# is pendin#, upon &ein#satis,ied that the issue invo"ved in such suit or proceedin# is re,era&"e toar&itration, sha"" sta' the action or proceedin# unti" an ar&itration has &eenhadinaccordance-iththeter!so,thea#ree!ent$ Provided,1hat theapp"icant, ,or the sta' is not in de,au"t in proceedin# -ith such ar&itration.2E!phasis supp"ied.3 Inother -ords, intheevent acasethat shou"dproper"'&ethesu&Cect o, vo"untar'ar&itration is erroneous"' ,i"ed -ith the courts or Duasi-Cudicia" a#encies, on !otion o, thede,endant,the courtor Duasi-Cudicia"a#enc'sha"" deter!ine -hether suchcontractua"provision ,or ar&itration is su,,icient and e,,ective. I, in a,,ir!ative, the court or Duasi-Cudicia" a#enc'sha"" then order the en,orce!ent o, saidprovision. Besides, in 8FCorporation v. Court of Appeal!, -e a"read' ru"ed$ In this connection, it &ears stressin# that the "o-er court has not"ost its Curisdictionover thecase. SectionBo, Repu&"icAct No. 4B>provides that proceedin#s therein have on"' &een sta'ed. A,ter the specia"proceedin# o, ar&itration has &een pursued and co!p"eted, then the "o-ercourt !a' con,ir! the a-ard !ade &' the ar&itrator./((0 J.@. Rea"t's contention, that prior resort to ar&itration is unavai"in# in the instant case&ecausethePOAs !andateis toar&itratedisputes invo"vin#!inera" a#ree!ents, is!isp"aced.A distinction !ust&e!ade&et-een vo"untar' andco!pu"sor' ar&itration.In )udo and )u1m Corporation v. 0aordino, the Court had the occasion to distin#uish&et-een the t-o t'pes o, ar&itrations$Co!parative"', in Reformi!t /nion of R.8. )iner, ,nc. v!. %)RC,co!pu"sor' ar&itration has &een de,ined &oth as the process o, sett"e!ento,"a&or disputes&'a &o,ern/ent#&en$A 1.+$. .#st.e#'t.or+tAto+n,est+te #n( to /#%e #n #1#r( -hich is &indin# on a"" the parties,and as a !ode o, ar&itration -here the parties are co!pe""ed to accept thereso"utiono,theirdisputethrou#har&itration&'athirdpart'.Ehi"eavo"untar' ar&itrator is not 2#rt o0 t.e &o,ern/ent#- 'n+t or -#)or(e2#rt/ents 2ersonne-, said ar&itrator renders ar&itration servicesprovided ,or under "a&or "a-s./(70 2E!phasis supp"ied.3 1here is a c"ear distinction &et-een co!pu"sor' and vo"untar' ar&itration. 1he ar&itrationprovided &' the POA is co!pu"sor', -hi"e the nature o, the ar&itration provision in theRAEOP is vo"untar', not invo"vin# an' #overn!ent a#enc'. 1hus, J.@. Rea"t's ar#u!enton this !atter !ust ,ai".As to J.@. Rea"t's contention that the provisions o, RA 4B> cannot app"' to the instantcase -hich invo"ves an ad!inistrative a#enc', it !ust &e pointed out that Section ++.*+ o,the RAEOP states that$ /An' controvers' -ith re#ard to the contract0 sha"" not &e cause o, an'action o, an' 6ind -hatsoever in an' court or #(/+n+str#t+,e #&en$A &utsha"", uponnoticeo,onepart'totheother, &ere,erredtoaBoardo,Ar&itrators consistin# o, three 273 !e!&ers, one to &e se"ected &'BEN@=E1,anotherto&ese"ected&'theOENERandthethirdto&ese"ected&'thea,ore!entionedt-oar&iterssoappointed./(;0 2E!phasissupp"ied.3 1herecan &e no Dui&&"in# that POA isaDuasi-Cudicia" &od' -hich ,or!s parto,theDENR, an ad!inistrative a#enc'. Hence, the provision on !andator' resort to ar&itration,,ree"' entered into &' the parties, !ust &e he"d &indin# a#ainst the!./(, the ar&itration "a-. Ho-ever, -e ,ind that Ben#uet is a"read' estopped ,ro!Duestionin# the POAsCurisdiction. As it -ere, -hen J.@. Rea"t' ,i"ed DENR Case No. (***-*+, Ben#uet ,i"edits ans-er and participated in the proceedin#s &e,ore the POA, Re#ion I. Second"', -henthe adverse 5arch +), (**+ POA Decision -as rendered, it ,i"ed an appea" -ith the 5ABin5ines Ad!inistrativeCaseNo. R-5-(***-*+anda#ainparticipatedinthe5ABproceedin#s. Ehen the adverse Dece!&er (, (**( 5AB Decision -as pro!u"#ated, it,i"eda!otion,orreconsideration-iththe5AB. Ehentheadverse5arch+B, (**;5AB Reso"ution -as issued, Ben#uet ,i"ed a petition -ith this Court pursuant to Sec. B)o, RA B);( i!p"ied"' reco#ni9in# 5ABs Curisdiction. In this ,actua" !i"ieu, the Courtru"esthat theCurisdictiono,POA andthat o,5ABcanno"on#er&eDuestioned&'Ben#uet at this "ate hour. Ehat Ben#uet shou"d have done -as to i!!ediate"' cha""en#ethe POAs Curisdiction &' a specia" civi" action ,or certiorari -hen POA ru"ed that it hasCurisdiction over the dispute. 1o redo the proceedin#s ,u""' participated in &' the partiesa,ter the "apse o, seven 'ears ,ro! date o, institution o, the ori#ina" action -ith the POA-ou"d &e anathe!a to the speed' and e,,icient ad!inistration o, Custice.Se$on( Iss'e T.e $#n$e--#t+on o0 t.e RA=OP1#s s'22orte( )A e,+(en$e 1hecance""ationo,theRAEOP&'thePOA-as&asedont-o#rounds$ 2+3Ben#uets ,ai"ure to pa' J.@. Rea"t's ro'a"ties ,or the !inin# c"ai!sG and 2(3 Ben#uets,ai"ure to serious"' pursue 5PSA App"ication No. APSA-I-***) over the !inin# c"ai!s.As to the ro'a"ties, Ben#uet c"ai!s that the chec6s representin# pa'!ents ,or thero'a"ties o, J.@. Rea"t' -ere avai"a&"e ,or pic6-up in its o,,ice and it is the "atter -hichre,used to c"ai! the!. Ben#uet then thus conc"udes that it did not vio"ate the RAEOP ,ornonpa'!ent o,ro'a"ties. %urther,Ben#uet reasonsthat J.@. Rea"t'hasthe&urdeno,provin#that the ,or!er didnot pa'suchro'a"ties ,o""o-in#theprincip"ethat theco!p"ainants !ust prove their a,,ir!ative a""e#ations. Eith re#ard to the ,ai"ure to pursue the 5PSA app"ication, Ben#uet c"ai!s thatthe"en#th'ti!eo,approva" o, theapp"icationisduetothe,ai"ureo, the5@Btoapprove it. In other -ords, Ben#uet ar#ues that the approva" o, the app"ication is so"e"' inthe hands o, the 5@B. Ben#uets ar#u!ents are &ere,t o, !erit. Sec. +;.*< o, the RAEOP provides$ +;.*< Ban6 Account OENER sha"" !aintain a &an6 account at OOOOOOOOOOO or an' other &an6,ro!ti!e to ti!e se"ected &' OENER-ith notice in -ritin# toBEN@=E1 -hereBEN@=E1 sha""deposittotheOENERscreditan'and a"" advances and pa'!ents -hich !a' &eco!e due the OENER underthis A#ree!entas-e"" as thepurchase priceherein a#reed uponintheevent that BEN@=E1 sha"" e:ercise the option to purchase provided ,or inthe A#ree!ent. AnA #n( #-- (e2os+ts so /#(e )A "ENGUET s.#-- )e #0'-- #n( $o/2-ete #$@'+tt#n$e #n( re-e#se to /sic0 "ENGUET 0ro/ #nA0'rt.er -+#)+-+tA to t.e O=NER o0 t.e #/o'nts re2resente( )A s'$.(e2os+ts. 2E!phasis supp"ied.3 Evident"', the RAEOP itse", provides ,or the !ode o, ro'a"t' pa'!ent &' Ben#uet. 1he,act that there -as the previous practice -here&' J.@. Rea"t' pic6ed-up the chec6s ,ro!Ben#uet isunavai"in#. 1he!odeo,pa'!ent ise!&odiedinacontract &et-eentheparties.Assuch, thecontract !ust &econsideredasthe"a-&et-eenthepartiesand&indin# on &oth./(>0 1hus, a,ter J.@. Rea"t' in,or!ed Ben#uet o, the &an6 account -heredeposits o, its ro'a"ties !a' &e !ade, Ben#uet had the o&"i#ation to deposit the chec6s.J.@. Rea"t' had no o&"i#ation to ,urnish Ben#uet -ith a Board Reso"ution considerin#that the RAEOP itse", provided ,or such pa'!ent sche!e. Nota&"', Ben#uets c"ai! that J.@. Rea"t' !ust prove nonpa'!ent o, its ro'a"tiesis &oth i""o#ica" and unsupported &' "a- and Curisprudence. 1he a""e#ation o, nonpa'!ent is not a positive a""e#ation as c"ai!ed &' Ben#uet.Rather, such is a ne#ative a""e#ation that does not reDuire proo, and in ,act trans,ers the&urden o, proo, to Ben#uet. 1hus, this Court ru"ed in Jimene. v. %ational )aborRelation! Commi!!ion$ As a#enera" ru"e, one-hop"eads pa'!ent has the&urdeno,provin# it. Even -here the p"ainti,, !ust a""e#e non-pa'!ent, the #enera"ru"e is that the &urden rests on the de,endant to prove pa'!ent, rather thanonthep"ainti,,toprovenon-pa'!ent. T.e(e)tor.#st.e)'r(eno0s.o1+n& 1+t. -e- $ert#+ntA t.#t t.e o)-+t+on .#s )een (+s$.#r&e()A 2#A/ent./(B02E!phasis supp"ied.3 In the instant case, the o&"i#ation o, Ben#uet to pa' ro'a"ties to J.@. Rea"t' has&een ad!itted and supported &' the provisions o, the RAEOP. 1hus, the &urden to provesuch o&"i#ation rests on Ben#uet. It shou"da"so&e&ornein!indthat 5PSA App"icationNo.APSA-I-***)has&eenpendin#-iththe5@B,or aconsidera&"e"en#tho, ti!e. Ben#uet, intheRAEOP,o&"i#ated itse", to per,ect the ri#hts to the !inin# c"ai!s andAor other-ise acDuire the!inin# ri#hts to the !inera" c"ai!s &ut ,ai"ed to present an' evidence sho-in# that ite:ertede,,ortsto speed up andhave theapp"icationapproved.In ,act,Ben#uet nevereven a""e#ed that it continuous"' ,o""o-ed-up the app"ication -ith the 5@B and that it-as in constant co!!unication -ith the #overn!ent a#enc' ,or the e:peditiousreso"utiono,theapp"ication. Sucha""e#ations-ou"dsho-that, indeed, Ben#uet -asre!iss in prosecutin# the 5PSAapp"ication and c"ear"',ai"ed to co!p"'-ith itso&"i#ation in the RAEOP. T.+r( Iss'e T.ere +s no 'n*'st enr+$./ent +n t.e +nst#nt $#se Based on the ,ore#oin# discussion, the cance""ation o, the RAEOP -as &ased on va"id#rounds and is, there,ore, Custi,ied. 1he necessar' i!p"ication o, the cance""ation is thecessation o,Ben#uetsri#httoprosecute5PSA App"icationNo. APSA-I-***) and to,urther deve"op such !inin# c"ai!s. In Car Cool Pilippine!, ,nc. v. /!io Realt1 and "evelopment Corporation, -e de,inedunCust enrich!ent, as ,o""o-s$ Ee have he"d that /t0here is unCust enrich!ent -hen aperson 'n*'st-A retains a &ene,it to the "oss o, another, or -hen a personretains !one' or propert' o, another a#ainst the ,unda!enta" princip"es o,Custice, eDuit' and #ood conscience. Artic"e (( o, the Civi" Code providesthat /e0ver' person -ho throu#h an act o, per,or!ance &' another, or an'other !eans, acDuires or co!es into possession o, so!ethin# at thee:pense o, the "atter -ithout Cust or "e#a" #round, sha"" return the sa!e tohi!. 1heprincip"eo,unCust enrich!ent under Artic"e((reDuirest-oconditions$ 2+3 that a person is &ene,ited -ithout a va"id &asis orCusti,ication, and 2(3thatsuch&ene,itisderivedat anotherse:penseorda!a#e. T.ere +s no 'n*'st enr+$./ent 1.en t.e 2erson 1.o 1+--)ene0+t .#s # ,#-+( $-#+/ to s'$. )ene0+t./(40 2E!phasis supp"ied.3 C"ear"', thereis nounCust enrich!ent intheinstant caseas thecance""ationo, theRAEOP, -hich "e,t Ben#uet -ithout an' "e#a" ri#ht to participate in ,urther deve"opin#the !inin# c"ai!s, -as &rou#ht a&out &' its vio"ation o, the RAEOP. Hence, Ben#uet hasno one to &"a!e &ut itse", ,or its predica!ent. =HEREFORE, -e DIS3ISS the petition, and AFFIR3 the Dece!&er (, (**(Decision and 5arch +B, (**; Reso"ution o, the DENR-5AB in 5AB Case No. *+(;-*+upho"din# the cance""ation o, the June +, +)4B RAEOP. No costs.SO ORDERED. 1HIRD DIIISIONFG.R. No. 1:18??. 3#r$. 2;, 299?GL3 PO=ER ENGINEERING CORPORATION, petitioner, vs. CAPITOLINDUSTRIAL CONSTRUCTION GROUPS, INC., respondent.D E C I S I O NPANGANI"AN, J.A"ternative dispute reso"ution !ethods or ADRs -- "i6e ar&itration, !ediation,ne#otiation and conci"iation -- are encoura#ed &' the Supre!e Court. B' ena&"in# partiesto reso"ve their disputes a!ica&"', the' provide so"utions that are "ess ti!e-consu!in#,"ess tedious, "ess con,rontationa", and !ore productive o, #ood-i"" and "astin#re"ationships./+0T.e C#seBe,oreusisaPetition,orRevie-on Certiorari/(0 underRu"e;. I, despite previous -arnin#s &' /respondent0, /petitioner0 does not e:ecute the EOR8 in accordance -ith this A#ree!ent, or per!i!tentl1 or flagrantl1 neglect! to carr1 out :it!; obligation! under ti! Agreement./(+0Supposed"', as a resu"t o, the ta6e-over, respondent incurred e:penses in e:cess o,the contracted price. It sou#ht to set o,, those e:penses a#ainst the a!ount c"ai!ed &'petitioner ,or the -or6 the "atter acco!p"ished, pursuant to the ,o""o-in# provision$I, the tota" direct and indirect cost o, co!p"etin# the re!ainin# part o, the EOR8 e:ceedthe su! -hich -ou"d have &een pa'a&"e to /petitioner0 had it co!p"eted the EOR8, the a!ount o, such e:cess /!a' &e0 c"ai!ed &' /respondent0 ,ro! either o, the ,o""o-in#$+. An' a!ount due /petitioner0 ,ro! /respondent0 at the ti!e o, the ter!ination o, this A#ree!ent./((01he issue as to the correct a!ount o, petitioners advances and &i""a&"eacco!p"ish!ents invo"ves an eva"uation o, the !anner in -hich the parties co!p"eted the-or6, the e:tent to-hichthe'didit, andthe e:penses eacho, the!incurredinconnection there-ith. Ar&itrators a"so need to "oo6 into the co!putation o, ,orei#n and"oca" costs o, !ateria"s, ,orei#n and "oca" advances, retention ,ees and "etters o, credit,and ta:es and duties as set ,orth in the A#ree!ent. 1hese data can &e #athered ,ro! arevie- o, the A#ree!ent, pertinent portions o, -hich are reproduced hereunder$C. CON1RAC1 PRICE AND 1ER5S O% PA5EN1: : : : : : : : :A"" pro#ress pa'!ents to &e !ade &' /respondent0 to /petitioner0 sha"" &e su&Cectto a retention su! o, ten percent 2+*F3 o, the va"ue o, the approved Duantities. An' c"ai!s &' /respondent0 on /petitioner0 !a' &e deducted &' /respondent0 ,ro! the pro#ress pa'!ents andAor retained a!ount. An' e:cess ,ro! the retained a!ount a,ter deductin# /respondents0 c"ai!s sha"" &e re"eased &' /respondent0 to /petitioner0 a,ter the issuance o, /the 5inistr' o, Pu&"ic Eor6sand Hi#h-a's0 o, the Certi,icate o, Co!p"etion and ,ina" acceptance o, the EOR8 &' /the 5inistr' o, Pu&"ic Eor6s and Hi#h-a's0.: : : : : : : : :D. I5POR1ED 5A1ERIA?S AND EN=IP5EN1/Respondent sha"" open the "etters o, credit ,or the i!portation o, eDuip!ent and!ateria"s "isted in Anne: E hereo, a,ter the dra-in#s, &rochures, and other technica" data o, each ite!s in the "ist have &een ,or!a""' approved &' /the 5inistr' o, Pu&"ic Eor6s and Hi#h-a's0. Ho-ever, petitioner -i"" sti"" &e ,u""' responsi&"e ,or a"" i!ported !ateria"s and eDuip!ent.A"" e:penses incurred &' /respondent0, &oth in ,orei#n and "oca" currencies in connection -ith the openin# o, the "etters o, credit sha"" &e deducted ,ro! the Contract Prices.: : : : : : : : :N. O1HER CONDI1IONS: : : : : : : : :(. A"" custo!s duties, i!port duties, contractors ta:es, inco!e ta:es, and other ta:es that !a' &e reDuired &' an' #overn!ent a#encies in connection -ith this A#ree!ent sha"" &e ,or the so"e account o, /petitioner0./(70 Bein# an ine:pensive, speed' and a!ica&"e !ethod o, sett"in# disputes,/(;0 ar&itration-- a"on# -ith !ediation, conci"iation and ne#otiation -- is encoura#ed &' the Supre!eCourt. Aside ,ro! unc"o##in# Cudicia" doc6ets, ar&itration a"so hastens the reso"ution o,disputes, especia""'o,theco!!ercia" 6ind./(5OA3/(0 -here&' each a#reed to contri&ute cash, propert', and services ,or theconstructionanddeve"op!ent o, Phi"a!"i,e 1o-er, a;, +))>, respondents e:ecuted a Deed o, Assi#n!ent 2+))> DOA3/70 -hereinthe'assi#nedto%ra&e""ePropertiesCorporation2%ra&e""e3theirri#htsando&"i#ationsunder the+))>5OA -ithrespect totheconstruction, deve"op!ent, andsu&seDuent o-nership o, =nit No. 74-B "ocated at the 74th ,"oor o, Phi"a!"i,e 1o-er. 1heparties a"sostipu"ated that the assi#nee sha"" &e dee!ed as a co-deve"oper o, theconstruction proCect -ith respect to =nit No. 74-B./;0%ra&e""e, in turn, assi#ned to %ra&e""e %ishin# Corporation 2%ra&e""e %ishin#3, petitionerherein, its ri#hts, o&"i#ations and interests over =nit No. 74-B.On 5arch ), +))4, petitioner %ra&e""e %ishin# and respondents e:ecuted a 5e!orandu!o, A#ree!ent 2+))4 5OA3/ DOA and +))4 5OA andtheir #ross vio"ation o, their contractua" o&"i#ations as condo!iniu! deve"opers. 1hesevio"ations are$ 2a3 the non-construction o, a partition -a"" &et-een =nit No. 74-B and therest o, the ,"oor areaG and 2&3 the reduction o, the net usa&"e ,"oor area ,ro! ,our hundredsi:t' ei#ht 2;>43 sDuare !eters to on"' three hundred ,i,teen 27+0 Ho-ever, in a "etter/B0 dated Nove!&er B, (**+, respondents !ani,estedtheir re,usa" to su&!it to PDRCIs Curisdiction.On %e&ruar' ++, (**(, petitioner ,i"ed -ith the Housin# and ?and =se Re#u"ator'Board2H?=RB3, E:pandedNationa" Capita" Re#ion%ie"dO,,ice a co!p"aint/40 ,orre,or!ation o, instru!ent, speci,ic per,or!ance and da!a#es a#ainst respondents,doc6etedasH?=RBCaseNo. RE5-*(++*(-++B)+. Petitionera""e#ed, a!on#others,that the contracts do not re,"ect the true intention o, the partiesG and that it is a !ere &u'erand not co-deve"oper andAor co-o-ner o, the condo!iniu! unit.A,ter considerin# their respective !e!oranda, H?=RB Ar&iter Att'. Dunstan 1.San Iicente, -ith the approva" o, H?=RB Re#iona" Director Jesse A. O&"i#acion, issuedan Order/)0 dated 5a' +;, (**(, the dispositive portion o, -hich reads$Accordin#"', respondents p"ea,or theoutri#ht dis!issa" o, thepresent caseis denied. Set theinitia" pre"i!inar'hearin#o, this caseon June (7 o, the +))B Ru"es o, Civi" Procedure, as a!ended, -hich provides$SEC1ION +. >o ma1 file petition. An' person interested under adeed, -i"", contract or other -ritten instru!ent, -hose ri#hts are a,,ected&' a statute, e:ecutive order or re#u"ation, ordinance, or an' other#overn!enta" re#u"ation !a', &e,ore &reach or vio"ation thereo,, &rin# anaction in the appropriate Re&+on#- Tr+#- Co'rt to deter!ine an' Duestiono, construction or va"idit' arisin#, and ,or a dec"aration o, his ri#hts orduties thereunder.An action ,or the re0or/#t+on o0 #n +nstr'/ent, to Duiet tit"e torea" propert'or re!ovec"oudsthere,ro!, or toconso"idateo-nershipunder Artic"e+>*Bo,theCivi"Code, !a'&e&rou#htunderthisRu"e.2E!phasis ours3 As correct"' he"d &' the Court o, Appea"s, an' disa#ree!ent as to the nature o,thepartiesre"ationship-hich-ou"d re@'+re0+rst#n#/en(/entorre0or/#t+ono0t.e+r $ontr#$t is an issue -hich the courts !a' and can reso"ve -ithout the need o, thee:pertise and specia"i9ed 6no-"ed#e o, the H?=RB.Eithre#ardtothe secondand"ast issue, para#raph;.(o, the +))45OA!andates that #nA(+s2'te &et-eenor a!on#theparties s.#-- 0+n#--A)esett-e()A#r)+tr#t+on $on('$te( +n #$$or(#n$e 1+t. t.e R'-es o0 Con$+-+#t+on #n( Ar)+tr#t+ono0 t.e Intern#t+on#- C.#/)er o0 Co//er$e./+;0 Petitioner re,erred the dispute to thePDRCI &ut respondents re,used to su&!it to its Curisdiction.It &ears stressin# that such ar&itration a#ree!ent is the "a-&et-een theparties. 1he' are, there,ore, e:pected to a&ide &' it in #ood ,aith./+