THIRD DIVISIONG.R. No. 138822 January 23, 2001EVANGELINE ALDAY,petitioner,vs.FGU INSURANCE CORPORATION,respondent.GONZAGA-REYES,J.:On 5 May 1989, respondent FGU Insurance Corporation filed a complaint with the Regional Trial Court of Makati1alleging that petitioner Evangeline K. Alday owed it P114,650.76, representing unliquidated cash advances, unremitted costs of premiums and other charges incurred by petitioner in the course of her work as an insurance agent for respondent.2Respondent also prayed for exemplary damages, attorney's fees, and costs of suit.3Petitioner filed her answer and by way of counterclaim, asserted her right for the payment of P104,893.45, representing direct commissions, profit commissions and contingent bonuses earned from 1 July 1986 to 7 December 1986, and for accumulated premium reserves amounting to P500,000.00. In addition, petitioner prayed for attorney's fees, litigation expenses, moral damages and exemplary damages for the allegedly unfounded action filed by respondent.4On 23 August 1989, respondent filed a "Motion to Strike Out Answer With Compulsory Counterclaim And To Declare Defendant In Default" because petitioner's answer was allegedly filed out of time.5However, the trial court denied the motion on 25 August 1989 and similarly rejected respondent's motion for reconsideration on 12 March 1990.6A few weeks later, on 11 April 1990, respondent filed a motion to dismiss petitioner's counterclaim, contending that the trial court never acquired jurisdiction over the same because of the non-payment of docket fees by petitoner.7In response, petitioner asked the trial court to declare her counterclaim as exempt from payment of docket fees since it is compulsory and that respondent be declared in default for having failed to answer such counterclaim.8In its 18 September 1990 Order, the trial court9granted respondent's motion to dismiss petitioner's counterclaim and consequently, denied petitioner's motion. The court found petitioner's counterclaim to be merely permissive in nature and held that petitioner's failure to pay docket fees prevented the court from acquiring jurisdiction over the same.10The trial court similar denied petitioner's motion for reconsideration on 28 February 1991.1wphi1.ntOn 23 December 1998, the Court of Appeals11sustained the trial court, finding that petitioner's own admissions, as contained in her answer, show that her counterclaim is merely permissive. The relevant portion of the appellate court's decision12is quoted herewith -Contrary to the protestations of appellant, mere reading of the allegations in the answera quowill readily show that her counterclaim can in no way be compulsory. Take note of the following numbered paragraphs in her answer:"(14) That, indeed, FGU's cause of action which is not supported by any document other than the self-serving 'Statement of Account' dated March 28, 1988 x x x(15) That it should be noted that the cause of action of FGU is not the enforcement of the Special Agent's Contract but the alleged 'cash accountabilities which are not based on written agreement x x x.xxxx(19) x x x A careful analysis of FGU's three-page complaint will show that its cause of action is not for specific performance or enforcement of the Special Agent's Contract rather, it is for the payment of the alleged cash accountabilities incurred by defendant during the period form [sic] 1975 to 1986 which claim is executory and has not been ratified. It is the established rule that unenforceable contracts, like this purported money claim of FGU, cannot be sued upon or enforced unless ratified, thus it is as if they have no effect. x x x."To support the heading "Compulsory Counterclaim" in her answer and give the impression that the counterclaim is compulsory appellant alleged that "FGU has unjustifiably failed to remit to defendant despite repeated demands in gross violation of their Special Agent's Contract x x x." The reference to said contract was included purposely to mislead. While on one hand appellant alleged that appellee's cause of action had nothing to do with the Special Agent's Contract, on the other hand, she claim that FGU violated said contract which gives rise of [sic] her cause of action. Clearly, appellant's cash accountabilities cannot be the offshoot of appellee's alleged violation of the aforesaid contract.On 19 May 1999, the appellate court denied petitioner's motion for reconsideration,13giving rise to the present petition.Before going into the substantive issues, the Court shall first dispose of some procedural matters raised by the parties. Petitioner claims that respondent is estopped from questioning her non-payment of docket fees because it did not raise this particular issue when it filed its motion - the "Motion to Strike out Answer With Compulsory Counterclaim And To Declare Defendant In Default" - with the trial court; rather, it was only nine months after receiving petitioner's answer that respondent assailed the trial court's lack of jurisdiction over petitioner's counterclaims based on the latter's failure to pay docket fees.14Petitioner's position is unmeritorious. Estoppel by laches arises from the negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned or declined to assert it.15In the case at bar, respondent cannot be considered as estopped from assailing the trial court's jurisdiction over petitioner's counterclaim since this issue was raised by respondent with the trial court itself - the body where the action is pending - even before the presentation of any evidence by the parties and definitely, way before any judgment could be rendered by the trial court.Meanwhile, respondent questions the jurisdiction of the Court of Appeals over the appeal filed by petitioner from the 18 September 1990 and 28 February 1991 orders of the trial court. It is significant to note that this objection to the appellate court's jurisdiction is raised for the first time before this Court; respondent never having raised this issue before the appellate court. Although the lack of jurisdiction of a court may be raised at any stage of the action, a party may be estopped from raising such questions if he has actively taken part in the very proceedings which he questions, belatedly objecting to the court's jurisdiction in the event that the judgment or order subsequently rendered is adverse to him.16In this case, respondent actively took part in the proceedings before the Court of Appeals by filing its appellee's brief with the same.17Its participation, when taken together with its failure to object to the appellate court's jurisdiction during the entire duration of the proceedings before such court, demonstrates a willingness to abide by the resolution of the case by such tribunal and accordingly, respondent is now most decidedly estopped from objecting to the Court of Appeals' assumption of jurisdiction over petitioner's appeal.18The basic issue for resolution in this case is whether or not the counterclaim of petitioner is compulsory or permissive in nature. A compulsory counterclaim is one which, being cognizable by the regular courts of justice, arises out of or is connected with the transaction or occurrence constituting the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.19InValencia v. Court of Appeals,20this Court capsulized the criteria or tests that may be used in determining whether a counterclaim is compulsory or permissive, summarized as follows:1. Are theissues of fact and lawraised by the claim and counterclaim largely the same?2. Wouldres judicatabar a subsequent suit on defendant's claim absent the compulsory counterclaim rule?3. Willsubstantially the same evidencesupport or refute plaintiff's claim as well s defendant's counterclaim?4. Is there anylogical relationbetween the claim and the counterclaim?Another test, applied in the more recent case ofQuintanilla v. Court of Appeals,21is the "compelling test of compulsoriness" which requires "a logical relationship between the claim and counterclaim, that is, where conducting separate trials of the respective claims of the parties would entail a substantial duplication of effort and time by the parties and the court."As contained in her answer, petitioner's counterclaims are as follows:(20) That defendant incorporates and repleads by reference all the foregoing allegations as may be material to her Counterclaim against FGU.(21) That FGU is liable to pay the following just, valid and legitimate claims of defendant:(a) the sum of at least P104,893.45 plus maximum interest thereon representing, among others, direct commissions, profit commissions and contingent bonuses legally due to defendant; and(b) the minimum amount of P500,000.00 plus the maximum allowable interest representing defendant's accumulated premium reserve for 1985 and previous years,which FGU has unjustifiably failed to remit to defendant despite repeated demands in gross violation of their Special Agent's Contract and in contravention of the principle of law that "every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith."(22) That as a result of the filing of this patently baseless, malicious and unjustified Complaint, and FGU's unlawful, illegal and vindictive termination of their Special Agent's Contract, defendant was unnecessarily dragged into this litigation and to defense [sic] her side and assert her rights and claims against FGU, she was compelled to hire the services of counsel with whom she agreed to pay the amount of P30,000.00 as and for attorney's fees and stands to incur litigation expenses in the amount estimated to at least P20,000.00 and for which FGU should be assessed and made liable to pay defendant.(23) That considering further the malicious and unwarranted action of defendant in filing this grossly unfounded action, defendant has suffered and continues to suffer from serious anxiety, mental anguish, fright and humiliation. In addition to this, defendant's name, good reputation and business standing in the insurance business as well as in the community have been besmirched and for which FGU should be adjudged and made liable to pay moral damages to defendant in the amount of P300,000.00 as minimum.(24) That in order to discourage the filing of groundless and malicious suits like FGU's Complaint, and by way of serving [as] an example for the public good, FGU should be penalized and assessed exemplary damages in the sum of P100,000.00 or such amount as the Honorable Court may deem warranted under the circumstances.22Tested against the abovementioned standards, petitioner's counterclaim for commissions, bonuses, and accumulated premium reserves is merely permissive. The evidence required to prove petitioner's claims differs from that needed to establish respondent's demands for the recovery of cash accountabilities from petitioner, such as cash advances and costs of premiums. The recovery of respondent's claims is not contingent or dependent upon establishing petitioner's counterclaim, such that conducting separate trials will not result in the substantial duplication of the time and effort of the court and the parties. One would search the records in vain for a logical connection between the parties' claims. This conclusion is further reinforced by petitioner's own admissions since she declared in her answer that respondent's cause of action, unlike her own, was not based upon the Special Agent's Contract.23However, petitioner's claims for damages, allegedly suffered as a result of the filing by respondent of its complaint, are compulsory.24There is no need for need for petitioner to pay docket fees for her compulsory counterclaim.25On the other hand, in order for the trial court to acquire jurisdiction over her permissive counterclaim, petitioner is bound to pay the prescribed docket fees.26The rule on the payment of filing fees has been laid down by the Court in the case ofSun Insurance Office, Ltd. V. Hon. Maximiano Asuncion27-1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.The above mentioned ruling inSun Insurancehas been reiterated in the recent case ofSusan v. Court of Appeals.28InSuson, the Court explained that although the payment of the prescribed docket fees is a jurisdictional requirement, its non-payment does not result in the automatic dismissal of the case provided the docket fees are paid within the applicable prescriptive or reglementary period. Coming now to the case at bar, it has not been alleged by respondent and there is nothing in the records to show that petitioner has attempted to evade the payment of the proper docket fees for her permissive counterclaim. As a matter of fact, after respondent filed its motion to dismiss petitioner's counterclaim based on her failure to pay docket fees, petitioner immediately filed a motion with the trial court, asking it to declare her counterclaim as compulsory in nature and therefore exempt from docket fees and, in addition, to declare that respondent was in default for its failure to answer her counterclaim.29However, the trial court dismissed petitioner's counterclaim. Pursuant to this Court's ruling inSun Insurance, the trial court should have instead given petitioner a reasonable time, but in no case beyond the applicable prescriptive or reglementary period, to pay the filing fees for her permissive counterclaim.Petitioner asserts that the trial court should have declared respondent in default for having failed to answer her counterclaim.30Insofar as the permissive counterclaim of petitioner is concerned, there is obviously no need to file an answer until petitioner has paid the prescribed docket fees for only then shall the court acquire jurisdiction over such claim.31Meanwhile, the compulsory counterclaim of petitioner for damages based on the filing by respondent of an allegedly unfounded and malicious suit need not be answered since it is inseparable from the claims of respondent. If respondent were to answer the compulsory counterclaim of petitioner, it would merely result in the former pleading the same facts raised in its complaint.32WHEREFORE,the assailed Decision of the Court of Appeals promulgated on 23 December 1998 and its 19 May 1999 Resolution are herebyMODIFIED. The compulsory counterclaim of petitioner for damages filed in Civil Case No. 89-3816 is orderedREINSTATED. Meanwhile, the Regional Trial Court of Makati (Branch 134) is ordered to require petitioner to pay the prescribed docket fees for her permissive counterclaim (direct commissions, profit commissions, contingent bonuses and accumulated premium reserves), after ascertaining that the applicable prescriptive period has not yet set in.33SO ORDERED.1wphi1.nt

SECOND DIVISIONG.R. No. 143581 January 7, 2008KOREA TECHNOLOGIES CO., LTD.,petitioner,vs.HON. ALBERTO A. LERMA, in his capacity as Presiding Judge of Branch 256 of Regional Trial Court of Muntinlupa City, and PACIFIC GENERAL STEEL MANUFACTURING CORPORATION,respondents.D E C I S I O NVELASCO, JR.,J.:In our jurisdiction, the policy is to favor alternative methods of resolving disputes, particularly in civil and commercial disputes. Arbitration along with mediation, conciliation, and negotiation, being inexpensive, speedy and less hostile methods have long been favored by this Court. The petition before us puts at issue an arbitration clause in a contract mutually agreed upon by the parties stipulating that they would submit themselves to arbitration in a foreign country. Regrettably, instead of hastening the resolution of their dispute, the parties wittingly or unwittingly prolonged the controversy.Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation which is engaged in the supply and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation.On March 5, 1997, PGSMC and KOGIES executed a Contract1whereby KOGIES would set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite. The contract was executed in the Philippines. On April 7, 1997, the parties executed, in Korea, an Amendment for Contract No. KLP-970301 dated March 5, 19972amending the terms of payment. The contract and its amendment stipulated that KOGIES will ship the machinery and facilities necessary for manufacturing LPG cylinders for which PGSMC would pay USD 1,224,000. KOGIES would install and initiate the operation of the plant for which PGSMC bound itself to pay USD 306,000 upon the plants production of the 11-kg. LPG cylinder samples. Thus, the total contract price amounted to USD 1,530,000.On October 14, 1997, PGSMC entered into a Contract of Lease3with Worth Properties, Inc. (Worth) for use of Worths 5,079-square meter property with a 4,032-square meter warehouse building to house the LPG manufacturing plant. The monthly rental was PhP 322,560 commencing on January 1, 1998 with a 10% annual increment clause. Subsequently, the machineries, equipment, and facilities for the manufacture of LPG cylinders were shipped, delivered, and installed in the Carmona plant. PGSMC paid KOGIES USD 1,224,000.However, gleaned from the Certificate4executed by the parties on January 22, 1998, after the installation of the plant, the initial operation could not be conducted as PGSMC encountered financial difficulties affecting the supply of materials, thus forcing the parties to agree that KOGIES would be deemed to have completely complied with the terms and conditions of the March 5, 1997 contract.For the remaining balance of USD306,000 for the installation and initial operation of the plant, PGSMC issued two postdated checks: (1) BPI Check No. 0316412 dated January 30, 1998 for PhP 4,500,000; and (2) BPI Check No. 0316413 dated March 30, 1998 for PhP 4,500,000.5When KOGIES deposited the checks, these were dishonored for the reason "PAYMENT STOPPED." Thus, on May 8, 1998, KOGIES sent a demand letter6to PGSMC threatening criminal action for violation ofBatas Pambansa Blg.22 in case of nonpayment. On the same date, the wife of PGSMCs President faxed a letter dated May 7, 1998 to KOGIES President who was then staying at a Makati City hotel. She complained that not only did KOGIES deliver a different brand of hydraulic press from that agreed upon but it had not delivered several equipment parts already paid for.On May 14, 1998, PGSMC replied that the two checks it issued KOGIES were fully funded but the payments were stopped for reasons previously made known to KOGIES.7On June 1, 1998, PGSMC informed KOGIES that PGSMC was canceling their Contract dated March 5, 1997 on the ground that KOGIES had altered the quantity and lowered the quality of the machineries and equipment it delivered to PGSMC, and that PGSMC would dismantle and transfer the machineries, equipment, and facilities installed in the Carmona plant. Five days later, PGSMC filed before the Office of the Public Prosecutor an Affidavit-Complaint forEstafadocketed as I.S. No. 98-03813 against Mr. Dae Hyun Kang, President of KOGIES.On June 15, 1998, KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally rescind their contract nor dismantle and transfer the machineries and equipment on mere imagined violations by KOGIES. It also insisted that their disputes should be settled by arbitration as agreed upon in Article 15, the arbitration clause of their contract.On June 23, 1998, PGSMC again wrote KOGIES reiterating the contents of its June 1, 1998 letter threatening that the machineries, equipment, and facilities installed in the plant would be dismantled and transferred on July 4, 1998. Thus, on July 1, 1998, KOGIES instituted an Application for Arbitration before the Korean Commercial Arbitration Board (KCAB) in Seoul, Korea pursuant to Art. 15 of the Contract as amended.On July 3, 1998, KOGIES filed a Complaint for Specific Performance, docketed as Civil Case No. 98-1178against PGSMC before the Muntinlupa City Regional Trial Court (RTC). The RTC granted a temporary restraining order (TRO) on July 4, 1998, which was subsequently extended until July 22, 1998. In its complaint, KOGIES alleged that PGSMC had initially admitted that the checks that were stopped were not funded but later on claimed that it stopped payment of the checks for the reason that "their value was not received" as the former allegedly breached their contract by "altering the quantity and lowering the quality of the machinery and equipment" installed in the plant and failed to make the plant operational although it earlier certified to the contrary as shown in a January 22, 1998 Certificate. Likewise, KOGIES averred that PGSMC violated Art. 15 of their Contract, as amended, by unilaterally rescinding the contract without resorting to arbitration. KOGIES also asked that PGSMC be restrained from dismantling and transferring the machinery and equipment installed in the plant which the latter threatened to do on July 4, 1998.On July 9, 1998, PGSMC filed an opposition to the TRO arguing that KOGIES was not entitled to the TRO since Art. 15, the arbitration clause, was null and void for being against public policy as it ousts the local courts of jurisdiction over the instant controversy.On July 17, 1998, PGSMC filed its Answer with Compulsory Counterclaim9asserting that it had the full right to dismantle and transfer the machineries and equipment because it had paid for them in full as stipulated in the contract; that KOGIES was not entitled to the PhP 9,000,000 covered by the checks for failing to completely install and make the plant operational; and that KOGIES was liable for damages amounting to PhP 4,500,000 for altering the quantity and lowering the quality of the machineries and equipment. Moreover, PGSMC averred that it has already paid PhP 2,257,920 in rent (covering January to July 1998) to Worth and it was not willing to further shoulder the cost of renting the premises of the plant considering that the LPG cylinder manufacturing plant never became operational.After the parties submitted their Memoranda, on July 23, 1998, the RTC issued an Order denying the application for a writ of preliminary injunction, reasoning that PGSMC had paid KOGIES USD 1,224,000, the value of the machineries and equipment as shown in the contract such that KOGIES no longer had proprietary rights over them. And finally, the RTC held that Art. 15 of the Contract as amended was invalid as it tended to oust the trial court or any other court jurisdiction over any dispute that may arise between the parties. KOGIES prayer for an injunctive writ was denied.10The dispositive portion of the Order stated:WHEREFORE, in view of the foregoing consideration, this Court believes and so holds that no cogent reason exists for this Court to grant the writ of preliminary injunction to restrain and refrain defendant from dismantling the machineries and facilities at the lot and building of Worth Properties, Incorporated at Carmona, Cavite and transfer the same to another site: and therefore denies plaintiffs application for a writ of preliminary injunction.On July 29, 1998, KOGIES filed its Reply to Answer and Answer to Counterclaim.11KOGIES denied it had altered the quantity and lowered the quality of the machinery, equipment, and facilities it delivered to the plant. It claimed that it had performed all the undertakings under the contract and had already produced certified samples of LPG cylinders. It averred that whatever was unfinished was PGSMCs fault since it failed to procure raw materials due to lack of funds. KOGIES, relying onChung Fu Industries (Phils.), Inc. v. Court of Appeals,12insisted that the arbitration clause was without question valid.After KOGIES filed a Supplemental Memorandum with Motion to Dismiss13answering PGSMCs memorandum of July 22, 1998 and seeking dismissal of PGSMCs counterclaims, KOGIES, on August 4, 1998, filed its Motion for Reconsideration14of the July 23, 1998 Order denying its application for an injunctive writ claiming that the contract was not merely for machinery and facilities worth USD 1,224,000 but was for the sale of an "LPG manufacturing plant" consisting of "supply of all the machinery and facilities" and "transfer of technology" for a total contract price of USD 1,530,000 such that the dismantling and transfer of the machinery and facilities would result in the dismantling and transfer of the very plant itself to the great prejudice of KOGIES as the still unpaid owner/seller of the plant. Moreover, KOGIES points out that the arbitration clause under Art. 15 of the Contract as amended was a valid arbitration stipulation under Art. 2044 of the Civil Code and as held by this Court inChung Fu Industries (Phils.), Inc.15In the meantime, PGSMC filed a Motion for Inspection of Things16to determine whether there was indeed alteration of the quantity and lowering of quality of the machineries and equipment, and whether these were properly installed. KOGIES opposed the motion positing that the queries and issues raised in the motion for inspection fell under the coverage of the arbitration clause in their contract.On September 21, 1998, the trial court issued an Order (1) granting PGSMCs motion for inspection; (2) denying KOGIES motion for reconsideration of the July 23, 1998 RTC Order; and (3) denying KOGIES motion to dismiss PGSMCs compulsory counterclaims as these counterclaims fell within the requisites of compulsory counterclaims.On October 2, 1998, KOGIES filed an Urgent Motion for Reconsideration17of the September 21, 1998 RTC Order granting inspection of the plant and denying dismissal of PGSMCs compulsory counterclaims.Ten days after, on October 12, 1998, without waiting for the resolution of its October 2, 1998 urgent motion for reconsideration, KOGIES filed before the Court of Appeals (CA) a petition for certiorari18docketed as CA-G.R. SP No. 49249, seeking annulment of the July 23, 1998 and September 21, 1998 RTC Orders and praying for the issuance of writs of prohibition, mandamus, and preliminary injunction to enjoin the RTC and PGSMC from inspecting, dismantling, and transferring the machineries and equipment in the Carmona plant, and to direct the RTC to enforce the specific agreement on arbitration to resolve the dispute.In the meantime, on October 19, 1998, the RTC denied KOGIES urgent motion for reconsideration and directed the Branch Sheriff to proceed with the inspection of the machineries and equipment in the plant on October 28, 1998.19Thereafter, KOGIES filed a Supplement to the Petition20in CA-G.R. SP No. 49249 informing the CA about the October 19, 1998 RTC Order. It also reiterated its prayer for the issuance of the writs of prohibition, mandamus and preliminary injunction which was not acted upon by the CA. KOGIES asserted that the Branch Sheriff did not have the technical expertise to ascertain whether or not the machineries and equipment conformed to the specifications in the contract and were properly installed.On November 11, 1998, the Branch Sheriff filed his Sheriffs Report21finding that the enumerated machineries and equipment were not fully and properly installed.The Court of Appeals affirmed the trial court and declaredthe arbitration clause against public policyOn May 30, 2000, the CA rendered the assailed Decision22affirming the RTC Orders and dismissing the petition for certiorari filed by KOGIES. The CA found that the RTC did not gravely abuse its discretion in issuing the assailed July 23, 1998 and September 21, 1998 Orders. Moreover, the CA reasoned that KOGIES contention that the total contract price for USD 1,530,000 was for the whole plant and had not been fully paid was contrary to the finding of the RTC that PGSMC fully paid the price of USD 1,224,000, which was for all the machineries and equipment. According to the CA, this determination by the RTC was a factual finding beyond the ambit of a petition for certiorari.On the issue of the validity of the arbitration clause, the CA agreed with the lower court that an arbitration clause which provided for a final determination of the legal rights of the parties to the contract by arbitration was against public policy.On the issue of nonpayment of docket fees and non-attachment of a certificate of non-forum shopping by PGSMC, the CA held that the counterclaims of PGSMC were compulsory ones and payment of docket fees was not required since the Answer with counterclaim was not an initiatory pleading. For the same reason, the CA said a certificate of non-forum shopping was also not required.Furthermore, the CA held that the petition for certiorari had been filed prematurely since KOGIES did not wait for the resolution of its urgent motion for reconsideration of the September 21, 1998 RTC Order which was the plain, speedy, and adequate remedy available. According to the CA, the RTC must be given the opportunity to correct any alleged error it has committed, and that since the assailed orders were interlocutory, these cannot be the subject of a petition for certiorari.Hence, we have this Petition for Review on Certiorari under Rule 45.The IssuesPetitioner posits that the appellate court committed the following errors:a. PRONOUNCING THE QUESTION OF OWNERSHIP OVER THE MACHINERY AND FACILITIES AS "A QUESTION OF FACT" "BEYOND THE AMBIT OF A PETITION FOR CERTIORARI" INTENDED ONLY FOR CORRECTION OF ERRORS OF JURISDICTION OR GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF (SIC) EXCESS OF JURISDICTION, AND CONCLUDING THAT THE TRIAL COURTS FINDING ON THE SAME QUESTION WAS IMPROPERLY RAISED IN THE PETITION BELOW;b. DECLARING AS NULL AND VOID THE ARBITRATION CLAUSE IN ARTICLE 15 OF THE CONTRACT BETWEEN THE PARTIES FOR BEING "CONTRARY TO PUBLIC POLICY" AND FOR OUSTING THE COURTS OF JURISDICTION;c. DECREEING PRIVATE RESPONDENTS COUNTERCLAIMS TO BE ALL COMPULSORY NOT NECESSITATING PAYMENT OF DOCKET FEES AND CERTIFICATION OF NON-FORUM SHOPPING;d. RULING THAT THE PETITION WAS FILED PREMATURELY WITHOUT WAITING FOR THE RESOLUTION OF THE MOTION FOR RECONSIDERATION OF THE ORDER DATED SEPTEMBER 21, 1998 OR WITHOUT GIVING THE TRIAL COURT AN OPPORTUNITY TO CORRECT ITSELF;e. PROCLAIMING THE TWO ORDERS DATED JULY 23 AND SEPTEMBER 21, 1998 NOT TO BE PROPER SUBJECTS OF CERTIORARI AND PROHIBITION FOR BEING "INTERLOCUTORY IN NATURE;"f. NOT GRANTING THE RELIEFS AND REMEDIES PRAYED FOR IN HE (SIC) PETITION AND, INSTEAD, DISMISSING THE SAME FOR ALLEGEDLY "WITHOUT MERIT."23The Courts RulingThe petition is partly meritorious.Before we delve into the substantive issues, we shall first tackle the procedural issues.The rules on the payment of docket fees for counterclaimsand cross claims were amended effective August 16, 2004KOGIES strongly argues that when PGSMC filed the counterclaims, it should have paid docket fees and filed a certificate of non-forum shopping, and that its failure to do so was a fatal defect.We disagree with KOGIES.As aptly ruled by the CA, the counterclaims of PGSMC were incorporated in its Answer with Compulsory Counterclaim dated July 17, 1998 in accordance with Section 8 of Rule 11, 1997 Revised Rules of Civil Procedure, the rule that was effective at the time the Answer with Counterclaim was filed. Sec. 8 on existing counterclaim or cross-claim states, "A compulsory counterclaim or a cross-claim that a defending party has at the time he files his answer shall be contained therein."On July 17, 1998, at the time PGSMC filed its Answer incorporating its counterclaims against KOGIES, it was not liable to pay filing fees for said counterclaims being compulsory in nature. We stress, however, that effective August 16, 2004 under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC, docket fees are now required to be paid in compulsory counterclaim or cross-claims.As to the failure to submit a certificate of forum shopping, PGSMCs Answer is not an initiatory pleading which requires a certification against forum shopping under Sec. 524of Rule 7, 1997 Revised Rules of Civil Procedure. It is a responsive pleading, hence, the courtsa quodid not commit reversible error in denying KOGIES motion to dismiss PGSMCs compulsory counterclaims.Interlocutory orders proper subject of certiorariCitingGamboa v. Cruz,25the CA also pronounced that "certiorari and Prohibition are neither the remedies to question the propriety of an interlocutory order of the trial court."26The CA erred on its reliance onGamboa.Gamboainvolved the denial of a motion to acquit in a criminal case which was not assailable in an action for certiorari since the denial of a motion to quash required the accused to plead and to continue with the trial, and whatever objections the accused had in his motion to quash can then be used as part of his defense and subsequently can be raised as errors on his appeal if the judgment of the trial court is adverse to him. The general rule is that interlocutory orders cannot be challenged by an appeal.27Thus, inYamaoka v. Pescarich Manufacturing Corporation, we held:The proper remedy in such cases is an ordinary appeal from an adverse judgmentonthemerits, incorporating in said appeal the grounds for assailing the interlocutory orders. Allowing appeals from interlocutory orders would result in the sorry spectacle of a case being subject of a counterproductiveping-pongto and from the appellate court as often as a trial court is perceived to have made an error in any of its interlocutory rulings. However, where the assailed interlocutory order was issued with grave abuse of discretion or patently erroneous and the remedy of appeal would not afford adequate and expeditious relief, the Court allows certiorari as a mode of redress.28Also, appeals from interlocutory orders would open the floodgates to endless occasions for dilatory motions. Thus, where the interlocutory order was issued without or in excess of jurisdiction or with grave abuse of discretion, the remedy is certiorari.29The alleged grave abuse of discretion of the respondent court equivalent to lack of jurisdiction in the issuance of the two assailed orders coupled with the fact that there is no plain, speedy, and adequate remedy in the ordinary course of law amply provides the basis for allowing the resort to a petition for certiorari under Rule 65.Prematurity of the petition before the CANeither do we think that KOGIES was guilty of forum shopping in filing the petition for certiorari. Note that KOGIES motion for reconsideration of the July 23, 1998 RTC Order which denied the issuance of the injunctive writ had already been denied. Thus, KOGIES only remedy was to assail the RTCs interlocutory order via a petition for certiorari under Rule 65.While the October 2, 1998 motion for reconsideration of KOGIES of the September 21, 1998 RTC Order relating to the inspection of things, and the allowance of the compulsory counterclaims has not yet been resolved, the circumstances in this case would allow an exception to the rule that before certiorari may be availed of, the petitioner must have filed a motion for reconsideration and said motion should have been first resolved by the court a quo. The reason behind the rule is "to enable the lower court, in the first instance, to pass upon and correct its mistakes without the intervention of the higher court."30The September 21, 1998 RTC Order directing the branch sheriff to inspect the plant, equipment, and facilities when he is not competent and knowledgeable on said matters is evidently flawed and devoid of any legal support. Moreover, there is an urgent necessity to resolve the issue on the dismantling of the facilities and any further delay would prejudice the interests of KOGIES. Indeed, there is real and imminent threat of irreparable destruction or substantial damage to KOGIES equipment and machineries. We find the resort to certiorari based on the gravely abusive orders of the trial court sans the ruling on the October 2, 1998 motion for reconsideration to be proper.The Core Issue: Article 15 of the ContractWe now go to the core issue of the validity of Art. 15 of the Contract, the arbitration clause. It provides:Article 15.Arbitration.All disputes, controversies, or differences which may arise between the parties, out of or in relation to or in connection with this Contract or for the breach thereof, shall finally be settled by arbitration in Seoul, Korea in accordance with the Commercial Arbitration Rules of the Korean Commercial Arbitration Board.The award rendered by the arbitration(s) shall befinal and bindingupon both parties concerned. (Emphasis supplied.)Petitioner claims the RTC and the CA erred in ruling that the arbitration clause is null and void.Petitioner is correct.Established in this jurisdiction is the rule that the law of the place where the contract is made governs.Lex loci contractus. The contract in this case was perfected here in the Philippines. Therefore, our laws ought to govern. Nonetheless, Art. 2044 of the Civil Code sanctions the validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award. Art. 2044 provides, "Any stipulation that the arbitrators award or decision shall be final, is valid, without prejudice to Articles 2038, 2039 and 2040." (Emphasis supplied.)Arts. 2038,312039,32and 204033abovecited refer to instances where a compromise or an arbitral award, as applied to Art. 2044 pursuant to Art. 2043,34may be voided, rescinded, or annulled, but these would not denigrate the finality of the arbitral award.The arbitration clause was mutually and voluntarily agreed upon by the parties. It has not been shown to be contrary to any law, or against morals, good customs, public order, or public policy. There has been no showing that the parties have not dealt with each other on equal footing. We find no reason why the arbitration clause should not be respected and complied with by both parties. InGonzales v. Climax Mining Ltd.,35we held that submission to arbitration is a contract and that a clause in a contract providing that all matters in dispute between the parties shall be referred to arbitration is a contract.36Again inDel Monte Corporation-USA v. Court of Appeals, we likewise ruled that "[t]he provision to submit to arbitration any dispute arising therefrom and the relationship of the parties is part of that contract and is itself a contract."37Arbitration clause not contrary to public policyThe arbitration clause which stipulates that the arbitration must be done in Seoul, Korea in accordance with the Commercial Arbitration Rules of the KCAB, and that the arbitral award is final and binding, is not contrary to public policy. This Court has sanctioned the validity of arbitration clauses in acatenaof cases. In the 1957 case ofEastboard Navigation Ltd. v. Juan Ysmael and Co., Inc.,38this Court had occasion to rule that an arbitration clause to resolve differences and breaches of mutually agreed contractual terms is valid. InBF Corporation v. Court of Appeals, we held that "[i]n this jurisdiction, arbitration has been held valid and constitutional. Even before the approval on June 19, 1953 of Republic Act No. 876, this Court has countenanced the settlement of disputes through arbitration. Republic Act No. 876 was adopted to supplement the New Civil Codes provisions on arbitration."39And inLM Power Engineering Corporation v. Capitol Industrial Construction Groups, Inc., we declared that:Being an inexpensive, speedy and amicable method of settling disputes,arbitrationalong with mediation, conciliation and negotiationis encouraged by the Supreme Court. Aside from unclogging judicial dockets, arbitration also hastens the resolution of disputes, especially of the commercial kind. It is thus regarded as the "wave of the future" in international civil and commercial disputes. Brushing aside a contractual agreement calling for arbitration between the parties would be a step backward.Consistent with the above-mentioned policy of encouraging alternative dispute resolution methods, courts should liberally construe arbitration clauses. Provided such clause is susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should be granted. Any doubt should be resolved in favor of arbitration.40Having said that the instant arbitration clause is not against public policy, we come to the question on what governs an arbitration clause specifying that in case of any dispute arising from the contract, an arbitral panel will be constituted in a foreign country and the arbitration rules of the foreign country would govern and its award shall be final and binding.RA 9285 incorporated the UNCITRAL Model lawto which we are a signatoryFor domestic arbitration proceedings, we have particular agencies to arbitrate disputes arising from contractual relations. In case a foreign arbitral body is chosen by the parties, the arbitration rules of our domestic arbitration bodies would not be applied. As signatory to the Arbitration Rules of the UNCITRAL Model Law on International Commercial Arbitration41of the United Nations Commission on International Trade Law (UNCITRAL) in the New York Convention on June 21, 1985, the Philippines committed itself to be bound by the Model Law. We have even incorporated the Model Law in Republic Act No. (RA) 9285, otherwise known as the Alternative Dispute Resolution Act of 2004 entitledAn Act to Institutionalize the Use of an Alternative Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution, and for Other Purposes, promulgated on April 2, 2004. Secs. 19 and 20 of Chapter 4 of the Model Law are the pertinent provisions:CHAPTER 4 - INTERNATIONAL COMMERCIAL ARBITRATIONSEC. 19.Adoption of the Model Law on International Commercial Arbitration.International commercial arbitration shall be governed by the Model Law on International Commercial Arbitration (the "Model Law") adopted by the United Nations Commission on International Trade Law on June 21, 1985 (United Nations Document A/40/17) and recommended for enactment by the General Assembly in Resolution No. 40/72 approved on December 11, 1985, copy of which is hereto attached as Appendix "A".SEC. 20.Interpretation of Model Law.In interpreting the Model Law, regard shall be had to its international origin and to the need for uniformity in its interpretation and resort may be made to thetravaux preparatoriesand the report of the Secretary General of the United Nations Commission on International Trade Law dated March 25, 1985 entitled, "International Commercial Arbitration: Analytical Commentary on Draft Trade identified by reference number A/CN. 9/264."While RA 9285 was passed only in 2004, it nonetheless applies in the instant case since it is a procedural law which has a retroactive effect. Likewise, KOGIES filed its application for arbitration before the KCAB on July 1, 1998 and it is still pending because no arbitral award has yet been rendered. Thus, RA 9285 is applicable to the instant case. Well-settled is the rule that procedural laws are construed to be applicable to actions pending and undetermined at the time of their passage, and are deemed retroactive in that sense and to that extent. As a general rule, the retroactive application of procedural laws does not violate any personal rights because no vested right has yet attached nor arisen from them.42Among the pertinent features of RA 9285 applying and incorporating the UNCITRAL Model Law are the following:(1) The RTC must refer to arbitration in proper casesUnder Sec. 24, the RTC does not have jurisdiction over disputes that are properly the subject of arbitration pursuant to an arbitration clause, and mandates the referral to arbitration in such cases, thus:SEC. 24.Referral to Arbitration.A court before which an action is brought in a matter which is the subject matter of an arbitration agreement shall, if at least one party so requests not later than the pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed.(2) Foreign arbitral awards must be confirmed by the RTCForeign arbitral awards while mutually stipulated by the parties in the arbitration clause to be final and binding are not immediately enforceable or cannot be implemented immediately. Sec. 3543of the UNCITRAL Model Law stipulates the requirement for the arbitral award to be recognized by a competent court for enforcement, which court under Sec. 36 of the UNCITRAL Model Law may refuse recognition or enforcement on the grounds provided for. RA 9285 incorporated these provisos to Secs. 42, 43, and 44 relative to Secs. 47 and 48, thus:SEC. 42.Application of the New York Convention.The New York Convention shall govern the recognition and enforcement of arbitral awards covered by said Convention.The recognition and enforcement of such arbitral awards shall be filed with theRegional Trial Courtin accordance with the rules of procedure to be promulgated by the Supreme Court. Said procedural rules shall provide that the party relying on the award or applying for its enforcement shall file with the court the original or authenticated copy of the award and the arbitration agreement. If the award or agreement is not made in any of the official languages, the party shall supply a duly certified translation thereof into any of such languages.The applicant shall establish that the country in which foreign arbitration award was made in party to the New York Convention.x x x xSEC. 43.Recognition and Enforcement of Foreign Arbitral Awards Not Covered by the New York Convention.The recognition and enforcement of foreign arbitral awards not covered by the New York Convention shall be done in accordance with procedural rules to be promulgated by the Supreme Court. The Court may, on grounds of comity and reciprocity, recognize and enforce a non-convention award as a convention award.SEC. 44.Foreign Arbitral Award Not Foreign Judgment.A foreign arbitral award when confirmed by a court of a foreign country, shall be recognized and enforced as a foreign arbitral award and not as a judgment of a foreign court.A foreign arbitral award, when confirmed by the Regional Trial Court, shall be enforced in the same manner as final and executory decisions of courts of law of the Philippinesx x x xSEC. 47.Venue and Jurisdiction.Proceedings for recognition and enforcement of an arbitration agreement or for vacations, setting aside, correction or modification of an arbitral award, and any application with a court for arbitration assistance and supervision shall be deemed as special proceedings and shall be filed with the Regional Trial Court (i) where arbitration proceedings are conducted; (ii) where the asset to be attached or levied upon, or the act to be enjoined is located; (iii) where any of the parties to the dispute resides or has his place of business; or (iv) in the National Judicial Capital Region, at the option of the applicant.SEC. 48.Notice of Proceeding to Parties.In a special proceeding for recognition and enforcement of an arbitral award, the Court shall send notice to the parties at their address of record in the arbitration, or if any part cannot be served notice at such address, at such partys last known address. The notice shall be sent al least fifteen (15) days before the date set for the initial hearing of the application.It is now clear that foreign arbitral awards when confirmed by the RTC are deemed not as a judgment of a foreign court but as a foreign arbitral award, and when confirmed, are enforced as final and executory decisions of our courts of law.Thus, it can be gleaned that the concept of a final and binding arbitral award is similar to judgments or awards given by some of our quasi-judicial bodies, like the National Labor Relations Commission and Mines Adjudication Board, whose final judgments are stipulated to be final and binding, but not immediately executory in the sense that they may still be judicially reviewed, upon the instance of any party. Therefore, the final foreign arbitral awards are similarly situated in that they need first to be confirmed by the RTC.(3) The RTC has jurisdiction to review foreign arbitral awardsSec. 42 in relation to Sec. 45 of RA 9285 designated and vested the RTC with specific authority and jurisdiction to set aside, reject, or vacate a foreign arbitral award on grounds provided under Art. 34(2) of the UNCITRAL Model Law. Secs. 42 and 45 provide:SEC. 42.Application of the New York Convention.The New York Convention shall govern the recognition and enforcement of arbitral awards covered by said Convention.The recognition and enforcement of such arbitral awards shall be filed with theRegional Trial Courtin accordance with the rules of procedure to be promulgated by the Supreme Court. Said procedural rules shall provide that the party relying on the award or applying for its enforcement shall file with the court the original or authenticated copy of the award and the arbitration agreement. If the award or agreement is not made in any of the official languages, the party shall supply a duly certified translation thereof into any of such languages.The applicant shall establish that the country in which foreign arbitration award was made is party to the New York Convention.If the application for rejection or suspension of enforcement of an award has been made, the Regional Trial Court may, if it considers it proper, vacate its decision and may also, on the application of the party claiming recognition or enforcement of the award, order the party to provide appropriate security.x x x xSEC. 45.Rejection of a Foreign Arbitral Award.A party to a foreign arbitration proceeding may oppose an application for recognition and enforcement of the arbitral award in accordance with the procedures and rules to be promulgated by the Supreme Court only on those grounds enumerated under Article V of the New York Convention. Any other ground raised shall be disregarded by the Regional Trial Court.Thus, while the RTC does not have jurisdiction over disputes governed by arbitration mutually agreed upon by the parties, still the foreign arbitral award is subject to judicial review by the RTC which can set aside, reject, or vacate it. In this sense, what this Court held inChung Fu Industries (Phils.), Inc. relied upon by KOGIES is applicable insofar as the foreign arbitral awards, while final and binding, do not oust courts of jurisdiction since these arbitral awards are not absolute and without exceptions as they are still judicially reviewable. Chapter 7 of RA 9285 has made it clear that all arbitral awards, whether domestic or foreign, are subject to judicial review on specific grounds provided for.(4) Grounds for judicial review different in domestic and foreign arbitral awardsThe differences between a final arbitral award from an international or foreign arbitral tribunal and an award given by a local arbitral tribunal are the specific grounds or conditions that vest jurisdiction over our courts to review the awards.For foreign or international arbitral awards which must first be confirmed by the RTC, the grounds for setting aside, rejecting or vacating the award by the RTC are provided under Art. 34(2) of the UNCITRAL Model Law.For final domestic arbitral awards, which also need confirmation by the RTC pursuant to Sec. 23 of RA 87644and shall be recognized as final and executory decisions of the RTC,45they may only be assailed before the RTC and vacated on the grounds provided under Sec. 25 of RA 876.46(5) RTC decision of assailed foreign arbitral award appealableSec. 46 of RA 9285 provides for an appeal before the CA as the remedy of an aggrieved party in cases where the RTC sets aside, rejects, vacates, modifies, or corrects an arbitral award, thus:SEC. 46.Appeal from Court Decision or Arbitral Awards.A decision of the Regional Trial Court confirming, vacating, setting aside, modifying or correcting an arbitral award may be appealed to the Court of Appeals in accordance with the rules and procedure to be promulgated by the Supreme Court.The losing party who appeals from the judgment of the court confirming an arbitral award shall be required by the appellate court to post a counterbond executed in favor of the prevailing party equal to the amount of the award in accordance with the rules to be promulgated by the Supreme Court.Thereafter, the CA decision may further be appealed or reviewed before this Court through a petition for review under Rule 45 of the Rules of Court.PGSMC has remedies to protect its interestsThus, based on the foregoing features of RA 9285, PGSMC must submit to the foreign arbitration as it bound itself through the subject contract. While it may have misgivings on the foreign arbitration done in Korea by the KCAB, it has available remedies under RA 9285. Its interests are duly protected by the law which requires that the arbitral award that may be rendered by KCAB must be confirmed here by the RTC before it can be enforced.With our disquisition above, petitioner is correct in its contention that an arbitration clause, stipulating that the arbitral award is final and binding, does not oust our courts of jurisdiction as the international arbitral award, the award of which is not absolute and without exceptions, is still judicially reviewable under certain conditions provided for by the UNCITRAL Model Law on ICA as applied and incorporated in RA 9285.Finally, it must be noted that there is nothing in the subject Contract which provides that the parties may dispense with the arbitration clause.Unilateral rescission improper and illegalHaving ruled that the arbitration clause of the subject contract is valid and binding on the parties, and not contrary to public policy; consequently, being bound to the contract of arbitration, a party may not unilaterally rescind or terminate the contract for whatever cause without first resorting to arbitration.What this Court held inUniversity of the Philippines v. De Los Angeles47and reiterated in succeeding cases,48that the act of treating a contract as rescinded on account of infractions by the other contracting party is valid albeit provisional as it can be judicially assailed, is not applicable to the instant case on account of a valid stipulation on arbitration. Where an arbitration clause in a contract is availing, neither of the parties can unilaterally treat the contract as rescinded since whatever infractions or breaches by a party or differences arising from the contract must be brought first and resolved by arbitration, and not through an extrajudicial rescission or judicial action.The issues arising from the contract between PGSMC and KOGIES on whether the equipment and machineries delivered and installed were properly installed and operational in the plant in Carmona, Cavite; the ownership of equipment and payment of the contract price; and whether there was substantial compliance by KOGIES in the production of the samples, given the alleged fact that PGSMC could not supply the raw materials required to produce the sample LPG cylinders, are matters proper for arbitration. Indeed, we note that on July 1, 1998, KOGIES instituted an Application for Arbitration before the KCAB in Seoul, Korea pursuant to Art. 15 of the Contract as amended. Thus, it is incumbent upon PGSMC to abide by its commitment to arbitrate.Corollarily, the trial court gravely abused its discretion in granting PGSMCs Motion for Inspection of Things on September 21, 1998, as the subject matter of the motion is under the primary jurisdiction of the mutually agreed arbitral body, the KCAB in Korea.In addition, whatever findings and conclusions made by the RTC Branch Sheriff from the inspection made on October 28, 1998, as ordered by the trial court on October 19, 1998, is of no worth as said Sheriff is not technically competent to ascertain the actual status of the equipment and machineries as installed in the plant.For these reasons, the September 21, 1998 and October 19, 1998 RTC Orders pertaining to the grant of the inspection of the equipment and machineries have to be recalled and nullified.Issue on ownership of plant proper for arbitrationPetitioner assails the CA ruling that the issue petitioner raised on whether the total contract price of USD 1,530,000 was for the whole plant and its installation is beyond the ambit of a Petition for Certiorari.Petitioners position is untenable.It is settled that questions of fact cannot be raised in an original action for certiorari.49Whether or not there was full payment for the machineries and equipment and installation is indeed a factual issue prohibited by Rule 65.However, what appears to constitute a grave abuse of discretion is the order of the RTC in resolving the issue on the ownership of the plant when it is the arbitral body (KCAB) and not the RTC which has jurisdiction and authority over the said issue. The RTCs determination of such factual issue constitutes grave abuse of discretion and must be reversed and set aside.RTC has interim jurisdiction to protect the rights of the partiesAnent the July 23, 1998 Order denying the issuance of the injunctive writ paving the way for PGSMC to dismantle and transfer the equipment and machineries, we find it to be in order considering the factual milieu of the instant case.Firstly, while the issue of the proper installation of the equipment and machineries might well be under the primary jurisdiction of the arbitral body to decide, yet the RTC under Sec. 28 of RA 9285 has jurisdiction to hear and grant interim measures to protect vested rights of the parties. Sec. 28 pertinently provides:SEC. 28.Grant of interim Measure of Protection.(a)It is not incompatible with an arbitration agreement for a party to request, before constitution of the tribunal, from a Court to grant such measure. After constitution of the arbitral tribunal and during arbitral proceedings, a request for an interim measure of protection, or modification thereof, may be made with the arbitralor to the extent that the arbitral tribunal has no power to act or is unable to act effectivity, the request may be made with the Court. The arbitral tribunal is deemed constituted when the sole arbitrator or the third arbitrator, who has been nominated, has accepted the nomination and written communication of said nomination and acceptance has been received by the party making the request.(b) The following rules on interim or provisional relief shall be observed:Any party may request that provisional relief be granted against the adverse party.Such relief may be granted:(i)to prevent irreparable loss or injury;(ii) to provide security for the performance of any obligation;(iii) to produce or preserve any evidence; or(iv) to compel any other appropriate act or omission.(c) The order granting provisional relief may be conditioned upon the provision of security or any act or omission specified in the order.(d) Interim or provisional relief is requested by written application transmitted by reasonable means to the Court or arbitral tribunal as the case may be and the party against whom the relief is sought, describing in appropriate detail the precise relief, the party against whom the relief is requested, the grounds for the relief, and the evidence supporting the request.(e)The order shall be binding upon the parties.(f) Either party may apply with the Court for assistance in implementing or enforcing an interim measure ordered by an arbitral tribunal.(g) A party who does not comply with the order shall be liable for all damages resulting from noncompliance, including all expenses, and reasonable attorney's fees, paid in obtaining the orders judicial enforcement. (Emphasis ours.)Art. 17(2) of the UNCITRAL Model Law on ICA defines an "interim measure" of protection as:Article 17. Power of arbitral tribunal to order interim measuresxxx xxx xxx(2) Aninterim measureis anytemporary measure, whether in the form of an award or in another form, by which, at any time prior to the issuance of the award by which the dispute is finally decided, the arbitral tribunal orders a party to:(a)Maintain or restore the status quo pending determination of the dispute;(b)Take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself;(c)Provide a means of preserving assets out of which a subsequent award may be satisfied; or(d)Preserve evidence that may be relevant and material to the resolution of the dispute.Art. 17 J of UNCITRAL Model Law on ICA also grants courts power and jurisdiction to issue interim measures:Article 17 J. Court-ordered interim measuresA court shall have the same power of issuing an interim measure in relation to arbitration proceedings, irrespective of whether their place is in the territory of this State, as it has in relation to proceedings in courts. The court shall exercise such power in accordance with its own procedures in consideration of the specific features of international arbitration.In the recent 2006 case ofTransfield Philippines, Inc. v. Luzon Hydro Corporation, we were explicit that even "the pendency of an arbitral proceeding does not foreclose resort to the courts for provisional reliefs." We explicated this way: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 a judicial authority for interim or conservatory measures. Likewise, Section 14 of Republic Act (R.A.) No. 876 (The Arbitration Law) recognizes the rights of any party to petition the court to take measures to safeguard and/or conserve any matter which is the subject of the dispute in arbitration. In addition, R.A. 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.50It is thus beyond cavil that the RTC has authority and jurisdiction to grant interim measures of protection.Secondly, considering that the equipment and machineries are in the possession of PGSMC, it has the right to protect and preserve the equipment and machineries in the best way it can. Considering that the LPG plant was non-operational, PGSMC has the right to dismantle and transfer the equipment and machineries either for their protection and preservation or for the better way to make good use of them which is ineluctably within the management discretion of PGSMC.Thirdly, and of greater import is the reason that maintaining the equipment and machineries in Worths property is not to the best interest of PGSMC due to the prohibitive rent while the LPG plant as set-up is not operational. PGSMC was losing PhP322,560 as monthly rentals or PhP3.87M for 1998 alone without considering the 10% annual rent increment in maintaining the plant.Fourthly, and corollarily, while the KCAB can rule on motions or petitions relating to the preservation or transfer of the equipment and machineries as an interim measure, yet on hindsight, the July 23, 1998 Order of the RTC allowing the transfer of the equipment and machineries given the non-recognition by the lower courts of the arbitral clause, has accorded an interim measure of protection to PGSMC which would otherwise been irreparably damaged.Fifth, KOGIES is not unjustly prejudiced as it has already been paidasubstantial amount based on the contract. Moreover,KOGIES is amply protected by the arbitral action it has instituted before the KCAB, the award of which can be enforced in our jurisdiction through the RTC. Besides, by our decision, PGSMC is compelled to submit to arbitration pursuant to the valid arbitration clause of its contract with KOGIES.PGSMC to preserve the subject equipment and machineriesFinally, while PGSMC may have been granted the right to dismantle and transfer the subject equipment and machineries, it does not have the right to convey or dispose of the same considering the pending arbitral proceedings to settle the differences of the parties. PGSMC therefore must preserve and maintain the subject equipment and machineries with the diligence of a good father of a family51until final resolution of the arbitral proceedings and enforcement of the award, if any.WHEREFORE, this petition isPARTLY GRANTED, in that:(1) The May 30, 2000 CA Decision in CA-G.R. SP No. 49249 isREVERSEDandSET ASIDE;(2) The September 21, 1998 and October 19, 1998 RTC Orders in Civil Case No. 98-117 areREVERSEDandSET ASIDE;(3) The parties are herebyORDEREDto submit themselves to the arbitration of their dispute and differences arising from the subject Contract before the KCAB; and(4) PGSMC is herebyALLOWEDto dismantle and transfer the equipment and machineries, if it had not done so, andORDEREDto preserve and maintain them until the finality of whatever arbitral award is given in the arbitration proceedings.No pronouncement as to costs.SO ORDERED.

FIRST DIVISIONG.R. No. 150241 November 4, 2004EDUARDO S. MERCADO, herein represented by his counsel, ATTY. ENRICO M. UYEHARA,petitioner,vs.THE COURT OF APPEALS, the Honorable LETICIA P. MORALES, in her capacity as Presiding Judge of Branch 140 of the Regional Trial Court of Makati City, ESTATE OF CONCEPCION CLAUDIO GATMAITAN, CARMELIE C. GATMAITAN and ARMANDO V. GATMAITAN,respondents.

QUISUMBING,J.:This special civil action for certiorari seeks to annul the Court of Appeals Resolutions dated February 23, 20011and July 31, 2001,2in CA-G.R. SP No. 62678, dismissing Eduardo S. Mercados petition for certiorari for late payment of docket fees and denying his Motion for Reconsideration.The facts and antecedent proceedings, as culled from records, are as follows:On various dates from January to August 1988, private respondent Armando V. Gatmaitan obtained a series of loans from petitioner Eduardo S. Mercado totaling P850,000, to renovate and repair two houses located at 1827 Santan St., Dasmarias Village, Makati City. Said houses were the conjugal properties of Armando and Concepcion Gatmaitan. The loan agreement was in writing.The agreement stipulated that Armando was to lease the aforementioned houses and deliver all the rentals collected to Eduardo. Despite repeated demands, Armando did not pay any amount to Eduardo.Sometime in 1989, Eduardo learned that Concepcion had filed a Complaint docketed as Civil Case No. 89-4506 against Armando for the separation and liquidation of their conjugal properties before the Regional Trial Court (RTC) of Makati City, Branch 149.3Eduardo immediately filed a Motion for Leave to File Complaint in Intervention, claiming that he had an interest as a creditor in the unpaid loans he extended to Armando for the renovation of the conjugal properties subject of said civil case.For failure to file his Answer, Armando was declared in default and Concepcion was allowed to present evidence ex parte. Petitioner then filed a Manifestation and Motion praying that the trial court hold in abeyance the resolution of the case pending resolution of his Motion for Leave to File Complaint in Intervention. Meanwhile, Armando moved to lift the Order of Default and sought to have his Answer admitted.In two separate Orders, both dated February 19, 1990, the trial court denied Armandos Motion to Lift Order of Default and Motion for Admission of Answer as well as petitioners Motion for Leave to File Complaint in Intervention.4However, Eduardo allegedly did not immediately learn of the denial of his motion to intervene.On January 7, 1994, the trial court handed down its Decision in Civil Case No. 89-4506. Again, Eduardo allegedly had no knowledge about the judgment or the subsequent appeal of said ruling.On February 22, 1999, Eduardo, thru a different counsel, filed a Motion for Early Resolution of the Motion for Leave to File Complaint in Intervention, which was raffled to Branch 140 of the Makati City RTC. During the hearing of the motion, the trial court informed Eduardo that a Decision had already been rendered in Civil Case No. 89-4506 by Branch 149 and the appeal from said judgment had already been resolved by the Court of Appeals. Nonetheless, it directed the parties to file their respective position papers. Concepcion filed an Opposition with Motion for Issuance of Writ of Execution but she died on May 15, 1999, before her motion could be resolved.In an Order5dated September 27, 1999, Branch 140, denied Eduardos motion for want of merit, pointing out that his Motion for Leave to File Complaint in Intervention had been dismissed previously by Branch 149 in its Order dated February 19, 1990, without any Motion for Reconsideration being filed from the aforesaid order of dismissal.On September 30, 1999, the trial court granted the Motion for Writ of Execution.Eduardo moved for reconsideration but this was denied on October 27, 1999. He then filed a Petition for Relief dated January 30, 2000, raising denial of due process and fraud as his grounds since he allegedly never received a copy of the Order of September 19, 1990, thus preventing him from moving for reconsideration. In paragraphs 14 and 15 of the Petition for Relief, however, petitioner admits he did receive an Order dated February 19, 1990.In an Order dated April 6, 2000, the Regional Trial Court of Makati City, Branch 140, ruled on the petition, as follows:Finding no cogent reasons to reverse or set aside the [O]rders dated September 27, 1999 and October 27, 1999, the petition for relief filed by petitioner-intervenor Eduardo S. Mercado praying that he be allowed to file complaint in intervention is hereby DENIED.SO ORDERED.6On May 18, 2000, petitioner moved for reconsideration of the foregoing Order but this was denied in an Order dated September 26, 2000, a copy of which was received by petitioner on November 17, 2000.Petitioner then filed a petition for certiorari with the Court of Appeals, which was dismissed for lack of jurisdiction due to late payment of docket fees. The appellate court found that while Eduardo filed his petition for certiorari by registered mail on January 16, 2001, the sixtieth (60th) day from the receipt of the Order of Denial of Motion for Reconsideration, the docket and other lawful fees were paid only on January 17, 2001, one day after the expiration of the reglementary period for filing his petition. The Court of Appeals applied Rule 46, Section 3 of the 1997 Rules of Civil Procedure7which allows payment of docket fees within a reasonable time if it was not paid during the filing of the initiatory pleading, but in no case beyond the applicable prescriptive period. It held that while the rule on the payment of docket fees may be liberally construed if only to secure a just and speedy disposition of every action and proceeding, nonetheless, it should not be ignored or belittled, lest it scathes and prejudices the other partys substantive rights.8Petitioner then filed a Motion for Reconsideration but was denied.Dissatisfied, petitioner now comes to this Court on the grounds that:1. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DISMISSED THE PETITION, SOLELY ON PROCEDURAL GROUNDS.2. PETITIONER HAS A GOOD AND MERITORIOUS CAUSE OF ACTION AS THE PUBLIC RESPONDENT REGIONAL TRIAL COURT, BRANCH 140, MAKATI CITY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DENIED THE PETITION FOR RELIEF FILED BY THE HEREIN PETITIONER.9Petitioners arguments lack persuasiveness. It bears stressing that this case must be dismissed outright as the petitioner adopted the wrong remedy in bringing this case before this Court. Petitioner should have filed a petition for review under Rule 45 of the 1997 Rules of Civil Procedure instead of a special civil action for certiorari under Rule 65. The proper remedy of a party aggrieved by a decision of the Court of Appeals is a petition for review under Rule 45, which is not identical to a petition for certiorari under Rule 65. Under Rule 45, decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceedings involved, may be appealed to us by filing a petition for review, which would be but a continuation of the appellate process over the original case. On the other hand, a special civil action under Rule 65 is an independent action based on the specific grounds therein provided and, as a general rule, cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that to be taken under Rule 45. Accordingly, when a party adopts an improper remedy, as in this case, his petition may be dismissed outright.10Petitioner should have availed of the ordinary appeal process such as a petition for review under Rule 45, within 15 days after notice of denial of his Motion for Reconsideration. Undoubtedly, petitioner had already lost this remedy when he filed this special civil action on January 16, 2001. A Petition for Certiorari cannot be a substitute for the lost or lapsed remedy of appeal, where such loss is occasioned by the petitioners own neglect or error in the choice of remedies.11By his own account, petitioner received the Order denying the Motion for Reconsideration from the RTC on November 17, 2000. Instead of filing a petition for review with the appellate court within 15 days thereof or until December 2, 2000, he filed a petition for certiorari by registered mail on January 16, 2001, but belatedly made the payment of docket fees only on January 17, 2001. Noteworthy, petitioner did not even attempt to explain why he was unable to file a petition for review within the reglementary period.Indeed, not infrequently, litigants and parties to a petition have invoked liberal construction of the Rules of Court to justify lapses in its observance. Hopefully, it is not simply a cover-up of their own neglect or sheer ignorance of procedure. While indeed this Court has on occasion set aside procedural irregularities in the interest of justice, it must be stressed that liberality of construction of the rules should not be a panacea for all procedural maladies. For this Court will not tolerate wanton disregard of the procedural rules under the guise of liberal construction.In any event, even if we were to disregard the procedural defects, we find that this petition must still be dismissed as the appellate court did not commit any grave abuse of discretion amounting to want or excess of jurisdiction in dismissing the petition for late payment of filing fees. Petitioner undeniably paid his docket fees beyond the reglementary period of 60 days for filing a petition for certiorari. Well settled is the rule that the court cannot acquire jurisdiction over the subject matter of a case, unless the docket fees are paid.12And where the filing of the initiatory pleading is not accompanied by payment of the docket fees, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.13Thus, the Court of Appeals correctly dismissed the petition for certiorari pursuant to Rule 46, Section 314in relation to Rule 65, Section 6 (2)15of the 1997 Rules of Civil Procedure.WHEREFORE, the instant petition is DISMISSED for lack of merit. The assailed Resolutions dated February 23, 2001 and July 31, 2001 of the Court of Appeals are hereby AFFIRMED.SO ORDERED.

SECOND DIVISIONG.R. No. 138031 May 27, 2004ANTONIO NAVARRO and GRAHMMS, INC.,petitioners,vs.METROPOLITAN BANK & TRUST COMPANY, THE HON. COURT OF APPEALS, and THE HON. ZEUS C. ABROGAR (Presiding Judge of the Regional Trial Court of Makati City, Branch 150),respondents.D E C I S I O NCALLEJO, SR.,J.:This is a petition for review oncertiorariunder Rule 45 of the Rules of Court, as amended, assailing the Decision1of the Court of Appeals, which affirmed the denial by the Regional Trial Court of Makati City, Branch 150, in Civil Case No. 94-2913, of the petitioners' appeal for non-payment of docket fees, as well as the appellate court's March 29, 1999 Resolution which denied the petitioners' motion for reconsideration.The facts are undisputed:On November 3, 1994, the private respondent Metropolitan Bank and Trust Company (respondent MBTC) filed with the RTC of Makati City a petition for the judicial foreclosure of the real estate mortgage executed by the petitioners in its favor.2The case was docketed as Civil Case No. 94-2913 and was raffled to Branch 150 of the same court.After due proceedings, the RTC rendered judgment on January 16, 1998,3the dispositive portion of which reads:WHEREFORE, the court hereby grants the right of the plaintiff bank to foreclose the properties belonging to defendant Antonio Navarro covered by TCT Nos. 155256, 155257, 155258 particularly described as follows:to be sold at public auction the proceeds of which to be applied in payment of theP3,500,000.00 loan, plus interest and penalty charges until fully paid. In case of deficiency on the proceeds of the aforesaid sale, execution on the defendant's property shall be implemented. Likewise, 10% of the total amount due shall be awarded as attorney's fees.4The petitioners received a copy of the Decision on February 10, 1998 and on February 18, 1998 filed a Motion for Reconsideration of the decision.5On March 25, 1998, the trial court issued an Order denying the said motion.6The petitioners received their copy of the order on April 7, 1998.On April 14, 1998, the last day of the reglementary period, the petitioners filed with the RTC a Notice of Appeal7from its January 16, 1998 Decision and March 25, 1998 Order. However, the petitioners failed to pay the requisite docket and other lawful fees.On April 21, 1998, the respondent MBTC filed a Motion to Deny Due Course to Notice of Appeal with Motion for Execution8on the ground that the notice of appeal was not timely filed. Acting on the motion, the RTC, while ruling in favor of the timeliness of the petitioners' notice of appeal, nevertheless denied the appeal for not being accompanied by the required docket fees. Hence, in its Order dated May 27, 1998,9the RTC granted the motion of the respondents for the issuance of a writ of execution for the enforcement of the decision. The RTC held that: From the sequence of dates and events, it is clear that defendants filed their Notice of Appeal within the reglementary period from the date of their receipt of the denial of their motion for reconsideration since they had still seven days left to file an appeal. However, since Section 4, Rule 41 of the New Rules of Civil Procedure, states that:"Within the period for taking an appeal, the appellant shall pay to the clerk of court which rendered the judgment or final order appealed from, the full amount of the appellate court docket and other lawful fees. Proof of payment of said fees shall be transmitted to the appellate court together with the original record or the record on appeal."It is also incumbent upon the appellants to pay the required appeal fee within the reglementary period. Up to the present, the court has not yet received any evidence of payment of the appellate docket fee to be attached to the record of this case, in accordance with the New Rules, to the prejudice of the other party.Wherefore, from the foregoing, the notice of appeal is hereby DENIED for not being accompanied by the required docket fees, and let a writ of execution be issued for the enforcement of the decision.On June 2, 1998, the RTC correspondingly issued the Writ of Execution10prayed for by the respondent MBTC.On June 11, 1998, the counsel for the petitioners informed the court by letter that on June 9, 1998, he sent his messenger to the court to pay the docket fees on the notice of appeal but was refused by the receiving clerk.11In a Letter-Response dated June 19, 1998, the trial court instructed the counsel for the petitioners, to wit:In response to your letter dated June 11, 1998, please be informed that as a matter of policy, courts do not receive payments of docket fees. This should be made to the Office of the Clerk of Court, with only the official receipts and/or proofs of payment filed in court to be attached to the record of the case to be forwarded to the Court of Appeals. Moreover, the court has already resolved all pending incidents before it, the last one in its Order dated May 27, 1998 so that, if the receiving clerk refused receipt of the docket fee on the nature (sic) of appeal, it is only in consonance with the above-mentioned order.12On June 29, 1998, the petitioner filed with the CA a petition forcertiorariassailing the May 27, 1998 Order of the RTC for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction.13In their reply to the comment, the petitioners, for the first time, proffered to the appellate court an explanation for their admitted failure to pay the appellate docket fees within the prescribed reglementary period. The petitioners, thus, averred:6. Petitioners' failure to pay the appellate docket fee is not without a valid explanation. At the time of the filing of Notice of Appeal, petitioners' counsel's lone secretary, without informing in advance the undersigned, decided to migrate to another country for "greener pasture," leaving the undersigned the responsibility to tend to all the cases in his office. The undersigned's operation was literally disabled and in shambles;7. Thus, when the undersigned discovered this inadvertence, he immediately tried to remedy the situation and can only hope that this Honorable Court can understand the undersigned's predicament.14On September 30, 1998, the CA promulgated its Decision dismissing the petitioner's appeal.15The petitioner's motion for reconsideration16and its supplement17thereto was, likewise, denied by the appellate court in its Resolution dated March 29, 1999.18Hence, the petition at bar.The petitioners assail the decision of the CA grounded on the following:A. THE APPEAL OF PETITIONER WAS DULY AND SEASONABLY PERFECTED; HENCE, THE HON. CA ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN RENDERING THE ASSAILED DECISION (ANNEX "M") THAT SUSTAINED THE ORDER OF THE RTC DENYING, DISALLOWING AND DISMISSING THE APPEAL;B. THE ORDER [OF THE RTC] DIRECTING THE EXECUTION OF ITS JUDGMENT [BEFORE THE EXPIRY OF THE 90-DAY PERIOD FROM RECEIPT THEREOF BY THE PETITIONERS] IS PREMATURE, BECAUSE (1) THE COURT HAD LOST JURISDICTION OVER THE CASE UPON THE FILING OF THE NOTICE OF APPEAL AND (2) RULE 68 PROVIDES FOR THE PROCEDURE HOW TO ENFORCE A JUDGMENT IN A PETITION FOR FORECLOSURE;C. THE HONORABLE COURT OF APPEALS ERRED IN SUSTAINING THE ORDER OF THE RTC THAT DISMISSED THE THIRD-PARTY COMPLAINT OF PETITIONER NAVARRO AGAINST THE ERRANT AND FRAUDULENT BRANCH MANAGER DANILO MENESES OF RESPONDENT METROBANK;D. THE JUDGMENT BINDING THE CONJUGAL PROPERTY OF SPOUSES CLARITA PARAGAS AND ANTONIO NAVARRO ON THE ALLEGED DEBT OF THE HUSBAND IS AGAINST THE LAW;19The petition is denied due course.The petitioners contend that the appellate court erred in sustaining the RTC's denial of their notice of appeal on the ground of their failure to pay the docket and other legal fees. The petitioners aver that the payment of the said fees is not a prerequisite for the perfection of an appeal. They contend that having seasonably filed their notice of appeal from the RTC's January 16, 1998 Decision and March 25, 1998 Order, the appeal therefrom was deemed perfected; thus, divesting the RTC of jurisdiction over the case. Hence, when the RTC issued its March 25, 1998 Order, it had no jurisdiction to do so. The petitioners cited the rulings of this Court inSantos v. Court of Appeals20and inManila Mandarin Employees Union v. NLRC21to bolster its stance.We are not convinced. Time and time again, this Court has consistently held that the "payment of docket fees within the prescribed period is mandatory for the perfection of an appeal. Without such payment, the appeal is not perfected. The appellate court does not acquire jurisdiction over the subject matter of the action and the decision sought to be appealed from becomes final and executory."22It bears stressing that appeal is not a right, but a mere statutory privilege.23Corollary to this principle is that the appeal must be exercised strictly in accordance with the provisions set by law. Rule 41 of the Rules of Court provides that an appeal to the CA from a case decided by the RTC in the exercise of the latter's original jurisdiction shall be taken within fifteen (15) days from the notice of judgment or final order appealed from. Such appeal is perfected by filing a notice of appeal thereof with the court that rendered the judgment or final order and, by serving a copy of that notice upon the adverse party,24and by paying within this same period the full amount of the appellate court docket and other lawful fees to the clerk of court.25The payment of the docket fees within this period is a condition sine qua non to the perfection of the appeal. Contrary to the petitioners' predication, the payment of the appellate docket and other lawful fees is not a mere technicality of law or procedure. It is an essential requirement, without which the decision or final order appealed from would become final and executory as if no appeal was filed at all.We have consistently ruled that litigation is not a game of technicalities and that every case must be prosecuted in accordance with the prescribed procedure so that issues may be properly presented and justly resolved.26However, we have also ruled that rules of procedure must be faithfully followed except only when, for persuasive and weighting reasons, they may be relaxed to relieve a litigant of an injustice commensurate with his failure to comply with the prescribed procedure. Concomitant to a liberal interpretation of the rules of procedure should be an effort on the part of the party invoking liberality to adequately explain his failure to abide by the rules.27Our ruling in this case is not antithetical to our ruling in La Salette College v. Victor Pilotin,28viz:Notwithstanding the mandatory nature of the requirement of payment of appellate docket fees, we also recognize that its strict application is qualified by the following: first, failure to pay those fees within the reglementary period allows only discretionary, not automatic, dismissal; second, such power should be used by the court in conjunction with its exercise of sound discretion in accordance with the tenets of justice and fair play, as well as with a great deal of circumspection in consideration of all attendant circumstances.In Mactan Cebu International Airport Authority v. Mangubat, the payment of the docket fees was delayed by six (6) days, but the late payment was accepted, because the party showed willingness to abide by the Rules by immediately paying those fees. Yambao v. Court of Appeals, saw us again relaxing the Rules when we declared therein that "the appellate court may extend the time for the payment of the docket fees if appellant is able to show that there is a justifiable reason for the failure to pay the correct amount of docket fees within the prescribed period, like fraud, accident, mistake, excusable negligence, or a similar supervening casualty, without fault on the part of the appellant."In the present case, the petitioners failed to establish any sufficient and satisfactory reason to warrant a relaxation of the mandatory rule on the payment of appellate docket and other lawful fees. The explanation given by the petitioners' counsel for the non-payment was that his secretary, who migrated to another country, inadvertently failed to pay the docket and other fees when she filed the petitioners' notice of appeal with the court. The said counsel came to know of the inadvertence only when he received a copy of the RTC's May 27, 1998 Order which denied due course to the appeal for failure to pay the required docket