CHUNG FU INDUSTRIES (PHILIPPINES) INC., its Directors and Officers namely: HUANG KUO-CHANG, HUANG AN-CHUNG, JAMES J.R. CHEN, TRISTAN A. CATINDIG, VICENTE B. AMADOR, ROCK A.C. HUANG, JEM S.C. HUANG, MARIA TERESA SOLIVEN and VIRGILIO M. DEL ROSARIO, vs. COURT OF APPEALS, HON. FRANCISCO X. VELEZ…
- G.R. Number: G.R. No. 96283
- Promulgated: 1992-02-25
- Ponente: Romero, J.
Doctrine
Parties' agreement that an award is final and unappealable does not oust courts of judicial review; statutory and Civil Code provisions supply exceptions permitting annulment or modification of awards.
Where the factual circumstances contemplated by the Civil Code or Arbitration Law are present, courts must inquire and may vacate, modify, or rescind an arbitral award despite a contractual finality clause.
Certiorari under Rule 65 is a proper remedy to annul judicial determinations that refuse to permit judicial inquiry into the validity or scope of an arbitral award.
Facts
Petitioner Chung Fu Industries and respondent Roblecor Philippines, Inc. entered into a construction contract dated 17 May 1989 for P42,000,000.00 to complete an industrial complex by 31 December 1989, with disputes to be submitted to a single agreed arbitrator.
Parties agreed that the arbitration award would be final and unappealable; after arbitration an award was rendered which petitioners sought judicial review of, but trial court and Court of Appeals held petitioners precluded from judicial review.
The petition is a Rule 65 certiorari action seeking annulment of Court of Appeals resolutions affirming the trial court orders enforcing the arbitration award and its writ of execution.
Issues
Whether an agreement that an arbitrator's decision shall be final and unappealable completely bars judicial review of the arbitral award.
Ruling
The Court ruled no — the finality clause is not absolute; Articles 2038, 2039, 2040 (Civil Code) and Sections 24–25 of the Arbitration Law provide grounds for annulment, vacatur, modification or correction of awards, permitting judicial review when those conditions obtain.
The Court granted the petition, set aside the Court of Appeals' resolutions and the trial court orders and writ of execution, remanding the case to the trial court for further hearing and restoring status quo ante pending disposition on merits.