LA NAVAL DRUG CORPORATION, vs. THE HONORABLE COURT OF APPEALS and WILSON C. YAO.
- G.R. Number: G.R. No. 103200
- Promulgated: 1994-08-31
- Ponente: Vitug, J.
Doctrine
Under R.A. No. 876 (Section 6) courts in summary enforcement proceedings may determine only whether an agreement in writing provides for arbitration and must summarily direct arbitration or dismiss; they cannot adjudicate substantive claims for damages in that summary proceeding.
Lack of jurisdiction over the subject matter cannot be conferred by estoppel or consent; jurisdiction must exist as a matter of law.
Jurisdiction over the person must be seasonably raised; voluntary appearance waives it, but pleading affirmative defenses does not automatically estop a party from challenging personal jurisdiction.
Facts
The case concerns the interplay between court jurisdiction and Section 6 of R.A. No. 876 (arbitration law) and whether courts may hear claims for damages in summary proceedings to enforce arbitration agreements.
The trial court ordered selection of a third arbitrator and asked parties whether respondent Yao's claim for damages may be litigated in the summary enforcement proceeding; petitioner also filed a motion and affirmative defenses.
The Court of Appeals held that under Section 6 a court may determine whether parties should proceed to arbitration, but found petitioner estopped from questioning the court's competence to hear damages because petitioner had filed a counterclaim.
This Court re-examined whether asserting other issues in a motion to dismiss or raising affirmative defenses in an answer forecloses challenge to personal jurisdiction.
Issues
Whether submission of other issues in a motion to dismiss, or of an affirmative defense in an answer, necessarily waives or estops a party from challenging the court's jurisdiction over the person.
Whether the trial court, under Section 6 of R.A. No. 876, may hear and decide private claims for damages in the summary proceeding enforcing an arbitration agreement.
Ruling
A party may seasonably raise lack of jurisdiction over the person by motion to dismiss or by affirmative defense; asserting affirmative defenses shall not be construed as estoppel or waiver of that defense.
Where a court clearly lacks jurisdiction over the subject matter, that defense may be invoked at any time and neither estoppel nor waiver will confer jurisdiction except in highly exceptional circumstances.
The court a quo had no jurisdiction to take up the parties' claims for damages in the summary enforcement proceedings under R.A. No. 876; the Court of Appeals and trial court orders are set aside and the trial court is ordered to desist from hearing the damage claims and counterclaim.
Keywords
G.R. No. 103200, Republic Act 876, Arbitration, jurisdiction of courts, doctrine of estoppel, Section 6 of Republic Act No. 876, hearing by court, agreement in writing providing for arbitration, Regional Trial Court, Angeles City, in Special Case No. 6024, Enforcement of ARBITRATION Agreement with Damages, Contract of Lease, tortuous acts, counterclaim for damages, Rules of Court, preliminary hearing of the special and affirmative defense, no cause of action, commercial building, rental rate, Section 7 of subject Contract of Lease, damages