DISSENTING OPINION
DEL CASTILLO, J.:
The Majority Opinion declares that "errors of an arbitral tribunal are not subject to correction by the judiciary"1 "the arbitral award is final and binding on the parties"2 and that courts have no jurisdiction to review the merits of the award.3 In particular, it holds that "[n]ot even the Court's expanded certiorari jurisdiction x x x can justify judicial intrusion into the merits of arbitral awards.''4 Thus, the CA as well as this Court had no power to substitute its own judgment for the arbitral award the same would amount to an unjustified judicial intrusion in violation of state-sanctioned policy on autonomy of arbitral tribunals. 5The Majority Opinion, holds that courts should not be allowed to ''throw their weight around" if they disagree with the results.6
With due respect, I disagree.
To adopt the views presented in the Majority Opinion is tantamount to this Highest Court surrendering its jurisdiction or capitulating to the decision or rulings of an arbitrator. I cannot in conscience trade this Court's judicial power in favor of an arbitrator especially since as the Majority Opinion itself admits, "arbitrators do not necessarily have a background in law [and] they cannot be expected to have the legal mastery of a magistrate;"7 in fact, "[t]here are no other legal requirements as to the competence or technical qualifications of an arbitrator. Their only legal qualifications are: (1) being of legal age; (2) full enjoyment of their civil rights; and (3) ability to read and write."8 Significantly, the Majority Opinion acknowledges that "because arbitrators do not necessarily have a background in law, x xx [t]here is a greater risk that an arbitrator might misapply the law or mis[-]appreciate the facts en route to an erroneous decision." 9
Moreover, the ruling of the Majority Opinion is contrary to the pronouncement of this Court in ABS-CBNBroadcasting Corporation v. World Interactive Network Systems (WINS) Japan Co. Ltd. 10
In the ABS-CBN case, the Court classified a voluntary arbitrator as a quasi-judicial instrumentality; 11 as such "decisions handed down by voluntary arbitrators fall under the exclusive appellate jurisdiction of the [Court of Appeals] x x x [under] Rule 43 x xx."12 The Court held therein that "the proper remedy from the adverse decision of a voluntary arbitrator if errors of fact and/or law are raised, is a petition for review under Rule 43 of the Rules of Court."13
In the same ABS-CBN case, the Court further declared that the remedy of a petition for certiorari may also be availed in assailing the decision of a voluntary arbitrator, viz.:
As may be gleaned from the above stated provision, it is well within the power and jurisdiction of the Court to inquire whether any instrumentality of the Government, such as voluntary arbitrator, has gravely abused its discretion in the exercise of its functions and prerogatives. Any agreement stipulating that 'the decision of the arbitrator shall be final and unappealable’ and ‘that no further judicial recourse if either party disagrees with the whole or any part of the arbitrator's award may be availed of’ cannot be held to preclude in proper cases the power of judicial review which is inherent in courts. We will not hesitate to review a voluntary arbitrator's award where there is a showing of grave abuse of authority or discretion and such is properly raised in a petition for certiorari and there is no appeal, nor any plain, speedy remedy in the course of law.
Significantly, Insular Savings Bank v. Far East Bank and Trust Company definitively outlined several judicial remedies an aggrieved party to an arbitral award may undertake:
(1) a petition in the proper RTC to issue an order to vacate the award on the grounds provided for in Section 24 of RA 876;
(2) a petition for review in the CA under Rule 43 of the Rules of Court on questions of fact, of law, or mixed questions of fact and law; and
(3) a petition for certiorari under Rule 65 of the Rules of Court should the arbitrator have acted without or in excess of his jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction.14
I disagree with the Majority Opinion's ruling that the foregoing pronouncements regarding remedies against an arbitral award are mere obiter dicta. The ABS-CBN case came out in 2008, or after Republic Act No. 9285 (or the Alternative Dispute Resolution. Act of 2004; RA 9285) was enacted on April 2, 2004. The ABS-CBN merely interpreted the law, and added to it principles already known, accepted and deemed read into or included in every law passed - it cannot be obsolete or wrong jurisprudence. The pronouncement in the ABS-CBN case cannot be obiter dicta. The Majority Opinion's view that arbitral awards of "commercial arbitrators" in "commercial arbitrations" are beyond judicial review effectively places these individuals, who are no better than "voluntary arbitrators authorized by law" in a position which is beyond scrutiny by this Court.
I also take the position that the Court did not commit the fallacy of equivocation in the ABS-CBN case. Rule 43 covers decisions of a voluntary arbitrator "authorized by law". Under Article 2042 of the Civil Code, arbitration is allowed as a mode of settling controversies, and for this purpose, "[t]he same persons who may enter into a compromise may submit their controversies to one or more arbitrator& for decision." Applied well, basic logic should enable one to reach the conclusion that any arbitrator/s appointed by parties by mutual agreement or contract to settle their differences would have to be a voluntary arbitrator "authorized by law" - that is, Article 2042 of the Civil Code. This simple legal tenet should dispel any notion that "commercial arbitration is a purely private system of adjudication facilitated by private citizens instead of government instrumentalities wielding quasi-judicial powers."15
A profound examination of RA 9285 which came into effect in 2004, the ABS-CBN case which was promulgated in 2008, and the Special ADR Rules (Special Rules of Court on Alternative Dispute Resolution)16 which was issued in 2009, would reveal that there is no conflict. In particular, the Special ADR Rules cannot be said to have superseded the pronouncement in the ABS-CBN case; quite the contrary, the latter merely echo the conclusions arrived at in the former. In fact, the Special ADR Rules tends to support my position on the availability of the remedies of a petition for review and a petition for certiorari.
In particular, Part VI, Rule 19 of the Special ADR Rules, on Motion for Reconsideration Appeal and Certiorari, provides:
Rule 19.8. Subject matter and governing rules. - The remedy of an appeal through a petition for review or the remedy of a special civil action of certiorari from a decision of the Regional Trial Court made under the Special ADR Rules shall be allowed in the instances, and instituted only in the manner, provided under this Rule.
x x x x
Rule 19.12. Appeal to the Court of Appeals. - An appeal to the Court of Appeals through a petition for review under this Special Rule shall only be allowed from the following final orders of the Regional Trial Court:
x x x x
e. Confirming vacating or correcting/modifying a domestic arbitral award;
x x x x
Rule 19.26. Certiorari to the Court of Appeals. - When the Regional Trial Court, in making a ruling under the Special ADR Rules, has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law, a party may file a special civil action for certiorari to annul or set aside a ruling of the Regional Trial Court.
A special civil action for certiorari may be filed against the following orders of the court.
x x xx
f. Confirming, vacating or correcting a domestic arbitral award;
x x x x
E. APPEAL BY CERTIORARI TO THE SUPREME COURT
Rule 19.36. Review discretionary. - A review by the Supreme Court is not a matter of right, but of sound judicial discretion, which will be granted only for serious and compelling reasons resulting in grave prejudice to the aggrieved party. The following, while neither controlling nor fully measuring the court's discretion, indicate the serious and compelling, and necessarily, restrictive nature of the grounds that will warrant the exercise of the Supreme Court's discretionary powers, when the Court of Appeals:
a. Failed to apply the applicable standard or test for judicial review prescribed in these Special ADR Rules in arriving at its decision resulting in substantial prejudice to the aggrieved party
b. Erred in upholding a final order or decision despite the lack of jurisdiction of the court that rendered such final order or decision;
c. Failed to apply any provision, principle, policy or rule contained in these Special ADR Rules resulting in substantial prejudice to the aggrieved party; and
d. Committed an error so egregious and harmful to a party as to amount to an undeniable excess of jurisdiction.
Finally, I am aware that an arbitral award can be assailed based on limited grounds, 17 among which is when ''the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted to them was not made."18 This is exactly what happened in this case and this was the ground upon which the vacation of the arbitral award should be anchored on. The Arbitral Tribunal's imperfect execution of powers" and "excessive exercise of arbitral power" are valid grounds for vacating the arbitral award.1âwphi1
At this juncture, it might help to stress that the arbitral award is patently null and void. It failed to distinguish the land which is the object of the lease from the improvements thereon which are owned by the lessee, Technology Electronics Assembly and Management Pacific Corporation (TEAM). The lease contract expressly stated that the buildings and structures on the land were built and owned by the lessee. Fruehauf Electronics Philippines, Corporation's (Fruehauf) President even made an admission that there was no specific provision in the lease contract requiring the lessee to return the structures in their original state, i.e., as a complete, rentable and fully facilitized electronics plant. The only condition stated in the lease contract was that title to said improvements shall ipso facto transfer to the lessor upon expiration of the lease. TI1ere was also no basis in ordering TEAM to pay rent. for the period July 9, 2003 to March 5, 2005. Capitol Publishing House, Inc.'s (Capitol) sublease with TEAM expired on May 31, 2003; TEAM properly advised Fruehauf of such termination. Thereafter, Fruehauf negotiated directly with Capitol. When their negotiations bogged down, Fruehauf posted armed guards in the premises; it effectively took control over the facility. Fruehauf also filed an ejectment suit against Capitol, without impleading TEAM. The CA eventually dismissed the ejectment suit; said CA Decision became final and executory. Meanwhile, the Arbitral Tribunal ordered TEAM to pay rent based on the Metropolitan Trial Court's (MeTC) pronouncement in the ejectment case between Capitol and Fruehauf. TEAM was never a party to the case; the MeTC/Regional Trial Court Decision was even reversed by the CA on appeal. More important, the Arbitrators did not properly determine the amount since they were not sure whether Fruehauf already collected from Capitol, for how much, and whether Fruehauf returned said collections to Capitol. In the end, the amount to be paid was ambiguous. Based on the foregoing, the arbitral award clearly has no basis in law, contract, fact, experience, and logic/common sense. It is unjust, and it unduly deprives the respondent of its property without due process of law. It enables unjust enrichment of petitioner at respondent's expense. Plainly, all the foregoing shows that ''the arbitrators exceeded their powers, or so imperfectly executed them", a valid ground for vacating the arbitral award.
ACCORDINGLY, I vote to DENY the Petition and AFFIRM the October 25, 2012 Amended Decision of the Court of Appeals in CA-G.R. SP No. 112384.
MARIANO C. DEL CASTILLO
Footnotes
1 Ponencia, p. 11.
2 Id.
3 Id, at22.
4 Id. at20.
5Id. at 23.
6 Id.
7 Id. at 11.
8 Id.
9 Id.
10 568 Phil. 282 (2008).
11 Id. at 291-292.
12 Id. at 292.
13 Id.
14 Id. at 293-294.
15 Ponencia, p. 15.
16 A.M. No. 07-11-08-SC. September l, 2009.
17 ABS-CBNBroadcasting Corporation v, World Interactive Network Systems (WINS) Japan Co. Ltd, supra note 10 at 290.
18 Id.
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