Ionics EMS v. Air Liquide
CLARIFICATIONFacts
1. The Antecedents: Air Liquide Philippines, Inc. (ALPI) entered into an Agreement with Ionics EMS, Inc. (petitioner) effective June 30, 2011, for supply of liquid nitrogen for five years, subject to automatic renewal absent six months' written notice; arbitration clause per Republic Act No. 876 for disputes settled by single arbitrator. Petitioner failed to terminate timely before May 12, 2016 expiry, renewing until July 14, 2021; sent termination notice November 21, 2017, reiterated July 30, 2018; ALPI demanded PHP 2,424,000.00 via letter December 14, 2020 for unconsumed nitrogen and fees; unresolved, ALPI demanded arbitration May 4, 2021. 2. Procedural History: ALPI filed Petition for arbitration and arbitrator designation with RTC Calamba City (Branch 105), S.P. Case No. 1786-2021-C; RTC Resolution March 21, 2022 granted, designating Atty. Danilo C. Cunanan per Section 8(c), Republic Act No. 876 as both parties failed to nominate. 3. The Petition: Petitioner filed Petition for Certiorari under Rule 65 assailing RTC Resolution for grave abuse, arguing RTC lacks authority in ad hoc arbitration (appointing authority is IBP President per Special ADR Rules Rule 6.1); prayed for temporary restraining order.
Issue(s)
Whether the Petition for Certiorari is the proper remedy to assail the RTC's authority to appoint an arbitrator. Whether the RTC committed grave abuse of discretion in appointing Atty. Cunanan as arbitrator.
Ruling
The Petition for Certiorari is DENIED. The Resolution dated March 21, 2022 of respondent Presiding Judge Arturo V. Noblejas of Branch 105, Regional Trial Court, Calamba City in S.P. Case No. 1786-2021-C is AFFIRMED. The Temporary Restraining Order issued by the Court on June 15, 2022 is LIFTED. SO ORDERED.
Ratio Decidendi
On Issue 1: Rule 6.9 of the Special Rules of Court on Alternative Dispute Resolution (A.M. No. 07-11-08-SC) expressly prohibits certiorari against court orders appointing arbitrators, mandating immediate executory effect to promote speedy resolution. Petitioner invokes Go v. Court of Appeals for 'procedural void' exception, but Court distinguishes as no such void exists here, unlike indefinite suspension in ejectment case there. Proper remedy is proceed to arbitration per competence-competence doctrine, allowing arbitrator to rule first on jurisdiction including appointment validity, as reiterated in Cagayan de Oro Water District v. Judge Pasal. Nonetheless, Court takes cognizance exceptionally for judicial economy and as question of first impression, bypassing hierarchy of courts per Gacad v. Judge Corpuz exceptions like cases of first impression or no plain remedy. ALPI correctly notes certiorari violates hierarchy and prohibited pleading. On Issue 2: Arbitration agreement Section 11.5 specifies 'arbitrator shall be in accordance with Republic Act No. 876,' binding parties per autonomy of contracts principle in Dupasquier v. Ascendas and Bricktown Development Corp. v. Amor Tierra; RA 9285 Section 32 preserves RA 876 for domestic arbitration, no repeal by implication per Mecano v. Commission on Audit. Section 8 RA 876 authorizes RTC appointment where no method provided and parties fail to nominate within 15 days, as here. RA 9285 Section 26 deems appointing authority as named in agreement (RA 876), not default IBP for ad hoc; parties cited specific older law post-RA 9285 effectivity, estopped from challenging. No grave abuse as RTC correctly applied Section 8(c) RA 876; petitioner consented via agreement.
Main Doctrine
In domestic arbitration, where parties expressly stipulate that the arbitrator shall be appointed in accordance with Republic Act No. 876 (Arbitration Law), the Regional Trial Court serves as the appointing authority under Section 8 thereof, notwithstanding Republic Act No. 9285's provision for the Integrated Bar of the Philippines National President as default in ad hoc arbitration; this respects the autonomy of contracts and good faith compliance, as RA 9285 expressly preserves RA 876 for domestic arbitration without repealing it by implication. The competence-competence principle requires parties to submit to arbitration first, allowing the arbitrator to rule on jurisdictional issues including appointment validity, before judicial recourse. Certiorari is expressly prohibited under Rule 6.9 of the Special Rules of Court on Alternative Dispute Resolution to assail appointment orders, promoting expeditious dispute resolution; direct Supreme Court resort exceptional only for first impression questions.