Alternative Dispute Resolution Cases - UNIVERSITY OF SANTO...

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UNIVERSITY OF SANTO TOMASEditors: Tricia LacuestaLorenzo Luigi GayyaCristopher ReyesMacky SiazonJanine ArenasNinna BonsolLloyd JavierALTERNATIVE DISPUTERESOLUTIONRecent Jurisprudence
ADR CASES (First Semester 2016-2017)Table of ContentsRepublic Act No. 92852Republic Act No. 8764Grounds for vacating an arbitral award 5Doctrine of Separability6E.O. No. 10088Special ADR Rules121 | P a g e
ADR CASES (First Semester 2016-2017)Republic Act No. 9285KOREA TECHNOLOGIES CO., LTD. v. HON. ALBERTO A. LERMA, in his capacity as Presiding Judgeof Branch 256 of Regional Trial Court of Muntinlupa City, and PACIFIC GENERAL STEEL MANUFACTURING CORPORATIONG.R. No. 143581, January 7, 2008, Velasco, Jr., J.The arbitration clause was mutually and voluntarily agreed upon by the parties. It has not beenshown to be contrary to any law, or against morals, good customs, public order, or public policy.Facts:Korean Technologies Co., Ltd. (KOGIES) and Pacific General Steel Manufacturing Corporation(PGSMC) entered into a contract whereby the former shall construct a liquefied gas cylindermanufacturing plant in the Philippines for a total contract price of $1,530,000. PGSMC issued checksas payment of the contract but were dishonored. Dispute arose between the two parties, with KOGIESsuing PGSMC for BP 22 and PGSMC suing KOGIES for estafa, alleging that it supplied sub-par qualityequipment. Meanwhile, KOGIES insisted that their disputes should be settled by arbitration as agreedupon in Article 15, the arbitration clause of their contract. Thereafter, KOGIES instituted anApplication for Arbitration before the Korean Commercial Arbitration Board (KCAB)in Seoul, Korea pursuant to Art. 15 of the Contract as amended. Subsequently, KOGIES filed acomplaint for specific performance before the Regional Trial Court (RTC), and prayed that aTemporary Restraining Order (TRO) be issued to restrain PGSMC from dismantling and transferringthe machinery and equipment installed in the plant which the latter threatened to do. PGSMC filed an opposition to the TRO arguing that KOGIES was not entitled to the TRO sinceArt. 15, the arbitration clause, was null and void for being against public policy as it ousts the localcourts of jurisdiction over the instant controversy.Issue:Whether Article 15 of the arbitration clause of the contract is contrary to public policy andousted the court of its jurisdiction over the case.Ruling:No. The arbitration clause which stipulates that the arbitration must be doneinSeoul,Koreain accordance with the Commercial Arbitration Rules of the KCAB, and that thearbitral award is final and binding, is not contrary to public policy.For domestic arbitration proceedings, we have particular agencies to arbitrate disputesarising from contractual relations. In case a foreign arbitral body is chosen by the parties, the2 | P a g eALTERNATIVE DISPUTE RESOLUTION
ADR CASES (First Semester 2016-2017)arbitration rules of our domestic arbitration bodies would not be applied. As signatory to the

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