Water Builders, a construction company based in Makati City, entered into a construction agreement with Super Powers, Inc., an energy company based in
Manila, for the construction of a mini hydro electric plant. Water Builders failed to complete the project within the stipulated duration. Super Powers cancelled the contract. Water Builders filed a request for arbitration with the Construction Industry Arbitration Commission (CIAC). After due proceedings, CIAC rendered judgment in favor of Super Powers, Inc. ordering Water Builders to pay the former P10 million, the full amount of the down payment paid, and P2 million by way of liquidated damages. Dissatisfied with the CIAC’s judgment, Water Builders, pursuant to the Special Rules of Court on Alternative Dispute Resolution (ADR Rules) filed with the RTC of Pasay City a petition to vacate the arbitral award. Super Powers, Inc., in its opposition, moved to dismiss the petition, invoking the ADR Rules, on the ground of improper venue as neither of the parties were doing business in Pasay City.
Should Water Builders’ petition be dismissed? (3%)
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Yes, Water Builders' petition should be dismissed. Under Rule 11.3 of the Special ADR Rules, a petition to vacate a domestic arbitral award must be filed in the Regional Trial Court where a
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Quick check
Where should a petition to vacate a domestic arbitral award be filed under the Special ADR Rules?
Under the Special ADR Rules venue lies where a party resides, has its business, or where arbitration was held
Which judicial body has appellate jurisdiction to review or set aside arbitral awards rendered by the CIAC?
CIAC arbitral awards are appealable directly to the Court of Appeals under Rule 43 of the Rules of Court
Do Regional Trial Courts have jurisdiction to vacate arbitral awards issued by the Construction Industry Arbitration Commission?
Regional Trial Courts lack jurisdiction to review or vacate arbitral awards rendered by the CIAC
What is the proper procedural ground for dismissing Water Builders' petition filed in the RTC of Pasay City?
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Under Executive Order No 1008, what type of disputes fall under the original and exclusive jurisdiction of the CIAC?
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Learn more about these topics
1. Domestic Arbitration Venue
Under Rule 11 of the Special Rules of Court on Alternative Dispute Resolution, a petition to vacate a domestic arbitral award must be filed in the Regional Trial Court where any of the parties resides, has its principal place of business, or where the arbitration proceedings were conducted. Filing the petition in a court where neither party resides or conducts business, and where arbitration did not take place, constitutes improper venue. Venue in special ADR proceedings is procedural and designed to ensure proper territorial connection.
2. CIAC Arbitral Jurisdiction
Under Executive Order No 1008 and prevailing jurisprudence, arbitral awards rendered by the Construction Industry Arbitration Commission are appealable directly to the Court of Appeals under Rule 43 of the Rules of Court on questions of fact, law, or mixed questions. Regional Trial Courts do not possess judicial authority or jurisdiction to review, vacate, or modify CIAC arbitral awards under the Special ADR Rules. Resorting to the Regional Trial Court to vacate a CIAC award is procedurally infirm.
3. Dismissal of Petition
A petition to vacate an arbitral award filed in the wrong forum suffers from fatal procedural and jurisdictional defects. When a party files a petition to vacate a CIAC award before a Regional Trial Court that also lacks territorial venue, the petition is subject to immediate dismissal upon proper motion. Objections based on improper venue under the Special ADR Rules and lack of subject matter jurisdiction over CIAC awards compel the court to dismiss the petition, directing the party to pursue the appropriate appellate remedy.