PHILIPPINES Trends and Developments Contributed by: Ricardo Ma P. G. Ongkiko, John Christian Joy A. Regalado and Ma Patricia B. Paz-Jacoba, SyCip Salazar Hernandez & Gatmaitan
parties. Roxaco appealed the CA’s decision before the Philippine Supreme Court. The Philippine Supreme Court reversed the CA deci - sion and substantially reinstated the CIAC arbitral award. Notably, the Supreme Court limited its ruling to the question of the existence of a valid extension of the completion date and declined to rule on the two other issues previously decided by the CA and the CIAC Arbitral Tribunal. The Supreme Court explained that the existence of a valid extension of the comple - tion date is a question of law, in as much as it neces - sitates the determination of the legal significance of the evidence presented by the parties, in particular, whether such pieces of evidence indicate that Roxaco waived the requirements for a valid extension in the construction contracts. The Supreme Court held that there was no waiver of such requirements and, con - sequently, no valid extension of the completion date. Further, the Supreme Court ruled that Gulf Canary’s liability for delay and the validity of Roxaco’s termina - tion of the construction contracts are questions of fact which are beyond the scope of the court’s power of review. It further clarified that the CA’s justification for conducting a factual review of the arbitral award – that the arbitral tribunal “had exceeded its powers, or so imperfectly executed them, that a mutual, final, and definite award was not made” – goes into the arbitral tribunal’s integrity, fairness, and impartiality, and does not merely pertain to the correctness of its ruling. In this case, however, Gulf Canary merely disagreed with the CIAC Arbitral Tribunal’s evaluation of the evidence and legal conclusions. The Supreme Court empha - sised that such disagreement, by itself, does not con - stitute sufficient proof of partiality. Grand Exploit Grand Exploit involved three construction contracts between Grand Exploit Builder Development, Inc (GEBDI) and Hoegaarden Realty Corporation (“Hoe - gaarden”) for the construction of three warehouse buildings. The dispute arose when GEBDI halted con - struction, alleging underpayment by Hoegaarden. In response, Hoegaarden filed a complaint before the CIAC, asserting, among other things, that GEBDI had incurred delays and was liable for damages.
The CIAC Arbitral Tribunal ruled in favour of GEBDI. Hoegaarden then filed an action before the CA to vacate the Final Award on the ground that the CIAC Arbitral Tribunal acted with evident partiality. The CA vacated the Final Award, finding, among other things, that the CIAC Arbitral Tribunal prevented Hoegaarden from presenting evidence, showed leniency to GEBDI, and unduly awarded GEBDI for the appropriated tools, machinery, and equipment. GEBDI appealed the CA’s decision to the Philippine Supreme Court. The Philippine Supreme Court reversed the CA’s deci - sion and reinstated the CIAC’s Final Award. Applying Global Medical Center , the Supreme Court ruled that the CIAC Arbitral Tribunal’s integrity was not com - promised, contrary to Hoegaarden’s allegations and the CA’s findings. According to the Supreme Court, the CIAC Arbitral Tribunal simply enforced its rules of procedure, and its refusal of Hoegaarden’s additional evidence was justified because the proceedings were past evidence presentation and were already at the formal offer stage. The CIAC Arbitral Tribunal was also not unduly lenient towards GEBDI, having similarly stricken GEBDI’s Amended Answer for being filed out of time. Finally, the monetary award in favour of GEBDI was supported by Hoegaarden’s own admission that it had taken GEBDI’s tools, machinery and equipment. Broader implications GS Yuasa , Roxaco - Asia , and Grand Exploit not only affirm the legislative and judicial policies favouring limited court intervention and the finality of arbi - tral awards, but also clarify the parameters of such approach. In particular, GS Yuasa and Roxaco - Asia demonstrate how these standards are applied in prac - tice – in both cases, the Supreme Court identified which among the issues brought before it fell within the permissible scope of judicial review and which lay beyond the courts’ authority, thereby concretely delineating the boundaries of judicial intervention in arbitral awards. Further, Roxaco - Asia and Grand Exploit exemplify the exacting standard established under the Construc - tion Industry Arbitration Law, and reaffirm the merit of a factual review of arbitral awards as highlighted in Global Medical Center . These cases underscore that judicial review of CIAC arbitral awards on factual
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