G.R. No. 184841 - Yukit vs. Tritran, Inc.

On February 20, 1901, Luciano Córdoba y Pascual (plaintiff/appellant) and Angel Condb y Moreno (defendant/appellee) formed a mercantile partnership.
The partnership contract included a seventh clause stating that in all matters not provided for in the contract, both partners would be bound by the provisions of the Spanish Code of Commerce.
The clause further provided that any doubts, disputes, or disagreements arising during the existence, dissolution, or liquidation of the partnership were to be decided by friendly adjusters (juicio de amigables componedores).

Differences between the partners eventually arose, prompting the plaintiff to bring an action for the dissolution of the partnership.
Notably, the complaint did not allege any attempt by the plaintiff to settle these differences through the agreed mechanism of friendly adjusters before resorting to litigation.

The friendly adjusters procedure was extensively detailed under the former Ley de Enjuiciamiento Civil.
Several specific procedural requirements under the Spanish law included:

Adjusters had to be literate and the number must be odd, not exceeding five.
A third party was not permitted the power to name the adjusters.
The submission agreement had to be executed before a notary to be valid and contain five specified particulars.
Rules on challenging an adjuster for any potential interest in the subject-matter or demonstrated antagonism, with recourse to the Court of First Instance if necessary.
Decisions rendered by the adjusters were required to be made before a notary and were subject to a writ of error in the Supreme Court of Spain within sixty days if contested.

The provisions for friendly adjusters under the Ley de Enjuiciamiento Civil were repealed and have not been substituted with any similar mechanism in the new code.
The new system allows for the appointment of referees in pending court cases (under sections 135-140), which is fundamentally different from the mechanism agreed upon in the partnership contract.
As a result, the method explicitly agreed upon by the parties no longer exists under current law.

The court below held that it had no jurisdiction to try the case due to the binding nature of the seventh clause providing for dispute resolution by friendly adjusters.
The plaintiff, on appeal, argued that he had consented only to the specific method contained in the contract, which is no longer operable because its procedural basis was abolished.
The conflicting interpretations centered on whether the dissolution action should await completion of the clause’s stipulated process or whether the plaintiff was entitled to seek relief directly in court given the current legal framework.

Does the withdrawal or abolition of the friendly adjusters mechanism (as provided for under the former Ley de Enjuiciamiento Civil) strip the court of jurisdiction to try the case when a party fails to submit to that method?
Can a clause in a contract that mandates a now-repealed procedural scheme be given effect under the current Civil Code or any other applicable law?

Did the plaintiff’s agreement to the seventh clause bind him exclusively to a method of dispute resolution that has now been abolished?
Is the plaintiff entitled to resort to ordinary court proceedings given that he never consented to any alternative procedure outside that which was defined in the contract?

How should the court interpret contractual stipulations that reference a procedural system (friendly adjusters) which no longer exists?
What is the proper remedy when the agreed dispute resolution mechanism is void under the current law?