Title
Supreme Court
Gonzales vs. Climax Mining Ltd.
Case
G.R. No. 161957
Decision Date
Jan 22, 2007
Dispute over Addendum Contract's validity; arbitration clause upheld as separable; DENR lacked jurisdiction; RTC properly ordered arbitration; Rule 65 petition dismissed.

Case Digest (G.R. No. 185728)
Expanded Legal Reasoning Model

Facts:

  • Consolidation and background
    • G.R. No. 161957: Jorge Gonzales sought a Rule 45 petition to annul the Addendum Contract on grounds of fraud and constitutional violation before the DENR Panel of Arbitrators. The Supreme Court (28 Feb 2005) denied the petition, holding the Panel lacked jurisdiction over judicial issues, which must be litigated in regular courts.
    • G.R. No. 167994: While motions for reconsideration in No. 161957 were pending, Gonzales filed a Rule 65 petition (6 May 2005) challenging RTC orders compelling arbitration under the Addendum’s Clause 19.1.
  • Procedural history of G.R. No. 167994
    • Demand for Arbitration (23 Mar 2000) and petition to compel arbitration (31 Mar 2000) filed by Climax-Arimco before RTC Makati (Branch 132). Gonzales filed an Answer with Counterclaim (15 May 2000), alleging the Addendum and its arbitration clause were void ab initio for fraud, oppression, and constitutional violation.
    • RTC orders and motions:
      • 18 May 2000 – motion to dismiss deemed moot.
      • 16 Jun 2000 – pre-trial denied; reconsidered and set (7 Jul 2000).
      • 24 Jul 2000 – motion to compel arbitration denied; moved to inhibit Judge Benito; granted (5 Aug 2000), case raffled to Branch 148 (Judge Pimentel).
      • 23 Aug 2000 – motion for reconsideration granted; directed arbitration.
      • 13 Feb 2001 – order compelling arbitration & appointment of sole arbitrator; motion for reconsideration denied (7 Mar 2005).
    • Gonzales then filed the Rule 65 petition, alleging grave abuse of discretion and denial of due process for ordering arbitration without hearing on the Addendum’s validity; invoked Sec. 6, R.A. 876 and Sec. 24, R.A. 9285.
  • Motions in G.R. No. 161957
    • Gonzales’ Motion for Reconsideration argued the DENR Panel had jurisdiction over mining disputes and contested the sufficiency and timeliness of his complaint.
    • Climax-Mining et al.’s Motion for Partial Reconsideration/Clarification urged that the arbitration clause is independent under American jurisprudence and the UNCITRAL Model Law; rescission of the main contract does not avoid arbitration.

Issues:

  • Proper mode of review
    • Whether Gonzales properly invoked Rule 65 certiorari instead of the appeal under Sec. 29, R.A. 876 (Rule 45, certiorari limited to questions of law).
    • Whether a petition for certiorari lies when an appeal is available and timely.
  • Enforceability and scope of the arbitration clause
    • Whether the alleged invalidity or nullity of the Addendum Contract affects the enforceability of its arbitration clause.
    • Whether the trial court must resolve issues of contract validity before compelling arbitration.
  • Jurisdiction of the DENR Panel of Arbitrators
    • Whether the Panel has jurisdiction to annul the Addendum Contract on grounds of fraud and constitutional violation.
    • Whether allegations of fraud in contract execution constitute judicial issues beyond the Panel’s competence.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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