G.R. No. L-26810 - Vda. de Bonifacio vs. BLTB Co., Inc.

Pioneer Insurance & Surety Corporation (Pioneer) is a domestic corporation engaged in selling non-life insurance.
Clearwater Insurance Company (Clearwater), formerly known under different corporate names, is a foreign entity organized under Delaware law, USA.
Clearwater later merged with TIG Insurance Company, a foreign company organized under California law.

In 1973, Clearwater entered into the SK 100 Retrocession Agreement No. 9166 with various insurance and reinsurance companies, including Pioneer.
On January 21, 1974, pursuant to the Interests and Liabilities Agreement, Pioneer assumed 1% of Clearwater’s liabilities under the SK 100 agreement.
Despite several amendments from 1975 to 1982, the arbitration clause remained intact, providing that any dispute arising from the SK 100 agreement shall be referred to a board of arbitration meeting in New York, New York.

Clearwater initiated arbitration in New York on April 21, 2016 after Pioneer failed to pay an outstanding balance of $138,093 plus $101,115 in interest.
The arbitral panel, which comprised two arbitrators and an umpire, allowed both sides to present their positions.
Pioneer did not appear at the scheduled hearing on April 24, 2013.
On April 25, 2013, the panel rendered a Final Award ordering Pioneer to pay:

$138,093 in principal;
$101,115 in pre-award interest;
$75,000 for attorney’s fees incurred by Clearwater; and
Additional costs covering fees and expenses of the umpire, Pioneer’s party-appointed arbitrator, and other incurred costs.

Despite receiving a copy of the Final Award, Pioneer failed to comply with payment and later contested the proceedings.
At the Regional Trial Court (RTC) in Makati City, procedural issues raised by Pioneer regarding verification and certification requirements were dismissed, and Clearwater’s petition was granted.
The RTC upheld the notion that the requirement of clearly stating the facts and governing law applies only to court judgments—not arbitral awards—and that disputing the merits of the arbitral award is not within the judicial review scope.

Pioneer filed a Petition for Review under Rule 19.12 of the Special ADR Rules, contending:

Clearwater’s failure to attach a Secretary’s Certificate or Board Resolution authorizing its legal counsel;
The arbitral award was contrary to public policy due to stale claims and issues of prescription.

The CA found that Clearwater substantially complied with the Special ADR Rules through the affidavit of its senior vice president and upheld the RTC’s decision.
The CA held that Pioneer’s allegations on public policy and prescription were not sufficiently established for overturning the Final Award.
Pioneer’s subsequent Motion for Reconsideration was denied as pro forma in a CA Resolution.

Pioneer elevated the matter to the Supreme Court via a Petition for Review under Special ADR Rules.
The Supreme Court emphasized that its review is confined to errors of law and that Pioneer failed to raise any of the specific grounds provided in the Special ADR Rules for review.
The Court found no error in the CA’s findings on the sufficiency of Clearwater’s verification and certification and the merits of the Final Award.
Consequently, the Petition for Review was denied, and the CA and RTC decisions confirming, recognizing, and enforcing the arbitral award were affirmed.

Whether Clearwater’s filing, supported by the affidavit of its senior vice president and the certification against forum shopping, complied with the verification requirements under the Special ADR Rules.
Whether the absence of a Secretary’s Certificate or Board Resolution to authorize the legal counsel was a fatal defect.

Whether the RTC and subsequently the CA correctly confirmed, recognized, and enforced the Final Award of the United States Board of Arbitrators.
Whether the arbitration clause mandating New York arbitration precluded Philippine court intervention.

Whether Pioneer’s assertion that the award violates public policy due to reliance on stale claims (beyond the 6-year statutory prescription period under the New York Civil Practice Law and Rules) is tenable.
Whether Pioneer’s failure to raise the prescription issue during the arbitral proceedings precluded its later invocation in court.

Whether Pioneer’s petition raised a sufficiently narrow question of law to justify Supreme Court review, given the limited scope of review provided under the Special ADR Rules.
Whether the asserted errors in fact or evidence could justify reexamination of the arbitral award by the Supreme Court.