G.R. No. 215644 - Tri-Mark Foods, Inc. vs. Gintong Pansit, Atbp., Inc.

On November 2, 2006, Tri-Mark Foods, Inc. (petitioner) and Gintong Pansit, Inc. (respondent) entered into a franchise agreement granting Gintong Pansit the right to operate a Ling Nam Noodle House branch in Mandaluyong City.
Under the agreement, Gintong Pansit regularly ordered stocks and supplies from Tri-Mark, which in turn sent payment reminders and notices to Gintong Pansit.

In 2008, Gintong Pansit raised concerns regarding the high prices of food items and supplies and disputed Tri-Mark’s computations through multiple written communications.
A series of letters and meetings ensued:

An August 2, 2008 meeting between representatives of Gintong Pansit (including Lucy Tan Yu, Catherine Ng Chungunco, and Atty. Soledad Mawis) and Tri-Mark’s representatives.
Subsequent letters from Tri-Mark demanding payment (notably on August 15, 2008 and November 9, 2009) and responses from Gintong Pansit contesting the computations and requesting explanations.

Tri-Mark sent further demand letters, culminating in a final demand on December 21, 2009, which ultimately led to the filing of a request for arbitration on February 15, 2010 with the Philippine Dispute Resolution Center, Inc. (PDRCI).
Gintong Pansit and its officers agreed to submit to arbitration, and the parties appointed Assistant Solicitor General Reynaldo Saludares as the sole arbitrator.
In its Statement of Claims, Tri-Mark asserted that Gintong Pansit failed to pay for food, supplies, manpower services, royalty fees, and other charges, amounting to a substantial sum.

On September 8, 2010, the sole arbitrator issued a final award awarding Tri-Mark a net sum (after deductions) based on its claims for food/supplies purchases, manpower services, royalty fees, and SWMS/local adds.
The award provided for solidary liability, thus holding the individual respondents jointly responsible for payment.

On October 13, 2010, respondents filed a petition to vacate the award before the Regional Trial Court (RTC) of Mandaluyong City, alleging:

Evident partiality of the arbitrator in disregarding evidence of overpricing, discrimination, and bad faith by Tri-Mark.
That the arbitration tribunal exceeded its powers and committed errors amounting to a merits appeal.

Simultaneously, Tri-Mark filed a petition to confirm the award.
On December 8, 2011, the RTC consolidated both petitions and issued a Joint Order:

Vacating the final arbitral award of September 8, 2010.
Denying Tri-Mark’s petition to confirm the award and directing that new hearings be conducted before new arbitrators.

Tri-Mark’s subsequent motion for reconsideration was denied on May 9, 2012.
Tri-Mark then elevated the matter by filing a petition for review with the Court of Appeals (CA), which on November 21, 2013, denied the petition for review.
A motion for reconsideration by Tri-Mark in CA was again denied by the CA Resolution dated December 11, 2014.
The present petition reached the Supreme Court for further review.

Whether the courts may vacate an arbitral award on the ground of evident partiality solely based on disagreement with the manner whereby the evidence was weighed and appreciated by the arbitrator.
Whether the trial courts and the Court of Appeals erred in essentially reviewing the merits (including factual findings) of the arbitration, rather than limiting their inquiry to the specific grounds provided under the Special ADR Rules.