G.R. No. 150946 - Municipal Board of Canvassers of Glan vs. Commission on Elections

Case Summary (G.R. No. 150946)

Contractual Background and Monetary Claims

The DENR, through LMB, entered a Consultancy Agreement with UPCI for the Land Resource Management Master Plan Project with a total contract price of P4,337,141.00, payable according to stage-based progress billings. UPCI completed the contracted work in December 1994 and the LMB formally accepted it on December 27, 1994. DENR paid only 47% (P2,038,456.30) of the contract price. COA’s TSO Report (October 25, 1994) found the contract price to be 84.14% excessive. Nonetheless, DENR acknowledged a liability to UPCI in the amount of P2,239,479.60 in a December 10, 1998 letter.

Referral to Arbitration and Adoption of CIAC Rules

UPCI filed suit in the Regional Trial Court (RTC) for unpaid obligations. By motion, the case was referred to arbitration pursuant to the parties’ arbitration clause; the referral was not opposed by DENR. The court-appointed Arbitral Tribunal was constituted and, during the preliminary conference, the parties agreed to govern proceedings under the CIAC Revised Rules Governing Construction Arbitration. The parties also agreed on submission schedules and the filing of draft decisions in lieu of memoranda.

Arbitral Award and Reliefs Granted

The Arbitral Tribunal rendered an award dated May 7, 2010 in favor of UPCI, ordering DENR to pay: (a) P2,285,089.89 for unpaid progress billings with 12% interest per annum from finality of the award; (b) P2,033,034.59 as accrued interest; (c) P500,000.00 as exemplary damages; (d) P150,000.00 as attorney’s fees; and (e) proportionate arbitration costs in the amount of P182,119.44. DENR filed motions for extensions and a motion for reconsideration but the Arbitral Tribunal denied or deemed the motions waived and, after asserting loss of jurisdiction upon filing the Report and Award with the RTC, noted DENR’s motion for reconsideration without action.

Procedural Posture Before the RTC

UPCI sought confirmation of the award under the Special ADR Rules. The RTC, finding copies of the award had been sent to the parties, confirmed the Arbitral Award pursuant to Rule 11.2(A) of the Special ADR Rules and ordered payment of confirmation costs. UPCI then moved for issuance of writ of execution; the RTC granted execution in an order dated September 12, 2011. DENR moved to quash the writ, arguing among other points that it had been denied due process because the Arbitral Tribunal allegedly failed to consider DENR’s draft decision and merely noted DENR’s motion for reconsideration.

RTC Ruling on Motion to Quash and Procedural Defects

On July 9, 2012, the RTC denied DENR’s motion to quash. The RTC concluded that DENR’s May 19, 2010 “Motion for Reconsideration” was a prohibited pleading under Section 17.2, Rule 17 of the CIAC Rules because the correct remedy was a motion for correction of the final award under Section 17.1. The RTC also found DENR’s June 1, 2010 manifestation defective for failure to observe the three-day notice rule. Having failed to avail of the proper remedies to challenge the award or its confirmation, the RTC held the award final and executory.

Court of Appeals Proceedings and Grounds for Dismissal

DENR filed a special civil action for certiorari before the Court of Appeals (CA). The CA dismissed the petition for two independent reasons: (a) the petition impermissibly attacked the merits of the Arbitral Award, which Rule 19.7 of the Special ADR Rules precludes; and (b) the petition was filed beyond the 15-day reglementary period prescribed by Rule 19.28 of the Special ADR Rules, thus untimely.

Issue Presented to the Supreme Court

The Supreme Court addressed whether the CA erred in applying the Special ADR Rules in dismissing DENR’s certiorari petition — specifically, whether DENR’s procedural course and the CA’s reliance on the Special ADR Rules were erroneous.

Supreme Court’s Analysis — Scope and Purpose of RA 9285 and the Special ADR Rules

The Court reiterated that RA 9285 institutionalizes ADR and that the Supreme Court promulgated Special ADR Rules (A.M. No. 07-11-08-SC) to govern judicial intervention in ADR matters. The Special ADR Rules specify the circumstances and procedures for court involvement (Rule 1.1) but do not automatically govern the internal conduct of arbitration, which remains a matter of party autonomy (Rule 2.3). Here, the parties had expressly adopted the CIAC Rules to govern arbitration, so those rules controlled the arbitral proceedings.

Supreme Court’s Analysis — CIAC Remedies and DENR’s Procedural Failures

Under CIAC Rule 17, Section 17.1, the permissible post-award remedy is a motion for correction of the final award on enumerated grounds (e.g., clerical errors, omission to resolve issues), and Section 17.2 expressly bars a motion for reconsideration or new trial. DENR did not pursue the CIAC-prescribed motion for correction nor appeal under CIAC Rule 18.2 (appeal under Rule 43, Rules of Court). Instead, DENR filed a prohibited motion for reconsideration before the Arbitral Tribunal and then sought collateral judicial relief. The Court concluded that DENR’s failure to avail itself of available remedies rendered the award final and the RTC confirmation proceedings appropriate.

Timeliness and Proper Forum for Certiorari under the Special ADR Rules

The Court explained that Rule 19.26 of the Special ADR Rules allows a special civil action for certiorari to annul certain RTC rulings made under the Special ADR Rules, but only in specified circumstances and only after other remedies are exhausted. Rule 19.28 imposes a strict 15-day period to file such certiorari petitions with the CA. DENR’s certiorari was filed long after the 15-day reglementary period elapsed; consequently, the CA correctly dismissed the petition as untimely and for raising matters precluded by Rule 19.7.

Due Process and Merits Consideration

Even if procedural infirmities were disregarded, the Court found DENR’s substantive due process claim to be without merit. DENR had opportunities to be heard and sought extensions but failed to justify delay; its draft decision was filed only on the scheduled pro

Case Syllabus (G.R. No. 150946)

Citation, Court, and Disposition

G.R. No. 212081; reported at 754 Phil. 513; First Division; Decision dated February 23, 2015.
Opinion authored by Justice Perlas-Bernabe.
Petition for review on certiorari by the Department of Environment and Natural Resources (DENR) denied; Decision of the Court of Appeals in CA-G.R. SP No. 126458 dated March 26, 2014, which dismissed DENR’s petition for certiorari, affirmed.
Concurrences: Sereno, C.J. (Chairperson), Leonardo-De Castro, Bersamin, and Perez, JJ., concur.

Parties and Procedural Posture

Petitioner: Department of Environment and Natural Resources (DENR), through its Land Management Bureau (LMB).
Respondent: United Planners Consultants, Inc. (UPCI).
Original action: UPCI filed complaint in the Regional Trial Court (RTC), Quezon City, Branch 222, docketed as Case No. Q-07-60321, for DENR’s failure to pay under a consultancy agreement; court-referred to arbitration pursuant to the parties’ arbitration clause.
Arbitration: Arbitral Tribunal composed of Atty. Alfredo F. Tadiar (Chairman), Arch. Armando N. Alli, and Engr. Ricardo B. San Juan (CIAC-accredited arbitrator); arbitration docketed as Arbitration Case No. A-001 and governed by the CIAC Revised Rules Governing Construction Arbitration as adopted by the parties.
Post-arbitral proceedings: Arbitral Award rendered May 7, 2010; confirmation proceedings in RTC; subsequent motions and special civil action for certiorari before the Court of Appeals; appeal to the Supreme Court via petition for review on certiorari.

Factual Background

Consultancy Agreement: Executed July 26, 1993, between LMB (DENR) and UPCI for the Land Resource Management Master Plan Project (LRMMP).
Contract price and payment: Total contract price P4,337,141.00; payment made by DENR only 47% amounting to P2,038,456.30.
Completion and acceptance: UPCI completed required work in December 1994; DENR formally accepted the work on December 27, 1994.
COA finding: On October 25, 1994, the Commission on Audit (COA) released a Technical Services Office Report finding the contract price to be 84.14% excessive.
DENR acknowledgment: By letter dated December 10, 1998, DENR acknowledged liability to UPCI in the amount of P2,239,479.60 and assured payment as soon as possible.
UPCI’s action: UPCI filed suit in RTC for failure to pay; the case was referred to arbitration under the parties’ arbitration clause.

Arbitration Proceedings and Procedural Timeline

Referral to arbitration: UPCI moved for referral to arbitration; DENR did not object; the RTC ordered referral (Order dated January 18, 2010).
Adoption of rules: Parties agreed during preliminary conference to adopt the CIAC Revised Rules (as amended by multiple CIAC resolutions) to govern arbitration.
Draft decision schedule: Parties agreed to submit draft decisions in lieu of memoranda by April 21, 2010.
DENR’s default on deadline: UPCI submitted its draft decision on time; DENR sought extensions (moved for deferment, then extension to May 11, 2010).
Arbitral Tribunal’s interim order: On April 30, 2010, the Arbitral Tribunal denied DENR’s extension motions, deemed non-submission a waiver, but stated it would consider DENR’s draft decision if submitted before May 7, 2010 (expected date of final award promulgation).
DENR’s late submission: DENR filed its draft decision only on May 7, 2010.

Arbitral Award (May 7, 2010) — Content and Reliefs Ordered

Award in favor of UPCI directing DENR to pay:
- P2,285,089.89 representing unpaid progress billings, with interest at 12% per annum from the date of finality of the Arbitral Award upon confirmation by the RTC until fully paid;
- P2,033,034.59 as accrued interest thereon;
- P500,000.00 as exemplary damages;
- P150,000.00 as attorney’s fees.
Arbitration costs: Arbitral Tribunal ordered DENR to reimburse UPCI its proportionate share in arbitration costs in the amount of P182,119.44.
Award documentation: Award signed by Chairman Alfredo F. Tadiar, Armando N. Alli, and Ricardo B. San Juan; Arbitral Tribunal asserted it submitted its Report and a copy of the Arbitral Award to the RTC.

Post-Award Procedural Steps and Motions

DENR’s motions:
- Motion for Reconsideration filed with the Arbitral Tribunal (dated May 19, 2010); Tribunal “noted” the motion but claimed it had lost jurisdiction upon submission of its Report to the RTC.
- Motion for Reconsideration before the RTC dated May 19, 2010 (same as the one filed in the Arbitral Tribunal).
- Manifestation and Motion dated June 1, 2010 asserting denial of opportunity to be heard because the Arbitral Tribunal failed to consider DENR’s draft decision and that DENR did not receive a copy of the Arbitral Award by electronic or registered mail.
- Motion to quash the writ of execution filed November 22, 2011 asserting monetary claims not owed and that issuance of the writ was premature because RTC allegedly failed to resolve DENR’s pending motions, thereby violating due process.
UPCI’s filings and requests:
- Opposition to DENR’s motions and Motion for Confirmation of the Arbitral Award (Opposition/Motion for Confirmation dated September 30, 2010).
- Motion for issuance of writ of execution (moved June 15, 2011).
RTC actions prior to confirmation:
- On March 30, 2011, RTC noted DENR’s motions but found the Arbitral Tribunal had sent copies of the award to the parties including the OSG, contrary to DENR’s claim; RTC confirmed the Arbitral Award pursuant to Rule 11.2(A) of the Special ADR Rules and ordered DENR to pay confirmation costs of P50,000.00.
- Writ of execution: RTC granted UPCI’s motion and issued writ of execution (Order dated September 12, 2011).

RTC Ruling on Motion to Quash (Order dated July 9, 2012)

Denial of DENR’s motion to quash the writ of execution.
RTC’s reasoning:
- DENR’s May 19, 2010 Motion for Reconsideration construed as a prohibited pleading under Section 17.2, Rule 17 of the CIAC Rules (which bars motion for reconsideration or new trial of the final award).
- The correct remedy under the CIAC Rules was a motion for correction of the final award under Section 17.1, Rule 17; the motion for correction interrupts running of the period for appeal and is limited to specified grounds (e.g., evident miscalculation, typographical errors, awards on matters not submitted, omitted resolution of issues, form defects not affecting merits).
- DENR’s June 1, 2010 Manifestation and Motion found defective for failure to observe the three-day notice rule.
- Because DENR failed to avail of the remedies available (motion for correction, petition to vacate, or appeal), the Arbitral Award had become final and executory.
DENR received the RTC Order dated July 9, 2012 on July 12, 2012.

Court of Appeals Ruling (Decision dated March 26, 2014)

CA dismissed DENR’s special civil action for certiorari (CA-G.R. SP No. 126458) on two independent grounds:
- The petition essentially assailed the merits of the Arbitral Award, which is precluded by Rule 19.7 of the Special ADR Rules that bars appeal or certiorari on the merits of an arbitral award.
- The petition was filed out of time in violation of Rule 19.28 in relation to Rule 19.8 of the Special ADR Rules: the certiorari petition should have been filed with the Court of Appeals within fifteen (15) days from notice of the judgment, order or resolution sought to be annulled or set aside (deadline was until July 27, 2012); DENR filed its certiorari petition on September 10, 2012, nearly two months after receipt of the RTC Order dated July 9, 2012.
CA concluded DENR failed to comply with procedures under the Special ADR Rules and dismissed the petition accordingly.

Issue Presented to the Supreme Court

Whether the Court of Appeals erred in applying the provisions of the Special Rules of Court on Alternative Dispute Resolution (Special ADR Rules), resulting in dismissal of DENR’s special civil action for certiorari.

Supreme Court’s Principal Rulings and Legal Analysis — Overview

The petition lacks merit and is DENIED; the CA’s dismissal is AFFIRMED.
The Court’s discussion centers on:
- The scope and applicability of Republic Act No. 9285 (Alternative Dispute Resolution Act of 2004) and the Special ADR Rules (A.M. No. 07-11-08-SC).
- The effect of party autonomy in arbitration and the parties’ adoption of the CIAC Rules to govern arbitration proceedings.
- The remedies available after an arbitral award under the CIAC Rules and the Special ADR Rules; the procedural consequences of DENR’s failure to avail itself of those remedies.
- The reglementary period and strict procedural rules under the Special ADR Rules for filing a certiorari petition with the CA.
- The due process considerations in arbitration and confirmation proceedings.
- The effect of Presidential Decree No. 1445 (Government Auditing Code) in relation to execution of money judgments against the Government and its agencies, and the COA’s primary jurisdicti