Case Summary (G.R. No. 225050)
Antecedents of the Case
FedEx, a foreign corporation engaged in international air carriage and logistics, initiated an international commercial arbitration case against AF2100, a domestic freight forwarding corporation, on June 24, 2011. The arbitration (docketed as Case No. 51-2011) was conducted by the Philippine Dispute Resolution Center, Inc. (PDRCI). A significant issue in the case revolved around AF2100’s withholding of amounts due to FedEx on the grounds of having paid VAT on behalf of FedEx.
Document Production Requests
During the arbitration, FedEx sought to obtain specific documents from AF2100, including VAT returns and related records for certain periods. AF2100, however, opposed this request, claiming it was premature and burdened with confidentiality concerns. The Arbitral Tribunal, after evaluating the arguments, mandated in Procedural Order No. 5 that AF2100 should provide the requested documents, which AF2100 failed to do, leading to further orders from the tribunal.
Final Award of the Arbitral Tribunal
In a decision dated February 3, 2014, the Arbitral Tribunal ruled in favor of FedEx, denying AF2100's claim for VAT payment. The tribunal inferred that AF2100’s failure to comply with the document requests suggested the existence of adverse evidence. Consequently, AF2100 filed a petition to set aside the award before Pasig City RTC-Branch 266 while FedEx simultaneously sought recognition and enforcement of the Final Award in another RTC branch.
Petition for Interim Relief and Protective Orders
FedEx subsequently filed a Petition for Interim Relief before RTC Pasig City-Br. 271, compelling AF2100 to comply with the earlier Procedural Orders. The RTC granted this petition, citing the ineffectiveness of the tribunal's orders and found no merit in AF2100’s motion for protective orders regarding the confidentiality of its VAT returns.
Petition for Assistance in Taking Evidence and BIR's Opposition
FedEx also sought a Petition for Assistance in Taking Evidence from the RTC of Quezon City, asking for a subpoena to the CIR to access the requested documents related to AF2100’s VAT dealings. The CIR opposed this, referencing confidentiality provisions under the National Internal Revenue Code (NIRC). The RTC QC found no legal basis for the CIR’s refusal and ordered compliance.
Intervention of AF2100 and Subsequent Court Rulings
AF2100 filed a Motion to Intervene in the PATE Case, claiming it was an indispensable party whose interests were affected. The RTC QC denied this motion, stating AF2100’s non-involvement contradicted procedural fairness, especially given that AF2100 was not impleaded in the original petition. Despite claims of forum shopping by FedEx, the court found this argument contextually baseless as different interests and parties were involved across the related cases.
Court of Appeals Ruling on Certiorari
After various motions and proceedings, AF2100 sought certiorari with the Court of Appeals (CA), alleging that the RTC QC had rendered erroneous decisions regarding its intervention rights and that FedEx engaged in forum shopping. The CA found merit in these claims, ruling that the PATE Case had become moot due to the Final Award from the arbitration but still concluded on forum shopping.
Current Petition for Review on Certiorari
FedEx now challenges the CA's decision, arguing that it misapplied relevant rules regarding indispensable parties and improperly framed the context of forum shopping. FedEx asserts that the CA's findings prejud
...continue readingCase Syllabus (G.R. No. 225050)
Introduction
- This case involves a Petition for Review on Certiorari filed by Federal Express Corporation (FedEx) against Airfreight 2100, Inc. (AF2100) and the Commissioner of Internal Revenue (CIR).
- The dispute arises from multiple interconnected legal proceedings stemming from international commercial arbitration concerning contracts between FedEx and AF2100.
Antecedents
A. Arbitration Case
- FedEx, a foreign corporation engaged in international air carriage and logistics, initiated an arbitration case against AF2100 on June 24, 2011.
- The arbitration was prompted by disputes over contracts under the Global Service Program.
- A significant issue was whether AF2100 could withhold payments to FedEx due to VAT payments made on behalf of FedEx.
- FedEx requested documents from AF2100, including VAT returns and receipts, which AF2100 opposed on grounds of being premature and overly broad.
B. Procedural Orders
- The Arbitral Tribunal issued Procedural Order No. 5 requiring AF2100 to produce the requested documents, which AF2100 contested.
- The tribunal reiterated its directives through subsequent procedural orders, ultimately leading to a final award favoring FedEx on February 3, 2014.
- AF2100's refusal to produce VAT returns led the tribunal to infer that these documents would have been detrimental to AF2100’s claims.
C. Petition for Interim Relief (PIR) Case
- Following AF2100's non-compliance, FedEx filed a Petition for Interim Relief on August 3, 2012, seeking