Case Summary (G.R. No. 215644)
Factual Background and Proceedings
On November 2, 2006, Tri-Mark Foods, Inc. (Tri-Mark) entered into a franchise agreement with Gintong Pansit, granting the latter the right to operate a Ling Nam Noodle House. The franchise was set for five years until November 2011. Disputes arose over unpaid accounts, leading Tri-Mark to file a request for arbitration due to Gintong Pansit's alleged failure to pay dues totaling P7,005,750.32 over several months, which included food supplies, manpower services, and various fees.
Arbitration Award
The sole arbitrator, Reynaldo Saludares, issued a final award on September 8, 2010, favoring Tri-Mark for a total of P5,527,100.20 after deductions for the amounts previously paid by Gintong Pansit. Following this outcome, Gintong Pansit and the individual respondents sought to vacate the award through the Regional Trial Court (RTC) under grounds that included alleged evident partiality, misconduct, and breaches of due process by the arbitrator.
Decision of the Regional Trial Court
On December 8, 2011, the RTC vacated the award, asserting that the arbitrator had acted with evident partiality by neglecting to adequately consider evidence presented by Gintong Pansit. The RTC ordered that new arbitrators be appointed and mandated hearings for a reevaluation of the case, arguing that the grounds for vacating the award stemmed from procedural rather than substantive merits.
Court of Appeals Denial
The Court of Appeals, in its decision dated November 21, 2013, upheld the RTC's ruling, identifying that evident partiality existed and that the issues raised indicated a merits appeal, which prohibited intervention under the Special Rules of Court on Alternative Dispute Resolution (Special ADR Rules). The Appeals Court corroborated the procedural legitimacy of the RTC's actions concerning evident partiality.
Supreme Court Review
The Supreme Court found that the courts below misapplied the standard for evident partiality. It clarified that a disagreement over evidence and its evaluation did not equate to bias on the part of the arbitrator. The Court emphasized that merely overlooking a party's evidence in adjudicating merits does not alone verify a claim of evident partiality. Proper grounds to vacate an arbitral award must indicate misconduct by the arbitrators, not mere dissatisfaction with the award.
Ruling on Evident Partiality
The Supreme Court ruled that no grounds existed for vacating the arbitral award based on evident partiality, as respond
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Case Overview
- Case Citation: G.R. No. 215644
- Date: September 14, 2021
- Parties Involved:
- Petitioner: Tri-Mark Foods, Inc.
- Respondents: Gintong Pansit, Atbp., Inc., Lucy Tan Yu, Catherine Ng Chungunco, Kathleen Go-Ocier, Raymond Ng Chungunco, Mary Jennifer Yap Ang
- Legal Context: Petition for Review under Rule 45 of the Rules of Court concerning the arbitration process and the subsequent vacatur of an arbitral award.
Procedural History
- Initial Proceedings:
- Petition filed by Tri-Mark Foods, Inc. to annul the Joint Order dated December 8, 2011, and the Order dated May 9, 2012, of the Regional Trial Court (RTC) of Mandaluyong City.
- The RTC's Joint Order vacated the Final Award dated September 8, 2010, issued by the Philippine Dispute Resolution Center, Inc. (PDRCI) in Case No. 46-2010.
- The Court of Appeals (CA) upheld the RTC's decision and denied the motion for reconsideration.
Factual Background
Franchise Agreement:
- On November 2, 2006, Tri-Mark granted Gintong Pansit a franchise to operate a Ling Nam Noodle House branch for five years.
- Gintong Pansit regularly sourced supplies from Tri-Mark, which subsequently sent payment reminders.
Disputes and Claims:
- Gintong Pansit raised concerns regarding high prices of supplies in 2008 and requested meetings to discuss the issue.
- Tri-Mark issued demand letters for unpaid accounts totaling P7,135,843.98.
- In