G.R. No. 212081 February 23, 2015
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR), Petitioner, vs. UNITED PLANNERS CONSULTANTS, INC. (UPCI), Respondent.

FACTS

On July 26, 1993, petitioner DENR, through the Land Management Bureau (LMB), entered into a Consultancy Agreement with respondent UPCI for the LMB’s Land Resource Management Master Plan Project, with a total contract price of ₱4,337,141.00. Respondent completed the work in December 1994, which petitioner accepted, but petitioner paid only 47% (₱2,038,456.30) of the price. Despite a 1994 COA report finding the contract price 84.14% excessive, petitioner acknowledged its liability of ₱2,239,479.60 to respondent in a 1998 letter. Due to non-payment, respondent filed a complaint before the RTC of Quezon City. The case was referred to arbitration per the agreement’s arbitration clause, with the parties adopting the CIAC Revised Rules. The Arbitral Tribunal rendered an Award on May 7, 2010, directing petitioner to pay respondent unpaid billings, accrued interest, exemplary damages, attorney’s fees, and arbitration costs. Petitioner filed a motion for reconsideration with the Tribunal, which was merely noted as the Tribunal claimed loss of jurisdiction. Petitioner then filed a Motion for Reconsideration and a Manifestation and Motion with the RTC, asserting denial of opportunity to be heard. The RTC, in an Order dated March 30, 2011, noted petitioner’s motions, found that copies of the Award were sent, and confirmed the Arbitral Award pursuant to the Special ADR Rules. Petitioner did not file a motion for reconsideration from this order. Upon respondent’s motion, the RTC issued a writ of execution. Petitioner moved to quash the writ, claiming due process violation and prematurity. The RTC denied the motion to quash, ruling that a motion for reconsideration of the arbitral award was a prohibited pleading under the CIAC Rules and that petitioner’s subsequent motion was defective for failure to observe the three-day notice rule. Petitioner received this denial on July 12, 2012, and filed a petition for certiorari with the CA on September 10, 2012. The CA dismissed the petition, ruling it assailed the merits of the award (prohibited by the Special ADR Rules) and was filed out of time (beyond 15 days from notice of the RTC’s July 9, 2012 Order).

ISSUE

Whether or not the Court of Appeals erred in applying the provisions of the Special ADR Rules, resulting in the dismissal of petitioner’s special civil action for certiorari.

RULING

The Supreme Court denied the petition, ruling that the CA correctly applied the Special ADR Rules. The Court held that the Special ADR Rules govern the case as it involved judicial intervention in an arbitration proceeding (specifically, confirmation of an award). The parties had agreed to adopt the CIAC Rules for the arbitration proceedings. Under the CIAC Rules, a motion for reconsideration of the arbitral award is a prohibited pleading; the proper remedy is a motion for correction of the final award based on specific grounds, which petitioner did not avail. The RTC’s confirmation order became final as petitioner did not file a motion for reconsideration therefrom or a timely petition to vacate the award. For the special civil action of certiorari assailing the RTC’s order denying the motion to quash the writ of execution, Rule 19.28 of the Special ADR Rules requires filing within 15 days from notice of the judgment, order, or resolution. Petitioner received the RTC’s denial on July 12, 2012, making the deadline July 27, 2012. Petitioner filed its certiorari petition on September 10, 2012, which was patently out of time. The CA was therefore correct in dismissing the petition. The Court further noted that a petition for certiorari cannot be used to assail the merits of an arbitral award, as agreements to arbitrate mean the award is final and binding.