G.R. No. 146717 ; May 19, 2006
Transfield Philippines, Inc. vs. Luzon Hydro Corporation, Australia and New Zealand Banking Group Limited and Security Bank Corporation

FACTS

This case concerns a dispute arising from a Turnkey Contract for a hydroelectric project. Petitioner Transfield Philippines, Inc. (TPI) and respondent Luzon Hydro Corporation (LHC) agreed to resolve disputes via arbitration before the International Chamber of Commerce (ICC). During the pendency of the ICC arbitration, LHC called on standby letters of credit provided by TPI. TPI filed Civil Case No. 00-1312 to enjoin this call, arguing it was premature pending arbitration. This case progressed to the Supreme Court as G.R. No. 146717. Separately, TPI initiated ICC Case No. 11264/TE/MW for the main dispute on project delays and claims. After the ICC tribunal issued a Third Partial Award, TPI also filed Civil Case No. 04-332 for its confirmation and enforcement.
LHC accused TPI of forum-shopping for filing these multiple suits. Conversely, TPI counter-charged that LHC was itself forum-shopping by raising the same accusation in different cases and attempting to relitigate arbitral issues in the confirmation proceeding. The Supreme Court, having previously resolved the merits regarding the propriety of the call on the securities, required memoranda to settle this ancillary issue of forum-shopping.

ISSUE

Whether Transfield Philippines, Inc. is guilty of forum-shopping for filing Civil Case No. 00-1312 (the precursor to G.R. No. 146717), ICC Case No. 11264/TE/MW, and Civil Case No. 04-332.

RULING

The Supreme Court ruled that TPI is NOT guilty of forum-shopping. Forum-shopping requires identity of parties, rights asserted and reliefs prayed for, founded on the same facts, such that a judgment in one would constitute res judicata in the others. Here, the causes of action in the three proceedings were distinct.
ICC Case No. 11264/TE/MW was the primary arbitral proceeding to resolve the substantive contractual dispute over project delays and monetary claims under the Turnkey Contract. In contrast, Civil Case No. 00-1312 (and subsequently G.R. No. 146717) was a separate action for injunction and later for the return of the proceeds of the letters of credit, aimed at obtaining an interim measure of protection to preserve the status quo pending the arbitration’s outcome. Civil Case No. 04-332 was a post-arbitration petition for judicial confirmation and enforcement of a specific arbitral award, a distinct proceeding recognized under arbitration law.
The Court emphasized that seeking interim relief from a judicial authority during ongoing arbitration is not an infringement or waiver of the arbitration agreement. The reliefs sought in the court actions—injunction/escrow and confirmation/enforcement—were ancillary and complementary to the main arbitral process, not a re-litigation of the arbitral tribunal’s core mandate. Since the three suits involved different causes of action and sought different reliefs based on different factual stages of the dispute, no forum-shopping existed.