G.R. No. 160071 . June 06, 2016.
ANDREW D. FYFE, RICHARD T. NUTTALL, AND RICHARD J. WALD, PETITIONERS, VS. PHILIPPINE AIRLINES, INC., RESPONDENT.

FACTS

Petitioners, foreign technical advisers engaged by respondent Philippine Airlines, Inc. (PAL) through Regent Star Services Ltd. under a Technical Services Agreement (TSA), initiated arbitration after PAL terminated the TSA. The arbitral tribunal ruled in favor of the petitioners, ordering PAL to pay them termination penalties. PAL then filed a Motion to Vacate the arbitral award with the Regional Trial Court (RTC), which granted the motion and set aside the award. The petitioners appealed the RTC order to the Court of Appeals (CA) via a notice of appeal.
PAL moved to dismiss the appeal, arguing that the proper mode of appeal from the RTC order vacating an arbitral award was a petition for review under Rule 43 of the Rules of Court, not an ordinary appeal under Rule 41. The CA granted PAL’s motion to dismiss, ruling that the petitioners availed of the wrong remedy. The petitioners’ motion for reconsideration was denied, prompting this petition.

ISSUE

Whether the Court of Appeals erred in dismissing the petitioners’ appeal on the ground that they availed of the wrong mode of appeal from the RTC order vacating the arbitral award.

RULING

No, the Court of Appeals did not err. The Supreme Court affirmed the CA’s dismissal, holding that the petitioners indeed used an incorrect and improper mode of appeal.
The legal logic hinges on the classification of arbitration proceedings and the nature of the RTC’s order. Arbitration is deemed a special proceeding under Republic Act No. 876 , the Arbitration Law. Consequently, any judgment or final order issued by the RTC in the exercise of its jurisdiction over such special proceedings is appealable via a petition for review under Rule 43 of the Rules of Court. Rule 43 explicitly governs appeals from quasi-judicial agencies and includes, under Section 1, appeals from awards, judgments, final orders, or resolutions of any court in the exercise of its quasi-judicial functions. The RTC, when acting upon a motion to vacate an arbitral award, exercises a quasi-judicial function integral to the special proceeding of arbitration.
The petitioners’ recourse of filing a mere notice of appeal under Rule 41 was therefore fatally defective. Rule 41 governs ordinary appeals from judgments or final orders of the RTC in the exercise of its original jurisdiction in ordinary civil actions. Since the RTC’s order arose from a special proceeding (arbitration) and not an ordinary civil action, the ordinary appeal was unavailable. The prescribed and exclusive appellate remedy was a petition for review under Rule 43. The failure to conform to this prescribed mode of appeal is a jurisdictional error, warranting the dismissal of the appeal. The Court emphasized that rules of procedure are designed to ensure the orderly administration of justice, and adherence to the correct appellate remedy is mandatory and jurisdictional.