G.R. No. 196723 & G.R. No. 196728; August 28, 2013
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner, vs. SUMITOMO CORPORATION, Respondent. (and the consolidated case)

FACTS

Asian Construction and Sumitomo entered into a Civil Work Agreement for a Light Rail Transit project. The Agreement stipulated that New York State Law would govern and that disputes would be settled by arbitration. Sumitomo terminated the Agreement in 1998, leading to unresolved claims from both parties. In 2008, Asian Construction filed a complaint with the Construction Industry Arbitration Commission (CIAC). The constituted Arbitral Tribunal issued a Partial Award in 2009, dismissing all claims and counterclaims as prescribed under New York’s six-year statute of limitations. Asian Construction filed a petition for review with the Court of Appeals (CA) challenging this Partial Award.
Subsequently, the Arbitral Tribunal proceeded to a Final Award in 2010, which, despite having dismissed the main claims, awarded attorney’s fees and costs to Sumitomo. Asian Construction also challenged this Final Award before the CA. The CA dismissed Asian Construction’s appeal from the Partial Award on the ground of forum shopping, as it was filed while the arbitration was still ongoing for the Final Award. However, in the appeal for the Final Award, the CA deleted the grant of attorney’s fees to Sumitomo. Both parties elevated their respective grievances to the Supreme Court via petitions for review.

ISSUE

The core issues were: (1) whether the CA correctly dismissed Asian Construction’s appeal from the Partial Award for forum shopping; and (2) whether the CA correctly deleted the award of attorney’s fees to Sumitomo from the Final Award.

RULING

The Supreme Court denied both petitions and affirmed the CA’s dispositions. On the first issue, the Court held that the CA correctly dismissed Asian Construction’s appeal from the Partial Award for forum shopping. A Partial Award that finally disposes of a portion of the claims is immediately appealable. However, Asian Construction’s act of appealing the Partial Award while simultaneously continuing to participate in the arbitration proceedings for the remaining issue of attorney’s fees constituted forum shopping. It invoked the jurisdiction of two different fora (the CA and the continuing arbitral tribunal) to obtain a favorable ruling, which is prohibited.
On the second issue, the Court upheld the CA’s deletion of the attorney’s fees awarded to Sumitomo. The Arbitral Tribunal’s Final Award, having dismissed all principal claims and counterclaims on the ground of prescription, left no remaining cause of action upon which to base an award for attorney’s fees. Under the governing New York law, as correctly applied by the CA, attorney’s fees are not recoverable by the prevailing party as a matter of right in the absence of a statute, court rule, or contractual provision expressly allowing it. The Agreement between the parties contained no such stipulation for the recovery of attorney’s fees in this context. Therefore, the award had no legal basis.