G.R. No. 225051, July 19, 2017
Department of Foreign Affairs (DFA), Petitioner, vs. BCA International Corporation & Ad Hoc Arbitral Tribunal, Respondents.

FACTS

The Department of Foreign Affairs (DFA) and BCA International Corporation entered into an Amended Build-Operate-Transfer Agreement for the Machine Readable Passport and Visa Project. A dispute arose, leading the DFA to terminate the agreement. BCA opposed this and initiated arbitration proceedings in 2006. The Arbitral Tribunal was constituted in 2009. In 2013, BCA sought to amend its Statement of Claims to include an alternative prayer for monetary damages, which the DFA opposed as prejudicial and belated. BCA initially withdrew this amendment but later, in 2015, filed a new Motion to Admit an Amended Statement of Claims, significantly increasing its monetary claim.
The Arbitral Tribunal issued Procedural Order No. 11, granting BCA’s motion to admit the amended claim on the premise that BCA would present no additional evidence-in-chief and upon payment of additional arbitration fees. The DFA filed a motion for reconsideration, which was denied by the Tribunal in Procedural Order No. 12. The DFA then filed a petition for certiorari with the Supreme Court, arguing that the Tribunal committed grave abuse of discretion in admitting the amended claim at a late stage, violating its right to due process.

ISSUE

Whether the Supreme Court can review, via a petition for certiorari, the interlocutory orders (Procedural Orders No. 11 and 12) issued by an arbitral tribunal during the pendency of arbitration proceedings.

RULING

The Supreme Court dismissed the petition. The Court held that a petition for certiorari under Rule 65 is not the proper remedy to assail interlocutory orders issued by an arbitral tribunal. The governing law for the international commercial arbitration is Republic Act No. 9285 (The Alternative Dispute Resolution Act of 2004), which adopts the UNCITRAL Model Law. Under this framework, judicial intervention is limited and highly circumscribed. The Court emphasized the policy of judicial restraint in arbitration matters to preserve its efficiency and finality.
The legal logic is that arbitral tribunals possess inherent authority to govern their own procedure, including rulings on the admissibility of amended pleadings. Such procedural orders are interim in nature and do not constitute a final award. Judicial review is reserved for final arbitral awards, not for intermediate procedural directives. The proper recourse for a party aggrieved by a procedural order is to await the final award and then raise the issue in a petition to vacate or modify that award based on the grounds provided by law, such as a violation of due process. Allowing immediate judicial review of every procedural order would defeat the purpose of arbitration as a speedy and extra-judicial dispute resolution mechanism. The Court found no grave abuse of discretion as the Tribunal’s orders were within its procedural prerogatives to control the conduct of the arbitration.