G.R. No. 244063 , June 21, 2022
LONE CONGRESSIONAL DISTRICT OF BENGUET PROVINCE, REPRESENTED BY HON. RONALD M. COSALAN, REPRESENTATIVE, PETITIONER, VS. LEPANTO CONSOLIDATED MINING COMPANY AND FAR SOUTHEAST GOLD RESOURCES, INC., RESPONDENTS. [G.R. No. 244216] REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE MINES AND GEOSCIENCES BUREAU OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (MGB-DENR), PETITIONER, VS. LEPANTO CONSOLIDATED MINING COMPANY AND FAR SOUTHEAST GOLD RESOURCES, INC., RESPONDENTS.

FACTS

This case involves consolidated petitions concerning a domestic arbitral award. The Separate Concurring Opinion of Justice Dimaampao concurs with the ponencia’s denial of the Petition of the Lone Congressional District of Benguet Province and its vacating of the Final Arbitral Award. The opinion focuses on clarifying the legal grounds for vacating an arbitral award, specifically the distinction between “manifest disregard of the law” and the “public policy exception.”

ISSUE

The primary issue addressed in the Separate Concurring Opinion is the clarification of the distinction between “manifest disregard of the law” and the “public policy exception” as grounds for vacatur of a domestic arbitral award under Philippine law.

RULING

Justice Dimaampao concurs with the ponencia’s result but provides a separate opinion to clarify that “manifest disregard of the law” and the “public policy exception” are separate and distinct grounds for vacating an arbitral award.
1. Manifest Disregard of the Law: This ground is not found in the Model Law or the New York Convention but originates from United States case law. In Philippine jurisprudence, as seen in Asset Privatization Trust v. Court of Appeals and Equitable PCI Banking Corp. v. RCBC Capital Corp., this ground is intertwined with and demonstrative of issues concerning the integrity of the arbitral tribunal or the regularity of the arbitral proceedings. It pertains to the arbitral tribunal’s conduct and process.
2. Public Policy Exception: This ground is found in Article 34 of the Model Law and Rule 19.10 of the Special ADR Rules. It is a broader concept, serving as a “safety valve” for exceptional circumstances where enforcing an award would require a legal system to abandon its very fundaments. The Court has adopted a narrow definition from Parsons & Whittemore Overseas v. Societe Generale de L’Industrie du Papier (RAKTA), where enforcement would violate the forum state’s “most basic notions of morality and justice.” Examples include awards giving effect to illegal or universally condemned activities (e.g., terrorism, corruption). The opinion cites Maynilad Water Services, Inc. v. Center for Popular Movement, where the Court refused to recognize an award for being contrary to public policy because it would adversely affect the public at large, result in unequal treatment of consumers, and be illegal for violating the mandate to fix “just and equitable rates” under Republic Act No. 6234 .
The opinion concludes by recommending that the ponencia include a discussion of these distinctions for the guidance of the bench and bar, noting that while courts may not correct an arbitral tribunal’s errors of law or fact, they have a duty to ensure that the enforcement of an award does not undermine the interests of the State and the public.