SECOND DIVISION
G.R. No. 232801, June 30, 2021
PHILIPPINE CHARITY SWEEPSTAKES OFFICE (PCSO), Petitioner, v. DFNN, INC. (DFNNI), Respondent.
D E C I S I O N
LAZARO-JAVIER, J.:
"WHEREAS, DFN[N]I, in a letter to GM Rosario Uriarte, dated January 18, 2005, admitted and confirmed its failure to secure the conformity and cooperation of Smart and Globe and instead (sic) argued that "the signed contracts were the obligations of the PCSO[,]"(sic) despite the clear agreement between the parties that it should be DFN[N]I that should procure the conformity of the telecoms w[h]ile conceding that the final contract should be signed by PCSO[;]By letter dated April 5, 2005, PCSO informed DFNNI of the rescission. On December 12, 2005, DFNNI replied, asking for a possible solution acceptable to all parties concerned.
WHEREAS, to date, only minor telecom players, namely, Sun Cellular and Nextel, has expressed their intention to cooperate in implementing the proposed project. Considering the limited number of subscribers of the Sun Cellular and Nextel, the text betting project is no longer feasible, as it will not generate the projected income, as proposed;
WHEREAS, PGMC, in its letter dated July 20,2004, from Mr. Kenny Low, Vice President for Operations, cited the potentially grave risks to the integrity of the PCSO online lottery central system due to the interconnection. Thus, PCSO and its lottery system runs a grave risk in incurring problems relating to technical glitches, validation and claiming of winnings due to the proposed interface of systems;
WHEREAS, in light of the foregoing, it appears that the System built by DFNN[I] cannot interface into the PGMC's system in a seamless manner, thereby putting grave risks in the PCSO's betting systems, which could generate controversies and negative publicity that will adversely affect the integrity of the lotto project as well as the established trust of the playing public in PCSO's lotto game;
WHEREFORE, for all the foregoing reasons, to wit: non-fulfillment of a suspensive condition relative to the interconnection cooperation with PGMC and ILTS as well as the non-conformity of Globe and/or Smart making the text betting project no longer feasible, doubts against the legality of the ELA as being contrary to laws, morals and public policy; lack of authority of DFN[N]I to engage in the proposed undertaking; absence of public bidding, as well as doubts arising from the unsigned Minutes of the Meetings where the authority to enter into the ELA was allegedly given, RESOLVED, THAT THE BOARD NOW RESCIND, AS IT HEREBY RESCINDS, THE ELA DATED APRIL 9, 2003 BETWEEN THE PCSO AND DFN[N]I, COPY OF WHICH IS ATTACHED HERETO AND MADE AN INTEGRAL PART HEREOF;"8 (Emphasis retained.)
Claimant DFNNI is entitled toSeveral cases had since ensued between the parties.
Liquidated damages as provided
in the ELA.
As the defaulting party, PCSO's liability for damages is governed by Section 13.2(i) of the ELA, which provides as follows:x x x x
(i) PCSO, if it is the party in default, shall pay DFNN[I] liquidated damages in the amount (sic) equal to the market value of the System plus rental payments for the unexpired term of this Agreement as provided under Section 10.2 and 10.3 hereof, inclusive of a penalty charge of two percent (2%) per month on the amount due computed from the date of termination or cancellation of the Agreement to the actual date of payment. For the purposes of this provision, "market value" shall be stipulated at Twenty Seven Million Pesos (P27,000.000) less depreciation of twelve and one half percent (12.5%) per year beginning from execution of this Agreement. "Unexpired term of rental payments" shall be computed based on the lease charge of five percent (5%) of the total value of bets placed through this System provided by DFNN[I] or the amount of Five Pesos (P5.00) per successful registrant under the System, whichever is higher, at the time such default shall have occurred multiplied by the remaining period of the term of this Agreement. PCSO shall also return the System to DFNN[I] in accordance with Section 9.2 hereof.
In addition to liquidated damages, the parties likewise agreed that PCSO, if the defaulting party, shall pay DFNN[I] for rental for the unexpired term of the ELA.
The Arbitration Panel holds that the award of the stipulated liquidated damages as set forth in the ELA is just and reasonable. PCSO did not present any evidence to prove that the market value of the system as defined in the ELA is excessive, or is iniquitous or unconscionable.
The provision on depreciation cannot be considered (or deducted) since the ELA was terminated even before the System could be launched on a commercial basis. For the same reason, rental payments for the unexpired term of the rental payment cannot be granted since the said rental payments axe to be "computed based on the lease charge of five percent (5%) of the total value of bets placed through this system provided by DFNN[I] or the amount of Five pesos (5.00) per successful registrant under the system, whichever is higher, at the time such default shall have occurred multiplied by the remaining period of the term of this Agreement." Since the System was never commercially launched, any claim for the unexpired term of rental payments would be purely speculative.
x x x
DFNN[I] did submit a feasibility study on projected lotto bettings using DFNN[I]'s System. Since there was no commercial launch of the System, however, there obviously were no successful registrants or total value of bets that could serve as a basis for computing the rental payments for the unexpired term of the ELA. Projections are plainly speculative and based on conjecture. Significantly, DFNN[I] did not present any witness to substantiate or validate its projections. Thus, in the absence of competent/reliable evidence, DFNN[I]'s claim for the rental payments on a System which was never commercially launched cannot be granted.
On the two percent interest, it is evident that the interest referred to unpaid lease rentals. As there are no lease rentals due, neither can there be any interest thereon.
WHEREFORE, ALL ABOVE PREMISES CONSIDERED, the Arbitration Panel rules that respondent Philippine Charity Sweepstakes Office improperly terminated its Equipment Lease Agreement with DFNN[I], Inc. Accordingly, PCSO is hereby ordered to pay DFNN[I], Inc. the amount of Twenty Seven Million Pesos (PhP27,000,000.00) as liquidated damages, in accordance with the terms of the Equipment Lease Agreement."
SO ORDERED14
WHEREFORE, premises considered, in accordance with the authority granted by Section 11.4(C) of the ADR Rules to this Court to correct arbitral awards, the award for liquidated damages in the Arbitral Award dated May 21, 2015[,] is hereby corrected to Php310,095,149.70, plus 6% interest from [date] of finality of this Decision until full satisfaction thereof.
WHEREFORE, all the above premises considered, the petition is DISMISSED. Accordingly, the assailed Decision dated February 17, 2016 of the Regional Trial Court of Makati City, Branch 66, in SP PROC. NO. M-7844 as well as the Order dated May 18, 2016 are hereby AFFIRMED.chanroblesvirtualawlibraryIt ruled that DFNNI was not guilty of forum shopping as it could not have known PCSO's filing of its petition for confirmation before the RTC-Mandaluyong when it filed its own petition for correction before the RTC-Makati a day after. For the same reason, the RTC-Makati could not be deemed to have violated the doctrines of judicial stability and non-interference. Finally, on the alleged evident miscalculation, the Court of Appeals adopted the position of the RTC-Makati.24 PCSO's motion for reconsideration was subsequently denied on August 31, 2017.
SO ORDERED.
x x xb. CA-G.R. SP No. 145462
Examining carefully the Ad Hoc Arbitration Panel's Arbitral Award dated May 21, 2015, particularly on the discussion on the award of liquidated damages in favor of the Respondent, the latter's claim of evident miscalculation is clearly unfounded. On the contrary, the Panel even painstakingly elaborated on the proper application of the pertinent provision of the ELA, specifically, Section 13.2 (i) thereof and made a detailed discussion as to the proper interpretation of the same as appearing on pages 18 to 20 of subject Arbitral Award. Even the application of the penalty charge of two percent (2%) upon which the Respondent bases its claim of evident miscalculation was clearly interpreted by the Ad Hoc Panel as follows:
"On the two percent interest, it is evident that the interest referred to unpaid lease rentals. As there are no lease rentals due, neither can there be any interest thereon."
Nothing more can get any clearer than the foregoing disquisition made by the Panel relative to the penalty charge of two percent (2%). Concededly, the claim of miscalculation, much less an "evident" one, is completely baseless and therefore must necessarily fail. Therefore, the court must strictly apply the provision of Rule 11.9 of the Special ADR Rules which mandates that the court shall not disturb the arbitral tribunal's determination of facts and/or interpretation of law.
x x x
In sum, to warrant any correction or modification or even vacation of an arbitral award, the arbiter's findings must clearly, convincingly and unequivocally show that the grounds enumerated in the Special ADR Rule are indeed present. Thus, the settled is that "courts are without power to amend or overrule merely because of disagreement with matters of law or facts determined by the arbitrators. They will not review the findings of law and fact contained in an award, and will not undertake to substitute their judgement for that of the arbitrators, since any other rule would make an award the commencement, not the end, of litigation. Errors of law and fact, or an erroneous decision of matters submitted to the judgment of the arbitrators, are insufficient to invalidate an award fairly and honestly made. (Equitable PCI Banking Corp., etal, vs. RCBC Capital Corp., G.R. No. 182248, December 18, 2008, citing Asset Privatization Trust vs. Court of Appeals, G.R. No. 121171, December 21,1998)"
WHEREFORE, premises considered, the instant Petition is GRANTED, accordingly the Ad Hoc Arbitration Panel's Award dated May 21, 2015 is hereby CONFIRMED.chanroblesvirtualawlibrary
SO ORDERED.
WHEREFORE, premises considered, the instant petition is hereby GRANTED. The Order dated 11 April 2016 is hereby REVERSED and SET ASIDE. The Regional Trial Court, Branch 212, Mandaluyong City is hereby ORDERED to consolidated Civil Case No. MC15-9557 with that of Special Proceedings No. M-7844 before the Regional Trial Court, Branch 66, Makati City.In ordering the consolidation, the Court of Appeals cited two reasons. One, the RTC-Mandaluyong did not acquire jurisdiction over the case as PCSO's petition for confirmation was prematurely filed on the 29th day from receipt of the Arbitral Award. Under the Special ADR Rules, such petition may only be filed after the lapse of 30 days from receipt of the Arbitral Award. Two, the RTC-Mandaluyong should have granted the consolidation. Two cases involving the same parties and affecting closely related subject matters must be ordered consolidated and jointly tried.
IT IS SO ORDERED.
RULE 19.36. Review Discretionary. - A review by the Supreme Court is not a matter of right, but of sound judicial discretion, which will be granted only for serious and compelling reasons resulting in grave prejudice to the aggrieved party. The following, while neither controlling nor fully measuring the court's discretion, indicate the serious and compelling, and necessarily, restrictive nature of the grounds that will warrant the exercise of the Supreme Court's discretionary powers, when the Court of Appeals:The first ground applies here.The mere fact that the petitioner disagrees with the Court of Appeals' determination of questions of fact, of law or both questions of fact and law, shall not warrant the exercise of the Supreme Court's discretionary power. The error imputed to the Court of Appeals must be grounded upon any of the above prescribed grounds for review or be closely analogous thereto.
- Failed to apply the applicable standard or test for judicial review prescribed in these Special ADK Rules in arriving at its decision resulting in substantial prejudice to the aggrieved party;
- Erred in upholding a final order or decision despite the lack of jurisdiction of the court that rendered such final order or decision;
- Failed to apply any provision, principle, policy or rule contained in these Special ADR Rules resulting in substantial prejudice to the aggrieved party; and
- Committed an error so egregious and harmful to a party as to amount to an undeniable excess of jurisdiction.
A mere general allegation that the Court of Appeals has committed serious and substantial error or that it has acted with grave abuse of discretion resulting in substantial prejudice to the petitioner without indicating with specificity the nature of such error or abuse of discretion and the serious prejudice suffered by the petitioner on account thereof, shall constitute sufficient ground for the Supreme Court to dismiss outright the petition. (Emphasis and italics supplied)
Section 25. Grounds for modifying or correcting award. - In any one of the following cases, the court must make an order modifying or correcting the award, upon the application of any party to the controversy which was arbitrated:The alleged: miscalculated figure DFNNI seeks to correct is the refusal of the Arbitration Panel to impose the 2% monthly interest provided in Par. 13.2(1) of the ELA, viz.:The order may modify and correct the award so as to effect the intent thereof and promote justice between the parties.
(a) Where there was an evident miscalculation of figures, or an evident mistake in the description of any person, thing or property referred to in the award; or (b) Where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of the decision upon the matter submitted; or (c) Where the award is imperfect in a matter of form not affecting the merits of the controversy, and if it had been a commissioner's-report, the defect could have been amended or disregarded by the court.
On the two percent interest, it is evident that the interest referred to unpaid lease rentals. As there are no lease rentals due, neither can there be any interest thereon.36DFNNI, too, seeks an award of temperate damages and attorney's fees.
Section 11, Same; modification or correction; grounds; order, U.S. Federal Arbitration Act. In either of the following cases the United States court in and for the district wherein the award was made may make an order modifying or correcting the award upon the application of any party to the arbitration:From a recent decision of the United States Court of Appeals Tenth Circuit,37 we quote the discussion of the common meaning of "evident miscalculation of figures" which embodied the so called "face-of-the-award limitation":38The order may modify and correct the award, so as to effect the intent thereof and promote justice between the parties.
(a)Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award. (b)Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted. (c) Where the award is imperfect in matter of form not affecting the merits of the controversy.
Let's start with § 11(a)'s plain meaning. See Jones v. Comm'r, 560 F.3d 196, 1200 (10th Cir. 2009). That section says, in relevant part, that a court may modify an award if it contains "an evident material miscalculation of figures." 9 U.S.C. § 11(a). In ordinarily English, a "miscalculation of figures" refers to mathematical, not legal, errors. See Calculate, NEW OXFORD AMERICAN DICTIONARY 242 (2d ed. 2005) ("Determine (the amount or number of something) mathematically."); Figure, id. at 626 (defining "figures" as "arithmetical calculations"). Likewise, "material" in this context takes its ordinary meaning of "important; essential; relevant." Material, id. at 1045. The word "evident," too, takes its ordinary meaning of "plain or obvious." Evident, id. at 585.5 The parties do not appear to dispute the ordinary meaning of these terms. See, e.g., Mid Atlantic's Opening Br. at 19-21; Ms. Bien & Mr. Wellman's Resp. & Principal Br. at 17. Putting these definitions together, we read § 11(a) to allow courts to correct obvious, significant mathematical errors."Evident miscalculation of figures," therefore, means obvious mathematical errors that relates to miscalculation that appears on the face of the award. It does not pertain to any allegation of fraud, corruption, or grave abuse. It is limited to clerical errors and honest mistake and are, thus, correctible insofar as they do not affect the merits of the controversy. Such is the restrained attitude that courts were intended to maintain with respect to arbitral awards.
But even with these dictionary definitions, the meaning of § 11 (a) – particularly the word "evident" – is not clear. Must a miscalculation be obvious on the face of the award or must it be obvious after one looks to the arbitration record? x x x x x x x
Consider the FAA's purposes. See Abramski v. United States, 573 U.S. 169, 179 (2014) (noting the importance of considering a statute's textually derived purpose in interpreting a provision). Its "'principal purpose' ... is to 'ensur[e] that private arbitration agreements are enforced according to their terms.'"x x x x
x x x
Reading this statutory term "evident" as relating to a material miscalculation that appears on the face of the award furthers the FAA's purposes. A face-of-the-award limitation preserves the integrity of the parties' bargain. Specifically, it preserves the parties' deal for an arbitrator's, rather than a court's, resolution of their dispute. This bargain essentially negates the risk that a court may substitute its judgment (inadvertently or otherwise) for that of the arbitrator when it goes beyond the award's face in search of obvious, material mathematical errors. Further, a face-of-the-award approach also ensures that arbitration remains an efficient means to resolve disputes rather than "merely a prelude to a more cumbersome and time-consuming judicial review process." x x x
x x x x
The Court agrees with DFNN[I] that there was an evident miscalculation of the figures in the award of damages in favor of DFNN[I] contained in the Arbitral A ward. Thus, the Court resolves to GRANT the instant Petition. Section 13.2 of the ELA prescribes the proper computation of liquidated damages in case an event of default should occur. Section 13.2 of the ELA states:Clearly, the-RTC-Makati passed off its decision as mere correction of the Arbitral Award. But in truth, it reversed and set aside the findings of the Arbitration Panel with respect to the 2% penalty provided in Par. 13.2(i) of the ELA, substituting its decision for that of the Arbitration Panel."(i) PCSO, if it is the party in default, shall pay DFNN[I] liquidated damages uithe amount (sic) equal to the market value of the System pirn rental payments for the unexpired term of this Agreement as provided under Section 10.2 and 10.3 hereof, inclusive of a penalty charge of two percent (2%) per month on the amount due computed from the date of termination or cancellation of the Agreement to the actual date of payment.For the purposes of this provision, "market value" shall be stipulated at Twenty Seven Million Pesos (P27,000,000) less depreciation of twelve and one half percent (12.5%) per year beginning from execution of this Agreement. "Unexpired term of rental payments" shall be computed based on the lease charge of five percent (5%) of the total value of bets placed through this System provided by DFNN[I] or the amount of Five Pesos (P5.00) per successful registrant under the System, whichever is higher, at the time such default shall have occurred multiplied by the remaining period of the term of this Agreement. PCSO shall also return the System to DFNN[I] in accordance with Section 9.2 hereof."
Based on the foregoing-quoted Seetion of the ELA, DFNN[I] claims a total amount of Php310,095,149.70 in liquidated damages. The Court agrees with this claim.
A reading of the controlling provision in the ELA shows that the two percent (2%) penalty charge per month is computed based on "the amount due." The amount due in this case refers to the "market value of the System plus rental payments for the unexpired term of this Agreement, inclusive of a penalty charge of two percent (2%) per month on the amount due computed from the date of termination or cancellation of the Agreement to the actual date of payment." The Arbitral Tribunal determined the amount due to be Php27,000,000.00.
The 2% penalty charge per month should therefore be imposed on the Php27,000,000.00 initially. Thereafter, the 2% penalty charge should be computed based on the Php27,000,000.00 plus the previously incurred penalty charges. The Court[,] therefore[,] corrects the computation of liquidated damages (sic) to Php310,095,149.70.
As to the legal interest that must be imposed on the award, it must be noted that the case of Nacar vs. Gallery Frames (G.R. No. 189871, August 13, 2013) already modified the rates stated in Eastern Shipping Lines vs. Court of Appeals (G.R. No. 97412, July 12, 1994) and now prescribes the uniform rate of 6% legal interest per annum from date of finality of this Decision until full satisfaction thereof.
WHEREFORE, premises considered, in accordance with the authority granted by Section 11.4(C) of the ADR Rules to this. Court to correct arbitral awards, the award for liquidated damages in the Arbitral Award dated May 21, 2015 is hereby corrected to Php310,095149.70, plus 6% interest from [date] of finality of this Decision until full satisfaction thereof.
SO ORDERED."
Arbitration is an alternative mode of dispute resolution outside of the regular court system. Although adversarial in character, arbitration is technically not litigation. It is a voluntary process in which one or more arbitrators – appointed according to the parties' agreement or according to the applicable rules of the Alternative Dispute Resolution (ADR) Law – resolve a dispute by rendering an award.41 While arbitration carries many advantages over court litigation, in many ways these advantages also translate into its disadvantages.In other words, a party may not invoke the grounds for correction of arbitral awards under Section 25(a), RA 876, including the correction of "evident miscalculation of figures", as a ruse to ask for a review of the substantive findings of an arbitral tribunal. The mere fact that a party disagrees with the arbitral tribunal's factual findings and legal conclusions does not warrant the modification or correction of the arbitral award, much less a review thereof.
Resort to arbitration is voluntary. It requires consent from both parties in the form of an arbitration clause that pre-existed the dispute or a subsequent submission agreement. This written arbitration agreement is an independent and legally enforceable contract that must be complied with in good faith. By entering into an arbitration agreement, the parties agree to submit their dispute to an arbitrator (or tribunal) of their own choosing and be bound by the latter's resolution.
However, this contractual and consensual character means that the parties cannot implead a third-party in the proceedings even if the latter's participation is necessary for a complete settlement of the dispute. The tribunal does not have the power to compel a person to participate in the arbitration proceedings without that person's consent. It also has no authority to decide on issues that the parties did not submit (or agree to submit) for its resolution.
As a purely private mode of dispute resolution, arbitration proceedings, including the records, the evidence, and the arbitral award, are confidential unlike court proceedings which are generally public. This allows the parties to avoid negative publicity and protect their privacy. Our law highly regards the confidentiality of arbitration proceedings that it devised a judicial remedy to prevent or prohibit the unauthorized disclosure of confidential information obtained therefrom.
The contractual nature of arbitral proceedings affords the parties substantial autonomy over the proceedings.
The parties are free to agree on the procedure to be observed during the proceedings. This lends considerable flexibility to arbitration proceedings as compared to court litigation governed by the Rules of Court. The parties likewise appoint the arbitrators based on agreement. There are no other legal requirements as to the competence or technical qualifications of an arbitrator. Their only legal qualifications are: (1) being of legal age: (2) full-enjoyment of their civil rights; and (3) the ability to read and write. The parties can tailor-fit the tribunal's composition to the nature of their dispute. Thus, a specialized dispute can be resolved by experts on the subject.
However, because arbitrators do not necessarily have a background in law, they cannot be expected to have the legal mastery of a magistrate. There is a greater risk that an arbitrator might misapply the law or misappreciate the facts en route erroneous decision.
This risk of error is compounded by the absence of an effective appeal mechanism. The errors of an arbitral tribunal are not subject to correction by the judiciary. As a private alternative to court proceedings, arbitration is meant to be an end, not the beginning, of litigation. Thus, the arbitral award is final and binding on the parties by reason of their contract the arbitration agreement. (Emphases and underscoring supplied)
Endnotes:
* Designated as additional member per S.O. No. 2822 dated April 7. 2021.
1 Penned by Associate Justice Danton Q. Bueser, concurred in by Associate Justices Apolinario D. Bruselas, Jr. and Renato C. Francisco; G.R. No. 232801, rollo, pp. 41-58.
2Id. at 56-58.
3 Penned by Associate Justice Socorro B. Inting, concurred in by Associate Justices Priscilla J. Baltazar-Padilla ( a retired member of the Court) and Leoncia R. Dimagiba; G.R. No. 234193, rollo, pp. 49-59.
4Id. at 61-62.
5 Sometimes referred to as DFNN in the record.
6 Such as: Text; GPRS; Bluetooth; 3G; WiFi Protocols; and other wireless devices, id. at 50.
7Id.
8Id. at 188-189.
9Id.
10Id. at 113.
11Id. at 114.
12Id. at 183-202.
13Id.
14Id. at 200-202.
15 Assigned to Judge Rizalina T. Capco-Umali, RTC Mandaluyong City, Branch 212, docketed as Civil Case No. MC15-9557. G.R. No. 232801, rollo, pp. 103-107.
16 Assigned to Judge Joselito C. Villarosa, RTC Makati City, Branch 66, docketed as Civil Case No. M-7844. G.R. No. 234193, rollo, pp. 208-221.
17Id.
18Id. at 63-67.
19Id.
20Id.
21Id. at 250-269.
22Id. at 48-59.
23Id.
24Id.
25Rollo, G.R. No. 232801, pp. 59-63.
26Id.
27Id. at 73-81.
28Id. at 41-54.
29Id. at 16-35.
30Rollo, G.R. No. 234193, p. 22.
31Rollo, G.R. No. 232801, pp. 213-231.
32Id.
33Id. at 246-271.
34Id. at 213-231.
35 788 Phil. 464, 475 (2016).
36Rollo, G.R. No. 234193, p. 202.
37 Mid Atlantic Capital Corporation v. Beverly Bien; David H. Wellman, Nos. 18-1195 and 18-1200.
38Id. The FAA's history supports this, reading. "When a statutory term is 'obviously transplanted from another legal source,' it 'brings the old soil with it.'" Taggart v. Lorenzen, 587 U.S. ----, 139 S. Ct. 1795, 1801 (2019) (quoting Hall v. Hall, 584 U.S. ----, 138 S. Ct. 1118, 1128 (2018)); see also AIG Baker, 508 F.3d at 1000 (noting that it was "be[ing] guided by the established meaning that the words of section 11 (a) had at the time they were adopted"). Congress enacted the FAA in 1925 and lifted the statute's text from "New York's [1920] arbitration statute." Hall St., 552 U.S. at 589 n.7; accord AIG Baker, 508 F.3d at 1000; see also Hall St., 552 U.S. at 589 n.7 ("The text of the FAA was based upon that of New York's arbitration statute.... The New York Arbitration Law incorporated pre-existing provisions of the New York Code of Civil Procedure."). Section 11(a)'s text, in particular, was "virtually identical" to New York's provision in effect in 1925. Hall St., 552 U.S. at 589 n.7; see AIG Baker, 508 F.3d at 1000 ("The language of section 11 (a) of the federal Act matched almost verbatim the language of section 2375 of the New York Code of Civil Procedure, which had long been a part of New York law and the New York Arbitration Law incorporated by reference,"). That provision allowed courts to modify an arbitration award to correct "an evident miscalculation of figures." N.Y. CODE CIV. P. § 2375 (Frank B. Gilbert & Austin B. Griffin 1920). By the time Congress transplanted that language into §11(a), New York courts had long interpreted the language "an evident miscalculation of figures" to mean a miscalculation that appeared in the award "on its face." In re Burke, 84 N.E. 405, 406 (N.Y. 1908); see Remington Paper Co. v. London Assurance Corp. of Eng., 12 A.D. 218, 225 (N.Y. App. Div. 1896) (affirming order concluding that "[t]he party who seeks to set aside an award upon the ground of mistake must show, from the award itself, that but for the mistake the award would have been different" (quoting Sweet v. Morrison, 22 N.E. 276, 280 (N.Y. 1889))); see also AIG Baker, 508 F.3d at 1001 (collecting New York cases showing that this reading has "been part of New York jurisprudence for many years"). The face-of-the-award limitation therefore "was part of the 'old soil'" that § 11(a) brought with it from New York law. AIG Baker, 508 F.3d at 1001. Over the intervening decades, Congress has left the "evident material miscalculation" language untouched. "Compare Pub. L. No. 68-401, § 11(a), 43 Stat. 883, 885 (1925), with 9 U.S.C, § 11(a) (2019). Therefore, we must not, in effect, do what Congress has not done by effacing the face-of-the-award limitation that has. long been old soil attached to § 11(a).
39Rollo, G.R. No. 234193, pp. 63-67.
40 800 Phil. 721 (2016).
41 Sec. 3 (d), Alternative Dispute Resolution Act of 2004.
PERLAS-BERNABE, J.:
I concur. The petition in G.R. No. 234193 should be granted since the Court of Appeals (CA), in CA-G.R. SP No. 145983, erred in affirming the Makati Regional Trial Court's1 (RTC) increase of the Arbitral Award dated May 21, 2015 (Arbitral Award) on the ground of "evident miscalculation of figures." As the ponencia correctly observed, such ground must relate to obvious mathematical errors and miscalculation appearing on the face of the award—a situation that does not obtain here as the RTC effectively used this ground to amend the Arbitration Panel's substantive findings.2
In the same vein, the petition in G.R. No. 232801 should likewise be granted since the CA, in CA-G.R. SP No. 145462, erred in ordering the Mandaluyong RTC3 to consolidate petitioner Philippine Charity Sweepstakes Office's (PCSO) Petition for Confirmation with respondent DFNN, Inc.'s (DFNNI) Petition for Correction filed before the Makati RTC. To expound, the rationale for consolidation is to have all intimately related cases acted upon by one branch of the court to avoid the possibility of conflicting decisions being rendered, and in effect, prevent confusion, unnecessary costs, and delay. However, an essential requisite of consolidation is that the actions to be consolidated are pending before the court.4
In this case, records show that at the time that the Mandaluyong RTC resolved DFNNI's motion seeking to consolidate the Petition for Confirmation filed before it with the Petition for Correction filed by DFNNI in the Makati RTC, the Makati RTC had already rendered a judgment in the petition before it. Hence, there was no more pending case before the Makati RTC which could be consolidated.
To briefly recount the events, on June 25, 2015, PCSO filed a Petition for Confirmation of the Arbitral Award before the Mandaluyong RTC, while DFNNI filed a Petition for Correction of the same award with the Makati RTC a day after.5
DFNNI subsequently filed a Motion for Consolidation6 dated July 16, 2015 under Rule 11.5 of the Special Rules of Court on Alternative Dispute Resolution before the Mandaluyong RTC seeking to consolidate both petitions in the Makati RTC.
While this motion was pending, the Makati RTC already rendered a Decision7 dated February 17, 2016, granting DFNNI's petition and increasing the arbitral award as above-stated. The ruling of the Makati RTC was then elevated to8 and, thereupon, affirmed by the CA,9 in CA-G.R. SP No. 145983. The CA's ruling, in turn, was elevated to this Court, via the present petition in G.R. No. 234193.
Considering the ruling of the Makati RTC at that time, the Mandaluyong RTC thus issued an Order10 dated April 11, 2016 denying DFNNI's Motion for Consolidation. Aside from ruling that the use of the word "may" in Rule 11.5 indicates the permissive and discretionary nature of consolidation, it found that since the Makati RTC had already rendered a decision in the Petition for Correction, consolidation will unduly delay the disposition of the cases and burden the court.11 The proceedings continued, culminating in a Decision12 dated January 5, 2017, rendered by the Mandaluyong RTC confirming the Arbitral Award.
The foregoing notwithstanding, the CA, in CA-G.R. SP No. 145462, granted DFFNI's appeal against the denial of its motion for consolidation. In a Decision13 dated February 20, 2017, the CA held that consolidation was proper, and thus, ordered the Mandaluyong RTC to consolidate its case with the petition before the Makati RTC.14 Glaringly, however, the CA ruling was silent as to the ground that prompted the Mandaluyong RTC to deny consolidation, i.e., that the Makati RTC had already rendered a judgment in the correction case. Moreover, it should be pointed out that at the time that the CA ordered consolidation in CA-G.R. SP No. 145462, the Mandaluyong RTC had already rendered a Decision15 dated January 5, 2017, granting PCSO's petition for confirmation of Arbitral Award.
Given the trajectory of events, the CA, in CA-G.R. SP No. 145462, erred in still ordering consolidation despite the fact that (a) during the pendency of the motion for consolidation before the Mandaluyong RTC, the Makati RTC had already rendered judgment in the correction case; and (b) during the pendency of the petition before it, the Mandaluyong RTC had also rendered a judgment in the confirmation case. Accordingly, the purpose sought to be achieved by consolidating the petitions would not be any more subserved since the proceedings before the Makati RTC had already been terminated, leaving no avenue for both petitions to be jointly tried in an effort to abbreviate and simplify the proceedings. Thus, considering the circumstances under which the Mandaluyong RTC disposed of DFNNTs motion for consolidation, the said court had no other choice but to deny the motion filed before it.
In fine, as ruled by the ponencia, the petitions in G.R. No. 232801 and G.R. No. 234193 should be both granted. The foregoing dispositions will thus yield the following practical result: pursuant to the Decision16 dated January 5, 2017 of the Mandaluyong RTC granting the petition for confirmation and pursuant to this Court's holding in G.R. No. 234193 that correction is improper, the Arbitral Award between the parties will therefore stand confirmed. Meanwhile, since the only issue involving the Mandaluyong RTC, as elevated in G.R. No. 232801, is the propriety of consolidation and no other, DFNNI is free to pursue any other remedy available to it under the law against the arbitral award's confirmation.
Endnotes:
1 Branch 66.
2Ponencia, pp. 15-21.
3 Branch 212.
4Puncia v. Toyota Shaw/Pasig, Inc., 788 Phil. 464, 476 (2016).
5Ponencia, pp. 2-5.
6 Rollo (G.R. No. 232801), pp. 123-131.
7 Id. at 148-152. Penned by Presiding Judge Joselito C. Villarosa.
8 Rollo (G.R. No. 234193), pp. 250-269.
9 Rollo (G.R. No. 232801), pp. 191-201. Penned by Associate Justice Socorro B. Inting with Associate Justices Priscilla J. Baltazar-Padilla (now a retired member of the Court) and Leoncia R. Dimagiba, concurring.
10 Id. at 59-63. Penned by Judge Rizalina T. Capco-Umali.
11 Id. at 64.
12 Id. at 73-81. Penned by Judge Rizalina T. Capco-Umali.
13 Id. at 41-54. Penned by Associate Justice Danton Q. Bueser with Associate Justices Apolinario D. Bruselas, Jr. and Renato C. Francisco, concurring.
14 Id. at 8-10.
15 Id. at 73-81. Penned by Judge Rizalina T. Capco-Umali.
16 Id.cralawredlibrary