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    Cargill Philippines, Inc. vs. San Fernando Regala Trading, Inc. G.R. No. 175404 January 31, 2011 J. Peralta

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    Joicey Catamio
    The Supreme Court ruled that arbitration can proceed in the case between Cargill Philippines, Inc. and San Fernando Regala Trading, Inc. despite San Fernando's opposition. The contract between the parties contained an arbitration clause, and under Philippine law, such a clause is a separate agreement to submit disputes to arbitration even if the main contract is invalid. As San Fernando alleged in its complaint that a contract existed between the parties, it cannot now deny that the arbitration agreement is binding. Issues regarding the validity of the main contract are for the arbitrator, not the courts, to decide.

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    Cargill Philippines, Inc. vs. San Fernando Regala Trading, Inc. G.R. No. 175404 January 31, 2011 J. Peralta

    Uploaded by

    Joicey Catamio
    38 views1 page
    The Supreme Court ruled that arbitration can proceed in the case between Cargill Philippines, Inc. and San Fernando Regala Trading, Inc. despite San Fernando's opposition. The contract between the parties contained an arbitration clause, and under Philippine law, such a clause is a separate agreement to submit disputes to arbitration even if the main contract is invalid. As San Fernando alleged in its complaint that a contract existed between the parties, it cannot now deny that the arbitration agreement is binding. Issues regarding the validity of the main contract are for the arbitrator, not the courts, to decide.

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    Addtl Bartolome ADR CargillvsSanFernando

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    The Supreme Court ruled that arbitration can proceed in the case between Cargill Philippines, Inc. and San Fernando Regala Trading, Inc. despite San Fernando's opposition. The contract between the parties contained an arbitration clause, and under Philippine law, such a clause is a separate agreement to submit disputes to arbitration even if the main contract is invalid. As San Fernando alleged in its complaint that a contract existed between the parties, it cannot now deny that the arbitration agreement is binding. Issues regarding the validity of the main contract are for the arbitrator, not the courts, to decide.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    38 views1 page

    Cargill Philippines, Inc. vs. San Fernando Regala Trading, Inc. G.R. No. 175404 January 31, 2011 J. Peralta

    Uploaded by

    Joicey Catamio
    The Supreme Court ruled that arbitration can proceed in the case between Cargill Philippines, Inc. and San Fernando Regala Trading, Inc. despite San Fernando's opposition. The contract between the parties contained an arbitration clause, and under Philippine law, such a clause is a separate agreement to submit disputes to arbitration even if the main contract is invalid. As San Fernando alleged in its complaint that a contract existed between the parties, it cannot now deny that the arbitration agreement is binding. Issues regarding the validity of the main contract are for the arbitrator, not the courts, to decide.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    CARGILL PHILIPPINES, INC. vs. SAN FERNANDO REGALA TRADING, INC.

    G.R. No. 175404 January 31, 2011 J. Peralta


    A contract is required for arbitration to take place and to be binding. Submission to arbitration is
    a contract and a clause in a contract providing that all matters in dispute between the parties
    shall be referred to arbitration is a contract. The provision to submit to arbitration any dispute
    arising therefrom and the relationship of the parties is part of the contract and is itself a
    contract.
    FACTS:
    San Fernando Inc. Filed with the RTC a Complaint for Recission of Contract against Cargill
    for breach of contract. Cargill filed a Motion to Dismiss and To Refer Controversy to Voluntary
    Arbitration as the contract between them had an arbitration clause. Respondent filed an
    Opposition stating that the RTC has jurisdiction over the action and could not be changed by an
    arbitration clause. The RTC ruled in favour of San Fernando Inc. The CA upheld the RTCs decision.
    ISSUE:
    Whether or not arbitration is can proceed in the case at bar.
    RULING:
    YES. Arbitration can proceed.
    Arbitration, as an alternative mode of settling disputes, has long been recognized and
    accepted in our jurisdiction. R.A. No. 876 authorizes arbitration of domestic disputes. Foreign
    arbitration, as a system of settling commercial disputes of an international character, is likewise
    recognized. The enactment of R.A. No. 9285 on April 2, 2004 further institutionalized the use of
    alternative dispute resolution systems, including arbitration, in the settlement of disputes.
    A contract is required for arbitration to take place and to be binding. Submission to
    arbitration is a contract and a clause in a contract providing that all matters in dispute between
    the parties shall be referred to arbitration is a contract. The provision to submit to arbitration any
    dispute arising therefrom and the relationship of the parties is part of the contract and is itself a
    contract.
    An arbitration agreement which forms part of the main contract shall not be regarded as
    invalid or non-existent just because the main contract is invalid or did not come into existence,
    since the arbitration agreement shall be treated as a separate agreement independent of the
    main contract. To reiterate. a contrary ruling would suggest that a party's mere repudiation of the
    main contract is sufficient to avoid arbitration and that is exactly the situation that the
    separability doctrine sought to avoid. Thus, we find that even the party who has repudiated the
    main contract is not prevented from enforcing its arbitration clause.
    Moreover, it is worthy to note that respondent filed a complaint for rescission of contract
    and damages with the RTC. In so doing, respondent alleged that a contract exists between
    respondent and petitioner. It is that contract which provides for an arbitration clause which states
    that "any dispute which the Buyer and Seller may not be able to settle by mutual agreement
    shall be settled before the City of New York by the American Arbitration Association. The
    arbitration agreement clearly expressed the parties' intention that any dispute between them as
    buyer and seller should be referred to arbitration. It is for the arbitrator and not the courts to
    decide whether a contract between the parties exists or is valid.

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