ABS-CBN v. World Interactive Network Systems (G.R. No. 169332)

Facts:

Petitioner ABS-CBN Broadcasting Corporation entered into a licensing agreement with respondent World Interactive Network Systems (WINS) Japan Co., Ltd., a foreign corporation licensed under the laws of Japan, in that the former granted respondent the exclusive license to distribute and sublicense the distribution of the television service known as “The Filipino Channel” (TFC) in Japan. By virtue thereof, petitioner undertook to transmit the TFC programming signals to respondent which the latter received through its decoders and distributed to its subscribers. A dispute arose between the parties when petitioner accused respondent of inserting nine episodes of WINS WEEKLY, a weekly 35-minute community news program for Filipinos in Japan, into the TFC programming. Petitioner claimed that these were “unauthorized insertions” constituting a material breach of their agreement. Consequently, petitioner notified respondent of its intention to terminate the agreement. Thereafter, respondent filed an arbitration suit pursuant to the arbitration clause of its agreement with petitioner. The parties appointed Professor Alfredo F. Tadiar to act as sole arbitrator who then rendered a decision in favor of respondent holding that petitioner gave its approval for the airing of WINS WEEKLY as shown by a series of written exchanges between the parties and that petitioner threatened to terminate the agreement due to its desire to compel respondent to re-negotiate the terms thereof for higher fees. He then allowed respondent to recover temperate damages, attorney’s fees and one-half of the amount it paid as arbitrator’s fee. Petitioner filed in the CA a petition for review under Rule 43 of the Rules of Court or, in the alternative, a petition for certiorari under Rule 65 of the same Rules, with application for temporary restraining order and writ of preliminary injunction. Respondent, on the other hand, filed a petition for confirmation of arbitral award. The CA rendered the assailed decision dismissing ABS-CBN’s petition for lack of jurisdiction. Petitioner moved for reconsideration but the same was denied.

Issue:

The issue before us is whether or not an aggrieved party in a voluntary arbitration dispute may avail of, directly in the CA, a petition for review under Rule 43 or a petition for certiorari under Rule 65 of the Rules of Court, instead of filing a petition to vacate the award in the RTC when the grounds invoked to overturn the arbitrator’s decision are other than those for a petition to vacate an arbitral award enumerated under RA 876.

Ruling:

RA 876 itself mandates that it is the Court of First Instance, now the RTC, which has jurisdiction over questions relating to arbitration, such as a petition to vacate an arbitral award. As RA 876 did not expressly provide for errors of fact and/or law and grave abuse of discretion (proper grounds for a petition for review under Rule 43 and a petition for certiorari under Rule 65, respectively) as grounds for maintaining a petition to vacate an arbitral award in the RTC, it necessarily follows that a party may not avail of the latter remedy on the grounds of errors of fact and/or law or grave abuse of discretion to overturn an arbitral award.  Adamson v. Court of Appeals gave ample warning that a petition to vacate filed in the RTC which is not based on the grounds enumerated in Section 24 of RA 876 should be dismissed.

In cases not falling under any of the aforementioned grounds to vacate an award, the Court has already made several pronouncements that a petition for review under Rule 43 or a petition for certiorari under Rule 65 may be availed of in the CA. Which one would depend on the grounds relied upon by petitioner.

Nevertheless, although petitioner’s position on the judicial remedies available to it was correct, we sustain the dismissal of its petition by the CA. The remedy petitioner availed of, entitled “alternative petition for review under Rule 43 or petition for certiorari under Rule 65,” was wrong. Time and again, we have ruled that the remedies of appeal and certiorari are mutually exclusive and not alternative or successive.

A careful reading of the assigned errors reveals that the real issues calling for the CA’s resolution were less the alleged grave abuse of discretion exercised by the arbitrator and more about the arbitrator’s appreciation of the issues and evidence presented by the parties. Therefore, the issues clearly fall under the classification of errors of fact and law — questions which may be passed upon by the CA via a petition for review under Rule 43. Petitioner cleverly crafted its assignment of errors in such a way as to straddle both judicial remedies, that is, by alleging serious errors of fact and law (in which case a petition for review under Rule 43 would be proper) and grave abuse of discretion (because of which a petition for certiorari under Rule 65 would be permissible).

Wherefore, the petition is hereby denied. The decision and resolution of the CA directing the RTC to proceed with the trial of the petition for confirmation of arbitral award is affirmed.

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