Republic of the PhilippinesCongress of the PhilippinesMetro ManilaTwelfth CongressThird Regular Session

Begun and held in Metro Manila, on Monday, the twenty-eight day of July, two thousand three.Republic Act No. 9285 April 2, 2004AN ACT TO INSTITUTIONALIZE THE USE OF AN ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN THE PHILIPPINES AND TO ESTABLISH THE OFFICE FOR ALTERNATIVE DISPUTE RESOLUTION, AND FOR OTHER PURPOSESBe it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:CHAPTER 1 - GENERAL PROVISIONSSECTION 1.Title.- This act shall be known as the "Alternative Dispute Resolution Act of 2004."SEC. 2.Declaration of Policy.- it is hereby declared the policy of the State to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own arrangements to resolve their disputes. Towards this end, the State shall encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to achieve speedy and impartial justice and declog court dockets. As such, the State shall provide means for the use of ADR as an efficient tool and an alternative procedure for the resolution of appropriate cases. Likewise, the State shall enlist active private sector participation in the settlement of disputes through ADR. This Act shall be without prejudice to the adoption by the Supreme Court of any ADR system, such as mediation, conciliation, arbitration, or any combination thereof as a means of achieving speedy and efficient means of resolving cases pending before all courts in the Philippines which shall be governed by such rules as the Supreme Court may approve from time to time.SEC. 3.Definition of Terms.- For purposes of this Act, the term:(a) "Alternative Dispute Resolution System" means any process or procedure used to resolve a dispute or controversy, other than by adjudication of a presiding judge of a court or an officer of a government agency, as defined in this Act, in which a neutral third party participates to assist in the resolution of issues, which includes arbitration, mediation, conciliation, early neutral evaluation, mini-trial, or any combination thereof;(b) "ADR Provider" means institutions or persons accredited as mediator, conciliator, arbitrator, neutral evaluator, or any person exercising similar functions in any Alternative Dispute Resolution system. This is without prejudice to the rights of the parties to choose nonaccredited individuals to act as mediator, conciliator, arbitrator, or neutral evaluator of their dispute.Whenever reffered to in this Act, the term "ADR practitioners" shall refer to individuals acting as mediator, conciliator, arbitrator or neutral evaluator;(c) "Authenticate" means to sign, execute or adopt a symbol, or encrypt a record in whole or in part, intended to identity the authenticating party and to adopt, accept or establish the authenticity of a record or term;(d) "Arbitration" means a voluntary dispute resolution process in which one or more arbitrators, appointed in accordance with the agreement of the parties, or rules promulgated pursuant to this Act, resolve a dispute by rendering an award;(e) "Arbitrator" means the person appointed to render an award, alone or with others, in a dispute that is the subject of an arbitration agreement;(f) "Award" means any partial or final decision by an arbitrator in resolving the issue in a controversy;(g) "Commercial Arbitration" An arbitration is "commercial if it covers matter arising from all relationships of a commercial nature, whether contractual or not;(h) "Confidential information" means any information, relative to the subject of mediation or arbitration, expressly intended by the source not to be disclosed, or obtained under circumstances that would create a reasonable expectation on behalf of the source that the information shall not be disclosed. It shall include (1) communication, oral or written, made in a dispute resolution proceedings, including any memoranda, notes or work product of the neutral party or non-party participant, as defined in this Act; (2) an oral or written statement made or which occurs during mediation or for purposes of considering, conducting, participating, initiating, continuing of reconvening mediation or retaining a mediator; and (3) pleadings, motions manifestations, witness statements, reports filed or submitted in an arbitration or for expert evaluation;(i) "Convention Award" means a foreign arbitral award made in a Convention State;(j) "Convention State" means a State that is a member of the New York Convention;(k) "Court" as referred to in Article 6 of the Model Law shall mean a Regional Trial Court;(l) "Court-Annexed Mediation" means any mediation process conducted under the auspices of the court, after such court has acquired jurisdiction of the dispute;(m) "Court-Referred Mediation" means mediation ordered by a court to be conducted in accordance with the Agreement of the Parties when as action is prematurely commenced in violation of such agreement;(n) "Early Neutral Evaluation" means an ADR process wherein parties and their lawyers are brought together early in a pre-trial phase to present summaries of their cases and receive a nonbinding assessment by an experienced, neutral person, with expertise in the subject in the substance of the dispute;(o) "Government Agency" means any government entity, office or officer, other than a court, that is vested by law with quasi-judicial power to resolve or adjudicate dispute involving the government, its agencies and instrumentalities, or private persons;(p) "International Party" shall mean an entity whose place of business is outside the Philippines. It shall not include a domestic subsidiary of such international party or a coventurer in a joint venture with a party which has its place of business in the Philippines.The term foreigner arbitrator shall mean a person who is not a national of the Philippines.(q) "Mediation" means a voluntary process in which a mediator, selected by the disputing parties, facilitates communication and negotiation, and assist the parties in reaching a voluntary agreement regarding a dispute.(r) "Mediator" means a person who conducts mediation;(s) "Mediation Party" means a person who participates in a mediation and whose consent is necessary to resolve the dispute;(t) "Mediation-Arbitration" or Med-Arb is a step dispute resolution process involving both mediation and arbitration;(u) "Mini-Trial" means a structured dispute resolution method in which the merits of a case are argued before a panel comprising senior decision makers with or without the presence of a neutral third person after which the parties seek a negotiated settlement;(v) "Model Law" means the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 1985;(w) "New York Convention" means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards approved in 1958 and ratified by the Philippine Senate under Senate Resolution No. 71;(x) "Non-Convention Award" means a foreign arbitral award made in a State which is not a Convention State;(y) "Non-Convention State" means a State that is not a member of the New York Convention.(z) "Non-Party Participant" means a person, other than a party or mediator, who participates in a mediation proceeding as a witness, resource person or expert;(aa) "Proceeding" means a judicial, administrative, or other adjudicative process, including related pre-hearing motions, conferences and discovery;(bb) "Record" means an information written on a tangible medium or stored in an electronic or other similar medium, retrievable form; and(cc) "Roster" means a list of persons qualified to provide ADR services as neutrals or to serve as arbitrators.SEC. 4.Electronic Signatures in Global and E-Commerce Act.- The provisions of the Electronic Signatures in Global and E-Commerce Act, and its implementing Rules and Regulations shall apply to proceeding contemplated in this Act.SEC. 5.Liability of ADR Provider and Practitioner.- The ADR providers and practitioners shall have the same civil liability for the Acts done in the performance of then duties as that of public officers as provided in Section 38 (1), Chapter 9, Book of the Administrative Code of 1987.SEC. 6.Exception to the Application of this Act.- The provisions of this Act shall not apply to resolution or settlement of the following: (a) labor disputes covered by Presidential Decree No. 442, otherwise known as the Labor Code of the Philippines, as amended and its Implementing Rules and Regulations; (b) the civil status of persons; (c) the validity of a marriage; (d) any ground for legal separation; (e) the jurisdiction of courts; (f) future legitime; (g) criminal liability; and (h) those which by law cannot be compromised.CHAPTER 2 - MEDIATIONSEC. 7.Scope.- The provisions of this Chapter shall cover voluntary mediation, whether ad hoc or institutional, other than court-annexed. The term "mediation' shall include conciliation.SEC. 8.Application and Interpretation.- In applying construing the provisions of this Chapter, consideration must be given to the need to promote candor or parties and mediators through confidentiality of the mediation process, the policy of fostering prompt, economical, and amicable resolution of disputes in accordance with the principles of integrity of determination by the parties, and the policy that the decision-making authority in the mediation process rests with the parties.SEC. 9.Confidentiality of Information.- Information obtained through mediation proceedings shall be subject to the following principles and guidelines:(a) Information obtained through mediation shall be privileged and confidential.(b) A party, a mediator, or a nonparty participant may refuse to disclose and may prevent any other person from disclosing a mediation communication.(c) Confidential Information shall not be subject to discovery and shall be inadmissible if any adversarial proceeding, whether judicial or quasi-judicial, However, evidence or information that is otherwise admissible or subject to discovery does not become inadmissible or protected from discovery solely by reason of its use in a mediation.(d) In such an adversarial proceeding, the following persons involved or previously involved in a mediation may not be compelled to disclose confidential information obtained during mediation: (1) the parties to the dispute; (2) the mediator or mediators; (3) the counsel for the parties; (4) the nonparty participants; (5) any persons hired or engaged in connection with the mediation as secretary, stenographer, clerk or assistant; and (6) any other person who obtains or possesses confidential information by reason of his/her profession.(e) The protections of this Act shall continue to apply even of a mediator is found to have failed to act impartially.(f) a mediator may not be called to testify to provide information gathered in mediation. A mediator who is wrongfully subpoenaed shall be reimbursed the full cost of his attorney's fees and related expenses.SEC. 10.Waiver of Confidentiality.- A privilege arising from the confidentiality of information may be waived in a record, or orally during a proceeding by the mediator and the mediation parties.A privilege arising from the confidentiality of information may likewise be waived by a nonparty participant if the information is provided by such nonparty participant.A person who discloses confidential information shall be precluded from asserting the privilege under Section 9 of this Chapter to bar disclosure of the rest of the information necessary to a complete understanding of the previously disclosed information. If a person suffers loss or damages in a judicial proceeding against the person who made the disclosure.A person who discloses or makes a representation about a mediation is preclude from asserting the privilege under Section 9, to the extent that the communication prejudices another person in the proceeding and it is necessary for the person prejudiced to respond to the representation of disclosure.SEC. 11.Exceptions to Privilege.-(a) There is no privilege against disclosure under Section 9 if mediation communication is:(1) in an agreement evidenced by a record authenticated by all parties to the agreement;(2) available to the public or that is made during a session of a mediation which is open, or is required by law to be open, to the public;(3) a threat or statement of a plan to inflict bodily injury or commit a crime of violence;(4) internationally used to plan a crime, attempt to commit, or commit a crime, or conceal an ongoing crime or criminal activity;(5) sought or offered to prove or disprove abuse, neglect, abandonment, or exploitation in a proceeding in which a public agency is protecting the interest of an individual protected by law; but this exception does not apply where a child protection matter is referred to mediation by a court or a public agency participates in the child protection mediation;(6) sought or offered to prove or disprove a claim or complaint of professional misconduct or malpractice filed against mediator in a proceeding; or(7) sought or offered to prove or disprove a claim of complaint of professional misconduct of malpractice filed against a party, nonparty participant, or representative of a party based on conduct occurring during a mediation.(b) There is no privilege under Section 9 if a court or administrative agency, finds, after a hearing in camera, that the party seeking discovery of the proponent of the evidence has shown that the evidence is not otherwise available, that there is a need for the evidence that substantially outweighs the interest in protecting confidentiality, and the mediation communication is sought or offered in:(1) a court proceeding involving a crime or felony; or(2) a proceeding to prove a claim or defense that under the law is sufficient to reform or avoid a liability on a contract arising out of the mediation.(c) A mediator may not be compelled to provide evidence of a mediation communication or testify in such proceeding.(d) If a mediation communication is not privileged under an exception in subsection (a) or (b), only the portion of the communication necessary for the application of the exception for nondisclosure may be admitted. The admission of particular evidence for the limited purpose of an exception does not render that evidence, or any other mediation communication, admissible for any other purpose.SEC. 12.Prohibited Mediator Reports.- A mediator may not make a report, assessment, evaluation, recommendation, finding, or other communication regarding a mediation to a court or agency or other authority that make a ruling on a dispute that is the subject of a mediation, except:(a) Where the mediation occurred or has terminated, or where a settlement was reached.(b) As permitted to be disclosed under Section 13 of this Chapter.SEC. 13.Mediator's Disclosure and Conflict of Interest.- The mediation shall be guided by the following operative principles:(a) Before accepting a mediation, an individual who is requested to serve as a mediator shall:(1) make an inquiry that is reasonable under the circumstances to determinate whether there are any known facts that a reasonable individual would consider likely to affect the impartiality of the mediator, including a financial or personal interest in the outcome of the mediation and any existing or past relationship with a party or foreseeable participant in the mediation; and(2) disclosure to the mediation parties any such fact known or learned as soon as is practical before accepting a mediation.(b) If a mediation learns any fact described in paragraph (a) (1) of this section after accepting a mediation, the mediator shall disclose it as soon as practicable.At the request of a mediation party, an individual who is requested to serve as mediator shall disclose his/her qualifications to mediate a dispute.This Act does not require that a mediator shall have special qualifications by background or profession unless the special qualifications of a mediator are required in the mediation agreement or by the mediation parties.SEC. 14.Participation in Mediation.- Except as otherwise provided in this Act, a party may designate a lawyer or any other person to provide assistance in the mediation. A lawyer of this right shall be made in writing by the party waiving it. A waiver of participation or legal representation may be rescinded at any time.SEC. 15.Place of Mediation.- The parties are free to agree on the place of mediation. Failing such agreement, the place of mediation shall be any place convenient and appropriate to all parties.SEC. 16.Effect of Agreement to Submit Dispute to Mediation Under Institutional Rules.- An agreement to submit a dispute to mediation by any institution shall include an agreement to be bound by the internal mediation and administrative policies of such institution. Further, an agreement to submit a dispute to mediation under international mediation rule shall be deemed to include an agreement to have such rules govern the mediation of the dispute and for the mediator, the parties, their respective counsel, and nonparty participants to abide by such rules.In case of conflict between the institutional mediation rules and the provisions of this Act, the latter shall prevail.SEC. 17.Enforcement of Mediated Settlement Agreement.- The mediation shall be guided by the following operative principles:(a) A settlement agreement following successful mediation shall be prepared by the parties with the assistance of their respective counsel, if any, and by the mediator.The parties and their respective counsels shall endeavor to make the terms and condition thereof complete and make adequate provisions for the contingency of breach to avoid conflicting interpretations of the agreement.(b) The parties and their respective counsels, if any, shall sign the settlement agreement. The mediator shall certify that he/she explained the contents of the settlement agreement to the parties in a language known to them.(c) If the parties so desire, they may deposit such settlement agreement with the appropriate Clerk of a Regional Trial Court of the place where one of the parties resides. Where there is a need to enforce the settlement agreement, a petition may be filed by any of the parties with the same court, in which case, the court shall proceed summarily to hear the petition, in accordance with such rules of procedure as may be promulgated by the Supreme Court.(d) The parties may agree in the settlement agreement that the mediator shall become a sole arbitrator for the dispute and shall treat the settlement agreement as an arbitral award which shall be subject to enforcement under Republic Act No. 876, otherwise known as the Arbitration Law, notwithstanding the provisions of Executive Order No. 1008 for mediated dispute outside of the CIAC.CHAPTER 3 - OTHER ADR FORMSSEC. 18.Referral of Dispute to other ADR Forms.- The parties may agree to refer one or more or all issues arising in a dispute or during its pendency to other forms of ADR such as but not limited to (a) the evaluation of a third person or (b) a mini-trial, (c) mediation-arbitration, or a combination thereof.For purposes of this Act, the use of other ADR forms shall be governed by Chapter 2 of this Act except where it is combined with arbitration in which case it shall likewise be governed by Chapter 5 of this Act.CHAPTER 4 - INTERNATIONAL COMMERCIAL ARBITRATIONSEC. 19.Adoption of the Model Law on International Commercial Arbitration.- International commercial arbitration shall be governed by the Model Law on International Commercial Arbitration (the "Model Law") adopted by the United Nations Commission on International Trade Law on June 21, 1985 (United Nations Document A/40/17) and recommended approved on December 11, 1985, copy of which is hereto attached as Appendix "A".SEC. 20.Interpretation of Model Law.- In interpreting the Model Law, regard shall be had to its international origin and to the need for uniformity in its interpretation and resort may be made to thetravaux preparatoriesand the report of the Secretary General of the United Nations Commission on International Trade Law dated March 25, 1985 entitled, "International Commercial Arbitration: Analytical Commentary on Draft Trade identified by reference number A/CN. 9/264."SEC. 21.Commercial Arbitration.- An arbitration is "commercial" if it covers matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a transactions: any trade transaction for the supply or exchange of goods or services; distribution agreements; construction of works; commercial representation or agency; factoring; leasing, consulting; engineering; licensing; investment; financing; banking; insurance; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road.SEC. 22.Legal Representation in International Arbitration.- In international arbitration conducted in the Philippines, a party may be presented by any person of his choice.Provided, that such representative, unless admitted to the practice of law in the Philippines, shall not be authorized to appear as counsel in any Philippine court, or any other quasi-judicial body whether or not such appearance is in relation to the arbitration in which he appears.SEC. 23.Confidential of Arbitration Proceedings.- The arbitration proceedings, including the records, evidence and the arbitral award, shall be considered confidential and shall not be published except (1) with the consent of the parties, or (2) for the limited purpose of disclosing to the court of relevant documents in cases where resort to the court is allowed herein. Provided, however, that the court in which the action or the appeal is pending may issue a protective order to prevent or prohibit disclosure of documents or information containing secret processes, developments, research and other information where it is shown that the applicant shall be materially prejudiced by an authorized disclosure thereof.SEC. 24.Referral to Arbitration.- A court before which an action is brought in a matter which is the subject matter of an arbitration agreement shall, if at least one party so requests not later that the pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed.SEC. 25.Interpretation of the Act.- In interpreting the Act, the court shall have due regard to the policy of the law in favor of arbitration. Where action is commenced by or against multiple parties, one or more of whom are parties who are bound by the arbitration agreement although the civil action may continue as to those who are not bound by such arbitration agreement.SEC. 26.Meaning of "Appointing Authority.".- "Appointing Authority" as used in the Model Law shall mean the person or institution named in the arbitration agreement as the appointing authority; or the regular arbitration arbitration institution under whose rules the arbitration is agreed to be conducted. Where the parties have agreed to submit their dispute to institutional arbitration rules, and unless they have agreed to a different procedure, they shall be deemed to have agreed to procedure under such arbitration rules for the selection and appointment of arbitrators. In ad hoc arbitration, the default appointment of an arbitrator shall be made by the National President of the Integrated Bar of the Philippines (IBP) or his duly authorized representative.SEC. 27.What Functions May be Performed by Appointing Authority.- The functions referred to in Articles 11(3), 11(4), 13(3) and 14(1) of the Model Law shall be performed by the Appointing Authority, unless the latter shall fail or refuse to act within thirty (30) days from receipt of the request in which case the applicant may renew the application with the Court.SEC. 28.Grant of Interim Measure of Protection.-(a) It is not incompatible with an arbitration agreement for a party to request, before constitution of the tribunal, from a Court an interim measure of protection and for the Court to grant such measure. After constitution of the arbitral tribunal and during arbitral proceedings, a request for an interim measure of protection or modification thereof, may be made with the arbitral tribunal or to the extent that the arbitral tribunal has no power to act or is unable to act effectively, the request may be made with the Court. The arbitral tribunal is deemed constituted when the sole arbitrator or the third arbitrator who has been nominated, has accepted the nomination and written communication of said nomination and acceptance has been received by the party making request.(b) The following rules on interim or provisional relief shall be observed:(1) Any party may request that provision relief be granted against the adverse party:(2) Such relief may be granted:(i) to prevent irreparable loss or injury:(ii) to provide security for the performance of any obligation;(iii) to produce or preserve any evidence; or(iv) to compel any other appropriate act or omission.(3) The order granting provisional relief may be conditioned upon the provision of security or any act or omission specified in the order.(4) Interim or provisional relief is requested by written application transmitted by reasonable means to the Court or arbitral tribunal as the case may be and the party against whom the relief is sought, describing in appropriate detail the precise relief, the party against whom the relief is requested, the grounds for the relief, and evidence supporting the request.(5) The order shall be binding upon the parties.(6) Either party may apply with the Court for assistance in Implementing or enforcing an interim measure ordered by an arbitral tribunal.(7) A party who does not comply with the order shall be liable for all damages resulting from noncompliance, including all expenses, and reasonable attorney's fees, paid in obtaining the order's judicial enforcement.SEC. 29.Further Authority for Arbitrator to Grant Interim Measure of Protection.- Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order any party to take such interim measures of protection as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute following the rules in Section 28, paragraph 2. Such interim measures may include but shall not be limited to preliminary injuction directed against a party, appointment of receivers or detention, preservation, inspection of property that is the subject of the dispute in arbitration. Either party may apply with the Court for assistance in implementing or enforcing an interim measures ordered by an arbitral tribunal.SEC. 30.Place of Arbitration.- The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be in Metro Manila, unless the arbitral tribunal, having regard to the circumstances of the case, including the convenience of the parties shall decide on a different place of arbitration.The arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts, or the parties, or for inspection of goods, other property or documents.SEC. 31.Language of the Arbitration.- The parties are free to agree on the language or languages to be used in the arbitral proceedings. Failing such agreement, the language to be used shall be English in international arbitration, and English or Filipino for domestic arbitration, unless the arbitral tribunal shall determine a different or another language or languages to be used in the proceedings. This agreement or determination, unless otherwise specified therein, shall apply to any written statement by a party, any hearing and any award, decision or other communication by the arbitral tribunal.The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined in accordance with paragraph 1 of this section.CHAPTER 5 - DOMESTIC ARBITRATIONSEC. 32.Law Governing Domestic Arbitration.- Domestic arbitration shall continue to be governed by Republic Act No. 876, otherwise known as "The Arbitration Law" as amended by this Chapter. The term "domestic arbitration" as used herein shall mean an arbitration that is not international as defined in Article (3) of the Model Law.SEC. 33.Applicability to Domestic Arbitration.- Article 8, 10, 11, 12, 13, 14, 18 and 19 and 29 to 32 of the Model Law and Section 22 to 31 of the preceding Chapter 4 shall apply to domestic arbitration.CHAPTER 6 - ARBITRATION OF CONSTRUCTION DISPUTESSEC. 34.Arbitration of Construction Disputes: Governing Law.- The arbitration of construction disputes shall be governed by Executive Order No. 1008, otherwise known as the Constitution Industry Arbitration Law.SEC. 35.Coverage of the Law.- Construction disputes which fall within the original and exclusive jurisdiction of the Construction Industry Arbitration Commission (the "Commission") shall include those between or among parties to, or who are otherwise bound by, an arbitration agreement, directly or by reference whether such parties are project owner, contractor, subcontractor, quantity surveyor, bondsman or issuer of an insurance policy in a construction project.The Commission shall continue to exercise original and exclusive jurisdiction over construction disputes although the arbitration is "commercial" pursuant to Section 21 of this Act.SEC. 36.Authority to Act as Mediator or Arbitrator.- By written agreement of the parties to a dispute, an arbitrator may act as mediator and a mediator may act as arbitrator. The parties may also agree in writing that, following a successful mediation, the mediator shall issue the settlement agreement in the form of an arbitral award.SEC. 37.Appointment of Foreign Arbitrator.- The Construction Industry Arbitration Commission (CIAC) shall promulgate rules to allow for the appointment of a foreign arbitrator or coarbitrator or chairman of a tribunal a person who has not been previously accredited by CIAC: Provided, That:(a) the dispute is a construction dispute in which one party is an international party(b) the person to be appointed agreed to abide by the arbitration rules and policies of CIAC;(c) he/she is either coarbitrator upon the nomination of the international party; or he/she is the common choice of the two CIAC-accredited arbitrators first appointed one of whom was nominated by the international party; and(d) the foreign arbitrator shall be of different nationality from the international party.SEC. 38.Applicability to Construction Arbitration.- The provisions of Sections 17 (d) of Chapter 2, and Section 28 and 29 of this Act shall apply to arbitration of construction disputes covered by this Chapter.SEC. 39.Court to Dismiss Case Involving a Construction Dispute.- A regional trial court which a construction dispute is filed shall, upon becoming aware, not later than the pretrial conference, that the parties had entered into an arbitration to be conducted by the CIAC, unless both parties, assisted by their respective counsel, shall submit to the regional trial court a written agreement exclusive for the Court, rather than the CIAC, to resolve the dispute.CHAPTER 7 - JUDICIAL REVIEW OF ARBITRAL AWARDSA. DOMESTIC AWARDSSEC. 40.Confirmation of Award.- The confirmation of a domestic arbitral award shall be governed by Section 23 of R.A. 876.A domestic arbitral award when confirmed shall be enforced in the same manner as final and executory decisions of the Regional Trial Court.The confirmation of a domestic award shall be made by the regional trial court in accordance with the Rules of Procedure to be promulgated by the Supreme Court.A CIAC arbitral award need not be confirmed by the regional trial court to be executory as provided under E.O. No. 1008.SEC. 41.Vacation Award.- A party to a domestic arbitration may question the arbitral award with the appropriate regional trial court in accordance with the rules of procedure to be promulgated by the Supreme Court only on those grounds enumerated in Section 25 of Republic Act No. 876. Any other ground raised against a domestic arbitral award shall be disregarded by the regional trial court.B. FOREIGN ARBITRAL AWARDSSEC. 42.Application of the New York Convention.- The New York Convention shall govern the recognition and enforcement of arbitral awards covered by the said Convention.The recognition and enforcement of such arbitral awards shall be filled with regional trial court in accordance with the rules of procedure to be promulgated by the Supreme Court. Said procedural rules shall provide that the party relying on the award or applying for its enforcement shall file with the court the original or authenticated copy of the award and the arbitration agreement. If the award or agreement is not made in any of the official languages, the party shall supply a duly certified translation thereof into any of such languages.The applicant shall establish that the country in which foreign arbitration award was made is a party to the New York Convention.If the application for rejection or suspension of enforcement of an award has been made, the regional trial court may, if it considers it proper, vacate its decision and may also, on the application of the party claiming recognition or enforcement of the award, order the party to provide appropriate security.SEC. 43.Recognition and Enforcement of Foreign Arbitral Awards Not Covered by the New York Convention.- The recognition and enforcement of foreign arbitral awards not covered by the New York Convention shall be done in accordance with procedural rules to be promulgated by the Supreme Court. The Court may, grounds of comity and reciprocity, recognize and enforce a nonconvention award as a convention award.SEC. 44.Foreign Arbitral Award Not Foreign Judgment.- A foreign arbitral award when confirmed by a court of a foreign country, shall be recognized and enforced as a foreign arbitral award and not a judgment of a foreign court.A foreign arbitral award, when confirmed by the regional trial court, shall be enforced as a foreign arbitral award and not as a judgment of a foreign court.A foreign arbitral award, when confirmed by the regional trial court, shall be enforced in the same manner as final and executory decisions of courts of law of the Philippines.SEC. 45.Rejection of a Foreign Arbitral Award.- A party to a foreign arbitration proceeding may oppose an application for recognition and enforcement of the arbitral award in accordance with the procedural rules to be promulgated by the Supreme Court only on those grounds enumerated under Article V of the New York Convention. Any other ground raised shall be disregarded by the regional trial court.SEC. 46.Appeal from Court Decisions on Arbitral Awards.- A decision of the regional trial court confirming, vacating, setting aside, modifying or correcting an arbitral award may be appealed to the Court of Appeals in accordance with the rules of procedure to be promulgated by the Supreme Court.The losing party who appeals from the judgment of the court confirming an arbitral award shall required by the appealant court to post counterbond executed in favor of the prevailing party equal to the amount of the award in accordance with the rules to be promulgated by the Supreme Court.SEC. 47.Venue and Jurisdiction.- Proceedings for recognition and enforcement of an arbitration agreement or for vacation, setting aside, correction or modification of an arbitral award, and any application with a court for arbitration assistance and supervision shall be deemed as special proceedings and shall be filled with the regional trial court (i) where arbitration proceedings are conducted; (ii) where the asset to be attached or levied upon, or the act to be enjoined is located; (iii) where any of the parties to the dispute resides or has his place of business; or (iv) in the National Judicial Capital Region, at the option of the applicant.SEC. 48.Notice of Proceeding to Parties.- In a special proceeding for recognition and enforcement of an arbitral award, the Court shall send notice to the parties at their address of record in the arbitration, or if any party cannot be served notice at such address, at such party's last known address. The notice shall be sent at least fifteen (15) days before the date set for the initial hearing of the application.CHAPTER 8 - MISCELLANEOUS PROVISIONSSEC. 49.Office for Alternative Dispute Resolution.- There is hereby established the Office for Alternative Dispute Resolution as an attached agency to the Department of Justice (DOJ) which shall have a Secretariat to be headed by an executive director. The executive director shall be appointed by the President of the Philippines.The objective of the office are:(a) to promote, develop and expand the use of ADR in the private and public sectors; andTo assist the government to monitor, study and evaluate the use by the public and the private sector of ADR, and recommend to Congress needful statutory changes to develop. Strengthen and improve ADR practices in accordance with world standards.SEC. 50.Powers and Functions of the Office for Alternative Dispute Resolution.- The Office for Alternative Dispute Resolution shall have the following powers and functions:(a) To formulate standards for the training of the ADR practitioners and service providers;(b) To certify that such ADR practitioners and ADR service providers have undergone the professional training provided by the office;(c) To coordinate the development, implementation, monitoring, and evaluation of government ADR programs;(d) To charge fees for their services; and(e) To perform such acts as may be necessary to carry into effect the provisions of this Act.SEC. 51.Appropriations.- The amount necessary to carry out the provisions of this Act shall be included in the General Appropriations Act of the year following its enactment into law and thereafter.SEC. 52.Implementing Rules and Regulations (IRR).- Within one (1) month after the approval of this Act, the secretary of justice shall convene a committee that shall formulate the appropriate rules and regulations necessary for the implementation of this Act. The committee, composed of representatives from:(a) the Department of Justice;(b) the Department of Trade and Industry;(c) the Department of the Interior and Local Government;(d) the president of the Integrated Bar of the Philippines;(e) A representative from the arbitration profession; and(f) A representative from the mediation profession; and(g) A representative from the ADR organizationsshall within three (3) months after convening, submit the IRR to the Joint Congressional Oversight Committee for review and approval. The Oversight Committee shall be composed of the chairman of the Senate Committee on Justice and Human Rights, chairman of the House Committee on Justice, and one (1) member each from the majority and minority of both Houses.The Joint Oversight Committee shall become functus officio upon approval of the IRR.SEC. 53.Applicability of the Katarungan Pambarangay.- This Act shall not be interpreted to repeal, amend or modify the jurisdiction of the Katarungan Pambarangay under Republic Act No. 7160, otherwise known as the Local Government Code of 1991.SEC. 54.Repealing Clause.- All laws, decrees, executive orders, rules and regulations which are inconsistent with the provisions of this Act are hereby repealed, amended or modified accordingly.SEC. 55.Separability Clause.- If for any reason or reasons, any portion or provision of this Act shall be held unconstitutional or invalid, all other parts or provisions not affected shall thereby continue to remain in full force and effect.SEC. 56.Effectivity.- This act shall take effect fifteen days (15) after its publication in at least two (2) national newspapers of general circulation.

Approved,

SECOND DIVISIONTUNA PROCESSING, INC.,Petitioner,-versus-PHILIPPINE KINGFORD, INC.,Respondent.G.R. No. 185582Present:CARPIO,J.,Chairperson,BRION,PEREZ,SERENO, andREYES,JJ.Promulgated:February 29, 2012

x-----------------------------------------------------------------------------------------xD E C I S I O NPEREZ,J.:Can a foreign corporation not licensed to do business in the Philippines, but which collects royalties from entities in the Philippines, sue here to enforce a foreign arbitral award?In thisPetition for Review on Certiorari under Rule 45,[1]petitioner Tuna Processing, Inc. (TPI), a foreign corporation not licensed to do business in the Philippines, prays that the Resolution[2]dated 21 November 2008 of the Regional Trial Court (RTC) of Makati City be declared void and the case be remanded to the RTC for further proceedings.In the assailed Resolution, the RTC dismissed petitionersPetition for Confirmation, Recognition, and Enforcement of Foreign Arbitral Award[3]against respondent Philippine Kingford, Inc. (Kingford), a corporation duly organized and existing under the laws of the Philippines,[4]on the ground that petitioner lacked legal capacity to sue.[5]The AntecedentsOn 14 January 2003, Kanemitsu Yamaoka (hereinafter referred to as the licensor), co-patentee of U.S. Patent No. 5,484,619, Philippine Letters Patent No. 31138, and Indonesian Patent No. ID0003911 (collectively referred to as the Yamaoka Patent),[6]and five (5) Philippine tuna processors, namely, Angel Seafood Corporation, East Asia Fish Co., Inc., Mommy Gina Tuna Resources, Santa Cruz Seafoods, Inc., and respondent Kingford (collectively referred to as the sponsors/licensees)[7]entered into a Memorandum of Agreement (MOA),[8]pertinent provisions of which read:1.Background and objectives.The Licensor, co-owner of U.S.Patent No. 5,484,619, Philippine Patent No. 31138, and Indonesian Patent No. ID0003911 xxx wishes to form an alliance with Sponsors for purposes of enforcing his three aforementioned patents, granting licenses under those patents, and collecting royalties.The Sponsors wish to be licensed under the aforementioned patents in order to practice the processes claimed in those patents in the United States, the Philippines, and Indonesia, enforce those patents and collect royalties in conjunction with Licensor.xxx4.Establishment of Tuna Processors, Inc.The parties hereto agree to the establishment of Tuna Processors, Inc. (TPI), a corporation established in the State of California, in order to implement the objectives of this Agreement.5.Bank account.TPI shall open and maintain bank accounts in the United States, which will be used exclusively to deposit funds that it will collect and to disburse cash it will be obligated to spend in connection with the implementation of this Agreement.6.Ownership of TPI.TPI shall be owned by the Sponsors and Licensor.Licensor shall be assigned one share of TPI for the purpose of being elected as member of the board of directors.The remaining shares of TPI shall be held by the Sponsors according to their respective equity shares.[9]xxxThe parties likewise executed a Supplemental Memorandum of Agreement[10]dated 15 January 2003 and an Agreement to Amend Memorandum of Agreement[11]dated 14 July 2003.Due to a series of events not mentioned in the petition, the licensees, including respondent Kingford, withdrew from petitioner TPI and correspondingly reneged on their obligations.[12]Petitioner submitted the dispute for arbitration before the International Centre for Dispute Resolution in the State of California, United States and won the case against respondent.[13]Pertinent portions of the award read:13.1Within thirty (30) days from the date of transmittal of this Award to the Parties, pursuant to the terms of this award, the total sum to be paid byRESPONDENT KINGFORDtoCLAIMANT TPI, is the sum ofONE MILLION SEVEN HUNDRED FIFTY THOUSAND EIGHT HUNDRED FORTY SIX DOLLARS AND TEN CENTS ($1,750,846.10).(A)For breach of theMOAby not paying past due assessments,RESPONDENT KINGFORDshall payCLAIMANTthe total sum ofTWO HUNDRED TWENTY NINE THOUSAND THREE HUNDRED AND FIFTY FIVE DOLLARS AND NINETY CENTS ($229,355.90)which is 20% ofMOAassessments since September 1, 2005[;](B)For breach of theMOAin failing to cooperate withCLAIMANT TPIin fulfilling the objectives of theMOA, RESPONDENT KINGFORDshall payCLAIMANTthe total sum ofTWO HUNDRED SEVENTY ONE THOUSAND FOUR HUNDRED NINETY DOLLARS AND TWENTY CENTS ($271,490.20)[;][14]and(C)For violation ofTHE LANHAM ACTand infringement of theYAMAOKA 619 PATENT, RESPONDENT KINGFORDshall payCLAIMANTthe total sum ofONE MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS AND NO CENTS ($1,250,000.00).xxxxxx[15]To enforce the award, petitioner TPI filed on 10 October 2007 aPetition for Confirmation, Recognition, and Enforcement of Foreign Arbitral Awardbefore the RTC of Makati City.The petition was raffled to Branch 150 presided by Judge Elmo M. Alameda.At Branch 150, respondent Kingford filed a Motion to Dismiss.[16]After the court denied the motion for lack of merit,[17]respondent sought for the inhibition of Judge Alameda and moved for the reconsideration of the order denying the motion.[18]Judge Alameda inhibited himself notwithstanding [t]he unfounded allegations and unsubstantiated assertions in the motion.[19]Judge Cedrick O. Ruiz of Branch 61, to which the case was re-raffled, in turn, granted respondents Motion for Reconsideration and dismissed the petition on the ground that the petitioner lacked legal capacity to sue in the Philippines.[20]Petitioner TPI now seeks to nullify, in this instantPetition for Review on Certiorari under Rule 45, the order of the trial court dismissing itsPetition for Confirmation, Recognition, and Enforcement of Foreign Arbitral Award.IssueThe core issue in this case is whether or not the courta quowas correct in so dismissing the petition on the ground of petitioners lack of legal capacity to sue.Our RulingThe petition is impressed with merit.TheCorporation Codeof the Philippinesexpressly provides:Sec. 133.Doing business without a license.- No foreign corporation transacting business in the Philippines without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines; but such corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws.It is pursuant to the aforequoted provision that the courta quodismissed the petition.Thus:Herein plaintiff TPIs Petition, etc. acknowledges that it is a foreign corporation established in the State of California and was given the exclusive right to license or sublicense the Yamaoka Patentand was assigned the exclusive right to enforce the said patent and collect corresponding royalties in the Philippines.TPI likewise admits that it does not have a license to do business in the Philippines.There is no doubt, therefore, in the mind of this Court that TPI has been doing business in the Philippines, but sans a license to do so issued by the concerned government agency of the Republic of the Philippines, when it collected royalties from five (5) Philippine tuna processors[,] namely[,] Angel Seafood Corporation, East Asia Fish Co., Inc., Mommy Gina Tuna Resources, Santa Cruz Seafoods, Inc. and respondent Philippine Kingford, Inc.This being the real situation, TPI cannot be permitted to maintain or intervene in any action, suit or proceedings in any court or administrative agency of the Philippines.A priori, the Petition, etc. extant of the plaintiff TPI should be dismissed for it does not have the legal personality to sue in the Philippines.[21]The petitioner counters, however, that it is entitled to seek for the recognition and enforcement of the subject foreign arbitral award in accordance with Republic Act No. 9285 (Alternative Dispute Resolution Act of 2004),[22]the Convention on the Recognition and Enforcement of Foreign Arbitral Awards drafted during the United Nations Conference on International Commercial Arbitration in 1958 (New York Convention), and the UNCITRAL Model Law on International Commercial Arbitration (Model Law),[23]as none of these specifically requires that the party seeking for the enforcement should have legal capacity to sue.It anchors its argument on the following:In the present case, enforcement has been effectively refused on a ground not found in the [Alternative Dispute Resolution Act of2004],New York Convention,orModel Law.It is for this reason that TPI has brought this matter before this most Honorable Court, as it [i]s imperative to clarify whether the Philippines international obligations and State policy to strengthen arbitration as a means of dispute resolution may be defeated by misplaced technical considerations not found in the relevant laws.[24]Simply put, how do we reconcile the provisions of theCorporation Code of the Philippineson one hand, and theAlternative Dispute Resolution Act of 2004, theNew York Conventionand theModel Lawon the other?In several cases, this Court had the occasion to discuss the nature and applicability of theCorporation Code of the Philippines, a general law, viz-a-viz other special laws.Thus, inKoruga v. Arcenas, Jr.,[25]this Court rejected the application of the Corporation Code and applied the New Central Bank Act.It ratiocinated:Korugas invocation of the provisions of the Corporation Code is misplaced.In an earlier case with similar antecedents, we ruled that:The Corporation Code, however, is a general law applying to all types of corporations, while the New Central Bank Act regulates specifically banks and other financial institutions, including the dissolution and liquidation thereof.As between a general and special law, the latter shall prevail generalia specialibus non derogant.(Emphasis supplied)[26]Further, in the recent case ofHacienda Luisita, Incorporated v. Presidential Agrarian Reform Council,[27]this Court held:Without doubt, the Corporation Code is the general law providing for the formation, organization and regulation of private corporations. On the other hand, RA 6657 is the special law on agrarian reform. As between a general and special law, the latter shall prevailgeneralia specialibus non derogant.[28]Following the same principle, theAlternative Dispute Resolution Act of 2004shall apply in this case as theAct,as its title- An Act to Institutionalize the Use of an Alternative Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution, and for Other Purposes -would suggest, is a law especially enacted to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own arrangements to resolve their disputes.[29]It specifically provides exclusive grounds available to the party opposing an application for recognition and enforcement of the arbitral award.[30]Inasmuch as theAlternative Dispute Resolution Act of 2004, a municipal law,applies in the instant petition, we do not see the need to discuss compliance with international obligations under theNew York Conventionand theModel Law.After all, both already form part of the law.In particular, theAlternative Dispute Resolution Act of 2004incorporated theNew York Conventionin the Act by specifically providing:SEC. 42.Application of the New York Convention.-The New York Convention shall govern the recognition and enforcement of arbitral awards covered by the said Convention.xxxSEC. 45.Rejection of a Foreign Arbitral Award.-A party to a foreign arbitration proceeding may oppose an application for recognition and enforcement of the arbitral award in accordance with the procedural rules to be promulgated by the Supreme Court only on those grounds enumerated under Article V of the New York Convention.Any other ground raised shall be disregarded by the regional trial court.It also expressly adopted theModel Law, to wit:Sec. 19.Adoption of the Model Law on International Commercial Arbitration.International commercial arbitration shall be governed by the Model Law on International Commercial Arbitration (the Model Law) adopted by the United Nations Commission on International Trade Law on June 21, 1985 xxx.Now, does a foreign corporation not licensed to do business in the Philippines have legal capacity to sue under the provisions of theAlternative Dispute Resolution Act of 2004?We answer in the affirmative.Sec. 45 of theAlternative Dispute Resolution Act of 2004provides that the opposing party in an application for recognition and enforcement of the arbitral award may raise only those grounds that were enumerated under Article V of theNew York Convention, to wit:Article V1.Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:(a)The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or(b)The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or(c)The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or(d)The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or(e)The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.2.Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:(a)The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or(b)The recognition or enforcement of the award would be contrary to the public policy of that country.Clearly, not one of these exclusive grounds touched on the capacity to sue of the party seeking the recognition and enforcement of the award.Pertinent provisions of theSpecial Rules of Court on Alternative Dispute Resolution,[31]which was promulgated by the Supreme Court, likewise support this position.Rule 13.1 of the Special Rules provides that [a]ny party to a foreign arbitration may petition the court to recognize and enforce a foreign arbitral award.The contents of such petition are enumerated in Rule 13.5.[32]Capacity to sue is not included.Oppositely, in the Rule on local arbitral awards or arbitrations in instances where the place of arbitration is in the Philippines,[33]it is specifically required that a petition to determine any question concerning the existence, validity and enforceability of such arbitration agreement[34]available to the parties before the commencement of arbitration and/or a petition for judicial relief from the ruling of the arbitral tribunal on a preliminary question upholding or declining its jurisdiction[35]after arbitration has already commenced should state [t]he facts showing that the persons named as petitioner or respondent have legal capacity to sue or be sued.[36]Indeed,it is in the bestinterestof justice that in the enforecementofa foreignarbitralaward, we denyavailment bythelosingpartyofthe rule that bars foreign corporations not licensed to do business in the Philippinesfrommaintainingasuit in our courts.When a party enters intoacontractcontainingaforeignarbitrationclause and, as in this case,infactsubmits itself to arbitration, itbecomes bound by the contract, bythe arbitration and by the result of arbitration, conceding therebythecapacity of theotherparty to enter into the contract, participate in the arbitration and cause the implementation of the result.Although not on all fours with the instant case, also worthy to consider is thewisdom of then Associate Justice Flerida Ruth P. Romero in her Dissenting Opinion inAsset Privatization Trust v. Court of Appeals,[37]to wit:xxx Arbitration, as an alternative mode of settlement, is gaining adherents in legal and judicial circles here and abroad.If its tested mechanism can simply be ignored by an aggrieved party, one who, it must be stressed, voluntarily and actively participated in the arbitration proceedings from the very beginning, it will destroy the very essence of mutuality inherent in consensual contracts.[38]Clearly, on the matter of capacity to sue, a foreign arbitral award should be respected not because it is favored over domestic laws and procedures, but because Republic Act No. 9285 has certainly erased any conflict of law question.Finally, even assuming, only for the sake of argument, thatthe courta quocorrectly observed that theModel Law, not theNew York Convention, governs the subject arbitral award,[39]petitioner may still seek recognition and enforcement of the award in Philippine court, since theModel Lawprescribes substantially identical exclusive grounds for refusing recognition or enforcement.[40]Premises considered, petitioner TPI, although not licensed to do business in the Philippines, may seek recognition and enforcement of the foreign arbitral award in accordance with the provisions of theAlternative Dispute Resolution Act of 2004.IIThe remaining arguments of respondent Kingford are likewise unmeritorious.First.There is no need to consider respondents contentionthat petitioner TPI improperly raised a question of fact when it posited that its act of entering into a MOA should not be considered doing business in the Philippines for the purpose of determining capacity to sue.We reiterate that the foreign corporations capacity to sue in the Philippines is not material insofar as the recognition and enforcement of a foreign arbitral award is concerned.Second.Respondent cannot fault petitioner for not filing a motion for reconsideration of the assailed Resolution dated 21 November 2008dismissing the case.We have, time and again, ruled that the prior filing of a motion for reconsideration is not required incertiorariunder Rule 45.[41]Third.While we agree that petitioner failed to observe the principle of hierarchy of courts, which, under ordinary circumstances, warrants the outright dismissal of the case,[42]we opt to relax the rules following the pronouncement inChua v. Ang,[43]to wit:[I]t must be remembered that [the principle of hierarchy of courts] generally applies to cases involving conflicting factual allegations.Cases which depend on disputed facts for decision cannot be brought immediately before us as we are not triers of facts.[44]Astrict applicationof this rule may be excused when the reason behind the rule is not present in a case, as in the present case, where the issues are not factual but purely legal.In these types of questions, this Court has the ultimate say so that we merely abbreviate the review process if we, because of the unique circumstances of a case, choose to hear and decide the legal issues outright.[45]Moreover, the novelty and the paramount importance of the issue herein raised should be seriously considered.[46]Surely, there is a need to take cognizance of the case not only to guide the bench and the bar, but if only to strengthen arbitration as a means of dispute resolution, and uphold the policy of the State embodied in theAlternative Dispute Resolution Act of 2004, to wit:Sec. 2.Declaration of Policy.-It is hereby declared the policy of the State to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own arrangements to resolve their disputes.Towards this end, the State shall encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to achieve speedy and impartial justice and declog court dockets. xxxFourth.As regards the issue on the validity and enforceability of the foreign arbitral award, we leave its determination to the courta quowhere its recognition and enforcement is being sought.Fifth.Respondent claims that petitioner failed to furnish the court of origin a copy of the motion for time to file petition for review oncertioraribefore the petition was filed with this Court.[47]We, however, find petitioners reply in order.Thus:26.Admittedly, reference to Branch 67 in petitioner TPIs Motion for Time to File a Petition for Review on Certiorari under Rule 45 is a typographical error.As correctly pointed out by respondent Kingford, the order sought to be assailed originated from Regional Trial Court, Makati City, Branch 61.27.xxxUpon confirmation with the Regional Trial Court, Makati City, Branch 61, a copy of petitioner TPIs motion was received by the Metropolitan Trial Court, Makati City, Branch 67.On 8 January 2009, the motion was forwarded to the Regional Trial Court, Makati City, Branch 61.[48]All considered, petitioner TPI, although a foreign corporation not licensed to do business in the Philippines, is not, for that reason alone, precluded from filing thePetition for Confirmation, Recognition, and Enforcement of Foreign Arbitral Awardbefore a Philippine court.WHEREFORE, the Resolution dated 21 November 2008 of the Regional Trial Court, Branch 61, Makati City in Special Proceedings No. M-6533 is herebyREVERSEDandSET ASIDE.The case isREMANDEDto Branch 61 for further proceedings.SO ORDERED.Maya foreign corporation not licensed to do business in the Philippines, but which collects royalties from entities in the Philippines, sue here to enforce a foreign arbitral award?G.R. No. 185582 (February 29, 2012)PEREZ, J.:FACTS:Kanemitsu Yamaoka, co-patentee of a US Patent, Philippine Letters Patent, and an Indonesian Patent, entered into aMemorandum of Agreement (MOA)with five Philippine tuna processors including Respondent Philippine Kingford, Inc. (KINGFORD). The MOA provides for the enforcing of the abovementioned patents, granting licenses under the same, and collecting royalties, and for the establishment of herein Petitioner Tuna Processors, Inc. (TPI).Due to a series of events not mentioned in the Petition, the tuna processors, including Respondent KINGFORD, withdrew from Petitioner TPI and correspondingly reneged on their obligations. Petitioner TPI submitted the dispute for arbitration before the International Centre for Dispute Resolution in the State of California, United States and won the case against Respondent KINGFORD.To enforce the award, Petitioner TPI filed aPetition for Confirmation, Recognition, and Enforcement of Foreign Arbitral Awardbefore the RTC of Makati City. Respondent KINGFORD filed aMotion to Dismiss, which the RTC denied for lack of merit. Respondent KINGFORD then sought for the inhibition of the RTC judge, Judge Alameda, and moved for the reconsideration of the order denying the Motion. Judge Alameda inhibited himself notwithstanding [t]he unfounded allegations and unsubstantiated assertions in the motion. Judge Ruiz, to which the case was re-raffled, in turn, granted Respondent KINGFORDSsMotion for Reconsiderationand dismissed the Petition on the ground that Petitioner TPI lacked legal capacity to sue in the Philippines. Petitioner TPI is a corporation established in the State of California and not licensed to do business in the Philippines.Hence, the presentPetition for Review on Certiorariunder Rule 45.ISSUE:Whether or not a foreign corporation not licensed to do business in the Philippines, but which collects royalties from entities in the Philippines, sue here to enforce a foreign arbitral award?ARGUMENT:Petitioner TPI contends that it is entitled to seek for the recognition and enforcement of the subject foreign arbitral award in accordance withRA No. 9285 (Alternative Dispute Resolution Act of 2004), theConvention on the Recognition and Enforcement of Foreign Arbitral Awardsdrafted during the United Nations Conference on International Commercial Arbitration in 1958(New York Convention), and theUNCITRAL Model Law on International Commercial Arbitration (Model Law), as none of these specifically requires that the party seeking for the enforcement should have legal capacity to sue.RULING:YES. Petitioner TPI, although not licensed to do business in the Philippines, may seek recognition and enforcement of the foreign arbitral award in accordance with the provisions of theAlternative Dispute Resolution Act of 2004. A foreign corporations capacity to sue in the Philippines is not material insofar as the recognition and enforcement of a foreign arbitral award is concerned.The Resolution of the RTC is REVERSED and SET ASIDE.RATIO DECIDENDI:Sec. 45 of theAlternative Dispute Resolution Act of 2004provides that the opposing party in an application for recognition and enforcement of the arbitral award may raise only those grounds that were enumerated under Article V of theNew York Convention, to wit:Article V1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:a. The parties to the agreement referred to in Article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made;b. The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case;c. The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced;d. The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; ore. The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:a. The subject matter of the difference is not capable of settlement by arbitration under the law of that country; orb. The recognition or enforcement of the award would be contrary to the public policy of that country.Not one of the abovementioned exclusive grounds touched on the capacity to sue of the party seeking the recognition and enforcement of the award.Pertinent provisions of theSpecial Rules of Court on Alternative Dispute Resolution, which was promulgated by the Supreme Court, likewise support this position.Rule 13.1 of theSpecial Rulesprovides that [a]ny party to a foreign arbitration may petition the court to recognize and enforce a foreign arbitral award. The contents of such petition are enumerated in Rule 13.5. Capacity to sue is not included. Oppositely, in the rule on local arbitral awards or arbitrations in instances where the place of arbitration is in the Philippines, it is specifically required that a petition to determine any question concerning the existence, validity and enforceability of such arbitration agreement available to the parties before the commencement of arbitration and/or a petition for judicial relief from the ruling of the arbitral tribunal on a preliminary question upholding or declining its jurisdiction after arbitration has already commenced should state [t]he facts showing that the persons named as petitioner or respondent have legal capacity to sue or be sued.Indeed, it is in the best interest of justice that in the enforcement of a foreign arbitral award, the Court deny availment by the losing party of the rule that bars foreign corporations not licensed to do business in the Philippines from maintaining a suit in Philippine courts. When a party enters into a contract containing a foreign arbitration clause and, as in this case, in fact submits itself to arbitration, it becomes bound by the contract, by the arbitration and by the result of arbitration, conceding thereby the capacity of the other party to enter into the contract, participate in the arbitration and cause the implementation of the result. Although not on all fours with the instant case, also worthy to consider is the wisdom of then Associate Justice Flerida Ruth P. Romero in her Dissenting Opinion inAsset Privatization Trust v. Court of Appeals [1998], to wit:xxx Arbitration, as an alternative mode of settlement, is gaining adherents in legal and judicial circles here and abroad. If its tested mechanism can simply be ignored by an aggrieved party, one who, it must be stressed, voluntarily and actively participated in the arbitration proceedings from the very beginning, it will destroy the very essence of mutuality inherent in consensual contracts.Clearly, on the matter of capacity to sue, a foreign arbitral award should be respected not because it is favored over domestic laws and procedures, but becauseRepublic Act No. 9285has certainly erased any conflict of law question.Finally, even assuming, only for the sake of argument, that the RTCcorrectly observed that theModel Law, not theNew York Convention, governs the subject arbitral award, Petitioner TPI may still seek recognition and enforcement of the award in Philippine court, since theModel Lawprescribes substantially identical exclusive grounds for refusing recognition or enforcement.

SECOND DIVISIONKOREA TECHNOLOGIES CO.,G.R. No. 143581LTD.,Petitioner,Present:- versus -QUISUMBING,J., Chairperson,CARPIO,CARPIO MORALES,HON. ALBERTO A. LERMA, inTINGA, andhis capacity as Presiding Judge ofVELASCO, JR.,JJ.Branch 256 of Regional TrialCourt of Muntinlupa City, andPACIFIC GENERAL STEELPromulgated:MANUFACTURINGCORPORATION,Respondents.January 7, 2008x-----------------------------------------------------------------------------------------xD E C I S I O NVELASCO, JR.,J.:In our jurisdiction, the policy is to favor alternative methods of resolving disputes, particularly in civil and commercial disputes.Arbitration along with mediation, conciliation, and negotiation, being inexpensive, speedy and less hostile methods have long been favored by this Court.The petition before us puts at issue an arbitration clause in a contract mutually agreed upon by the parties stipulating that they would submit themselves to arbitration in a foreign country.Regrettably, instead of hastening the resolution of their dispute, the parties wittingly or unwittingly prolonged the controversy.Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation which is engaged in the supply and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation.OnMarch 5, 1997, PGSMC and KOGIES executed a Contract[1]whereby KOGIES would set up an LPG Cylinder Manufacturing Plant in Carmona,Cavite.The contract was executed in thePhilippines.OnApril 7, 1997, the parties executed, inKorea, an Amendment for Contract No. KLP-970301 datedMarch 5, 1997[2]amending the terms of payment.The contract and its amendment stipulated that KOGIES will ship the machinery and facilities necessary for manufacturing LPG cylinders for which PGSMC would pay USD 1,224,000.KOGIES would install and initiate the operation of the plant for which PGSMC bound itself to pay USD 306,000 upon the plants production of the 11-kg. LPG cylinder samples.Thus, the total contract price amounted to USD 1,530,000.On October 14, 1997, PGSMC entered into a Contract of Lease[3]with Worth Properties, Inc. (Worth) for use of Worths 5,079-square meter property with a 4,032-square meter warehouse building to house the LPG manufacturing plant.The monthly rental was PhP 322,560 commencing onJanuary 1, 1998with a 10% annual increment clause.Subsequently, the machineries, equipment, and facilities for the manufacture of LPG cylinders were shipped, delivered, and installed in the Carmona plant.PGSMC paid KOGIES USD 1,224,000.However, gleaned from the Certificate[4]executed by the parties on January 22, 1998, after the installation of the plant, the initial operation could not be conducted as PGSMC encountered financial difficulties affecting the supply of materials, thus forcing the parties to agree that KOGIES would be deemed to have completely complied with the terms and conditions of the March 5, 1997 contract.For the remaining balance of USD306,000 for the installation and initial operation of the plant, PGSMC issued two postdated checks: (1)BPI Check No. 0316412 dated January 30, 1998 for PhP 4,500,000; and (2)BPI Check No. 0316413 dated March 30, 1998 for PhP 4,500,000.[5]When KOGIES deposited the checks, these were dishonored for the reason PAYMENT STOPPED.Thus, onMay 8, 1998, KOGIES sent a demand letter[6]to PGSMC threatening criminal action for violation ofBatas Pambansa Blg.22 in case of nonpayment.On the same date, the wife of PGSMCs President faxed a letter datedMay 7, 1998to KOGIES President who was then staying at aMakatiCityhotel.She complained that not only did KOGIES deliver a different brand of hydraulic press from that agreed upon but it had not delivered several equipment parts already paid for.OnMay 14, 1998, PGSMC replied that the two checks it issued KOGIES were fully funded but the payments were stopped for reasons previously made known to KOGIES.[7]OnJune 1, 1998, PGSMC informed KOGIES that PGSMC was canceling their Contract datedMarch 5, 1997on the ground that KOGIES had altered the quantity and lowered the quality of the machineries and equipment it delivered to PGSMC, and that PGSMC would dismantle and transfer the machineries, equipment, and facilities installed in the Carmona plant.Five days later, PGSMC filed before the Office of the Public Prosecutor an Affidavit-Complaint forEstafadocketed as I.S. No. 98-03813 against Mr. Dae Hyun Kang, President of KOGIES.OnJune 15, 1998, KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally rescind their contract nor dismantle and transfer the machineries and equipment on mere imagined violations by KOGIES.It also insisted that their disputes should be settled by arbitration as agreed upon in Article 15, the arbitration clause of their contract.OnJune 23, 1998, PGSMC again wrote KOGIES reiterating the contents of itsJune 1, 1998letter threatening that the machineries, equipment, and facilities installed in the plant would be dismantled and transferred onJuly 4, 1998.Thus, onJuly 1, 1998, KOGIES instituted an Application for Arbitration before the Korean Commercial Arbitration Board (KCAB) inSeoul,Koreapursuant to Art. 15 of the Contract as amended.OnJuly 3, 1998, KOGIES filed a ComplaintforSpecific Performance, docketed as Civil Case No. 98-117[8]against PGSMC before the Muntinlupa City Regional Trial Court (RTC).The RTC granted a temporary restraining order (TRO) onJuly 4, 1998, which was subsequently extended untilJuly 22, 1998.In its complaint, KOGIES alleged that PGSMC had initially admitted that the checks that were stopped were not funded but later on claimed that it stopped payment of the checks for the reason that their value was not received as the former allegedly breached their contract by altering the quantity and lowering the quality of the machinery and equipment installed in the plant andfailed to make the plant operational although it earlier certified to the contrary as shown in a January 22, 1998 Certificate.Likewise, KOGIES averred that PGSMC violated Art. 15 of their Contract, as amended, by unilaterally rescinding the contract without resorting to arbitration.KOGIES also asked that PGSMC be restrained from dismantling and transferring the machinery and equipment installed in the plant which the latter threatened to do onJuly 4, 1998.OnJuly 9, 1998, PGSMC filed an opposition to the TRO arguing that KOGIES was not entitled to the TRO since Art. 15, the arbitration clause, was null and void for being against public policy as it ousts the local courts of jurisdiction over the instant controversy.On July 17, 1998, PGSMC filed its Answer with Compulsory Counterclaim[9]asserting that it had the full right to dismantle and transfer the machineries and equipment because it had paid forthem in full as stipulated in the contract; that KOGIES was not entitled to the PhP 9,000,000 covered by the checks for failing to completely install and make the plant operational; and that KOGIES was liable for damages amounting to PhP 4,500,000 for altering the quantity and lowering the quality of the machineries and equipment.Moreover, PGSMC averred that it has already paid PhP 2,257,920 in rent (covering January to July 1998) to Worth and it was not willing to further shoulder the cost of renting the premises of the plant considering that the LPG cylinder manufacturing plant never became operational.After the parties submitted their Memoranda, onJuly 23, 1998, the RTC issued an Order denying the application for a writ of preliminary injunction, reasoning that PGSMC had paid KOGIES USD 1,224,000, the value of the machineries and equipment as shown in the contract such that KOGIES no longer had proprietary rights over them.And finally, the RTC held that Art. 15 of the Contract as amended was invalid as it tended to oust the trial court or any other court jurisdiction over any dispute that may arise between the parties.KOGIES prayer for an injunctive writ was denied.[10]The dispositive portion of the Order stated:WHEREFORE, in view of the foregoing consideration, this Court believes and so holds that no cogent reason exists for this Courtto grant the writ of preliminary injunction to restrain and refrain defendant from dismantling the machineries and facilities at the lot and building of Worth Properties, Incorporated at Carmona, Cavite and transfer the same to another site: and therefore denies plaintiffs application for a writ of preliminary injunction.OnJuly 29, 1998, KOGIES filed its Reply to Answer and Answer to Counterclaim.[11]KOGIES denied it had altered the quantity and lowered the quality of the machinery, equipment, and facilities it delivered to the plant.It claimed that it had performed all the undertakings under the contract and had already produced certified samples of LPG cylinders.It averred that whatever was unfinished was PGSMCs fault since it failed to procure raw materials due to lack of funds.KOGIES, relying onChung Fu Industries (Phils.), Inc. v. Court of Appeals,[12]insisted that the arbitration clause was without question valid.After KOGIES filed a Supplemental Memorandum with Motion to Dismiss[13]answering PGSMCs memorandum of July 22, 1998 and seeking dismissal of PGSMCs counterclaims, KOGIES, on August 4, 1998,filed its Motion for Reconsideration[14]of the July 23, 1998 Order denying its application for aninjunctive writ claiming that the contract was not merely for machinery and facilities worth USD 1,224,000 but was for the sale of an LPG manufacturing plant consisting of supply of all the machinery and facilities and transfer of technology for a total contract price of USD 1,530,000 such that the dismantling and transfer of the machinery and facilities would result in the dismantling and transfer of the very plant itself to the great prejudice of KOGIES as the still unpaid owner/seller of the plant.Moreover, KOGIES points out that the arbitration clause under Art. 15 of the Contract as amended was a valid arbitration stipulation under Art. 2044 of the Civil Code and as held by this Court inChung Fu Industries (Phils.), Inc.[15]In the meantime, PGSMC filed a Motion for Inspection of Things[16]to determine whether there was indeed alteration of the quantity and lowering of quality of the machineries and equipment, and whether these were properly installed.KOGIES opposed the motion positing that the queries and issues raised in the motion for inspection fell under the coverage of the arbitration clause in their contract.On September 21, 1998, the trial court issued an Order (1) granting PGSMCs motion for inspection; (2) denying KOGIES motion for reconsideration of the July 23, 1998 RTC Order; and (3) denying KOGIES motion to dismiss PGSMCs compulsory counterclaims as these counterclaims fell within the requisites of compulsory counterclaims.On October 2, 1998, KOGIES filed an Urgent Motion for Reconsideration[17]of the September 21, 1998 RTC Order granting inspection of the plant and denying dismissal of PGSMCs compulsory counterclaims.Ten days after, on October 12, 1998, without waiting for the resolution of its October 2, 1998 urgent motion for reconsideration, KOGIES filed before the Court of Appeals (CA) a petition for certiorari[18]docketed as CA-G.R. SP No. 49249, seeking annulment of the July 23, 1998 and September 21, 1998 RTC Orders and praying for the issuance of writs of prohibition, mandamus, and preliminary injunction to enjoin the RTC and PGSMC from inspecting, dismantling, and transferring the machineries and equipment in the Carmona plant,and to direct the RTC to enforce the specific agreement on arbitration to resolve the dispute.In the meantime, onOctober 19, 1998, the RTC denied KOGIES urgent motion for reconsideration and directed the Branch Sheriff to proceed with the inspection of the machineries and equipment in the plant onOctober 28, 1998.[19]Thereafter, KOGIES filed a Supplement to the Petition[20]in CA-G.R. SP No. 49249 informing the CA about theOctober 19, 1998RTC Order.It also reiterated its prayer for the issuance of the writs of prohibition, mandamus and preliminary injunction which was not acted upon by the CA.KOGIES asserted that the Branch Sheriff did not have the technical expertise to ascertain whether or not the machineries and equipment conformed to the specifications in the contract and were properly installed.OnNovember 11, 1998, the Branch Sheriff filed his Sheriffs Report[21]finding that the enumerated machineries and equipment were not fully and properly installed.The Court of Appeals affirmed the trial court and declaredthe arbitration clause against public policyOnMay 30, 2000, the CA rendered the assailed Decision[22]affirming the RTC Orders and dismissing the petition for certiorari filed by KOGIES.The CA found that the RTC did not gravely abuse its discretion in issuing the assailedJuly 23, 1998andSeptember 21, 1998Orders.Moreover, the CA reasoned that KOGIES contention that the total contract price for USD 1,530,000 was for the whole plant and had not been fully paid was contrary to the finding of the RTC that PGSMC fully paid the price of USD 1,224,000, which was for all the machineries and equipment.According to the CA, this determination by the RTC was a factual finding beyond the ambit of a petition for certiorari.On the issue of the validity of the arbitration clause, the CA agreed with the lower court that an arbitration clause which provided for a final determination of the legal rights of the parties to the contract by arbitration was against public policy.On the issue of nonpayment of docket fees and non-attachment of a certificate of non-forum shopping by PGSMC, the CA held that the counterclaims of PGSMC were compulsory ones and payment of docket fees was not required since the Answer with counterclaim was not an initiatory pleading.For the same reason, the CA said a certificate of non-forum shopping was also not required.Furthermore, the CA held that the petition for certiorari had been filed prematurely since KOGIES did not wait for the resolution of its urgent motion for reconsideration of the September 21, 1998 RTC Order which was the plain, speedy, and adequate remedy available.According to the CA, the RTC must be given the opportunity to correct any alleged error it has committed, and that since the assailed orders were interlocutory, these cannot be the subject of a petition for certiorari.Hence, we have this Petition for Review on Certiorari under Rule 45.The IssuesPetitioner posits that the appellate court committed the following errors:a.PRONOUNCING THE QUESTION OF OWNERSHIP OVER THE MACHINERY AND FACILITIES AS A QUESTION OF FACT BEYOND THE AMBIT OF A PETITION FOR CERTIORARI INTENDED ONLY FOR CORRECTION OF ERRORS OF JURISDICTION OR GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF (SIC) EXCESS OF JURISDICTION, AND CONCLUDING THAT THE TRIAL COURTS FINDING ON THE SAME QUESTION WAS IMPROPERLY RAISED IN THE PETITION BELOW;b.DECLARING AS NULL AND VOID THE ARBITRATION CLAUSE IN ARTICLE 15 OF THE CONTRACT BETWEEN THE PARTIES FOR BEING CONTRARY TO PUBLIC POLICY AND FOR OUSTING THE COURTS OF JURISDICTION;c.DECREEING PRIVATE RESPONDENTS COUNTERCLAIMS TO BE ALL COMPULSORY NOT NECESSITATING PAYMENT OF DOCKET FEES AND CERTIFICATION OF NON-FORUM SHOPPING;d.RULING THAT THE PETITION WAS FILED PREMATURELY WITHOUT WAITING FOR THE RESOLUTION OF THE MOTION FOR RECONSIDERATION OF THE ORDER DATED SEPTEMBER 21, 1998 OR WITHOUT GIVING THE TRIAL COURT AN OPPORTUNITY TO CORRECT ITSELF;e.PROCLAIMING THE TWO ORDERS DATED JULY 23 ANDSEPTEMBER 21, 1998NOT TO BE PROPER SUBJECTS OF CERTIORARI AND PROHIBITION FOR BEING INTERLOCUTORY IN NATURE;f.NOT GRANTING THE RELIEFS AND REMEDIES PRAYED FOR IN HE (SIC) PETITION AND, INSTEAD, DISMISSING THE SAME FOR ALLEGEDLY WITHOUT MERIT.[23]The Courts RulingThe petition is partly meritorious.Before we delve into the substantive issues, we shall first tackle the procedural issues.The rules on the payment of docket fees for counterclaimsand cross claims were amended effectiveAugust 16, 2004KOGIES strongly argues that when PGSMC filed the counterclaims, it should have paid docket fees and filed a certificate of non-forum shopping, and that its failure to do so was a fatal defect.We disagree with KOGIES.As aptly ruled by the CA, the counterclaims of PGSMC were incorporated in its Answer with Compulsory Counterclaim datedJuly 17, 1998in accordance with Section 8 of Rule 11, 1997 Revised Rules of Civil Procedure, the rule that was effective at the time the Answer with Counterclaim was filed.Sec. 8 onexisting counterclaim or cross-claimstates, A compulsory counterclaim or a cross-claim that a defending party has at the time he files his answer shall be contained therein.OnJuly 17, 1998, at the time PGSMC filed its Answer incorporating its counterclaims against KOGIES, it was not liable to pay filing fees for said counterclaims being compulsory in nature.We stress, however, that effectiveAugust 16, 2004under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC, docket fees are now required to be paid in compulsory counterclaim or cross-claims.As to the failure to submit a certificate of forum shopping,PGSMCs Answer is not an initiatory pleading which requires a certification against forum shopping under Sec. 5[24]of Rule 7, 1997 Revised Rules of Civil Procedure.It is a responsive pleading, hence, the courtsa quodid not commit reversible error in denying KOGIES motion to dismiss PGSMCs compulsory counterclaims.Interlocutory orders proper subject of certiorariCitingGamboa v. Cruz,[25]the CA also pronounced that certiorari and Prohibition are neither the remedies to question the propriety of an interlocutory order of the trial court.[26]The CA erred on its reliance onGamboa.Gamboainvolved the denial of a motion to acquit in a criminal case which was not assailable in an action for certiorari since the denial of a motion to quash required the accused to plead and to continue with the trial, and whatever objections the accused had in his motion to quash can then be used as part of his defense and subsequently can be raised as errors on his appeal if the judgment of the trial court is adverse to him.The general rule is that interlocutory orders cannot be challenged by an appeal.[27]Thus, inYamaoka v. Pescarich Manufacturing Corporation, we held:The proper remedy in such cases is an ordinary appeal from an adverse judgmentonthemerits, incorporating in said appeal the grounds for assailing the interlocutory orders.Allowing appeals from interlocutory orders would result in the sorry spectacl