Referring to its prudential judgment in Guarantee and Assurance, Inc. v. Anscor Land, Inc., 630 SCRA 368 (2010), the Supreme Court held that a performance loan was significantly and substantially linked to the construction contract and therefore fell within the jurisdiction of the CIAC. Since the fixing of services is a kind of contract of guarantee, it must be read as a whole at the same time as the main agreement (doctrine “complementary contract-interpreted jointly”). Pursuant to this explanatory memorandum to Prudential, the Supreme Court held that, in this case, despite the silence of the fixing of benefits with regard to the arbitration procedure, the guarantor was willing to adhere to the terms of the construction contract. Arbitration, in particular, is consistently referred to in our jurisprudence as the “wave of the future” in civil and commercial litigation. It has become a matter of State policy in the Philippines to protect and ensure the application of all types of arbitration arrangements, so that non-compliance with a valid arbitration agreement renders null and void all legal proceedings that were conducted after the referral of the case to arbitration; any decision taken should be annulled and annulled. Referring to Executive Order No. 1008 (19_) or the Construction Industry and Arbitration Law and Section 35 of Republic Act No. 9285 or the Alternative Dispute Resolution Act of 2004, the Supreme Court held that, as in Heunghwa Industry Co., Ltd. v. DJ Builders Corporation, there were two laws that gave the CIAC responsibility for a construction dispute: first, the existence of an arbitration clause in a construction contract; and, second, the agreement of the parties to submit the dispute to the CWC. “In this case, the Court of Appeal found that there was an arbitration agreement in the terms and conditions of the contract, including clause 20.2, which was part of MoAs xxx.
In arbitration proceedings, the arbitrator reviews the legal rights and errors of a dispute and makes a decision. Once the arbitrator has reached a decision, the parties are bound by their agreement or not. This is very similar to how a court proceeding is judged by a judge, except that the trial does not take place in a courtroom and is not open to the public. As in a court proceeding, there is usually a winning party and a losing party in an arbitration proceeding. During mediation, the Mediator essentially helps the parties to settle their disputes through a process of discussion and reduction of differences. The Mediator helps the parties to find an amicable solution. He does not decide the dispute. Successful mediation results in an agreement signed by the parties, while a contested arbitration leads to a decision by the arbitrator himself without the agreement of the parties. In a mediation, there is no kind of winning or losing party, because there is no binding decision without the consent of both parties.
In the case of Steamship Mutual Underwriting Association (Bermuda) Limited v Sulpicio Lines, Inc. (G.R. No. 196072, September 20, 2017, 840 SCRA 203) of 2017, the arbitration agreement established by the club rules, introduced by reference into the contract between the parties, was also upheld by the Supreme Court. The Court held that “the reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement, provided that the contract is in writing and that the reference is such as to make that clause part of the treaty … ” and that an “arbitration agreement that was not included in the main agreement but was presented in another document is binding on the parties when the document has been incorporated by reference to the main agreement. The arbitration agreement contained in the club rules, pointed out in turn in the certificate of participation and acceptance, binds Sulpicio, even if there was no specific provision on the settlement of disputes in this certificate. The Supreme Court ruled that there was no dispute over the fact that the agreement between Asis-Leif and mr and Mr. Stroem was a construction contract for which the CWC had jurisdiction. . . .