Facts:
On July 26, 1993, petitioner, through the Land Management Bureau (LMB), entered into an Agreement for Consultancy Services (Consultancy Agreement) with respondent United Planners Consultants, Inc. (respondent) in connection with the LMB’ s Land Resource Management Master Plan Project (LRMMP). Under the Consultancy Agreement, petitioner committed to pay a total contract price of ₱4,337,141.00, based on a predetermined percentage corresponding to the particular stage of work accomplished.
For failure to pay its obligation under the Consultancy Agreement despite repeated demands, respondent instituted a Complaint against petitioner before the Regional Trial Court of Quezon City, Branch 222 (RTC), docketed as Case No. Q-07-60321. The case was subsequently referred to arbitration pursuant to the arbitration clause of the Consultancy Agreement, which petitioner did not oppose. The Arbitral Tribunal rendered its Award dated May 7, 2010 (Arbitral Award) in favor of respondent
Unconvinced, petitioner filed a motion for reconsideration, which the Arbitral Tribunal merely noted without any action, claiming that it had already lost jurisdiction over the case after it had submitted to the RTC its Report together with a copy of the Arbitral Award.
The RTC confirmed the Arbitral Award pursuant to Rule 11.2 (A) of the Special ADR Rules and ordered petitioner to pay respondent the costs of confirming the award, as prayed for, in the total amount of ₱50,000.00. From this order, petitioner did not file a motion for reconsideration. On appeal, CA dismissed the certiorari petition on the merits of the Arbitral Award which is prohibited under Rule 19.7 of the Special ADR Rules
Issue:
May the Special ADR Rules be applied even until the execution of the Arbitral Award, even if the Special Rules are silent as to execution of a confirmed arbitral award?
Held:
Yes, while it appears that the Special ADR Rules remain silent on the procedure for the execution of a confirmed arbitral award, it is the Court’s considered view that the Rules’ procedural mechanisms cover not only aspects of confirmation but necessarily extend to a confirmed award’s execution in light of the doctrine of necessary implication which states that every statutory grant of power, right or privilege is deemed to include all incidental power, right or privilege. In Atienza v. Villarosa,the doctrine was explained as follows:
No statute can be enacted that can provide all the details involved in its application.There is always an omission that may not meet a particular situation. What is thought, at the time of enactment, to be an all embracing legislation may be inadequate to provide for the unfolding of events of the future. So-called gaps in the law develop as the law is enforced. One of the rules of statutory construction used to fill in the gap is the doctrine of necessary implication. The doctrine states that what is implied in a statute is as much a part thereof as that which is expressed. Every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms. Ex necessitate legis. And every statutory grant of power, right or privilege is deemed to include all incidental power, right or privilege. This is so because the greater includes the lesser, expressed in the maxim, in eo plus sit, simper inest et minus.
Execution is fittingly called the fruit and end of suit and the life of the law. A judgment, if left unexecuted, would be nothing but an empty victory for the prevailing party.
As the Court sees it, execution is but a necessary incident to the Court’s confirmation of an arbitral award. To construe it otherwise would result in an absurd situation whereby the confirming court previously applying the Special ADR Rules in its confirmation of the arbitral award would later shift to the regular Rules of Procedure come execution. Irrefragably, a court’s power to confirm a judgment award under the Special ADR Rules should be deemed to include the power to order its execution for such is but a collateral and subsidiary consequence that may be fairly and logically inferred from the statutory grant to regional trial courts of the power to confirm domestic arbitral awards.
All the more is such interpretation warranted under the principle of ratio legis est anima which provides that a statute must be read according to its spirit or intent, for what is within the spirit is within the statute although it is not within its letter, and that which is within the letter but not within the spirit is not within the statute. Accordingly, since the Special ADR Rules are intended to achieve speedy and efficient resolution of disputes and curb a litigious culture, every interpretation thereof should be made consistent with these objectives.
Real LexEcon 