ABS-CBN Broadcasting Corporation vs. WINS Japan Co., Ltd.

The remedies of a petition for review under Rule 43 and a petition for certiorari under Rule 65 from a voluntary arbitrator's award are mutually exclusive and not alternative or successive; filing an alternative petition under both rules is an erroneous mode of appeal that warrants dismissal.

Petitioner ABS-CBN Broadcasting Corporation and respondent WINS Japan Co., Ltd. entered into a licensing agreement granting respondent the exclusive license to distribute "The Filipino Channel" (TFC) in Japan. A dispute arose when petitioner accused respondent of unauthorized insertions of a community news program, "WINS WEEKLY," into the TFC programming from March to May 2002. Petitioner issued a notice of termination, prompting respondent to initiate arbitration. The arbitrator found that petitioner had approved the insertions and merely sought to compel renegotiation for higher fees; the arbitrator awarded temperate damages and attorney's fees to respondent.

• The Licensing Agreement: On September 27, 1999, petitioner ABS-CBN and respondent WINS Japan entered into a licensing agreement granting respondent the exclusive license to distribute and sublicense the television service known as "The Filipino Channel" (TFC) in Japan. Petitioner transmitted TFC programming signals to respondent, which respondent distributed to its subscribers via decoders.
• The Dispute: Petitioner accused respondent of inserting nine episodes of "WINS WEEKLY," a 35-minute community news program, into the TFC programming from March to May 2002. Petitioner considered these "unauthorized insertions" constituting a material breach of the agreement and notified respondent of its intention to terminate the agreement effective June 10, 2002.
• The Arbitration: Respondent filed an arbitration suit pursuant to their agreement's arbitration clause, contending that the airing of WINS WEEKLY was authorized and that petitioner merely sought to renegotiate for higher fees. The parties appointed Professor Alfredo F. Tadiar as sole arbitrator and stipulated on the issues: (1) whether the broadcast was authorized, (2) whether it constituted a material breach, (3) whether the breach was seasonably cured, and (4) which party was entitled to damages.
• The Arbitral Award: The arbitrator ruled in favor of respondent, finding that petitioner gave approval for the airing of WINS WEEKLY. Even if there were a breach, the arbitrator found it was seasonably cured. The arbitrator awarded respondent temperate damages, attorney's fees, and one-half of the arbitrator's fee.
• The Petition in the CA: Petitioner filed in the Court of Appeals an "alternative petition for review under Rule 43 or petition for certiorari under Rule 65," alleging serious errors of fact and law and/or grave abuse of discretion by the arbitrator.

• Jurisdiction of the Court of Appeals: Petitioner argued that the Court of Appeals erred in ruling that it lacked jurisdiction and that the Regional Trial Court had exclusive jurisdiction over arbitration matters. Petitioner maintained that an aggrieved party could directly file a petition for review under Rule 43 (for errors of fact and law) or a petition for certiorari under Rule 65 (for grave abuse of discretion) in the Court of Appeals, even if the grounds invoked were not among those enumerated in Section 24 of Republic Act No. 876.
• Errors of the Arbitrator: Petitioner asserted that the sole arbitrator committed serious errors and/or grave abuse of discretion in ruling that the broadcast was authorized, that it did not constitute a material breach, that the breach was seasonably cured, and in awarding temperate damages and attorney's fees.

• Exclusivity of RA 876 Remedies: Respondent defended the Court of Appeals' dismissal, implicitly arguing that the Regional Trial Court has exclusive original jurisdiction over questions relating to arbitration and that a petition to vacate an arbitral award under Section 24 of Republic Act No. 876 is the proper remedy, precluding direct recourse to the Court of Appeals via Rule 43 or Rule 65.
• Finality of the Award: Respondent relied on the parties' stipulation in the terms of reference that the arbitrator's decision shall be final and unappealable, arguing that no further judicial recourse was available to petitioner.

• Judicial Remedies from Arbitral Awards: Whether an aggrieved party in a voluntary arbitration dispute may directly file an alternative petition for review under Rule 43 or certiorari under Rule 65 in the Court of Appeals, instead of filing a petition to vacate the award in the Regional Trial Court, when the grounds invoked are errors of fact/law or grave abuse of discretion.

• Judicial Remedies from Arbitral Awards: The petition was correctly dismissed, but on the ground of erroneous mode of appeal rather than lack of jurisdiction. The Court of Appeals has jurisdiction over petitions for review under Rule 43 and certiorari under Rule 65 from voluntary arbitrators, as the latter are quasi-judicial instrumentalities. However, the remedies of appeal and certiorari are mutually exclusive and not alternative or successive. A petition for review under Rule 43 is proper for errors of fact or law, while a petition for certiorari under Rule 65 is proper for grave abuse of discretion amounting to lack or excess of jurisdiction. Filing an "alternative" petition under both rules is an inappropriate mode of appeal that warrants dismissal.

• Mutually Exclusive Remedies — The remedies of appeal and certiorari are mutually exclusive and not alternative or successive. A party must ascertain the nature of the errors assigned and choose the appropriate remedy; certiorari cannot be availed of where appeal is the proper remedy or as a substitute for a lapsed appeal. Filing an alternative petition under both Rule 43 and Rule 65 is a fatal procedural error warranting dismissal.
• Judicial Review of Arbitral Awards — A stipulation that the arbitrator's decision is "final and unappealable" cannot preclude judicial review via certiorari under Rule 65 where there is a showing of grave abuse of discretion amounting to lack or excess of jurisdiction, as the duty to determine grave abuse of discretion is inherent in courts under Section 1, Article VIII of the Constitution.
• Expressio Unius Est Exclusio Alterius — The explicit enumeration of grounds to vacate an arbitral award in Section 24 of Republic Act No. 876 excludes others not specifically mentioned. Errors of fact or law and grave abuse of discretion are not grounds to vacate an award under RA 876; thus, a petition to vacate in the RTC cannot be based on such grounds.

• "Time and again, we have ruled that the remedies of appeal and certiorari are mutually exclusive and not alternative or successive."
• "It must be emphasized that every lawyer should be familiar with the distinctions between the two remedies for it is not the duty of the courts to determine under which rule the petition should fall."
• "An appeal taken either to this Court or the CA by the wrong or inappropriate mode shall be dismissed."

• Luzon Development Bank v. Association of Luzon Development Bank Employees — Followed. Established that a voluntary arbitrator is a quasi-judicial instrumentality, placing decisions of voluntary arbitrators within the exclusive appellate jurisdiction of the Court of Appeals under Section 9(3) of the Judiciary Reorganization Act and Section 1 of Rule 43.
• Insular Savings Bank v. Far East Bank and Trust Company — Followed. Definitively outlined the three judicial remedies available to an aggrieved party from an arbitral award: (1) petition to vacate in the RTC under Section 24 of RA 876; (2) petition for review in the CA under Rule 43; and (3) petition for certiorari in the CA under Rule 65.
• Adamson v. Court of Appeals — Followed. Held that a petition to vacate an arbitral award filed in the RTC must be based solely on the grounds enumerated in Section 24 of RA 876; nullification of an award based on errors of fact or law is improper.

• Section 24, Republic Act No. 876 (Arbitration Law) — Enumerates the exclusive grounds for a petition to vacate an arbitral award in the Regional Trial Court: corruption, fraud, undue means, evident partiality or corruption, arbitrator misconduct, or arbitrators exceeding their powers. Errors of fact, law, or grave abuse of discretion are not included.
• Section 1, Rule 43, Rules of Court — Provides that appeals from awards, judgments, final orders, or resolutions of voluntary arbitrators authorized by law shall be taken to the Court of Appeals.
• Section 1, Rule 65, Rules of Court — Provides for certiorari to correct grave abuse of discretion amounting to lack or excess of jurisdiction by any tribunal, board, or officer exercising judicial or quasi-judicial functions.
• Section 1, Article VIII, 1987 Constitution — Defines judicial power to include the duty of courts to determine whether there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government.

Reynato S. Puno, Angelina Sandoval-Gutierrez, Adolfo S. Azcuna, Teresita J. Leonardo-De Castro