Romago Inc contracted Siemens Building Technologies Inc to supply it with electrical equipment for a project. After Siemens delivered 99.8% of the equipment, Romago failed to pay. Siemens requested arbitration; at the conclusion of the proceedings, the arbitrator rendered an award directing Romago to pay Siemens Ps16.9 million plus interest.
Siemens subsequently filed a petition in court for confirmation and enforcement of the award. More than 30 days later, Romago filed its response claiming that the arbitrator had been biased.
The court confirmed the award and ruled that there is a time limit for filing an action to vacate a domestic arbitral award. The party dissatisfied with the award must institute a suit to vacate the award within one month of the date on which the award was served on it. If it fails to institute a suit to vacate within that period, the award becomes final and executory.
Romago claimed that it had received a copy of the award on February 28 2005; however, records showed that the award had been served on it by courier on February 4 2005.
When Romago filed its response on March 30 2005, the period to seek vacation of the award had lapsed.
On appeal, Romago alleged that the arbitrator had no jurisdiction because under Executive Order 1008, all construction disputes must be arbitrated by the Construction Industry Arbitration Commission and not by an arbitrator.
The appellate court ruled(1) that the dispute arose from a supply agreement and not a construction agreement. Furthermore, Romago had submitted itself to the jurisdiction of the arbitrator and even presented evidence before it. Romago was therefore in estoppel.
For further information on this topic please contact Eduardo de los Angeles at Romulo Mabanta Buenaventura Sayoc & De Los Angeles by telephone (+63 2 848 0114), fax (+63 2 815 3172) or email ([email protected]).
(1) Romago Inc v Siemens Building Technologies Inc, 602 SCRA 656.