Professional Documents
Culture Documents
, LTD
vs.
HON. ALBERTO A. LERMA and PACIFIC GENERAL STEEL MANUFACTURING
CORPORATION
G.R. No. 143581
January 7, 2008
Parties:
Petitioner - Korea Technologies Co., Ltd. (KOGIES), Korean corporation engaged in
the supply and installation of LPG Cylinder manufacturing plants
Respondent - Pacific General Steel Manufacturing Corp. (PGSMC), domestic
Underlying transaction:
Contact to set up a manufacturing plant at Carmona, Cavite
USD 1,224,000 - KOGIES will ship the machinery and facilities necessary for
manufacturing LPG cylinders
USD 306,000 - install and initiate the operation of the plant
Events:
KORGIES shipped and installed the necessary facilities but initial operation could not
be conducted as PGSMC encountered financial difficulties affecting the supply of
materials. This forced the parties to agree that KOGIES would be deemed to have
completely complied with the terms and conditions of the contract
PGSMC issued two postdated checks for the balance of the contract price. When
KOGIES deposited the checks, these were dishonored for the reason PAYMENT
STOPPED.
PGSMC claimed the stop payment order was due to its discovery that that the quantity
and quality stipulated was different from what was delivered by KOGIES.
PGSMC then informed KOGIES that it was cancelling their contract based on said
ground and that it would dismantle and transfer the machines installed at the plant.
Thereafter, PGSMC then filed a complaint for estafa against KORGIES.
KOGIES told PGSMC that it could not unilaterally rescind the contract or dismantle
and transfer the M & E.
PGSMC reiterated its threat of dismantling; thus KOGIES instituted an Application for
Arbitration before the Korean Commercial Arbitration Board (KCAB) in Seoul, Korea
pursuant to Art. 15 of the Contract as amended
Issue: Whether the arbitration clause was was null and void
No. The lower courts erred in finding that the arbitration clause was void.
Sec. 42 of 9285 incorporates the provision and provides that recognition and
enforcement of arbitral awards covered by the NY Convention shall be filed with the
Regional Trial Court
The concept of a final and binding arbitral award is similar to judgments or
awards given by some of our quasi-judicial bodies whose final judgments are
stipulated to be final and binding, but not immediately executory in the sense
that they may still be judicially reviewed, upon the instance of any party.
Thus, based on the foregoing features of RA 9285, PGSMC must submit to the foreign
arbitration as it bound itself through the subject contract.