JURISDICTION of COURTS 20.) DEMOSTHENES P. AGAN, JR., JOSEPH B. CATAHAN, JOSE MARI B. REUNILLA, MANUEL ANTONIO B. BOE, MAMERTO S. CLARA, REUEL E. DIMALANTA, MORY V. DOMALAON, CONRADO G. DIMAANO, LOLITA R. HIZON, REMEDIOS P. ADOLFO, BIENVENIDO C. HILARIO, MIASCOR WORERS UNION ! NATIONAL LABOR UNION "MWU!NLU), #$% PHILIPPINE AIRLINES EMPLOYEES ASSOCIATION "PALEA), &'((o$'*+, +. PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., MANILA INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS #$% SECRETARY LEANDRO M. MENDOZA, $ -+ #&#(/ #+ H'#% of (-' D'&#*('$( of T*#$+&o*(#(o$ #$% Co1$#(o$+ + PHILIPPINE INTERNATIONAL INTERNATIONAL AIR TERMINALS CO., INC., MANILA INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, SECRETARY LEANDRO M. MENDOZA, $ -+ #&#(/ #+ H'#% of (-' D'&#*('$( of T*#$+&o*(#(o$ #$% Co1$#(o$+ "G.R. No. 3300. M#/ 3, 2004)
FACTS5 •
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In 1989, The DOTC conducted studies on NAIA’s capability to cope with the traffic deelop!ent up to "#1#$ In 199%, business tycoons &o'on(wei, &otianun, )y, Tan, Ty, and *uchen(co for!ed the Asia’s +!er(in( Dra(on &roup A+DC- and sub!itted an unsolicited proposal to the &oern!ent throu(h the DOTC./IAA for the deelop!ent of NAIA Ter!inal III under a 0uildOperateTransfer A(ree!ent 0OTunder 0OT 2aw 3A4956, a!ended by 3A 6618-$
DOTC be(an the biddin( process for the NAIA Ter!inal III pro7ect by for!in( the 0AC reualification 0ids and Awards Co!!ittee-$ A+DC’s pri!ary co!petitor was the AI3CA3&O consortiu! co!posed of air Car(o, A&), and )ecurity 0an'- filed their bid, which A+DC uestioned since the for!er alle(edly lac'ed financial capability$
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AI3CA3&O Consortiu! was awarded the Contract because it offered a hi(her (uaranteed pay!ent to the (oern!ent$ 2ater on, AI3CA3&O chan(ed its na!e to IATCO hil$ Int’l Airport Ter!inals Co$ Inc$ ost biddin(, the (oern!ent and IATCO si(ned the 1996 Concession A(ree!ent for the NAIA Ter!inal III pro7ect, and a subseuent A!ended : 3eised Concession A(ree!ent ; supple!ents of the said 1996 Concession A(ree!ent were entered into$
The &oern!ent, throu(h then DOTC )ecretary Arturo T$ +nrile, and IATCO, throu(h its resident, 1996 Concession A(ree!ent-$ The &oern!ent and IATCO si(ned an A!ended and 3estated Concession A(ree!ent A3CA-$ )ubseuently, the &oern!ent and IATCO si(ned three )upple!ents to the A3CA$ The ?irst )upple!ent was si(ned on Au(ust "6, 1999@ the )econd )upple!ent on )epte!ber , "###@ and the Third )upple!ent on Bune "", "##1$ /eanwhile, the /IAA which is char(ed with the !aintenance and operation of the NAIA Ter!inals I and II, had eistin( concession contracts with arious serice proiders to offer international airline airport serices, such as infli(ht caterin(, passen(er handlin(, ra!p and (round support, aircraft !aintenance and proisions, car(o handlin( and warehousin(, and other serices, to seeral international airlines at the NAIA$ Conseuently, the wor'ers of the international airline serice proiders, clai!in( that they stand to lose their e!ploy!ent upon the i!ple!entation of the uestioned a(ree!ents, filed before this Court a petition for prohibition to Durin( the pendency of the case before this Court, resident &loria /acapa(al Arroyo, on Noe!ber "9, "##", in her speech at the "##" &olden )hell +port Awards at /alacaan( alace, stated that she will
not =honor IATCO- contracts which the +ecutie 0ranch’s le(al offices hae concluded as- null and oid$> •
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3espondent IATCO filed its Co!!ents to the present petitions$ )eeral petitions of prohibition filed by NAIA Ter!inal I : II’s int’l serice proiders, their e!ployees, and con(ress!en alle(in( that the 1996 Concession A(ree!ent, the A3CA, : its supple!ents are contrary to the Constitution, 0OT 2aw, : its I33$
ISSUE5
Ehether or not the arbitration step ta'en by IATCO will not oust this Court of its 7urisdiction oer the cases$
RULING5 In Del /onte CorporationF)A $ Court of Appeals,G"#H een after findin( that the arbitration clause in the Distributorship A(ree!ent in uestion is alid and the dispute between the parties is arbitrable, this Court affir!ed the trial courts decision denyin( petitioners /otion to )uspend roceedin(s pursuant to the arbitration clause under the contract$ In so rulin(, this Court held that as contracts produce le(al effect between the parties, their assi(ns and heirs, only the parties to the Distributorship A(ree!ent are bound by its ter!s, includin( the arbitration clause stipulated therein$ This Court ruled that arbitration proceedin(s could be called for but only with respect to the parties to the contract in uestion$ Considerin( that there are parties to the case who are neither parties to the Distributorship A(ree!ent nor heirs or assi(ns of the parties thereto, this Court, citin( its preious rulin( in )alas, Br$ $ 2aperal 3ealty Corporation ,G"1H held that to tolerate the splittin( of proceedin(s by allowin( arbitration as to so!e of the parties on the one hand and trial for the others on the other hand would, in effect, result in !ultiplicity of suits, duplicitous procedure and unnecessary delay$ G""H Thus, we ruled that the interest of 7ustice would best be sered if the trial court hears and ad7udicates the case in a sin(le and co!plete proceedin($ It is established that petitioners in the present cases who hae presented le(iti!ate interests in the resolution of the controersy are not parties to the IATCO Contracts$ Accordin(ly, they cannot be bound by the arbitration clause proided for in the A3CA and hence, cannot be co!pelled to sub!it to arbitration
proceedin(s$ A speedy and decisie resolution of all the critical issues in the present controersy, includin( those raised by petitioners, cannot be !ade before an arbitral tribunal$ The ob7ect of arbitration is precisely to allow an epeditious deter!ination of a dispute$ This ob7ectie would not be !et if this Court were to allow the parties to settle the cases by arbitration as there are certain issues inolin( nonparties to the IATCO Contracts which the arbitral tribunal will not be euipped to resole$ Now, to the !erits of the instant controersy$
