8/3/2019 La Naval Drug Corporation V
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La Naval Drug Corporation V. CA, Wilson Yao
Respondent Wilson Yao is the owner of a commercial building a
portion of which is leased to petitioner La
Naval Drug Corporation. When the contract of lease expired,
petitioner exercised his option to lease the same
building an extension of five (5) years. But both parties
disagreed with the rental rate, to settle the
controversy both agreed to submit their disagreement to
arbitration in accordance with under RA 876
(Arbitration Law), pursuant to paragraph 7 of the lease contract
which provides that; If parties fail to agree on
rentals, it shall be submitted to group of three(3)
arbitrators.
However, both parties disagreed with the appointment of the
third arbitrator both alleging that the other was
the cause of the delay.
Respondent prayed for a summary hearing with the respondent
court praying that the two arbitrators be
ordered to appoint the third arbitrator and immediately convene
and resolve the controversy before it with
claims for damages.
Petitioner objected to the jurisdiction of the court, invoking
Sec 5 of Rule 16 of the Rules of Court for lack of
jurisdiction over the nature of the case, for the reason that
the respondent court lack the authority to settle
issue other than those related with the arbitration.
Respondent court argues that, petitioner having filed its own
counterclaim which is a motion other than the
objection to the jurisdiction of the court; he herby submits to
the said jurisdiction and shall be estopped from
questioning the same.
ISSUE: WON the court can resolve issue beyond what has been
expressly invested by law and the case be
dismissed on the ground of lack of jurisdiction over the nature
of the case under SEC 5 RULE 16 of the RULES
OF COURT.
HELD:
Lack of jurisdiction over the nature of the action is the
situation that arises when a court, which ordinarily
would have the authority and competence to take a case, is
rendered without it either because a special law
has limited the exercise of its normal jurisdiction on a
particular matter or because the type of action has been
reposed by law in certain other courts or quasi-judicial
agencies for determination.
In the case at bench, the want of jurisdiction by the court is
indisputable, given the nature of the controversy.
The arbitration law explicitly confines the court's authority
only to pass upon the issue of whether there is or
there is no agreement in writing providing for arbitration. In
the affirmative, the statute ordains that the court
shall issue an order "summarily directing the parties to proceed
with the arbitration in accordance with the
terms thereof." If the court, upon the other hand, finds that no
such agreement exists, "the proceeding shall
be dismissed." The proceedings are summary in nature.
The court therefore must then refrain from taking up the claims
of the contending parties for damages, which,
upon the other hand, may be ventilated in separate regular
proceedings at an opportune time and venue.
