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2.) Benguet Corporation v. DENR- Mines Adjudication Board and J.G. Realty and
Mining G.R. No. 163101February 13, 2008
Facts: Benguet Corporation and J.G. Realty and Mining entered into a Royalty
Agreement with Option to Purchase (RAWOP), wherein J.G. Realty was
acknowledged as the owner of four mining claims covered by Mineral Production
Sharing Agreement (MPSA) Application
The RAWOP provides:
1. Any disputes x x x shall not be a cause of any action x x x in any court or
administrative agency but shall x x x be referred to a Board of Arbitrators
2. No action shall be instituted in court as to any matter in dispute as hereinabove
stated, except to enforce the decision of the majority of the Arbitrators.
J.G. Realty sought the cancellation of the RAWOP, filing a petition for this purpose with
the Panel of Arbitrators (POA) having territorial jurisdiction over the mining area
involved. In its Decision, the POA declared the RAWOP cancelled. The decision was
affirmed on appeal to the Mines Adjudication Board (MAB).
Issue: Whether or not the POA lacks jurisdiction over the dispute in view of the
arbitration clause?
Yes.
Under Philippine domestic arbitration law, an agreement to avail of voluntary arbitration
before resort is made to the courts or quasi-judicial agencies of the government is a
valid contractual stipulation that must be adhered to by the parties.
The Court stated that there is a clear distinction between compulsory and voluntary
arbitration. The arbitration provided by the POA is compulsory, while the nature of the
arbitration provision in the RAWOP is voluntary, not involving any government agency.
An agreement to submit to voluntary arbitration must be complied with
notwithstanding the fact that the dispute involved, under the law, is also required
to be submitted to compulsory arbitration.