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BF CORPORATION vs. COURT OF APPEALS

The Supreme Court ruled that the contract between BF Corporation and Shangri-la Properties, Inc. for the EDSA Plaza Project contains a valid arbitration clause, as it met the formal requirements outlined in Republic Act No. 876. The written agreement was signed by representatives of both parties and duly notarized, fulfilling the necessary criteria for arbitration agreements. The court determined that the absence of initials on the 'Conditions of Contract' did not invalidate the arbitration clause since it was incorporated by reference in the main contract.

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20 views2 pages

BF CORPORATION vs. COURT OF APPEALS

The Supreme Court ruled that the contract between BF Corporation and Shangri-la Properties, Inc. for the EDSA Plaza Project contains a valid arbitration clause, as it met the formal requirements outlined in Republic Act No. 876. The written agreement was signed by representatives of both parties and duly notarized, fulfilling the necessary criteria for arbitration agreements. The court determined that the absence of initials on the 'Conditions of Contract' did not invalidate the arbitration clause since it was incorporated by reference in the main contract.

Uploaded by

dmhcollection69
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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BF CORPORATION vs.

COURT OF APPEALS
GR No. G.R. No. 120105, March 27, 1998
Romero, J.

DOCTRINE:

The formal requirements of an agreement to arbitrate are therefore the following:


(a) it must be in writing and (b) it must be subscribed by the parties or their
representatives.

FACTS:

Shangri-la Properties, Inc. (SPI) engaged the services of petitioner BF


Corporation to construct the main structure of the "EDSA Plaza Project," a shopping mall
complex in the City of Mandaluyong. The petitioner and SPI then entered into a written
agreement denominated as "Agreement for the Execution of Builder's Work for the EDSA
Plaza Project." Said agreement would cover the construction work on said project until
its eventual completion.
However, according to SPI, petitioner BF Corporation failed to complete the
construction works and abandoned the project. This resulted in disagreements
between the parties as regards their respective liabilities under the contract. With this,
the petitioner subsequently filed with the Regional Trial Court of Pasig a complaint for
collection of the balance due under the construction agreement.
Instead of filing an answer, SPI and its co-defendants filed a motion to suspend the
proceedings anchored on the defendants' allegation that the contract for the
construction of the project provided for a clause requiring prior resort to arbitration
before judicial intervention could be invoked in any dispute arising from the contract.

Petitioner opposed said motion claiming that there was no formal contract between the
parties. It contends that the agreement did not provide for arbitration and therefore, the
court could not be deprived of jurisdiction conferred by law by the mere allegation of
the existence of an arbitration clause in the agreement between the parties. Petitioner
denies the existence of the arbitration clause primarily on the ground that the
representatives of the contracting corporations did not sign the "Conditions of Contract"
that contained the said clause.

ISSUE:
Whether or not the contract for the construction of the EDSA Plaza between
petitioner BF Corporation and respondent Shangri-la Properties, Inc. contains an
arbitration clause in case of disagreement between the parties in the implementation of
contractual provisions

RULING:

Yes. According to Republic Act No. 876, the formal requirements of an agreement
to arbitrate are as follows: (a) it must be in writing and (b) it must be subscribed by the
parties or their representatives. There is no denying that the parties entered into a
written contract that was submitted in evidence before the lower court.

The Supreme Court finds that these requisites were complied with in the contract in
question. The Articles of Agreement, which incorporates all the other contracts and
agreements between the parties, was signed by representatives of both parties and duly
notarized. The failure of the private respondent's representative to initial the
'Conditions of Contract' would therefore not affect compliance with the formal
requirements for arbitration agreements because that particular portion of the covenants
between the parties was included by reference in the Articles of Agreement.

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