In Philippine Commercial Industrial Bank vs. Court of Appeals, the Supreme Court clarified that under the Construction Industry Arbitration Commission (CIAC) Rules of Procedure, official notification of a CIAC decision is properly served to the parties involved, not necessarily their legal counsel. This ruling underscores the importance of parties ensuring internal communication so that the period to appeal is not lost. The case emphasizes strict adherence to procedural rules in appeals, reinforcing that failure to meet deadlines results in the finality of the decision.

Can Actual Notice to a Party Override the Requirement of Notice to Counsel?

Philippine Commercial Industrial Bank (PCIB) contracted William Golangco Construction Corporation (WGCC) for construction work. A dispute arose, leading to arbitration before the Construction Industry Arbitration Commission (CIAC). After the CIAC rendered its decision, PCIB sought to appeal, but their petition was dismissed by the Court of Appeals (CA) for being filed beyond the prescribed period. PCIB argued that the official notice of the CIAC decision was not served upon their counsel but rather on an employee, and that the period to appeal should be reckoned from the date their counsel actually received knowledge of the decision. This case squarely addresses the question of whether notice to the party, rather than the counsel, is sufficient to commence the running of the appeal period, especially in the context of CIAC rules.

The Supreme Court (SC) addressed the issue of whether the service of the CIAC decision to PCIB, instead of its counsel, was valid and binding. The SC emphasized that under Section 7, Article XV of the CIAC Rules of Procedure, the notification of the award is to be made directly to the parties involved, not necessarily their counsel. This provision is markedly different from the general rule in judicial proceedings where notice to the counsel is considered notice to the client.

Section 7. Notification of Award to Parties — Once an award has been made, provided that the costs of the arbitration have been fully paid to the Secretariat by the parties or by one of them, the Secretariat shall notify the parties of the text signed by the Arbitrator or Arbitral Tribunal.

The Court highlighted the specific language of the CIAC Rules, which mandates that the Secretariat shall notify the parties of the decision’s text. The rule further states that additional copies may be requested by the parties or their counsel. However, the primary obligation of notification rests with informing the parties directly.

The SC underscored PCIB’s admission that it received the CIAC decision on June 24, 1996, through its employee. Despite PCIB’s counsel’s argument that the service was ineffective since it was not served directly to him, the Court held that such argument was untenable. The acknowledgment of receipt by PCIB itself was a critical factor in the Court’s decision. The court noted that PCIB was candid in alleging that although it received a copy of a decision of the Arbitral Tribunal, no actual service thereof was made on the undersigned counsel.

The Court reiterated the fundamental principle that the perfection of an appeal within the reglementary period is both mandatory and jurisdictional. Failure to comply with this requirement renders the decision final and executory, depriving the appellate court of jurisdiction to alter the judgment. The SC stated that, “perfection of an appeal within the reglementary period is not only mandatory but also jurisdictional so that failure to do so renders the questioned decision final and executory, and deprives an appellate court of jurisdiction to alter the final judgment, much less to entertain the appeal.”

Given that PCIB filed its petition for Certiorari and/or Partial Review after the CIAC decision had become final and executory, the Court of Appeals correctly dismissed the petition. The Supreme Court thus affirmed the CA’s decision, emphasizing the importance of adhering to procedural rules, particularly the timeliness of appeals. It emphasized that appeal and certiorari are mutually exclusive and not alternative or successive. It reiterated the standing rule that “a special civil action for certiorari under Rule 65 lies only when “there is no appeal nor plain, speedy and adequate remedy in the ordinary course of law.”  Certiorari cannot be allowed when a party to a case fails to appeal a judgment despite the availability of that remedy, certiorari not being a substitute for lost appeal.  The remedies of appeal and certiorari are mutually exclusive and not alternative or successive”

The ruling in this case serves as a reminder to parties involved in arbitration proceedings under the CIAC Rules to ensure timely filing of appeals, regardless of whether their counsel has been directly notified. Parties must establish effective internal communication channels to promptly inform their legal counsel of any decisions received, to allow sufficient time for the preparation and filing of necessary appeals or other legal remedies. The SC also clarified that the remedies of appeal and certiorari are distinct and cannot be used interchangeably or sequentially.

FAQs

This case clarifies the protocol for serving decisions in CIAC arbitrations, highlighting the responsibility of the parties to monitor and act promptly upon receiving notifications. The ruling underscores the need for clear communication between clients and their counsel to ensure that appeal periods are not missed, thereby safeguarding their legal rights.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Philippine Commercial International Bank vs. Court of Appeals, G.R. No. 127275, June 20, 2003