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Equitable vs. RCBC

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RCBC’s claim is not time-barred, the claim properly

Equitable vs. RCBC falling under the contemplation of Sec. 5(g) and not Sec.
5(h). As such, the tribunal concluded, RCBC’s claim was
Facts: filed within the three (3)-year period under Sec. 5(g)
and that the six (6)-month period under Sec. 5(h) did
Petitioners Equitable PCI Bank, Inc. (EPCIB) and the not apply.
individual shareholders of Bankard, Inc., as sellers, and
respondentRCBC Capital Corporation (RCBC), as buyer, The tribunal also exonerated RCBC from laches, the
executed a Share Purchase Agreement (SPA) for the latter having sought relief within the three (3)-year
purchase of petitioners’ interests in Bankard, period prescribed in the SPA. Notably, the tribunal
representing 226,460,000 shares, for the price of PhP considered the rescission of the SPA and ASPA as
1,786,769,400. impracticable and "totally out of the question.

To expedite thepurchase, RCBC agreed to dispense with RCBC filed with the RTC a Motion to Confirm Partial
the conduct of a due diligence audit on the financial Award. The RTC issued the first assailed order
status of Bankard. On June 2, 2000, RCBC deposited the confirming the Partial Award and denying the adverted
stipulated downpayment amount in an escrow account separate motions to vacate and to suspend and
after which it was given full management and inhibit. From this order, petitioners sought
operational control of Bankard. June 2, 2000 is also reconsideration, but their motion was denied by the
considered by the parties as the Closing Date referred RTC.
to in the SPA.
Issue: WON there is manifest disregard of the law by
Sometime in September 2000, RCBC had Bankard’s the ICC-ICA
accounts audited, creating for the purpose an audit
team and the conclusion was that the warranty, as
contained in Section 5(h) of the SPA (simply Sec. 5[h] Held: None.
hereinafter), was correct. RCBC paid the balance of the
As earlier recited, the ICC-ICA’s Partial Award dated
contract price. The corresponding deeds of sale for the
September 27, 2007 was confirmed by the RTC in its
shares in question were executed in January 2001.
first assailed order of January 8, 2008. Thereafter, the
Thereafter RCBC informed petitioners of its having
RTC, by order of March 17, 2008, denied petitioners’
overpaid the purchase price of the subject shares,
motion for reconsideration. Therefrom, petitioners
claiming that there was an overstatement of valuation
came directly to this Court on a petition for review
of accounts amounting to PhP 478 million, resulting in
under Rule 45 of the Rules of Court.
the overpayment of over PhP 616 million. Thus, RCBC
claimed that petitioners violated their warranty, as This is a procedural miscue for petitioners who
sellers, embodied inSec. 5(g) of the SPA (Sec. 5[g] erroneously bypassed the Court of Appeals (CA) in
hereinafter). pursuit of its appeal. While this procedural gaffe has not
been raised by RCBC, still we would be remiss in not
RCBC, in accordance with Sec. 10 of the SPA, filed a pointing out the proper mode of appeal from a decision
Request for Arbitration dated May 12, 2004 with the of the RTC confirming, vacating, setting aside,
ICC-ICA. In the request, RCBC charged Bankard with modifying, or correcting an arbitral award.
deviating from, contravening and not following
generally accepted accounting principles and practices Rule 45 is not the remedy available to petitioners as the
in maintaining their books. Arbitration in the ICC-ICA proper mode of appeal assailing the decision of the RTC
proceeded after the formation of the arbitration confirming as arbitral award is an appeal before the CA
tribunal consisting of retired Justice Santiago pursuant to Sec. 46 of Republic Act No. (RA) 9285,
M.Kapunan, nominated by petitioners; Neil Kaplan, otherwise known as the Alternative Dispute Resolution
RCBC’s nominee; and Sir Ian Barker, appointed by the Act of 2004, or completely, An Act to Institutionalize the
ICC-ICA. After drawn out proceedings with each party Use of an Alternative Dispute Resolution System in the
alleging deviation and non-compliance by the other Philippines and to Establish the Office for Alternative
with arbitration rules, the tribunal, with Justice Kapunan Dispute Resolution, and for other Purposes,
dissenting, rendered a Partial Award . On the matter of promulgated on April 2, 2004 and became effective on
prescription, the tribunal held that April 28, 2004 after its publication on April 13, 2004.
It is clear from the factual antecedents that RA 9285
applies to the instant case. This law was already
effective at the time the arbitral proceedings were
commenced by RCBC through a request for arbitration
filed before the ICC-ICA on May 12, 2004. Besides, the
assailed confirmation order of the RTC was issued on
March 17, 2008. Thus, petitioners clearly took the
wrong mode of appeal and the instant petition can be
outright rejected and dismissed.

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