G.R. No. 179537 - PHILIPPINE ECONOMIC ZONE AUTHORITY, VS. EDISON (BATAAN) COGENERATION CORPORATION.D E C I S I O N - Supreme Court E-Library

Ruling

accordingly prayed for judgment x x x (a) designating (i) an arbitrator to represent defendant; and (ii) the third arbitrator who shall act as Chairman of the Arbitration Committee; and (b) referring the attached Request for Arbitration to the Arbitration Committee to commence the arbitration. [3] and for other just and equitable reliefs. In its Answer, [4] PEZA (hereafter petitioner): ADMIT[TED] the allegations in paragraphs 1, 2, 3, 4, and 6 of the complaint, with the qualification that the alleged dispute subject of the plaintiff's Request for Arbitration dated October 20, 2004 is not an arbitrable issue , considering that the provision on pre-termination fee in the Power Sales and Purchase Agreement (PSPA), is gravely onerous, unconscionable, greatly disadvantageous to the government, against public policy and therefore invalid and unenforceable. ADMIT[TED] the allegation in paragraph 5 of the complaint with the qualification that the refusal of the defendant to arbitrate is justified considering that the provision on the pre-termination fee subject of the plaintiff's Request for Arbitration is invalid and unenforceable . Moreover, the pre-termination of the PSPA is whimsical, has no valid basis and in violation of the provisions thereof, constituting breach of contract on the part of the plaintiff. [5] (Emphasis and underscoring supplied) X x x x Respondent thereafter filed a Reply and Motion to Render Judgment on the Pleadings , [6] contending that since petitioner x x x does not challenge the fact that (a) there is a dispute between the parties; (b) the dispute must be resolved through arbitration before a three-member arbitration committee; and (c) defendant refused to submit the dispute to arbitration by naming its representative in the arbitration committee, judgment may be rendered directing the appointment of the two other members to complete the composition of the arbitration committee that will resolve the dispute of the parties. [7] By Order of April 5, 2005, Branch 118 of the Pasay City RTC granted respondent's Motion to Render Judgment on the Pleadings, disposing as follows: WHEREFORE, all the foregoing considered, this Court hereby renders judgment in favor of the plaintiff and against the defendant . Pursuant to Section 8 of RA 876, also known as the Arbitration Law, and Power Sales and Purchase Agreement, this Court hereby appoints, subject to their agreement as arbitrators , retired Supreme Court Chief Justice Andres Narvasa, as chairman of the committee, and retired Supreme Court Justices Hugo Gutierrez, and Justice Jose Y. Feria, as defendant's and plaintiff's representative, respectively, to the arbitration committee. Accordingly, let the Request for Arbitration be immediately referred to the Arbitration Committee so that it can commence with the arbitration. SO ORDERED.