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[G.R. No. 146717.� April 27, 2005]
TRANSFIELD PHILS vs. LUZON HYDRO
SECOND DIVISION
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated APR 27 2005.
G.R. No. 146717 (Transfield Philippines, Inc. vs. Luzon Hydro Corporation, Australia and New Zealand Banking Group Limited and Security Bank Corporation.)
Petitioner seeks reconsideration of the Court's Decision promulgated on 22 November 2004, the dispositive portion of which reads:
WHEREFORE, the petition is DENIED, with costs against the petitioner.
Petitioner is hereby required to answer the charge of forum-shopping within fifteen (15) days from notice.
SO ORDERED.
In its Motion for Reconsideration, petitioner Transfield Philippines, Inc. (hereinafter, TPI) maintains that respondent Luzon Hydro Corporation (hereinafter, LHC) is guilty of fraud when it called on the letters of credit even before any resolution was made by the International Chamber of Commerce (ICC) on their dispute, and notwithstanding LHC's knowledge and admission of the existence and effects of a force majeure. [1] cralaw Relying on correspondences between LHC's President and officers, TPI imputes bad faith on the part of LHC, stating that it was LHC's strategy to unjustly enrich itself from the proceeds of the standby letters of credit subject of this case, and use such proceeds to pay off their maturing obligations. [2] cralaw
Likewise, TPI disputes the Court's finding that nowhere in the proceedings before the trial court did TPI invoke the fraud exception rule, claiming that it did so in its Reply to LHC's Answer to its Complaint, as well as in its petition before the Court of Appeals. [3] cralaw TPI also denies that the instant petition for injunction has become moot for being fait accompli, because it filed its complaint with the Regional Trial Court before LHC could draw on, and respondent banks could release from, the standby letters of credit. In view of LHC's alleged bad faith and knowing misrepresentation, TPI claims that it would be incongruous and grossly unjust to allow LHC to retain the fruits of its illegal acts. Thus, despite the consummation of the act sought to be restrained, mandatory injunctive relief is still available to restore the parties to the status quo ante. [4] cralaw
The Court is not persuaded.
It is a fundamental rule that the obligation under a letter of credit is independent of the related and originating contract. This basic feature makes letters of credit desirable and useful to commercial transactions. We see no reason to disturb the Decision, petitioner having adduced no new or meritorious argument. So long as the party presents the stipulated documents and complies with the conditions required by the letter of credit, the issuing bank has no option but to release the funds, its duty being limited to ascertaining compliance by the parties in the main contract. To hold otherwise would destroy the delicate role of letters of credit in commercial transactions.
TPI's assertion that it invoked the fraud exception rule in the RTC proceedings is likewise untenable. A reading of the pleadings referred to by TPI reveals that TPI did not state with particularity the circumstances constituting the alleged fraud, nor was it able to substantiate the allegations in the complaint which according to it advert to the commission of fraud. Like in its petition, TPI once more failed to show entitlement to injunctive relief.
Similarly, TPI's attempt to introduce new evidence before the Court to purportedly show bad faith on the part of LHC must fail. The rule in appellate procedure is that a factual question may not be raised for the first time on appeal, and the documents forming no part of the proofs before the appellate court will not be considered in disposing of the issues in an action. This is true whether the decision elevated for review originated from a regular court or an administrative agency or quasi judicial body, and whether it was rendered in a civil case, a special proceeding, or a criminal case. Piecemeal presentation of evidence is simply not in accord with orderly justice. [5] cralaw
The Court likewise received TPI's Comment on LHC's charge of forum-shopping. [6] cralaw TPI called LHC's charge as misleading, false and grossly inaccurate. [7] cralaw It classified the two groups of proceedings involving the parties in this case: the injunction proceedings and the arbitration proceedings. Under the injunction group, TPI listed three actions: (1) Complaint for injunction (RTC Civil Case No. 001312); (2) Certiorari in the Court of Appeals (CA-G.R. No. SP 61901); and (3) the Petition for Review before this Court (G.R. No. 146717). Meanwhile, under the arbitration group, two are listed, namely: (1) ICC Arbitration in Australia (ICC Case No. 11264/TE/ MW); and (2) Enforcement Application (RTC Civil Case NO. 04-332).
TPI explains that the elements of forum-shopping are not present in the said proceedings. To begin with, the arbitration proceedings concern the merits of the dispute between TPI and LHC arising from the Turnkey contract, and the RTC enforcement action is not a money claim, but a claim for the confirmation/recognition and enforcement of the Third Partial Award issued in the ICC Arbitration. The parties in the two cases are only TPI and LHC, but excluding respondent banks herein. The bases for the arbitration case and the enforcement action were the Turnkey contract, Republic Act No. 876 [8] cralaw and the New York Convention. [9] cralaw Meanwhile, the injunction cases are provisional in nature and concern only the right of LHC to call or draw on the securities while the arbitration was still pending. [10] cralaw Thus, TPI insists that the various remedies it pursued are wholly distinct from one another.
On the other hand, LHC insists on the tenability of its charge of forum-shopping, asserting that Civil Case No. 04-332 of the Makati RTC is for recovery of the same money claim subject of ICC Case No. 11264/TE/ MW, while the instant petition is also concerned with the same money claim. LHC adds that the Third Partial Award invoked by TPI as basis for the civil case merely evinces an obligation to refund, and does not state the actual amount to be refunded, as the quantification of the monetary amounts of liabilities of both parties is reserved for future determination. Hence, the enforcement case before the Makati RTC which is Civil Case No. 04-332 is in actuality a money claim as TPI seeks therein the issuance of a writ of execution for the satisfaction of the arbitral award. LHC alleges that TPI's claim for a refund of the letter of credit proceeds is both self-serving and immaterial. Such a remedy would be part of the reliefs it could obtain on its main claims, and was available from the arbitral tribunal with whom those claims are lodged. [11] cralaw LHC concludes that in maintaining the instant petition for the purpose of securing a refund, even if the remedy could be characterized as a refund, TPI was splitting the cause of action it had pleaded before the arbitrators and is guilty of forum-shopping. [12] cralaw
Meanwhile, on 18 March 2005, LHC moved for the suspension of Civil Case No. 04-332, to await the Court's resolution on the issue of forum-shopping.
As the Court sees it, there are two aspects to the charge of forum-shopping. First is Civil Case No. 04-332, wherein TPI seeks to compel the Makati RTC to make its own determination or quantification of the Third Partial Award, which the ICC itself declared to be subject of future determination. Second is TPI's prayer for the refund of the proceeds of the letters of credit, contained in its Consolidated Reply [13] cralaw dated 17 October 2001, to wit:
.
1.� Ordering LHC to return to petitioner all the proceeds of the Securities it received from ANZ and Security Bank, including the fruits thereof, and petitioner to reinstate the Securities, which will then be deposited in escrow either with this Honorable Court or with the ICC Tribunal, pending resolution of the disputes between petitioner and LHC by the ICC Arbitral Tribunal. . . . [14] cralaw (emphasis supplied)
Thus, while TPI insists on the substantial differences between the injunction cases it filed vis-�-vis the enforcement action in the Makati RTC, LHC argues that in the so-called injunction cases, TPI appears to be asking for the return of the same funds, that is, the proceeds of the subject letters of credit. Moreover, according to LHC, the enforcement action and the case before the ICC ostensibly involves the determination of the amounts due TPI.
Considering that the specific charges made by LHC require an equally categorical explanation on the part of TPI and in view of the other allegations, issues, and arguments adduced by the parties on the issue of forum-shopping, the Court sees the need for the submission of the parties' respective Memoranda within thirty (30) days from notice. The memorandum of each party shall contain the following:
a)� A "Statement of the Case," which is a clear and concise statement of the nature of the proceedings and a summary thereof;
b)� A "Statement of the Facts," which is a clear and concise statements in a narrative form of the established facts;
c)� A "Statement of the Issues," which is a clear and concise statement of the issues to be submitted to the Court for its resolution;
d)� The "Argument," which is a clear and concise presentation of the argument in support of each issue; and
e)� The "Relief," which is a specification of the order which the party seeks to obtain. No new issues may be raised by a party in his/its memorandum, and the issues raised in his/its pleadings but not included in the memorandum shall be deemed waived or abandoned. Being a summation of the parties' previous pleadings, the Court may consider the memoranda alone in deciding or resolving the incident.
WHEREFORE, the Court RESOLVES to:
1.� DENY with finality Transfield Philippines, Inc.'s Motion for Reconsideration dated 29 December 2004;
2.� REQUIRE the parties to submit their respective MEMORANDA on the issue of forum-shopping within thirty (30) days from notice hereof;
3.� REQUIRE Transfield Philippines, Inc. to file its COMMENT to Luzon Hydro Corporation's Manifestation and Motion dated 18 March 2005.
SO ORDERED.
Very truly yours,
(Sgd.) LUDICHI YASAY-NUNAG
Clerk of Court
Endnotes:
[1] cralaw Rollo, Volume II, pp. 796-797.
[2] cralaw Id. at 801.
[3] cralaw Id. at 805.
[4] cralaw Id. at 806-808.
[5] cralaw Engineer Ernesto T. Matugas v. Commission on Elections and Robert Lyndon S. Barbers, G.R. No. 151944, 20 January 2004, 240 SCRA 365 citations omitted.
[6] cralaw Rollo, Volume II, pp. 845-867.
[7] cralaw Id. at 845.
[8] cralaw The Arbitration Law.
[9] cralaw New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
[10] cralaw Rollo, Volume II, p. 855.
[11] cralaw Rollo, Volume II, p. 877.
[12] cralaw Ibid.
[13] cralaw Rollo, Volume I, p. 551.
[14] cralaw Id. at 559.
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