ALTERNATIVE DISPUTE RESOLUTION | HYGIENIC PACKAGING CORPORATION VS. NUTRI-ASIA, INC ., G.R. NO. 201302, JANUARY 23, 2019

HYGIENIC PACKAGING CORPORATION VS. NUTRI-ASIA, INC .,

G.R. NO. 201302, JANUARY 23, 2019

 

FACTS

Hygienic Packaging Corporation (Hygienic) is a domestic corporation that manufactures and sells packaging materials such as plastic bottles. Nutri-Asia, also a domestic corporation, manufactures, and distributes food products such as banana-based and tomato-based condiments, vinegar, soy sauce, and other sauces. 

From 1998 to 2009, Hygienic supplied Nutri-Asia with plastic bottles for its banana catsup products. Every transaction was covered by a Purchase Order issued by Nutri-Asia. The Purchase Order contains terms and conditions, among which is an Arbitration clause which provides: “13. Arbitration of all disputes arising in connection with this Contract shall be referred to an Arbitration Committee, in accordance with the Philippine Arbitration Law, composed of three members: xxx 

For every purchase of plastic containers by Nutri-Asia, Hygienic issues Sales Invoices to cover these transactions. These Sales Invoices contains a stipulation that the parties submit themselves to the jurisdiction of the Courts of the City of Manila in any legal action arising out of their transactions. On July 29, 2009, Hygienic filed a Complaint for sum of money against Nutri-Asia when the latter refused to pay for the plastic containers amounting to P9,737,674.62 despite oral and written demands. It instituted the case before the RTC of Manila. 

In its Answer with Compulsory Counter-Claim, Nutri-Asia argued that the case should be dismissed for failure to comply with a condition precedent. It claimed that under the Terms and Conditions of the Purchase Orders, Hygienic should have first referred the matter to the Arbitration Committee. 

Hygienic maintains that the arbitration clause lacks the elements of a valid arbitration agreement because it was not properly subscribed, and the person who signed the Purchase Orders was only a messenger, not its authorized agent. Thus, the arbitration clause cannot bind Hygienic.


ISSUE

Whether the arbitration clause in the Purchase Order binding between Hygienic and Nutri-Asia.

 

RULING

No.

The court held that Cathay Metal Corporation v. Laguna West Multi-Purpose Cooperative, Inc. provides, "[f]or there to be a contract, there must be a meeting of the minds between the parties." 

Here, the court held that no evidence shows that petitioner and respondent had a meeting of minds and agreed to submit any future issue either to the trial court or to arbitration. The act of signing the Purchase Orders, then, was limited to acknowledging respondent's order and facilitating the payment of the goods to be delivered. It did not bind petitioner to the terms and conditions in the Purchase Orders, which included the arbitration clause. Since there is no contractual stipulation that can be enforced on the venue of dispute resolution, the venue of petitioner's personal action will be governed by the 1997 Revised Rules of Civil Procedure.







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