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ARBITRAL TRIBUNAL
Davao City
Wonderful Banana,
Inc.
Applicant,
- versus Masipag Farmers
Cooperative,
X - - - - -Respondents.
- - - - - - - - - - - - - - - - - - - -X
STATEMENT OF FACTS
Applicant is a German corporation, had a 25 year contract
with Respondent where members of the Cooperative would plant,
harvest, and exclusively sell bananas to the corporation for
$2/box. The Cooperative would be responsible for all other
expenses, including those incurred to buy fertilizers, pesticides,
and agricultural equipment. On the 5th year of the contract period,
the Respondent alleged that the contract was void for failing to
comply with the required signature by the Regional Director of the
Department of Agrarian Reform.
The Applicant provided all fertilizers, pesticides, and
agricultural equipment at the plantation and just billed these to
the farmers cooperative on an annual basis. For five years, the
cooperative failed to pay for these expenses. Consequently, the
Applicant initiated a collection case against the Respondent
before the Regional Trial Court of Davao and now wishes to
petition this Honorable Tribunal to arbitrate the dispute.
ISSUES
- Whether or not the Dispute Resolution Board of the
Department of Agrarian Reform (DAR) has jurisdiction
over the matter
- Who has jurisdiction to determine the validity of
the principal contract and the arbitration clause?
DISCUSSION/ARGUMENTS
The Dispute Resolution Board of the Department of
Agrarian Reform (DAR) has no jurisdiction over the matter
The Masipag Farmers Cooperative invokes the jurisdiction of this
Honorable Tribunal to decide on a case for declaration of nullity.
However, the cases or matters that may be adjudicated by the
DAR or any of its instrumentalities are prescribed by law, and a
case for the declaration of nullity of a contract is not one of them.
In the case of Department of Agrarian Reform v. Paramount
Holdings Equities, Inc. (G.R. No. 176838, June 13, 2013), a petition
was filed before the DAR which sought to nullify a contract of sale
concerning several parcels of land. The PARO argued that the
properties were agricultural land, yet their sale was effected
without DAR Clearance as required under Republic Act No. 6657
(R.A. No. 6657), otherwise known as the Comprehensive Agrarian
Reform Law (CARL). Allegedly, the PARO came to know of the
transactions only after he had received a directive from the
Secretary of Agrarian Reform to investigate the matter following
the latters receipt of a letter-request from persons who claimed
to be the tenant-farmers of the properties previous owners.
However, the Supreme Court ruled that the DAR did not have
jurisdiction to declare the contract void. The Court said:
The jurisdiction of the DARAB (Department of
Agrarian Reform Adjudication Board) is limited
under the law, as it was created under Executive
Order (E.O.) No. 129-A specifically to assume
powers and functions with respect to the
The above reasons show that even though the case is now
before the DARs Dispute Resolution Board and not before the
DARAB, such circumstance has no legal bearing as to the
jurisdictional limits relevant to this case. We once again assert
that the jurisdictional limits for both the Dispute Resolution
Board and the DARAB are the same. Neither can decide on an
action for declaration of nullity since such an action is not an
agrarian reform matter.
Lastly, the Masipag Cooperative cannot invoke the rules on
domestic arbitration in the Philippines (R.A. 876, R.A. 9285)
because they did not bring this case before this Board pursuant
to the arbitration clause in the subject contract. This case was
brought before this Board by virtue of the rules and regulations
of the Department of Agrarian Reform. Hence, the rules and
VERIFICATION
MARJORIE PORCINA
Affiant
Passport Number 21739874893
NOTARY PUBLIC
Copy furnished: