De los Santos, Lara Aurea L.

JURISDICTION OVER THE SUBJECT MATTER

Insular Savings Bank vs. Far East Bank and Trust Company
GR No. 141818 June 22, 2006

FACTS

Far East Bank and Trust Company filed a complaint against Home Bankers Trust and Company
(HBTC) with the Philippine Clearing House Corporations (PCHC) Arbitration Committee. It sought to
recover the sum of P25,200,000.00 representing the total amount of the three checks of HBTC which
were dishonoured for insufficiency of funds yet was drawn and debited against Far East Bank’s
clearing account.

Before the termination of the arbitration proceedings, Far East Bank filed another complaint but this
time with the Regional Trial Court (RTC) in Makati City for Sum of Money and Damages with
Preliminary Attachment.

The PCHC Arbitration Committee rendered its decision in favor of Far East Bank sentencing HBTC to
pay.

HBTC filed a motion for reconsideration which was denied by the Arbitration Committee.

HBTC filed a petition for review in the earlier case filed by Far East Bank in the RTC of Makati to
appeal the decision of the Arbitration Committee.

Far East Bank filed a Motion to Dismiss Petition for Review for Lack of Jurisdiction.

RTC dismissed the petition for review on the ground of lack of jurisdiction.

HBTC claims that the RTC erred in dismissing the petition since the parties by agreement had
conferred on the RTC appellate jurisdiction over decisions of private arbitrator.

ISSUE

Whether the Regional Trial Court erred in dismissing the Petition of Petitioner for lack of jurisdiction
on the ground that it should have been docketed as a separate case.

RULING

Jurisdiction over the subject matter is conferred by law and not by the consent or acquiescence of
any or all of the parties or by erroneous belief of the court that it exists.
The PCHC Rules grants jurisdiction to the RTC to review arbitral awards on questions of law.
However, since the PCHC Rules came about only as a result of an agreement between and among
member banks of PCHC and not by law, it cannot confer jurisdiction to the RTC.

HBTC filed a petition for review with the RTC when the same should have been filed with the Court
of Appeals under Rule 43 of the Rules of Court. Thus, the RTC of Makati did not err in dismissing the
petition for review for lack of jurisdiction but not on the ground that petitioner should have filed a
separate case from Civil Case No. 92-145 but on the necessity of filing the correct petition in the
proper court.