BY ATTY. JULIUS GREGORY B. DELGADO
MAPFRE INSURANCE INSULAR INSURANCE CORPORATION VS. ATTY. ARIS L. GULAPA AND PHILIPPINE PHOSPHATE FERTILIZER CORPORATION, G.R. NO. 251119 (NOVEMBER 18, 2025): TRIAL COURT HAS JURISDICTION TO COMPEL INSURERS OF A CORPORATION UNDER REHABILITATION TO SUBMIT TO ARBITRATION IF INSURANCE INDEMNITY CLAIM IS INCLUDED OR INCIDENTAL TO THE REHABILITATION PLAN
Respondent Philippine Phosphate Fertilizer Corporation (“Philphos”) insured its buildings, machinery, and equipment (“BME”) for a total of Php17,572,571,300.00 with several insurers, including petitioner Mapfre Insurance Insular Insurance Corporation (“Mapfre”). After the onslaught of Typhoon Yolanda, Philphos incurred damages amounting to Php7,293,174,817.00 from which Php734,910,000.00 has already been paid. Philphos sent Formal Demand Letters asking insurers to pay the balance of Php6,558,264,817.00 as indemnity claim. Despite demand, insurers refused or failed to pay the claim.
Philphos initiated rehabilitation proceedings through a Petition for Voluntary Rehabilitation which was assigned to the Regional Trial Court of Tacloban City, Branch 8 (“RTC”) as rehabilitation court, and where Atty. Aris Gulapa was appointed as the court-appointed receiver. Atty. Gulapa filed a Motion to Compel Petitioner’s Insurers to Submit to Arbitration arguing that it is his duty as rehabilitation receiver to preserve and maximize the value of Philphos’ assets. Atty. Gulapa also avers that Section 26 of Republic Act No. 10142, or the Financial Rehabilitation and Insolvency Act of 2010 (“Fria Law”) vests the RTC, sitting as rehabilitation court, the authority to refer any dispute relating to the rehabilitation proceedings pending before it to arbitration. Item No. 22 of the Insurance Policy Conditions provides that all differences as to the amount of any loss or damage covered thereby shall be referred to the decision as an arbitrator. Atty. Gulapa also contends that the appraisal of BME and the corresponding valuation of indemnity require special attention and technical expertise, hence, should be heard by a specialized tribunal. Notwithstanding Mapfre’s Opposition, the trial court granted the motion and ordered to insurers to submit themselves to arbitration with Philphos. The Court of Appeals denied the Petition for Certiorari of Mapfre, hence, the latter filed a Petition for Review on Certiorari before the Supreme Court.
The crux of the controversy is whether the trial court can compel Mapfre, along with the other insurers, to submit to arbitration with Philphos. Mapfre invokes the case of Steel Corporation of the Philippines vs. Mapfre Insular Insurance Corporation, et al., G.R. No. 201199 (October 16, 2013) wherein the Supreme Court held that “the jurisdiction of the rehabilitation court is over claims against the debtor that is under rehabilitation, not over claims by the debtor against its own debtors or against third parties.” Mapfre argues that the motion is eventually to set the stage for Philphos’ collection of insurance indemnity which makes the case of Steel Corporation of the Philippines vs. Mapfre Insular Insurance Corporation, et al., supra, supposedly applicable.
Citing City Government of Taguig vs. Shoppers Paradise Realty & Development Corporation, et al., G.R. No. 246179 (July 14, 2021), the Supreme Court held that the term “claim” under the FRIA Law does not in any way preclude claims by the debtor which are incidental to the rehabilitation plan and proceedings. As such, the rehabilitation court is empowered to issue orders necessary to carry out the rehabilitation of the insolvent debtor. In City Government of Taguig vs. Shoppers Paradise Realty & Development Corporation, et al., supra, the Supreme Court sanctioned the off-setting arrangement of the parties since, while incidental to the rehabilitation proceedings, was sanctioned under the rehabilitation plan and necessary to rehabilitate the respondents. The Court differentiated the said case from the earlier Steel Corporation of the Philippines vs. Mapfre Insular Insurance Corporation, et al., supra, as petitioner’s insurance claim was not in any manner included in the rehabilitation plan.
In the instant case, the Supreme Court held: “It bears reiterating that Section 26 of RA 10142 clearly provides that the rehabilitation court has the authority to refer any dispute relating to the rehabilitation plan to arbitration upon finding that such mode will resolve the dispute more quickly, fairly, and efficiently than the rehabilitation court. Here, the evidence on record reveals that the collection of insurance claim from MAPFRE, among other insurers, relates to the rehabilitation proceedings as the same is sanctioned by PhilPhos’s Revised Rehabilitation Plan, which was approved by the RTC through an Order dated April 16, 2018. To be sure, this Revised Rehabilitation Plan provided a framework aimed at rehabilitating PhilPhos which includes the ‘Use of Insurance Proceeds,’ to wit: x x x
This finding is consistent with the Court’s ruling in City Government of Taguig which held that claims made by the debtor may be taken cognizance by the rehabilitation court provided that these are incidental to the rehabilitation plan. It then goes without saying that the Motion, in this case, is inextricably related to the rehabilitation plan as it affects the viability of the plan. As aptly argued by Atty. Gulapa, the final determination of the value of PhilPhos ‘s insurance claim in the arbitration proceedings can increase the resource pool of PhilPhos from which creditors may be paid, in furtherance of the effort to salvage PhilPhos and restore it to its former position of successful operation and solvency.”