A better way to resolve matters

Here is another reason why litigants should opt to go for commercial arbitration, instead of resorting to the regular courts where their cases become like the Mona Lisa song ... They just lie there and they die there.

In a first of sorts involving a dispute in network marketing, Filipino-owned YMCO Distributors Inc. sought relief against Max Health & Living International Inc., a wholly owned subsidiary of Max International LLC, via commercial arbitration under the rules of the Philippine Dispute Resolution Center Inc. (PDRCI). YMCO and its officers appointed Attys. Soledad Nograles, Joannes Vinarao-Pilapil and Jericho Del Puerto of Nograles Law offices as their authorized representatives, while Max Health and its officers chose Attys. Jorge Melo of Zambrano Gruba Caganda & Advincula, and Trisha Cruz of Carpo Law and Associates.

YMCO and its officers claimed that they were working as independent associates of Max International since 2007. However, in 2009, Max International changed the rules and prodded YMCO, represented by Hdward Yco, to enter into an assignment of rights ceding its exclusive distributorship and importation rights over all Max International products from YMCO to Max International’s newly formed local subsidiary, Max Health. For alleged multiple violations of Max Health policies and procedures and violation of ethical business conduct, Max Health placed the accounts of YMCO and its officers on indefinite suspension, which later culminated in the termination of their accounts. Aggrieved, YMCO and its officers initiated arbitration before the PDRCI pursuant to the arbitration clause set forth in their Philippine Associate Agreement with Max Health.

In a final award dated Aug. 23, 2018, Health was declared to have breached its contractual obligations when it penalized YMCO and its officers with indefinite suspension and eventual termination of their accounts.

As a result, Max Health was not only ordered to pay YMCO and its officers, the total amount of almost P12 million as compensatory damages, with six percent interest to boot, but also moral damages of P1.6 million. The Max International subsidiary was also ordered to reimburse YMCO more than P4.9 million by way of arbitration costs plus six percent interest.