Furukawa Sangyo Kaisha (H.K.) v. Clark Premiere Industrial

Summary

This Supreme Court case involves a commercial dispute between Hong Kong corporation Furukawa and Philippine corporation Clark Premiere over unpaid LED lights under a 2011 importation and distribution agreement. Furukawa delivered goods worth PHP6,026,403.00 but Clark Premiere failed to pay despite multiple demands and negotiations. Furukawa terminated the contract and filed a collection case. The RTC awarded Furukawa the full amount plus interest and attorney's fees. The Court of Appeals ruled that the contract was rescinded, requiring mutual restitution and return of the LED lights instead of payment. The Supreme Court reversed, distinguishing contract termination from rescission. It held that termination does not erase prior contractual obligations, so Clark Premiere must still pay for goods delivered before termination. The Court reinstated the RTC decision with modified interest rates, emphasizing that parties remain bound by reciprocal obligations performed prior to contract termination.