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SECOND DIVISION
EXCELLENT QUALITY APPAREL, G.R. No.
175048
INC.,
Petitioner,
Present:
QUISUMBING, J.,
Chairperson,
- versus - CARPIO MORALES
TINGA,
VELASCO, JR., and
WIN MULTI RICH BUILDERS, INC., BRION, JJ.
represented by its President,
WILSON G. CHUA, Promulgated:
Respondent.
February 10, 2009
x
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DECISION
TINGA, J.:
Before us is a Rule 45 petition [1] seeking the
reversal of the Decision[2] and Resolution[3] of
the Court of Appeals in CA-G.R. SP No.
84640. The Court of Appeals had annulled
two orders[4] of the Regional Trial Court (RTC),
Branch 32, of Manila in Civil Case No. 04108940. This case involves a claim for a sum
of money which arose from a construction
dispute.
On 26 March 1996, petitioner Excellent
Quality Apparel, Inc. (petitioner) then
represented by Max L.F. Ying, Vice-President
for Productions, and Alfiero R. Orden,
Decision of the CA in CA-G.R. SP No. 85579 Petition for certiorari under Rule 65 with the
Court of Appeals questioning the jurisdiction
of the CIAC
Meanwhile, on October 28, 2005, the CA in
its decision[20] in the First Petition upheld
the jurisdiction of the CIAC over the case.
The CA held that when parties agree to settle
their disputes arising from or connected with
construction contracts, the CIAC acquires
primary jurisdiction.[21] Citing Philrock Inc. v.
Construction
Industry
Arbitration
Commission,[22] the CA stated that the CIAC
may resolve not only the merits of such
controversies, but may also award damages,
interest, attorneys fees, and expenses of
litigation, when appropriate.[23]
Second, the CA held that the claims in
question fall under the jurisdiction of the
CIAC. Thus:
Xxx Section 4 of Executive Order No. 1008,
otherwise known as the Construction
Industry Arbitration Law delineates CIACs
jurisdiction
as
original
and
exclusive
jurisdiction over disputes arising from, or
connected with, contracts entered into by
parties involved in construction in the
Philippines, whether the disputes arise
before or after the completion of the
contract, or after abandonment thereof.
Moreover, Section 5 (k) of Republic Act No.
9184 otherwise known as [the] Government
Procurement Reform Act expressly defines
infrastructure project as including water
supply[,]
construction,
rehabilitation[,]
demolition,
repair,
restoration
and
maintenance.
Consistent with the above-mentioned policy
of encouraging alternative dispute resolution
methods, courts should liberally construe
arbitration clauses. Provided such clause is
susceptible of an interpretation that covers
the asserted dispute, an order to arbitrate
should be granted. Any doubt should be
resolved in favor of arbitration. It is to be
highlighted that the dispute in the case at
bar arose from the parties incongruent
positions with regard to clause 17 of the
Water Supply Contract[,] specifically the
price escalation/adjustment. The instant case
ISSUES
MCWD raises the following issues in its
petition for review:
MAY
THE
CONSTRUCTION
INDUSTRY
[ARBITRATION]
COMMISSION
EXERCISE
JURISDICTION OVER DISPUTES ARISING FROM
A WATER SUPPLY CONTRACT?
MAY A PARTY, WHO IS A SIGNATORY TO THE
WATER SUPPLY CONTRACT[,] IN EFFECT
SUBMITTING ITSELF TO THE JURISDICTION OF
THE CONSTRUCTION INDUSTRY ARBITRATION
COMMISSION, QUESTION THE JURISDICTION
OF [THE] CIAC?
DOES
THE
CONSTRUCTION
INDUSTRY
ARBITRATION COMMISSION HAVE THE (SIC)
JURISDICTION OVER A COMPLAINT PRAYING
FOR A REFORMATION OF A WATER SUPPLY
CONTRACT?
MAY THE COURT OF APPEALS REFUSE TO
RENDER A [SIC] JUDGMENT ON AN ISSUE
BECAUSE THIS HAS BEEN ALREADY SETTLED
IN A DECISION RENDERED BY ANOTHER
DIVISION OF THE COURT OF APPEALS IN A
PETITION FOR CERTIORARI, EVEN IF THE SAID
DECISION HAS NOT YET BEEN (SIC) FINAL
to
xxx
3. Operating Cost Adjustment Foreign
xxx
Current Forex Base Forex x 70% of 40% of
Base Selling Price of Water
Base Forex
xxx
4.
xxx
Current CPI Base CPI x 30% of 30% of Base
Selling Price of Water
Base CPI
xxx
5.
xxx
Current Forex Base Forex x 70% of 30% of
Base Selling Price of Water
Base Forex
xxx[64]
The dispositive portion of the decision,
however, reads:
WHEREFORE[,]
premises
considered,
judgment is hereby rendered as follows:
1.
Ordering the reformation of Clause 17
of the Water Supply Contract to read:
17.2
Consumer Price Index (CPI)
Adjustment/Operatiing (sic) Cost Adjustment:
Current CPI Base CPI x 40% of Base Selling
Price of Water
Base CPI
17.3
2.
Ordering Respondent Metropolitan Cebu
Water District to pay Claimant, Mactan Rock
Industries, Inc. under the reformed Clause 17
of the Water Supply Contract, the net
amount of Php12,126,296.70 plus legal
interest of six percent (6%) per annum from
March 15, 2004, the date of filing of the case
with the Construction Industry Arbitration
Commission, and twelve percent (12%) per
annum from the date this Decision becomes
final and executory, until the foregoing
amounts shall have been fully paid.
3.
Claimant Mactan Rock Industries, Inc.
and Metropolitan Cebu Water District shall
share the cost of arbitration equally.
SO ORDERED.
THIRD DIVISION
[G.R. No. 120105. March 27, 1998]
BF CORPORATION, petitioner, vs. COURT OF
APPEALS,
SHANGRI-LA
PROPERTIES,
COLAYCO, ALFREDO C. RAMOS, INC., RUFO B.
MAXIMO G. LICAUCO III and BENJAMIN C.
RAMOS, respondents.
DECISION
ROMERO, J.:
The basic issue in this petition for review on
certiorari is whether or not the contract for
the construction of the EDSA Plaza between
petitioner BF Corporation and respondent
Shangri-la Properties, Inc. embodies an
arbitration clause in case of disagreement
between the parties in the implementation of
contractual provisions.
Petitioner
and
respondent
Shangri-la
Properties, Inc. (SPI) entered into an
agreement whereby the latter engaged the
former to construct the main structure of the
EDSA Plaza Project, a shopping mall complex
in the City of Mandaluyong.
The construction work was in progress when
SPI decided to expand the project by
engaging the services of petitioner again.
Thus, the parties entered into an agreement
for the main contract works after which
construction work began.
However, petitioner incurred delay in the
construction work that SPI considered as
serious and substantial.[1] On the other
hand,
according
to
petitioner,
the
construction works progressed in faithful
compliance with the First Agreement until a
fire broke out on November 30, 1990
damaging Phase I of the Project.[2] Hence,
SPI proposed the re-negotiation of the
agreement between them.
Consequently, on May 30, 1991, petitioner
and SPI entered into a written agreement
denominated as Agreement for the Execution
of Builders Work for the EDSA Plaza Project.
Said agreement would cover the construction
work on said project as of May 1, 1991 until
its eventual completion.
According to SPI, petitioner failed to
complete the construction works and
abandoned the project.[3] This resulted in
disagreements between the parties as
regards their respective liabilities under the
contract. On July 12, 1993, upon SPIs
initiative,
the
parties
respective
representatives met in conference but they
failed to come to an agreement.[4]
Barely two days later or on July 14, 1993,
petitioner filed with the Regional Trial Court
of Pasig a complaint for collection of the
balance
due
under
the
construction
agreement. Named defendants therein were
SPI and members of its board of directors
namely, Alfredo C. Ramos, Rufo B. Colayco,
Antonio B. Olbes, Gerardo O. Lanuza, Jr.,
Maximo G. Licauco III and Benjamin C.
Ramos.
On August 3, 1993, SPI and its co-defendants
filed a motion to suspend proceedings
instead of filing an answer. The motion was
anchored on defendants allegation that the
formal trade contract for the construction of
the project provided for a clause requiring
prior resort to arbitration before judicial
intervention could be invoked in any dispute
arising from the contract. The following day,
SPI submitted a copy of the conditions of the
contract containing the arbitration clause
that it failed to append to its motion to
suspend proceedings.
Petitioner opposed said motion claiming that
there was no formal contract between the
parties although they entered into an
agreement
defining
their
rights
and
obligations in undertaking the project. It