ADR Cases First Set

ADR CASES - FIRST SET
CHINA CHANG JIANG ENERGY CORP. vs. ROSAL INFRASTRUCTURE g.r.no. 125706, 9/30/1996 cannot be located in the internet or in the SCRA THIRD DIVISION G.R. No. 127275 June 20, 2003
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entry in the CIAC logbook showing that Engineer Bong Nuno received a copy of the decision for PCIB on June 24, 1996. By its assailed Resolution,7 the CA granted WGCCs Motion to Dismiss PCIBs petition upon a finding that indeed PCIB received a copy of the CIAC decision on June 24, 1996 and, therefore, its petition was belatedly filed. On the nature of the petition, the CA held that an original action for certiorari under Rule 65 and a petition for review under Circular 1-95 of the Supreme Court cannot be the subject of a single pleading. PCIBs Motion for Reconsideration having been denied by the CA, it comes to this Court by the present petition for Certiorari and Mandamus upon the following grounds: I
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Petitioner, vs. COURT OF APPEALS, WILLIAM GOLANGCO CONSTRUCTION CORP., Chairman ERNESTO S. DE CASTRO, and members LAURO M. CRUZ and VICTOR P. LAZATIN of the ARBITRAL TRIBUNAL of the CONSTRUCTION INDUSTRY ARBITRATION COMMISSION, Respondents. DECISION CARPIO-MORALES, J.: Petitioner Philippine Commercial Industrial Bank (PCIB) assails, by the present Petition for Certiorari and Mandamus, the September 25, 1996 Resolution of the Court of Appeals (CA) dismissing its petition for "Certiorari and/or Partial Review of CIAC Case No. 07-95," on motion of private respondent William Golangco Construction Corporation (WGCC). PCIB contracted WGCC to construct the 5th to 21st floors of PCIB Tower II in Makati. Alleging that the "granite finish [of the tower] proved to be defective such that after all efforts at negotiations proved futile" it hired another contractor to redo the "defective finish", but that WGCC refused to pay it actual damages incurred in the process, PCIB filed a request for arbitration with the Construction Industry Arbitration Commission (CIAC), which docketed it as CIAC Case No. 07-95, praying that WGCC be held liable for "construction deficiencies." WGCC denied PCIBs claim, it alleging that it accomplished the project faithfully and in accordance with the specificationsrequirements of PCIB which accepted it after due inspection. It counterclaimed that PCIB was actually indebted to it for material cost adjustment since the cost of materials substantially increased in the course of the construction of the project. The CIAC, by Decision1 of June 21, 1996, found that PCIB was entitled to recover from WGCC the sum ofP9,741,829.00 representing cost of repairs done by another contractor on the project. On WGCCs counterclaim, finding that under the parties contract, increase for labor and materials under certain conditions was allowed but that PCIB presented no strong, or at best, token opposition to the evidence presented by WGCC for the escalated cost of materials, the CIAC awarded WGCC the amount of P5,777,157.84. The CIAC accordingly disposed as follows: After summing up the award to both parties this TRIBUNAL hereby awards the amount of THREE MILLION NINE HUNDRED SIXTYFOUR THOUSAND SIX HUNDRED SEVENTY[-]ONE PESOS AND SIXTEEN CENTAVOS (P3,964,671.16) to CLAIMANT Philippine Commercial Industrial Bank. Respondent William Golangco Construction is hereby ordered to pay the stated amount with legal interest of six (6%) percent from date of this decision until fully paid .2 PCIB filed on June 28, 1996 a Motion for Partial Reconsideration3 of the CIAC Decision which is not allowedunder Section 9, Article XV of the CIAC Rules of Procedure. It subsequently filed on July 12, 1996 before the CA a petition for "Certiorari and/or Partial Review" 4 which "may be treated as an original action for certiorari under Rule 65 of the Rules of Court or as a petition for review under Circular 1-95 of the Supreme Court," alleging that the CIAC acted in excess of its jurisdiction and contrary to law in awarding, without basis, an amount in favor of WGCC. To PCIBs petition filed before the CA WGCC filed a M otion to Dismiss with Motion to Cite PCIB Counsel for Contempt 5 on the ground that it was filed beyond the 15-day reglementary period for filing an appeal, in support of which it alleged that, contrary to the allegation of counsel for PCIB that he acquired actual knowledge of the CIAC decision on June 28, 1996, PCIB actually received a copy thereof on June 24, 1996, hence, it had only until July 9, 1996 within which to file before the CA a petition for review. Since PCIB filed before the CA its petition for "Certiorari and/or Partial Review" on July 12, 1996, WGCC concluded that it was late by 3 days. WGCC attached to its motion a certified photocopy6 of the pertinent
THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION TO THE GRAVE AND IRREPARABLE DAMAGE TO THE PETITIONER AND FAILED OR UNLAWFULLY NEGLECTED TO DO AN ACT WHICH THE LAW ENJOINS IT TO DO WHEN IT DISMISSED THE PETITION IN CA G.R. SP NO. 41227. II THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION TO THE GRAVE AND IRREPARABLE DAMAGE AND INJURY TO THE PETITIONER AND FAILED OR UNLAWFULLY NEGLECTED TO DO AN ACT WHICH THE LAW ENJOINS IT TO DO WHEN IT REFUSED TO ALLOW THE PETITIONERS ALTERNATIVE RELIEFS FOR REVIEW AND/OR FOR CERTIORARI. (Underscoring supplied) PCIBs counsel disclaims that Engineer Bong Nuno is his employee but submits anyway that he was not authorized to receive the CIAC decision for him in his (counsels) capacity as, by his claim, "the authorized representative" of PCIB. The present petition fails. In the petition for "Certiorari and/or Partial Review of CIAC Case No. 07-95"8 filed before the CA by PCIB, its counsel alleged, inter alia, as follows, quoted verbatim: "Inasmuch as the undersigned counsel ha[s] not officially received its copy of the Decision sought to be reviewed because the Arbitral Tribunal had such copy served only on [PCIB], the reglementary period should be reckoned from the date when the undersigned counsel actually acquired knowledge thereof which was on 28 June 1996when it filed [PCIBs] Motion for Partial Reconsideration. Accordingly, treated as a Petition for Review, pursuant to resolution No. 2-95, this petition is seasonable. A copy of the Decision as served upon [PCIB] itself is attached marked as Annex A and made a part thereof ."9(Underscoring supplied) The copy of the CIAC decision attached to PCIBs petition before the CA is a computer print-out bearing theoriginal signatures of the Chairman and two members of the Arbitral Tribunal. 10 When PCIB received that copy of the CIAC decision, the petition filed before the CA did not state. As earlier stated, WGCC filed before the CA a Motion to Dismiss with Motion to Cite PCIB Counsel for Contempt,11on the grounds that: THE . . . PETITION HAS BEEN FILED BEYOND THE REGLEMENTARY PERIOD OF FIFTEEN DAYS FROM PETITIONERS RECEIPT OF THE ASSAILED DECISION. PETITIONERS COUNSEL IS GUILTY OF MISREPRESENTING FACTS IN A BLATANT ATTEMPT TO HIDE THE BELATED FILING OF THE . . . PETITION; and in said Motion to Dismiss, WGCC alleged that per CIAC records, petitioner received its copy of the CIAC decision on June 24, 1996, hence, the petition filed before the CA on July 12, 1996 was late by 3 days. In its Opposition [to WGCCs Motion to Dismiss], and Countermotion for Contempt,12 PCIBs counsel admitted that PCIB was indeed

served copy of the CIAC decision through Engineer Nuno but that it was only on June 28, 1996 that PCIB sent him a copy thereof. Thus PCIBs counsel alleged: In its petition filed with this Honorable Court [of Appeals], the petitioner was candid in alleging that although it received a copy of a decision of the Arbitral Tribunal, no actual service thereof was made on the undersigned counsel. Receipt by the petitioner itself of the decision did not start the running of the period to appeal. It is basic that: "xxx. The moment an attorney appears for any party, notice should be given to the furnished. xxx where a party appears by attorney in an action or proving in a court of record all notices thereafter requires to be given in the action or providing must be given to the attorney and not to the client; and a notice given to the client and not to his attorney is not a notice in law (Palad vs. Cui, et al., 28 Phil. 44). In legal contemplation, therefore, and under the fact, the present case, there was no legal service of the notice, and the defendants creed not be in default." (Elli, et al. vs. Ditan, et al., 5 SCRA 503, 506). When, therefore, the undersigned submitted in the petition that it had actual knowledge of the decision on 28 June 1996 when the petitioner sent it a copy thereof, it was not only being candid, but was also admitting that it already had actual notice of the decision as of then, hence, the running of the period to appeal must commence as of then. (Emphasis supplied, underscoring by petitioner) In the present petition before this Court, PCIBs counsel now alleges that in the CIAC decision, he was specifically named as "the representative and counsel for [PCIB]," but since the decision was not served on him as the authorized representative of PCIB "but to an employee of [PCIB] on June 24, 1996, it was only on June 27 (sic), 1996 that [he] had actual knowledge of the content of the decision." (Emphasis supplied). PCIBs counsels latest position may not be entertained given his glaring admission that copy of the CIAC decision was duly served on June 24 1996 on PCIB, a party to the case which, as will now be discussed, CIAC Rules mandates should be the one to be notified of the "text" of the decision. The CIAC Rules of Procedure does not contain a provision similar to Section 2, Rule 13 of the Revised Rules of Court, reiterated in the 1997 Rules of Civil Procedure, which provides that service to any party represented by counsel should be made upon his counsel, unless service upon the party himself is ordered by the court.1wphi1 Instead, Section 7, Article XV of the CIAC Rules of Procedure provides: Section 7. Notification of Award to Parties Once an award has been made, provided that the costs of the arbitration have been fully paid to the Secretariat by the parties or by one of them, the Secretariat shall notify theparties of the text signed by the Arbitrator or Arbitral Tribunal. Additional copies certified true by the Executive Director of the Secretariat shall be made available, on request and at any time, to the parties or their counsel but to no one else. (Emphasis and underscoring supplied) From the immediately-quoted provision of the CIAC Rules, it is the parties who are to be notified of the "text" of the CIAC decision.1avvphi1 This answers PCIBs counsels jarring complaint that he was not officially served with a copy of the CIAC decision. In fine, copy of the CIAC decision having admittedly been served on and received by PCIB on June 24, 1996, PCIBs counsel cannot assail the validity of such service by now claiming that the same was ineffective as it was not served on him (counsel) as the duly authorized representative of PCIB. It is an elementary rule of procedure that "perfection of an appeal within the reglementary period is not onlymandatory but also jurisdictional so that failure to do so renders the questioned decision final and executory, and deprives an appellate court of jurisdiction to alter the final judgment, much less to entertain the appeal."13 PCIB having filed its petition for "Certiorari and/or Partial Review" after the CIAC decision had become final and executory, the CA correctly granted WGCCs Motion to Dismiss the same. This leaves it unnecessary to pass upon PCIBs plaint about the CAs
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"refus[al] to allow [its] alternative reliefs for review and/or certiorari." Suffice it to state that the following ruling of this Court instructs: We have time and again reminded members of the bench and bar that a special civil action for certiorari under Rule 65 lies only when "there is no appeal nor plain, speedy and adequate remedy in the ordinary course of law." Certiorari cannot be allowed when a party to a case fails to appeal a judgment despite the availability of that remedy, certiorari not being a substitute for lost appeal. The remedies of appeal and certiorari are mutually exclusive and not alternative or successive (Emphasis supplied, citations omitted.)14 PCIB, at all events, appeals for a relaxation of the Rules given "the [substantial] issues and amounts involved." But even its present petition for certiorari and mandamus is not the proper remedy from the CA Resolution. What it should have filed was a petition for review under Rule 45 of the Rules of Court. But even if, in accordance with the liberal spirit pervading the Rules of Court and in the interest of justice, this Court, in the exercise of its discretion, treats the present petition for certiorari as one for review under Rule 45, petitioner has failed to proffer meritorious reasons or arguments for its allowance. WHEREFORE, the present petition is hereby DISMISSED. SO ORDERED. FIRST DIVISION G.R. No. 141897 September 24, 2001 INC., petitioner,
METRO CONSTRUCTION, vs. CHATHAM PROPERTIES, INC., respondent. DAVIDE, JR., C.J.:
The core issue in this case is whether under existing law and rules the Court of Appeals can also review findings of facts of the Construction Industry Arbitration Commission (CIAC). Respondent Chatham Properties, Inc. (CHATHAM) and petitioner Metro Construction, Inc. (MCI) entered into a contract for the construction of a multi-storey building known as the Chatham House located at the corner of Herrera and Valero Streets, Salcedo Village, Makati City, Metro Manila. In April 1998, MCI sought to collect from CHATHAM a sum of money for unpaid progress billings and other charges and instituted a request for adjudication of its claims with the CIAC. The case was docketed as CIAC Case No. 10-98. The arbitral tribunal was composed of Joven B. Joaquin as Chairman, and Beda G. Fajardo and Loreto C. Aquino as members. The preliminary conference before the CIAC started in June 1998 and was concluded a month after with the signing of the Terms of Reference (TOR) of the Case.1 The hearings immediately started with the presentation of MCI's witnesses, namely: Ms. Ma. Suzette S. Nucum, Chief Accountant; Ms. Isabela Redito, Office Engineer; Mr. John Romulo, Field Manager; and Dr. John Y. Lai, President. CHATHAM's witnesses were: Engr. Ruperto Kapunan III, Managing Director of RK Development and Construction Co., Inc. (RKDCCI), which was the Construction Manager firm hired by CHATHAM to oversee the construction work of the Chatham House; Engr. Alex Bautista, Area Manager of RKDCCI; Mr. Avelino M. Mercado, CHATHAM's Project Manager; and Engr. Jose T. Infante. In the meantime, the TOR was amended and finalized on 19 August 1998.2 The facts, as admitted by the parties before the CIAC and incorporated in the original TOR, are as follows: 1. On 21 April 1994, the parties formally entered into a . . . contract for the construction of the "Chatham House" . . . for the contract price of price of P50,000,000.00 inclusive of value-added tax, subject to adjustments in accordance with Article 9 of the contract. Construction of the project, however, commenced on 15 April 1994 upon the release by CHATHAM of the down payment 2. On 12 July 1994, a Supplemental Contract was executed by and between the parties whereby CHATHAM authorized MCI to procure in behalf of the former materials, equipment,

tools, fixtures, refurbishing, furniture, and accessories necessary for the completion of the project. 3. Under Section I.04 of the Supplemental Contract, the total amount of procurement and transportation cost[s] and expenses which may be reimbursed by MCI from CHATHAM shall not exceed the amount of P75, 000,000.00. 4. In the course of the construction, Change Orders No. 1, 4, 8A, 11, 12 and 13 were implemented, payment of which were recommended by x x x RKDCCI and approved by one of CHATHAM's Project Managers, Romulo F. Sugay. 5. On 15 September 1995, CHATHAM through its Project Manager, Romulo F. Sugay, agreed to give P20,000 per floor for five (5) floors, or a total of P100,000.00 as bonus/incentive pay to MCI's construction workers for the completion of each floor on schedule. CHATHAM reimbursed MCI the amount of P60,000.00 corresponding to bonuses advanced to its workers by the latter for the 14th, 16th, and 17th floors. 6. CHATHAM's payments to MCI totaled P104,875,792.37, representing payments for portions of MCI's progress billings and x x x additional charges. The parties then stipulated on the following issues, again, as set forth in the TOR: 1. Is MCI entitled to its claims for unpaid progress billings amounting to P21,062,339.76? 2. Were the approved Change Orders 1, 4, 8a, 11, 12 and 13 fully paid by CHATHAM? If not, is MCI entitled to its claim for the unpaid balance? 3. Is CHATHAM liable for Change Orders 7a, 7b, 10, 14, 15, 16, 17, 19 and 20? 4. Were the CHB works from the 8th to the 31st floors part of the original contract or in the nature of extra/additional works? Is CHATHAM liable for the same? If so, how much? 5. Is MCI entitled to an additional reimbursement of P40,000.00 for bonuses granted to workers as an incentive for the early completion of each floor? 6. Were the deductions in the amount of P1,393,458.84 made by CHATHAM in MCI's progress billing reasonable? 7. Is MCI's claim of P1,646,502.00 for labor escalation valid? 8. Is MCI entitled to payment of attendance fee? To what extent and how much? 9. Did MCI fail to complete and/or deliver the project within the approved completion period? If so, is MCI liable for liquidated damages and how much? 10. Whether or not CHATHAM is entitled to claim x x x actual damages? If so, to what extent and how much? 11. Whether or not CHATHAM is entitled to x x x additional counterclaims as follows: 11.1. Core testing expenses and penalty for concrete strength failure P3,630,587.38. 11.2. Expenses to rectify structural steel works for the foundation P1,331,139.74. 11.3. Cost of additional materials (concrete & rebars) supplied by CPI P5,761,457.91. 12. Are the parties entitled to their respective claims for attorney's fees and cost of litigation? If so, how much?3
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In the resolution of these issues, the CIAC discovered significant data, which were not evident or explicit in the documents and records but otherwise revealed or elicited during the hearings, which the CIAC deemed material and relevant to the complete adjudication of the case. In its decision of 19 October 1998, 4 the CIAC made the following findings and conclusions: It was established during the hearing that the contract was awarded to MCI through negotiation as no bidding was conducted, x x x It was also revealed that two agreements were entered into, one is labeled Construction Contract for the total fixed amount of P50,000,000.00 and the other a Supplemental Contract for an amount not to exceed P75,000,000.00. The latter is supposed to cover the procurement of materials for the project. The Construction Contract provides for monthly progress billings and payments based on actual accomplishments of the various phases of work. The Supplemental Contract provides for; reimbursement of [the] total amount of procurement and transportation costs and expenses, upon MCI's presentation of suppliers' invoices/receipts. However, from testimonies of witnesses from both parties, it was revealed that the two distinct manner(s) of payment to MCI was set aside. The earlier attempt by CHATHAM to prove that MCI was remiss in submitting suppliers' invoices and/or receipts in support of its billings against the Supplemental Contract was in fact later on abandoned when CHATHAM's witness Mercado admitted that the matter of adherence to the payment provision of the Supplemental Contract is a 'non-issue.' This was borne out by the fact that progress billings and payments under both contracts were made on the basis of percentage of project completion. Both documentary and testimonial evidence prove that, effectively, the construction contract and supplemental contract is but one agreement for a lump sum contract amount of P125,000,000.00. xxx xxx xxx
There was also the admitted fact that the contract was negotiated and awarded in the absence of a complete construction plan. In any case, in support of the total contract amount of P125 million, is a Cost Breakdown (Exh. 17-L), where the estimated quantities of owner furnished materials (OFM) are indicated. It is however, understood that these quantities are estimates, based on (an) incomplete set of construction plans. It is likewise understood that except for the OFM, all the other costs in the Cost Breakdown form the basis for the lump-sum agreement under the contract, subject to adjustment only if there are any significant changes in the contract plans. RKDCCI in its letter to MCI dated 15 Feb. 1995 (Exh. 4), informed MCI that it was confirming the agreement allegedly accepted by Dr. Lai that the Building Committee will take over the management of the construction operations (of the project) albeit under certain conditions. Specifically, the take over was for an interim period and will extend only after concreting of up to basement level 5 or up to 30 May 1995 whichever is later. The letter also stated that the Building Committee . . . will be responsible for management and direction including management of MCI engineers at the site, sequencing of work, additional labor, additional equipment and management of the yard and staging area. The letter, however, emphasized that the intent is not a take over of the contract or take over of the entire work and in fact, it was mentioned that MCI will still be responsible for earth anchoring and steel fabrication work. CHATHAM claims that the interim take-over was necessitated by MCI's delay in the progress of its work, due allegedly to MCI's lack of manpower and equipment. During the hearings of this case, this claim of MCI's lack of manpower, necessary equipment, qualified engineers and inefficient construction management was testified to by both Mr. Mercado [of CHATHAM] and Engr. Kapunan of RKDCCI. CHATHAM's witnesses, however, testified that in spite of these alleged deficiencies, MCI was nevertheless allowed to continue to take full control of the operations. When asked why termination of the contract was not resorted to if truly, MCI was not performing its contracted obligations, witnesses Mercado and Kapunan cited "special

relations" between the owner of MCI (Dr. John Lai) and the president of CHATHAM (Mr. Lamberto Ocampo) as the reason. On the other hand, Dr. Lai contends that, as explained in his letter to CHATHAM dated 17 February 1995, (Exh. 4-A) MCI's work was on schedule. During the hearings, Dr. Lai also insisted that beginning 15 February 1995, MCI was relieved of full control of the construction operations, that it was relegated to (be) a mere supplier of labor, materials and equipment, and that the alleged interim takeover actually extended through the completion of the project. Dr. Lai cited CHATHAM's purchases of materials, fielding labor force and sub-contracting works allegedly for the project without his knowledge and consent as proof that CHATHAM had taken full control of the project. To the above allegation of MCI that CHATHAM went ahead and procured materials, hired labor and entered into subcontract agreements with the intention of eventually charging the costs thereof to MCI, witness Mercado countered, that CHATHAM has the right to do this under the provisions of Article 27 of the contract, dealing with 'Recision, Cancellation, Termination of Contract.' By way of responding to the various counterclaims of CHATHAM, MCI referred to a letter of the former addressed to MCI dated 18 January 1997 (Exhibit E-1) the first paragraph of which reads as follows: After evaluating all the documents issued and received from both Chatham Properties Inc. and Metro Construction, Inc., the Building Committee of Chatham Properties, Inc. evaluated them. The Building Committee finds the total receivable of Metro Construction is in the amount of EIGHT MILLION PESOS (P8,000,000.00) only. When queried by the Tribunal if the said amount already took into account the costs and expenses, (Chatham) claims to have incurred for the account of MCI, Mr. Mercado answered in the affirmative. When queried further how the amount was arrived at, Mr. Mercado replied that it was the sum the Building Committee figured it was willing to pay MCI simply to close the issue. Mr. Mercado even added that while MCI is not actually entitled to this amount, it was out of a friendship" that CHATHAM offered this sum to MCI as final settlement under the contract. It is with the above attendant circumstances that this Tribunal will be guided in the resolution of issues brought before it for adjudication. From what this Tribunal finds as peculiar circumstances surrounding the contracting and implementation of the CHATHAM House Project. it arrived at the following fundamental conclusions: 1. That indeed 'special friendly relations' were present between the parties in this case, although decisions by either party on any particular issue were made not purely on the basis of such special relations. For example, this Tribunal believes that, contrary to the allegation of (CHATHAM's) witnesses, the decision not to terminate the contract was not due to the admitted 'special relations' only, but also due to the greater problems the project would be faced with by terminating the MCI contract and mobilizing another contractor. 2. That while there was no official termination of the contract, the manner by which CHATHAM had taken upon themselves the procurement of materials, the fielding of labor, the control over MCI's engineers, and the subcontracting of various phases of work on its own, is considered by this Tribunal as implied termination of the contract. The idea of allowing MCI to remain on the project in spite of what CHATHAM claims. (to be) MCI's shortcomings, and MCI's agreement to stay on the project under conditions set by CHATHAM, is believed a matter of mutual benefit to both parties.
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3. That CHATHAM's invoking its rights under the provisions of Article 27 of the construction contract is believed out of place, as it failed to observe the required antecedent acts before it can exercise its prerogative under the said contract provision. 4. That there is no reason to believe, either party was in any way guilty of bad faith in acting as it did on certain relevant matters. However, this Tribunal is of the belief that due perhaps to the eagerness on the part particularly of CHATHAM's representatives to take such steps it considered necessary to insure completion of the project within the period desired by CHATHAM, it deviated from some generally accepted procedures in the construction industry in dealing with MCI. One example was not giving MCI the opportunity to rectify some of what CHATHAM considered as construction deficiencies and instead engaging the services of other parties to undertake the corrective works and later on charging the costs thereof to MCI. In addition to the above conclusions resulting from what this Tribunal considered peculiar of circumstances surrounding the implementation of the project that were revealed during the proceedings of this case, this Tribunal finds the necessity of establishing a cut-off date with regard to the fiscal liability of one party towards the other. Mr. Avelino Mercado of CHATHAM presented a list of what he claims as its Payments to MCI (Exhibit 7) summarized as follows:
a. Down payment (Paid in two equal trances b. Cash Advance for Mobilization c. Payments of Progress Billings up to Billing No. 19 d. Other Payments (Mar 1994 to Apr. 1996) e. Advances on MCI Payrolls (April 1996 to March 1997) Total P 20,000,000.00 800,000.00 71,081,183.44 5,474,419.67 8,196,755.51 P 104,752,358.42
The records of this case show that the last progress payment to MCI was in January 1996 representing payment of Progress Billing No. 19 for the period ending 31 December 1995. The percentage of completion claimed then by MCI was 80.02%, the amount evaluated and eventually paid to MCI was the equivalent of 77.15% work accomplishment. No further progress payments were made thereafter, other than for advances to cover MCI payrolls from April 1996 to March 1997 in the amount of P8,196,755.51 and for various advances and payments of approved change orders in the amount of P5,474,419.67. In the meantime, up to Billing No. 23 for the period ending 30 April 1996, MCI billed CHATHAM a total accomplishment of 95.29%. This billing was however, evaluated by CHATHAM, and in its letter to MCI dated 27 May 1996 (Exhibit E) it confirmed that MCI's remaining balance of work stands at P7,374,201.15 as of 23 May 1996. This amount, percentage-wise, equals roughly 5.88% of the contract amount as testified to by Engr. Jose Infante. (Exhibit 22-B). Therefore, what was computed as MCI's work accomplishment as of 23 May 1996 was 94.12% and it is this evaluation which this Tribunal believes MCI is entitled to as of said date. Applying this percentage of completion of 94.12% to the P125,000,000.00 contract amount gives a total accomplishment equivalent to P117,650,000.00 as of 23 May 1996. Add to this amount the sum of P5,353,091.08 representing the total of approved Change Orders as of 31 December 1995 gives a total MCI accomplishment of P123,003,091.08, as CHATHAM saw it. Of this amount, CHATHAM admitted having paid MCI the total sum of P104,752,358.42 only (Exhibit 7) up to March 15, 1997, leaving a balance of P18,250,732.66. It should be noted that of the total payment of P104,752,358.42, the sum of P5,750,000.00 was paid after May 1996 so that as of 25 May 1996, CHATHAM's total payment to MCI was P99,002,358.42. Effectively, therefore, the amount due MCI as of 23 May 1996 amounted to P24,005,732.66 computed as follows:

Total accomplishment as of 23 May 1996 at 94.12% Add approved change orders Total Less payments up to 23 May 1996 Balance due MCI as of 23 May 1996 Of the above balance of P24,005,732.66 as of 23 May 1996, the only payments made by CHATHAM to MCI is the sum of P5,750,000.00 from June 1996 onwards, allegedly to cover MCI payrolls. It is of course noted that CHATHAM's suspension of further payments to MCI was because it had been undertaking on its own, the further procurement of materials and sub-contracting of various phases of works on the project. In consideration of the above facts, this Tribunal's conclusion that there was in fact an implied take over of the project is further confirmed. Furthermore, this Tribunal additionally concludes that the cut-off date for purposes of delineating the financial obligations of the parties between them should be 23 May 1996, the date when CHATHAM evaluated MCI's accomplishment at 94.10% but nevertheless suspended all further progress payments to MCI. MCI presented further documentary evidence (Exhibit E-6) the subject of which is a PUNCHLISTING-CIVIL STRUCTURAL." In this particular document which bears the signatures of representatives of both MCI and RKDCCI, MCI tried to prove that as of 30 August 1996 it had actually attained 99.16% work accomplishment. While it may be true that as of that date the project had reached 99.16% completion, there is no incontrovertible evidence showing that MCI was responsible for such accomplishment. This was in fact actually testified to by Engr. Alex Bautista of RKDCCI, when he said that it was an evaluation of the project's completion stage, not necessarily MCI's work accomplishment. This Tribunal therefore stands firm on its conclusion that MCI's accomplishment is only up to the extent of 94.10%.5 With those findings, the CIAC disposed of the specific money claims by either granting or reducing them. On Issue No. 9, i.e., whether CHATHAM failed to complete and/or deliver the project within the approved completion period and, if so, whether CHATHAM is liable for liquidated damages and how much, the CIAC ruled in this wise: This Tribunal holds that the provision of the contract insofar as the Overall Schedule is concerned cannot justifiably be applied in the instant case in view of the implied take-over of the Chatham House project by CHATHAM. Accordingly, this Tribunal finds no necessity to resolve whether or not MCI complete[d] and/or deliver[ed] the project within the approved completion period. In fact, Mr. Mercado testified that it was CHATHAM who ultimately completed the project, with assistance of the construction managers. In any case, this Tribunal finds merit in RKDCCI's claim that MCI was in delay in the concreting milestone and that [it] is liable for liquidated damages therefor. This, notwithstanding MCI's invoking that Chatham is estopped from claiming liquidated damages after it failed to deduct the alleged liquidated damages from MCI's progress billings. This Tribunal holds that such failure to deduct, which CHATHAM claims it did in order not to hamper progress of work in the project, is an option which [it] may or may not exercise. However, this Tribunal finds that CHATHAM's Exh. 11-A where the liquidated damages on delays in concreting milestone was applied is not consistent with [its] own Exhibit 3-I. This Tribunal notes that in Exh. 11-A, CHATHAM included a projected delay of 85 days for the Helipad Concreting works, while no such projected delay was included in Exh. 3-I as it should be. This Tribunal holds that Exh. 3-I showing a delay of 294 days in concreting milestones should rightfully be used in computing liquidated damages. Accordingly, this Tribunal holds that MCI is liable for liquidated damages in the amount of P3,062,498.78 as follows: 1/4 x 000.00 1/3[(1/10 x P125,000,000.00) 1%] P 117, 655, P3,062,498.78.6 5,353,091.08
5
x 294 =
123,008,091.08 The P CIAC then decreed: 99,002,358.42 Accordingly, as presented below, all the amounts due MCI P 24,005,732.66 are first listed and added up and the total payment is deducted therefrom. The admitted total payment figure as reflected in the Terms of Reference is the amount applied instead of the total reflected in CHATHAM's Summary of Payments which incidentally reflected a lesser amount. From the 'Balance Due MCI' the 'Amounts CPI is Held Entitled To' is deducted and the 'Net Amount Due MCI' is arrived at. (table omitted) WHEREFORE, judgment is hereby rendered in favor of the Claimant [MCI] directing Respondent [CHATHAM] to pay Claimant [MCI] the net sum of SIXTEEN MILLION ONE HUNDRED TWENTY SIX THOUSAND NINE HUNDRED TWENTY TWO & 91/100 (16,126,922.91) PESOS. SO ORDERED.7 Impugning the decision of the CIAC, CHATHAM instituted a petition for review with the Court of Appeals, which was docketed as CA-G.R. SP No. 49429. In its petition, CHATHAM alleged that: The Arbitral Tribunal grossly erred in failing to indicate specific reference to the evidence presented or to the transcript of stenographic notes in arriving at its questioned Decision, in violation of the cardinal rule under Section 1, Rule 36 of the Revised Rules of Civil Procedure that a judgment must state clearly and definitely the facts and the law on which it is based. The Tribunal's conclusions are grounded entirely on speculations, surmises and conjectures. The Arbitral Tribunal grossly erred in failing to consider the evidence presented by CHATHAM and the testimony of its witnesses. The Arbitral Tribunal gravely abused its discretion in considering arbitrarily that there was an implied takeover contrary to the facts and evidence submitted. The Arbitral Tribunal committed grave error and gross misapprehension of facts in holding that CHATHAM is not entitled to liquidated damages despite failure of MCI to meet the over-all schedule of completion. The Arbitral Tribunal manifestly erred in holding that MCI is entitled to its claim for unpaid progress billings. The Arbitral Tribunal committed gross and reversible error in equating the percentage of MCI's work accomplishment with the entire work in place, despite evidence to the contrary. The Arbitral Tribunal gravely erred in making 23 May 1996 as the cut-off date for purposes of delineating the financial obligations of the parties. The Arbitral Tribunal erred in denying CHATHAM its claim for actual damages pursuant to Article 27.8 of the Construction Contract. The facts set forth in CHATHAM's Answer with Compulsory Counterclaim as well as its documentary and testamentary evidence were not overturned or controverted by any contrary evidence.8 In its decision of 30 September 1999, 9 the Court of Appeals simplified the assigned errors into one core issue, namely, the "propriety" of the CIAC's factual findings and conclusions. In upholding the decision of the CIAC, the Court of Appeals confirmed the jurisprudential principle that absent any showing of arbitrariness, the CIAC's findings as an administrative agency and quasi judicial body should not only be accorded great respect but also given the stamp of finality. However, the Court of Appeals found exception in the CIAC's disquisition of Issue No.9on the matter of liquidated damages.

The Court of Appeals disagreed with the CIAC's finding that there was an implied takeover by CHATHAM of the project and that it was unnecessary for the CIAC to rule on whether MCI completed and/or delivered the project within the approved completion schedule of the project since CHATHAM failed to observe the antecedent acts required for the termination of the contract, as set forth in the Construction Agreement. The Court of Appeals ascertained that the evidence overwhelmingly proved that there was no takeover by CHATHAM and that MCI exercised complete control, authority and responsibility over the construction. In support of this conclusion, the appellate court pointed to the following evidentiary bases:10 1. Testimony of CHATHAM's Engr. Kapunan that the interim takeover for the works on the basement was triggered by lack of manpower and delays as early as February 1995, as evidenced by their assessment11and that the interim takeover was only with respect to the direction or management of the field operations and was limited only to works on the basement and intended to assist MCI to catch up with the schedule of completion, since at that time the project was very much delayed; thereafter, the MCI was back in full control of the project.12 2. Testimony of Engr. Bautista that the takeover was only partial and temporary and limited to the management portion on the basement only and that MCI was always in control of the project.13 3. Testimony of Engr. Infante that MCI personnel were constantly present in the project and the "intervention" (not takeover) by CHATHAM was justified to ensure completion of the project on time.14 4. Documentary exhibits evincing the nature and extent of MCI's work during the takeover period which belied its claims that it was not in control of the project because of the takeover thus: Exhibit "4" Letter dated 15 February 1995 of Engr. Kapunan of RKDCCI to John Lai of MCI stating that the takeover of directions or management of the field operations is interim, i.e. while the takeover is effective immediately it will extend only after concreting Level B-1 or approximately until 30 May 1995 which ever is later. Exhibit "4-A" Letter dated 17 February 1995 written by Dr. Lai of MCI to Engr. Kapunan in response to the latter's 15 February 1995 letter stating that "[Also we were assured that we will not be responsible for any errors or accidents that may occur during this INTERIM period," indicating that Dr. Lai was very much aware of the interim period. Exhibit "4-C" Letter dated 18 February 1995 written by Engr. Ben C. Ruiz of RKDCCI to Dr. Lai containing the reasons for the takeover. Exhibit "8A" Letter dated 5 September 1995 written by Dr. E.G. Tabujara to Dr. Lai/Romy Laron (Project Manager of MCI) requesting for an engineer of MCI to accompany the inspector of RKDCCI to witness batching procedures. By so doing, Dr. E.G. Tabujara acknowledged that Dr. Lai was in control of the project. Exhibit "8" Letter dated 4 September 1995 by Engr. Romulo R Sugay to Dr. Lai offering an incentive to the workers of MCI to exert (their) best effort for topping off by the end of December; another clear indication that Dr. Lai was in control of the project. Exhibit "4-D" Letter dated 4 January 1996 indicating that Mr. H.T. Go offered Dr Lai an incentive of P1,800,000 on the condition that MCI meets the new schedule/milestones. MCI's acceptance of the incentive offer likewise shows that MCI was in control of the Project.
6
Exhibits "5," "3-1," "3-M," "3-N," "3-W-1," 3-X," "3Y," and "3-Z" among others containing reminders to MCI of its duties and shortcomings, likewise attest to the fact that MCI was in control (of) and responsible for the Project, although markedly deficient. Exhibits "5," "5-A," "5-B," "5-C," "5-D," "5-E," "5-F," "5-O," "C-7," and "E-9" evidencing that MCI continued to manage other works on the project even during the time of the interim takeover of the basement works, as seen in the series of communications between CHATHAM or RKDCCI and MCI within the period beginning February 1995 to 30 May 1995. 5. Respondent's Request for Adjudication, Annex G, Records, Folder No. 6 which incorporated Change Order No. 12, among others, dated 28 August 1995, recommended by the RKDCCI and accepted by Dr. Lai, and which request for an extension of 25 days readily showed that even after 30 May 1995, after the close of the supposed takeover period, MCI was still the contractor in complete control of the project for it would not have otherwise accepted the said change order if it (were) no longer the Contractor of the project due to the termination of the Construction agreement as of said date on account of the alleged takeover. 6. Exhibits "3-J," "3-M," "3-Q," "3-R," "3-V," "3- W-1," "3-W2," "5-F," "5-1," "6," "12-II," "12-JJ," "12-MM," and "12-NN" tending to prove that RKDCCI monitored the work from start to finish and had zealously pointed out to MCI the defects or improper execution of the construction works, and gave MCI all the opportunity to rectify the construction deficiencies and complete the works of the project. The Court of Appeals concluded that the interim takeover was necessitated by CHATHAM's insistence to meet its own turnover dates with the buyers of the project's units. Thus, CHATHAM was constrained to hire subcontractors with sufficient manpower and supervision and incur various expenses to facilitate the completion of the project and/or assist MCI in making up for its delay. The Court of Appeals then considered it imperative to determine whether MCI failed to complete the project on time for which it may be held liable for liquidated damages based on the delays in the overall schedule of completion pursuant to Art. 13.5 of the Construction Agreement, to wit: 13.5. Over-All Schedule For not meeting the final completion date of the PROJECT, the OWNER will deduct from the Contract Sum or amounts due the CONTRACTOR, the amount equivalent to 1/10 of 1% of the Contract Sum for every calendar day of delay, provided, however, that the maximum penalty should not exceed 25% of the fee payable to the CONTRACTOR as stipulated in the Bill of Quantities. Penalties from concreting milestones shall be deducted from the penalty of Over-All Schedule.15 The Court of Appeals disposed of the controversy in this wise: As is extant from the records, the completion date of the Project under the Construction Contract or under the revised construction schedule was never met by reason of [MCI's] lack of manpower, necessary equipment, qualified engineers and inefficient management of construction works on the Project. Thus, under the Contract (Exhibit '1'), [MCI] had 780 days, or until 22 January 1996, from starting date, or April 12, 1994, to finish the project. The completion date, however, was not followed and was revised as early as December 17, 1994, extending the milestone dates up to March 15, 1996 (Exhibits '3-G' and '3-H'). As of December 25, 1995, the number of days delayed was already 294 days. Thus, on February 22, 1996, the contract milestones were again revised, inclusive of 53 days extension, to May 23, 1996 (Exhibits '3-I' and '3-O'). The May 23, 1996 turnover milestone nor the July 22, 1996 turnover of the whole project were neither met (Exhibits '3-P', '3-R', '3-S' and '3-T' but [CHATHAM] was again constrained to allow [MCI] to continue working on the Project to complete the balance of the works (Exhibit 'M'). And all throughout the construction of the Project, [CHATHAM] had to assist [MCI]

along the way to expedite the execution and completion of the Project (Exhibits '3-K' and '3-V'). From the foregoing disquisitions, it is clear that [MCI] is liable for liquidated damages, as per Article 13.5 of the Construction Contract, for its failure to complete the project within the period stipulated in the Construction Contract and even despite an extension of 53 days from the original schedule or of the overall schedule of completion. [MCI] should therefore pay [CHATHAM] the amount of liquidated damages equivalent to P24,125,000.00 for 193 days of delay in the overall schedule of completion counted from overall completion date on July 22, 1996 up to the date of completion on February 15, 1997, as stated in the Certificate of Occupancy, computed as follows, to wit: 1/10[1%(P125,000,000.00)] per day x 193 days = [1/10 (P1,250,000.00)] per day x 193 days = P125,000.00 per day x 193 days = P24,125,000.00 IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered partially granting [CHATHAM's] claim for liquidated damages. The Tribunal's Decision dated 19 October 1998 is hereby AFFIRMED with the modification on [MCI's] liability for liquidated damages in the amount of P24,125,000.00. Thus, A. AMOUNT [MCI] IS ENTITLED TO: A.1. From the 94.12% of P125,000,000.00 original
7
SECTION 19. Finality of Awards The arbitral award shall be binding upon the parties. It shall be final and inappealable (sic), except on questions of law which shall be appealable to the Supreme Court. MCI then asserts that as signatories to the contract, it and CHATHAM complied with this legal provision when they included as part of their TOR the stipulation that "[t]he decision of the Arbitral Tribunal shall be final and non-appealable except on questions of law." Accordingly, the binding character of this provision upon the parties is conclusive and final. MCI also contends that while it may be argued that recent (1) issuances by the Supreme Court, specifically, Circular No. 1-91, which eventually became Revised Administrative Circular No. 1-95; (2) legislation in particular, Republic Act No. 7902, which amended Batas Pambansa Blg. 129; and (3) amendments to the Rules on Civil Procedure, modifying E.O. No. 1008 in the sense that "questions of facts, of law, or mixed questions of facts and law may be the subject of an appeal of the CIAC's decision to the Court of Appeals," it is still E.O. No. 1008 which remains to be the fundamental and substantive law that endows parties to an arbitral controversy the right to appeal. Hence, the provisions on appeal of E.O. No. 1008 should be controlling, i.e., only questions of law should be entertained. Therefore, the only effect of these rules on E.O. No. 1008 is the transfer of the appeal forum from the Supreme Court to the Court of Appeals. MCI further asserts that, even assuming that the CIAC's findings of facts are reviewable on appeal, the Court of Appeals gravely abused its discretion when it accepted "hook, line and sinker" CHATHAM's contention that MCI was in delay, and ignored competent, clear and substantial evidence that prove the contrary, and that CHATHAM is not entitled to liquidated damages. contract: 117,650,000.00 For its part, CHATHAM avers that the evolution on the rules governing appeals from judgments, decisions, resolutions, orders or 5,353,091.08 awards of the CIAC convincingly discloses that E.O. No. 1008 has 1,648,560.46 already been superseded. With the power of the Supreme Court to promulgate rules concerning the protection and enforcement of 1,248,654.71 constitutional rights, pleadings, practice, and procedure in all courts, -0its issuances and amendments to the Rules on Civil Procedure, not to mention R A. No. 7902, as enacted by Congress, effectively modified 909,484.70 E.O. No. 1008. Accordingly, the judgments, awards, decisions, 076,256.00 resolutions, orders or awards of the CIAC are now appealable to the Court 508,162.73 of Appeals on questions of facts, mixed questions of facts and law, and questions of law, and no longer with the Supreme Court on P128,394,209.68 exclusively questions of law. Further, the TOR cannot limit the expanded jurisdiction of the Court of Appeals based on the latest 104,875,792.37 rules. Thus, the Court of Appeals did not err in reviewing the factual P23,518,417.31 findings of the CIAC. CHATHAM also contends that, even if the Court of Appeals can only P24,125,000.00 review questions of law, said court did not err in rendering the 335,994.50 questioned decision as the conclusions therein, drawn as they were from factual 1,778,285.44 determinations, can be considered questions of law. . I2,214,715.68 Finally, CHATHAM asseverates that the Court of Appeals did not P28,453,995.62 commit grave abuse of discretion in reversing the CIAC's ascertainment on the implied take-over and liquidated damages. This Court shall now resolve the primary issue raised in this case. EO. No. 1008 vest upon the CIAC original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines, whether the dispute arises before or after the completion of the contract, or after the abandonment or breach thereof.19 By express provision of Section 19 thereof, the arbitral award of the CIAC is final and unappealable, except on questions of law, which are appealable to the Supreme Court. The parties, however, disagree on whether the subsequent Supreme Court issuances on appellate procedure and R.A. No. 7902 removed from the Supreme Court its appellate jurisdiction in Section 19 of E.O. No. 1008 and vested the same in the Court of Appeals, and whether appeals from CISC awards are no longer confined to questions of law. On 27 February 1991, this Court issued Circular No. 1-91, which prescribes the Rules Governing Appeals to the Court of Appeals from Final Orders or Decisions of the Court of Tax Appeals and QuasiJudicial Agencies. Pertinent portions thereof read as follows:
A.2 Approved Change Orders A.3 Pending Change Orders A.4 CHB Works A.5 Workers Bonus A.6 Disputed Deductions A.7 Labor Escalation A.8 Attendance Fee Total Less: Total payments-item 11-6 of TOR Balance Due Respondent B. AMOUNTS [CHATHAM] IS ENTITLED TO: B.1. liquidated Damages B.2. Actual Damages B.3. Penalties B.4. Cash Payments in behalf of MCI Total Amount Due CPI C. NET AMOUNT DUE [CHATHAM] (B minus A) Correspondingly, Respondent [MCI] is hereby directed to pay the Petitioner [CHATHAM] the net sum of FOUR MILLION NINE HUNDRED THIRTY-FIVE THOUSAND FIVE HUNDRED SEVENTY-EIGHT & 31/100 (P4,935,578.31) PESOS.16 MCI promptly filed on 25 October 1999 a motion for reconsideration. In its Resolution of 4 February 2000, the Court of Appeals denied MCI's motion for reconsideration for lack of merit, as well as CHATHAM's Motion to Lift Garnishment and Levy Pending Appeal, filed on 13 October 1999, for being premature. 17 Thus, MCI filed the instant petition for review to challenge the decision of the Court of Appeals. MCI alleges that the Court of Appeals erred in reviewing and reversing the CIAC's factual findings, that there was an implied takeover by CHATHAM of the project, and that MCI was not in delay in the overall schedule. In so doing, the Court of Appeals contravened Section 19 of Executive Order (E.O.) No. 1008,18 which limits the review of an Arbitral Award to only questions of law, thus:

1. Scope. These rules shall apply to appeals from final orders or decisions of the Court of Tax Appeals. They shall also apply to appeals from final orders or decisions of any quasi-judicial agency from which an appeal is now allowed by statute to the Court of Appeals or the Supreme Court. Among these agencies are the Securities and Exchange Commission, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunications Commission, Secretary of Agrarian Reform and Special Agrarian Courts under RA. No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission and Philippine Atomic Energy Commission. 2. Cases not Covered. These rules shall not apply to decisions and interlocutory orders of the National Labor Relations Commission or the Secretary of Labor and Employment under the Labor Code of the Philippines, the Central Board of Assessment Appeals, and other quasijudicial agencies from which no appeal to the courts is prescribed or allowed by statute. 3. Who may appeal and where to appeal. The appeal of a party affected by a final order, decision, or judgment of the Court of Tax Appeals or a quasi judicial agency shall be taken to the Court of Appeals within the period and in the manner herein provided, whether the appeal involves questions of fact or of law or mixed questions of fact and law. From final judgments or decisions of the Court of Appeals, the aggrieved party may appeal by certiorari to the Supreme Court as provided in Rule 45 of the Rules of Court. Subsequently, on 23 February 1995, RA. No. 7902 was enacted. It expanded the jurisdiction of the Court of Appeals and amended for that purpose Section 9 of B.P. Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980. 20 Section 9(3) thereof reads: SECTION 9. Jurisdiction. The Court of Appeals shall exercise: xxx xxx xxx
8
Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, and Construction Industry Arbitration Commission. SECTION 2. Cases Not Covered. These rules shall not apply to judgments or final orders issued under the Labor Code of the Philippines, Central Board of Assessment Appeals, and by other quasi-judicial agencies from which no appeal to the court is prescribed or allowed. SECTION 3. Where to Appeal. An appeal under these rules may be taken to the Court of Appeals within the period and in the manner herein provided, whether the appeal involves questions of fact, of law, or mixed questions of fact and law. Thereafter, this Court promulgated the 1997 Rules on Civil Procedure. Sections 1, 2 and 3 of Rule 43 thereof provides: SECTION 1. Scope. This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law. SECTION 2. Cases Not Covered. This Rule shall not apply to judgments or final orders issued under the Labor Code of the Philippines. SECTION 3. Were to Appeal. An appeal under this Rule may be taken to the Court of Appeals within the period and in the manner herein provided, whether the appeal involves question of fact, of law, or mixed questions of fact and law. Through Circular No. 1-91, the Supreme Court intended to establish a uniform procedure for the review of the final orders or decisions of the Court of Tax Appeals and other quasi judicial agencies provided that an appeal therefrom is then allowed under existing statutes to either the Court of Appeals or the Supreme Court. The Circular designated the Court of Appeals as the reviewing body to resolve questions of fact or of law or mixed questions of fact and law. It is clear that Circular No. 1-91 covers the CIAC. In the first place, it is a quasi judicial agency. A quasi-judicial agency or body has been defined as an organ of government other than a court and other than a legislature, which affects the rights of private parties through either adjudication or rule-making.22 The very definition of an administrative agency includes its being vested with quasi judicial powers. The ever increasing variety of powers and functions given to administrative agencies recognizes the need for the active intervention of administrative agencies in matters calling for technical knowledge and speed in countless controversies which cannot possibly be handled by regular courts.23 The CIAC's primary function is that of a quasijudicial agency, which is to adjudicate claims and/or determine rights in accordance with procedures set forth in E.O. No. 1008. In the second place, the language of Section 1 of Circular No. 1-91 emphasizes the obvious inclusion of the CIAC even if it is not named in the enumeration of quasi-judicial agencies. The introductory words "[a] among these agencies are" preceding the enumeration of specific quasi-judicial agencies only highlight the fact that the list is not exclusive or conclusive. Further, the overture stresses and acknowledges the existence of other quasi-judicial agencies not included in the enumeration but should be deemed included. In addition, the CIAC is obviously excluded in the catalogue of cases not covered by the Circular and mentioned in Section 2 thereof for the reason that at the time the Circular took effect, E.O. No. 1008 allows appeals to the Supreme Court on questions of law.
(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Social Security Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings. x x x Then this Court issued Administrative Circular No. 1-95,21 which revised Circular No. 1-91. Relevant portions of the former reads as follows: 1. Scope. These rules shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of any quasi-judicial agency from which an appeal is authorized to be taken to the Court of Appeals or the Supreme Court. Among these agencies are the Securities and Exchange Commission, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunication Commission, Department of

In sum, under Circular No. 1-91, appeals from the arbitral awards of the CIAC may be brought to the Court of Appeals, and not to the Supreme Court alone. The grounds for the appeal are likewise broadened to include appeals on questions of facts and appeals involving mixed questions of fact and law. The jurisdiction of the Court of Appeals over appeals from final orders or decisions of the CIAC is further fortified by the amendments to B.P. Blg. 129, as introduced by RA. No. 7902. With the amendments, the Court of Appeals is vested with appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except "those within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948." While, again, the CIAC was not specifically named in said provision, its inclusion therein is irrefutable. The CIAC was not expressly covered in the exclusion. Further, it is a quasi-judicial agency or instrumentality. The decision inLuzon Development Bank v. Luzon Development Bank Employees24 sheds light on the matter, thus: Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly be considered as a quasi-judicial agency, board or commission, still both he and the panel are comprehended within the concept of a 'quasi-judicial instrumentality.' It may even be stated that it was to meet the very situation presented by the quasijudicial functions of the voluntary arbitrators here, as well as the subsequent arbitrator/arbitral tribunal operating under the Construction Industry Arbitration Commission, that the broader term 'instrumentalities' was purposely included in [Section 9 of B.P. Blg. 129 as amended by RA. No. 7902]. An instrumentality' is anything used as a means or agency. Thus, the terms governmental 'agency' or 'instrumentality' are synonymous in the sense that either of them is a means by which a government acts, or by which a certain government act or function is performed. The word 'instrumentality,' with respect to a state, contemplates an authority to which the state delegates governmental power for the performance of a state function. Any remaining doubt on the procedural mutation of the provisions on appeal in E.O. No. 1008, vis-a-vis Circular No. 1-91 and R A. No. 7902, was completely removed with the issuance by the Supreme Court of Revised Administrative Circular No. 1-95 and the 1997 Rules of Civil Procedure. Both categorically include the CIAC in the enumeration of quasi-judicial agencies comprehended therein. Section 3 of the former and Section 3, Rule 43 of the latter, explicitly expand the issues that may be raised in an appeal from quasi judicial agencies or instrumentalities to the Court of Appeals within the period and in the manner therein provided. Indisputably, the review of the CIAC award may involve either questions of fact, of law, or of fact and law. In view of all the foregoing, we reject MCI's submission that Circular No. 1-91, B.P. Blg. 129, as amended by RA. 7902, Revised Administrative Circular 1-95, and Rule 43 of the 1997 Rules of Civil Procedure failed to efficaciously modify the provision on appeals in E.O. No. 1008. We further discard MCI's claim that these amendments have the effect of merely changing the forum for appeal from the Supreme Court to the Court of Appeals. There is no controversy on the principle that the right to appeal is statutory. However, the mode or manner by which this right may be exercised is a question of procedure which may be altered and modified provided that vested rights are not impaired. The Supreme Court is bestowed by the Constitution with the power and prerogative, inter alia, to promulgate rules concerning pleadings, practice and procedure in all courts, as well as to review rules of procedure of special courts and quasi-judicial bodies, which, however, shall remain in force until disapproved by the Supreme Court.25 This power is constitutionally enshrined to enhance the independence of the Supreme Court.26 The right to appeal from judgments, awards, or final orders of the CIAC is granted in E.O. No. 1008. The procedure for the exercise or application of this right was initially outlined in E.O. No. 1008. While R. A. No. 7902 and circulars subsequently issued by the Supreme Court and its amendments to the 1997 Rules on Procedure effectively
9
modified the manner by which the right to appeal ought to be exercised, nothing in these changes impaired vested rights. The new rules do not take away the right to appeal allowed in E.O. No. 1008. They only prescribe a new procedure to enforce the right. 27 No litigant has a vested right in a particular remedy, which may be changed by substitution without impairing vested rights; hence, he can have none in rules of procedure which relate to remedy."28 The foregoing discussion renders academic MCI's assertion on the binding effect of its stipulation with CHATHAM in the TOR that the decision of the CIAC shall be final and non-appealable except on questions of law. The agreement merely adopted Section 19 of E.O. No. 1008, which, as shown above, had been modified. The TOR, any contract or agreement of the parties cannot amend, modify, limit, restrict or circumscribe legal remedies or the jurisdiction of courts. Rules of procedure are matters of public order and interest and unless the rules themselves so allow, they cannot be altered, changed or regulated by agreements between or stipulations of the parties for their singular convenience.29 Having resolved the existence of the authority of the Court of Appeals to review the decisions, awards, or final orders of the CIAC, the Court shall now determine whether the Court of Appeals erred in rendering the questioned decision of30 September 1999. Settled is the general rule that the findings of facts of the Court of Appeals are binding on us. There are recognized exceptions to the rule, such as when the findings are contrary to those of the trial court 30 as in this case. Hence, we have to take a closer reexamination of this case. The CIAC is certain that the evidence overwhelmingly tended to prove that the manner by which CHATHAM took charge in the procurement of materials, fielding of labor, control of MCI engineers and the subcontracting of various phases of the work, constituted an implied takeover of the project. The CIAC then concludes that the cutoff date for delineating the fiscal liabilities of the parties is 23 May 1996 when CHATHAM evaluated MCI's work accomplishment at 94.12% and then suspended all further progress payments to MCI. For these reasons, the CIAC found it trifling to determine whether MCI was in delay based on the Overall Schedule. However, the CIAC discovered that MCI was in delay for 294 days in the concreting milestone and held the latter liable for liquidated damages in the amount of P3,062,498.78. The Court of Appeals made a contrary conclusion and declared that MCI was in delay for 193 days based on the overall schedule of completion of the project and should incur liquidated damages in the amount of P24,125,000.00. It is undisputed that the CIAC and the Court of Appeals found MCI liable for liquidated damages but on different premises. Based on the CIAC's assessment, MCI's responsibility was anchored on its delay in the concreting milestone, while the Court of Appeal's evaluation concentrated on MCI's delay in completing the project based on the overall schedule of work. The variance in the evaluation spells a staggering difference in the party who should ultimately be held liable and the net amount involved. A study of the final computation of the net amount due in both the final disquisition of the CIAC and the Court of Appeals shows that all the other figures therein are constant, save for the amount of liquidated damages for which MCI should be accountable. If this Court concurs with the CIAC's conclusions, MCI's responsibility for liquidated damages is, as already stated, P3,062,498.78. Setting this off against CHATHAM's overall fiscal accountability would bring the latter's total liability to MCI to P16,126,922.91. If the Court of Appeals is correct, MCI would be held liable for a much higher P24,125,000 liquidated damages. Setting this off against CHATHAM's monetary responsibilities, MCI would still have to pay CHATHAM P4,935,578.31. After painstakingly combing through the voluminous records, we affirm the findings of the CIAC. The evidence taken as a whole or in their totality reveals that there was an implied takeover by CHATHAM on the completion of the project. The evidence that appears to accentuate the Court of Appeals' decision ironically bolstered the CIAC's conclusion. The testimonies of Engr. Kapunan, Engr. Bautista, Dr. Lai, and the letter of Engr. Ruiz, 31acknowledging the "temporary takeover" by CHATHAM of the project, underscore the palpable fact that there was indeed a takeover. We confer particular credit to Dr. Lai's testimony that as of 15 February 1995, MCI was relieved of full control of the construction operations, that it was relegated to a mere

supplier of labor, materials and equipment, and that the alleged interim takeover actually extended through the completion of the project. Even CHATHAM admits the takeover but sugarcoated the same with words like "interim" did "charging the costs to MCI." With these glaring admissions, we can even consider that the takeover was not implied but blatant. Exhibits "4," "4-A," "4-C," "8A," "8," "4-D," '43," "3-I," "3-M," "3- N," "3W-1," "3-X," "3-Y," "3-Z," "5,""5-A," "5-B," "5-C," "5-D," "5-E," "5-F," "5-O," "C-7," "E-9," etc.,32 relied upon by the Court of Appeals when considered by themselves and singly, seemingly and initially evince MCI's control over the project. However, they eventually lose evidentiary puissance to support the Court of Appeals' conclusion when reckoned against the totality of the evidence that CHATHAM took charge of the completion of the project, particularly, the fact that CHATHAM suspended all progress billing payments to MCI. The continued presence and participation of MCI in the project was, as found by the CIAC, a matter of mutual benefit to and convenience of the parties. WHEREFORE, IN VIEW OF ALL THE FOREGOING, the assailed 30 September 1999 decision of the Court of Appeals in CA-G.R SP No. 49429 is hereby PARTIALLY MODIFIED by setting aside the order directing Metro Construction, Inc. to pay Chatham Properties, Inc. the amount of P4,935,578.31. The arbitral award of the Construction Industry Arbitration Commission in CIAC Case 10-98, promulgated on 19 October 1998, directing Chatham Properties, Inc. to pay Metro Construction, Inc. the sum of SIXTEEN MILLION ONE HUNDRED TWENTY-SIX THOUSAND NINE HUNDRED TWENTY-TWO & 91/100 (P16,126,922.91) PESOS, is accordingly REINSTATED. No pronouncement as to costs. SO ORDERED. THIRD DIVISION G.R. No. 110434 December 13, 1993 HI-PRECISION STEEL CENTER, INC., petitioner, vs. LIM KIM STEEL BUILDERS, INC., and CONSTRUCTION INDUSTRY ARBITRATION COMMISSION,respondents. Felix Q. Vinluan and Siguion Reyna, Montecillo & Ongsiako for petitioner. De Castro & Cagampang Law Offices for Lim Kim teel Builders, Inc. RESOLUTION FELICIANO, J.: On 18 June 1993, a "Petition for Extension to File Petition for Review" 1 was filed before the Court, petitioner Hi-Precision Steel Center, Inc. ("Hi-Precision") stating that it intended to file a Petition for Review on Certiorari in respect of the 13 November 1992 Award 2 and 13 May 1993 Order 3 of public respondent Construction Industry Arbitration Commission ("CIAC") in Arbitration Case No. 1390. The Petition (really a Motion) prayed for an extension of thirty (30) days or until 21 July 1993 within which to file a Petition for Review. An opposition 4 to the Motion was filed by private respondent Lim Kim Steel Builders, Inc. ("Steel Builders") on 5 July 1993. On the same day, however, the Court issued a Resolution 5 granting the Motion with a warning that no further extension would be given. The Opposition, the subsequent Reply 6 of petitioner filed on 20 July 1993 and the Petition for Review 7 dated 21 July 1993, were noted by the Court in its Resolution 8 of 28 July 1993. The Court also required private respondent Steel Builders to file a Comment on the Petition for Review and Steel Builders complied. The Petition prays for issuance of a temporary restraining order 9 to stay the execution of the assailed Order and Award in favor of Steel Builders, which application the Court merely noted, as it did subsequent Urgent Motions for a temporary restraining order. 10 Petitioner Hi-Precision entered into a contract with private respondent Steel Builders under which the latter as Contractor was to complete a P21 Million construction project owned by the former within a period
10
of 153 days, i.e.from 8 May 1990 to 8 October 1990. The project completion date was first moved to 4 November 1990. On that date, however, only 75.8674% of the project was actually completed. Petitioner attributed this non-completion to Steel Builders which allegedly had frequently incurred delays during the original contract period and the extension period. Upon the other hand, Steel Builders insisted that the delays in the project were either excusable or due to Hi-Precision's own fault and issuance of change orders. The project was taken over on 7 November 1990, and eventually completed on February 1991, by Hi-Precision. Steel Builders filed a "Request for Adjudication" with public respondent CIAC. In its Complaint filed with the CIAC, Steel Builders sought payment of its unpaid progress buildings, alleged unearned profits and other receivables. Hi-Precision, upon the other hand, in its Answer and Amended Answer, claimed actual and liquidated damages, reimbursement of alleged additional costs it had incurred in order to complete the project and attorney's fees. The CIAC formed an Arbitral Tribunal with three (3) members, two (2) being appointed upon nomination of Hi-Precision and Steel Builders, respectively; the third member (the Chairman) was appointed by the CIAC as a common nominee of the two (2) parties. On the Chairman was a lawyer. After the arbitration proceeding, the Arbitral Tribunal rendered a unanimous Award dated 13 November 1992, the dispositive portion of which reads as follows: WHEREFORE, premises considered, the Owner [petitioner Hi-Precision] is ordered to pay the Contractor [private respondent Steel Builders] the amount of P6,400,717.83 and all other claims of the parties against each other are deemed compensated and offset. No pronouncement as to costs. The Parties are enjoined to abide by the award. 11 Upon motions for reconsideration filed, respectively, by HiPrecision and Steel Builders, the Arbitral Tribunal issued an Order dated 13 May 1993 which reduced the net amount due to contractor Steel Builders to P6,115,285.83. 12 In its Award, the Arbitral Tribunal stated that it was guided by Articles 1169, 1192 and 2215 of the Civil Code. With such guidance, the arbitrators concluded that (a) both parties were at fault, though the Tribunal could not point out which of the parties was the first infractor; and (b) the breaches by one party affected the discharge of the reciprocal obligations of the other party. With mutual fault as a principal premise, the Arbitral Tribunal denied (a) petitioner's claims for the additional costs allegedly incurred to complete the project; and (b) private respondent's claim for profit it had failed to earn because of petitioner's take over of the project. The Tribunal then proceeded to resolve the remaining specific claims of the parties. In disposing of these multiple, detailed claims the Arbitral Tribunal, in respect of one or more of the respective claims of the parties: (a) averaged out the conflicting amounts and percentages claimed by the parties; 13 (b) found neither basis nor justification for a particular claim; 14 (c) found the evidence submitted in support of particular claims either weak or non-existent;15 (d) took account of the admissions of liability in respect of particular claims; 16 (e) relied on its own expertise in resolving particular claims; 17 and (f) applied a "principle of equity" in requiring each party to bear its own loss resulting or arising from mutual fault or delay ( compensation morae). 18 Petitioner Hi-Precision now asks this Court to set aside the Award, contending basically that it was the contractor Steel Builders who had defaulted on its contractual undertakings and so could not be the injured party and should not be allowed to recover any losses it may have incurred in the project. Petitioner Hi-Precision insists it is still entitled to damages, and claims that the Arbitral Tribunal committed grave abuse of discretion when it allowed certain claims by Steel Builders and offset them against claims of Hi-Precision. A preliminary point needs to be made. We note that the Arbitral Tribunal has not been impleaded as a respondent in the Petition at bar. The CIAC has indeed been impleaded; however, the Arbitral Award was not rendered by the CIAC, but rather by the Arbitral Tribunal. Moreover, under Section 20 of Executive Order No. 1008, dated 4 February 1985, as amended, it is the Arbitral Tribunal, or the single Arbitrator, with the concurrence of the CIAC, which issues the writ of execution requiring any sheriff or other proper officer to execute the award. We consider that the Arbitral Tribunal which

rendered the Award sought to be reviewed and set aside, should be impleaded even though the defense of its Award would presumably have to be carried by the prevailing party. Petitioner Hi-Precision apparently seeks review of both under Rule 45 and Rule 65 of the Rules of Court. 19 We do not find it necessary to rule which of the two: a petition for review under Rule 45 or a petition for certiorari under Rule 65 is necessary under Executive Order No. 1008, as amended; this issue was, in any case, not squarely raised by either party and has not been properly and adequately litigated. In its Petition, Hi-Precision purports to raise "legal issues," and in presenting these issues, prefaced each with a creative formula: (1) The public respondent [should be the "Arbitral Tribunal'] committed serious error in law, if not grave abuse of discretion, when it failed to strictly apply Article 1191, New Civil Code, against the contractor . . .; (2) The public respondent committee serious error in law, if not grave abuse of discretion, when it failed to rule in favor of the owner, now petitioner herein, all the awards it claimed on arbitration, and when it nonetheless persisted in its awards of damages in favor of the respondent. . . .; (3) The public respondent committed serious error in law, if not grave abuse of discretion, for its abject failure to apply the doctrine of waiver, estoppel against the contractor, the private respondent herein, when it agreed on November 16, 1990 to award termination of the contract and the owner's takeover of the project . . .; (4) The public respondent committed serious error in law, if not grave abuse of discretion, when it did not enforce the law between the parties, the "technical specification[s]" which is one of the contract documents, particularly to par. (a), subpart 3.01, part 3, Sec. 2b, which expressly requires that major site work activities like stripping, removal and stockpiling of top soil shall be done "prior to the start of regular excavation or backfiling work", the principal issue in arbitration being non-compliance with the contract documents; (5) The public respondent committed serious error in law, if not grave abuse of discretion, when it found, in the May 13, 1993 Order, the petitioner "guilty of estoppel" although it is claimed that the legal doctrine of estoppel does not apply with respect to the required written formalities in the issuance of change order . . .; (6) The exceptional circumstances in Remalante vs. Tibe, 158 SCRA 138, where the Honorable Supreme Court may review findings of facts, are present in the instant case, namely; (a) when the inference made is manifestly absurd, mistaken or impossible (Luna vs. Linatoc, 74 Phil. 15); (2) when there is grave abuse of discretion in the appreciation of facts (Buyco vs. People, 95 Phil. 253); (3) when the judgment is premised on a misapprehension of facts (De la Cruz v. Sosing, 94 Phil. 26 and Castillo vs. CA, 124 SCRA 808); (4) when the findings of fact are conflicting (Casica
11
v. Villaseca, 101 Phil. 1205); (5) when the findings are contrary to the admissions of the parties (Evangelista v. Alto Surety, 103 Phil. 401), and therefore, the findings of facts of the public respondent in the instant case may be reviewed by the Honorable Supreme Court. 20 (Emphasis partly applied and partly in the original) From the foregoing, petitioner Hi-Precision may be seen to be making two (2) basic arguments: (a) Petitioner asks this Court to correct legal errors committed by the Arbitral Tribunal, which at the same time constitute grave abuse of discretion amounting to lack of jurisdiction on the part of the Arbitral Tribunal; and (b) Should the supposed errors petitioner asks us to correct be characterized as errors of fact, such factual errors should nonetheless be reviewed because there was "grave abuse of discretion" in the misapprehension of facts on the part of the Arbitral Tribunal. Executive Order No. 1008, as amended, provides, in its Section 19, as follows: Sec. 19. Finality of Awards. The arbitral award shall be binding upon the parties. It shall be final and inappealable except on questions of law which shall be appealable to the Supreme Court. Section 19 makes it crystal clear that questions of fact cannot be raised in proceedings before the Supreme Court which is not a trier of facts in respect of an arbitral award rendered under the aegis of the CIAC. Consideration of the animating purpose of voluntary arbitration in general, and arbitration under the aegis of the CIAC in particular, requires us to apply rigorously the above principle embodied in Section 19 that the Arbitral Tribunal's findings of fact shall be final and inappealable. Voluntary arbitration involves the reference of a dispute to an impartial body, the members of which are chosen by the parties themselves, which parties freely consent in advance to abide by the arbitral award issued after proceedings where both parties had the opportunity to be heard. The basic objective is to provide a speedy and inexpensive method of settling disputes by allowing the parties to avoid the formalities, delay, expense and aggravation which commonly accompany ordinary litigation, especially litigation which goes through the entire hierarchy of courts. Executive Order No. 1008 created an arbitration facility to which the construction industry in the Philippines can have recourse. The Executive Order was enacted to encourage the early and expeditious settlement of disputes in the construction industry, a public policy the implementation of which is necessary and important for the realization of national development goals. 21 Aware of the objective of voluntary arbitration in the labor field, in the construction industry, and in any other area for that matter, the Court will not assist one or the other or even both parties in any effort to subvert or defeat that objective for their private purposes. The Court will not review the factual findings of an arbitral tribunal upon the artful allegation that such body had "misapprehended the facts" and will not pass upon issues which are, at bottom, issues of fact, no matter how cleverly disguised they might be as "legal questions." The parties here had recourse to arbitration and chose the arbitrators themselves; they must have had confidence in such arbitrators. The Court will not, therefore, permit the parties to relitigate before it the issues of facts previously presented and argued before the Arbitral Tribunal, save only where a very clear showing is made that, in reaching its factual conclusions, the Arbitral Tribunal committed an error so egregious and hurtful to one party as to constitute a grave abuse of discretion resulting in lack or loss of jurisdiction. 22 Prototypical examples would be factual conclusions of the Tribunal which resulted in deprivation of one or the other party of a fair opportunity to present its position before the Arbitral Tribunal, and an award obtained through fraud or the corruption of arbitrators. 23 Any other, more relaxed, rule would result in setting at naught the basic objective of a voluntary arbitration and would reduce arbitration to a largely inutile institution. Examination of the Petition at bar reveals that it is essentially an attempt to re-assert and re-litigate before this Court the detailed or itemized factual claims made before the Arbitral Tribunal under a

general averment that the Arbitral Tribunal had "misapprehended the facts" submitted to it. In the present Petition, too, Hi-Precision claims that the Arbitral Tribunal had committed grave abuse of discretion amounting to lack of jurisdiction in reaching its factual and legal conclusions. The first "legal issue" submitted by the Petition is the claimed misapplication by the Arbitral Tribunal of the first and second paragraphs of Article 1911 of the Civil Code. 24 Article 1191 reads: Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage Law. Hi-Precision contends energetically that it is the injured party and that Steel Builders was the obligor who did not comply with what was incumbent upon it, such that Steel Builders was the party in default and the entity guilty of negligence and delay. As the injured party, HiPrecision maintains that it may choose between the fulfillment or rescission of the obligation in accordance with Article 1191, and is entitled to damages in either case. Thus, Hi-Precision continues, when the contractor Steel Builders defaulted on the 153rd day of the original contract period, Hi-Precision opted for specific performance and gave Steel Builders a 30-day extension period with which to complete the project. What petitioner Hi-Precision, in its above argument, disregards is that the determination of whether Hi-Precision or Steel Builders was the "injured party" is not to be resolved by an application of Article 1191. That determination is eminently a question of fact, for it requires ascertainment and identification of which the two (2) contending parties had first failed to comply with what is incumbent upon it. In other words, the supposed misapplication of Article 1191, while ostensibly a "legal issue," is ultimately a question of fact, i.e., the determination of the existence or non-existence of a fact or set of facts in respect of which Article 1191 may be properly applied. Thus, to ask this Court to correct a claimed misapplication or nonapplication of Article 1191 is to compel this Court to determine which of the two (2) contending parties was the "injured party" or the "first infractor." As noted earlier, the Arbitral Tribunal after the prolonged arbitration proceeding, was unable to make that factual determination and instead concluded that both parties had committed breaches of their respective obligations. We will not review, and much less reverse, that basic factual finding of the Arbitral Tribunal. A second "legal issue" sought to be raised by petitioner Hi-Precision relates to the supposed failure of the Arbitral Tribunal to apply the doctrines of estoppel and waiver as against Steel Builders. 25 The Arbitral Tribunal, after declaring that the parties were mutually at fault, proceeded to enumerate the faults of each of the parties. One of the faults attributed to petitioner Hi-Precision is that it had failed to give the contractor Steel Builders the required 15-day notice for termination of the contract. 26 This was clearly a finding of fact on the part of the Tribunal, supported by the circumstance that per the record, petitioner had offered no proof that it had complied with such 15-day notice required under Article 28.01 of the General Conditions of Contract forming part of the Contract Documents. Petitioner HiPrecision's argument is that a written Agreement dated 16 November 1990 with Steel Builders concerning the take over of the project by HiPrecision, constituted waiver on the part of the latter of its right to a 15-day notice of contract termination. Whether or not that Agreement dated 16 November 1990 (a document not submitted to this Court) is properly characterized as constituting waiver on the part of Steel Builders, may be conceded to be prima facie a question of law; but, if it is, and assuming arguendo that the Arbitral Tribunal had erred in resolving it, that error clearly did not constitute a grave abuse of discretion resulting in lack or loss of jurisdiction on the part of the Tribunal.
12
A third "legal issue" posed by Hi-Precision relates to the supposed failure on the part of the Arbitral Tribunal "to uphold the supremacy of 'the law between the parties' and enforce it against private respondent [Steel Builders]." 27 The "law between that parties" here involved is the "Technical Specifications" forming part of the Contract Documents. Hi-Precision asserts that the Arbitral Tribunal did not uphold the "law between the parties," but instead substituted the same with "its [own] absurd inference and 'opinion' on mud." Here again, petitioner is merely disguising a factual question as a "legal issue," since petitioner is in reality asking this Court to review the physical operations relating, e.g., to site preparation carried out by the contractor Steel Builders and to determine whether such operations were in accordance with the Technical Specifications of the project. The Arbitral Tribunal resolved Hi-Precision's claim by finding that Steel Builders had complied substantially with the Technical Specifications. This Court will not pretend that it has the technical and engineering capability to review the resolution of that factual issue by the Arbitral Tribunal. Finally, the Petition asks this Court to "review serious errors in the findings of fact of the [Arbitral Tribunal]." 28 In this section of its Petition, Hi-Precision asks us to examine each item of its own claims which the Arbitral Tribunal had rejected in its Award, and each claim of the contractor Steel Builders which the Tribunal had granted. In respect of each item of the owner's claims and each item of the contractor's claims, Hi-Precision sets out its arguments, to all appearances the same arguments it had raised before the Tribunal. As summarized in the Arbitral Award, Contractor's Claims were as follows: 12.1. Unpaid Progress Billing 1,812,706.95 12.2. Change 12.3. -do12.4. -do12.5. -do12.6. -do12.7. -do12.8. -do12.9. -do12.10. -do12.11. -do12.12. -do12.13. -do12.14. -do12.15. -do12.16. -do12.17. -do12.18. -do12.19. 12.20. 12.21. 12.22. 12.23. 12.24. 12.25. 12.26. 12.27. 12.28. 12.29. 12.30. 0.00 12.31. 7,318,499.28 29 ============= Upon the other hand, the petitioner's claims we are asked to review and grant are summarized as follows: 1. Actual Damages Advance Downpayment [at] signing of Contract which is subject to 40% deduction every progress billing (40% of Contract Price) P8,406,000.00 Progress Billings 5,582,585.55 Advances made to Lim Kim Order 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 0.00 10,014.00 320,000.00 112,300.70 398,398.00 353,050.38 503,836.53 216,138.75 101,621.40 7,200.00 0.00 7,800.00 49,250.00 167,952.00 445,600.00 92,457.30 1,500.00 20,240.00 63,518.00 0.00 0.00 0.00 0.00 0.00 730,201.57 1,130,722.70 0.00 273,991.00 1

a) prior to b) after the take-over take-over 392,781.45
13
WHEREFORE, for all the foregoing, the Petition is hereby DISMISSED for lack of merit. Costs against petitioner. SO ORDERED. SECOND DIVISION G.R. No. 187521 March 14, 2012 INC., Petitioner,
Civil Works Materials Labor Equipment Rental 1,448,208.90 P8,974,816.45
1,158,513.88 4,213,318.72 2,155,774.79
F.F. CRUZ & CO., vs. HR CONSTRUCTION CORP., Respondent. DECISION REYES, J.:
Total Amount Paid for Construction 23,650,183.00 Less: Contract Price (21,000,000.00) IA Excess of amount over contract price 2,650,163.29 IB Other items Kim Steel Builders due from paid
Lim
This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner F.F. Cruz & Co., Inc. (FFCCI) assailing the Decision1 dated February 6, 2009 and Resolution2 dated April 13, 2009 issued by the Court of Appeals (CA) in CA-G.R. SP No. 91860. The Antecedent Facts Sometime in 2004, FFCCI entered into a contract with the Department of Public Works and Highways (DPWH) for the construction of the Magsaysay Viaduct, known as the Lower Agusan Development Project. On August 9, 2004, FFCCI, in turn, entered into a Subcontract Agreement3 with HR Construction Corporation (HRCC) for the supply of materials, labor, equipment, tools and supervision for the construction of a portion of the said project called the East Bank Levee and Cut-Off Channel in accordance with the specifications of the main contract. The subcontract price agreed upon by the parties amounted to P31,293,532.72. Pursuant to the Subcontract Agreement, HRCC would submit to FFCCI a monthly progress billing which the latter would then pay, subject to stipulated deductions, within 30 days from receipt thereof. The parties agreed that the requests of HRCC for payment should include progress accomplishment of its completed works as approved by FFCCI. Additionally, they agreed to conduct a joint measurement of the completed works of HRCC together with the representative of DPWH and consultants to arrive at a common quantity. Thereafter, HRCC commenced the construction of the works pursuant to the Subcontract Agreement. On September 17, 2004, HRCC submitted to FFCCI its first progress billing in the amount of P2,029,081.59 covering the construction works it completed from August 16 to September 15, 2004.4 However, FFCCI asserted that the DPWH was then able to evaluate the completed works of HRCC only until July 25, 2004. Thus, FFCCI only approved the gross amount of P423,502.88 for payment. Pursuant to the Subcontract Agreement, FFCCI deducted from the said gross amount P42,350.29 for retention and P7,700.05 for expanded withholding tax leaving a net payment in the amount of P373,452.54. This amount was paid by FFCCI to HRCC on December 3, 2004.5 FFCCI and the DPWH then jointly evaluated the completed works of HRCC for the period of July 26 to September 25, 2004. FFCCI claimed that the gross amount due for the completed works during the said period wasP2,008,837.52. From the said gross amount due, FFCCI deducted therefrom P200,883.75 for retention andP36,524.07 for expanded withholding tax leaving amount of P1,771,429.45 as the approved net payment for the said period. FFCCI paid this amount on December 21, 2004.6 On October 29, 2004, HRCC submitted to FFCCI its second progress billing in the amount of P1,587,760.23 covering its completed works from September 18 to 25, 2004.7 FFCCI did not pay the amount stated in the second progress billing, claiming that it had already paid HRCC for the completed works for the period stated therein. On even date, HRCC submitted its third progress billing in the amount of P2,569,543.57 for its completed works from September 26 to October 25, 2004.8 FFCCI did not immediately pay the amount stated in the third progress billing, claiming that it still had to evaluate the works accomplished by HRCC.
a. Amount not yet from Downpayment to non-completion of (P24.1326%) 2,027,138.40 b. Due to Huey used for HSCI Project 51,110.40 IC Additional construction expenses
deducted due Project
Commercial
a. Increases in prices since Oct. 5,272,096.81 b. Cost of money of (a) 873,535.49 ID Installation of machinery a. Foreign exchange loss 11,565,048.37 b. Cost of money (a) 2,871,987.01 I[E] Raw Materials a. Foreign exchange loss 4,155,982.18 b. Cost of money (a) 821,242.72 c. Additional import levy of 5% 886,513.33 d. Cost of money (c) 170,284.44 e. Cost of money on marginal deposit on Letter of Credit 561,195.25 IF Cost of money on holding to CRC INTY 3,319,609.63 Total Actual Damages 35,295,927.32 2. Liquidated Damages 2,436,000.00 3. Attorney's Fees 500,000.00 P38,231,927.32 30 ============= We consider that in asking this Court to go over each individual claim submitted by it and each individual countering claim submitted by Steel Builders to the Arbitral Tribunal, petitioner Hi-Precision is asking this Court to pass upon claims which are either clearly and directly factual in nature or require previous determination of factual issues. This upon the one hand. Upon the other hand, the Court considers that petitioner Hi-Precision has failed to show any serious errors of law amounting to grave abuse of discretion resulting in lack of jurisdiction on the part of the Arbitral Tribunal, in either the methods employed or the results reached by the Arbitral Tribunal, in disposing of the detailed claims of the respective parties.

On November 25, 2004, HRCC submitted to FFCCI its fourth progress billing in the amount of P1,527,112.95 for the works it had completed from October 26 to November 25, 2004. Subsequently, FFCCI, after it had evaluated the completed works of HRCC from September 26 to November 25, 2004, approved the payment of the gross amount of P1,505,570.99 to HRCC. FFCCI deducted therefromP150,557.10 for retention and P27,374.02 for expanded withholding tax leaving a net payment of P1,327,639.87, which amount was paid to HRCC on March 11, 2005. 9 Meanwhile, HRCC sent FFCCI a letter10 dated December 13, 2004 demanding the payment of its progress billings in the total amount of P7,340,046.09, plus interests, within three days from receipt thereof. Subsequently, HRCC completely halted the construction of the subcontracted project after taking its Christmas break on December 18, 2004. On March 7, 2005, HRCC, pursuant to the arbitration clause in the Subcontract Agreement, filed with the Construction Industry Arbitration Commission (CIAC) a Complaint 11 against FFCCI praying for the payment of the following: (1) overdue obligation in the reduced amount of P4,096,656.53 as of December 15, 2004 plus legal interest; (2) P1,500,000.00 as attorneys fees; (3) P80,000.00 as acceptance fee and representation expenses; and (4) costs of litigation. In its Answer, FFCCI claimed that it no longer has any liability on the Subcontract Agreement as the three payments it made to HRCC, which amounted to P3,472,521.86, already represented the amount due to the latter in view of the works actually completed by HRCC as shown by the survey it conducted jointly with the DPWH. FFCCI further asserted that the delay in the payment processing was primarily attributable to HRCC inasmuch as it presented unverified work accomplishments contrary to the stipulation in the Subcontract Agreement regarding requests for payment. Likewise, FFCCI maintained that HRCC failed to comply with the condition stated under the Subcontract Agreement for the payment of the latters progress billings, i.e. joint measurement of the completed works, and, hence, it was justified in not paying the amount stated in HRCCs progress billings. On June 16, 2005, an Arbitral Tribunal was created composed of Engineer Ricardo B. San Juan, Joven B. Joaquin and Attorney Alfredo F. Tadiar, with the latter being appointed as the Chairman. In a Preliminary Conference held on July 5, 2005, the parties defined the issues to be resolved in the proceedings before the CIAC as follows: 1. What is the correct amount of [HRCCs] unpaid progress billing? 2. Did [HRCC] comply with the conditions set forth in subparagraph 4.3 of the Subcontract Agreement for the submission, evaluation/processing and release of payment of its progress billings? 3. Did [HRCC] stop work on the project? 3.1 If so, is the work stoppage justified? 3.2 If so, what was the percentage and value of [HRCCs] work accomplishment at the time it stopped work on the project? 4. Who between the parties should bear the cost of arbitration or in what proportion should it be shared by the parties?13 Likewise, during the said Preliminary Conference, HRCC further reduced the amount of overdue obligation it claimed from FFCCI to P2,768,916.66. During the course of the proceedings before the CIAC, HRCC further reduced the said amount to P2,635,397.77 the exact difference between the total amount of HRCCs progress billings (P6,107,919.63) and FFCCIs total payments in favor of the latter (P3,472,521.86). The CIAC Decision
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On September 6, 2005, after due proceedings, the CIAC rendered a Decision14 in favor of HRCC, the decretal portion of which reads: WHEREFORE, judgment is hereby rendered in favor of the Claimant HR CONSTRUCTION CORPORATION and AWARD made on its monetary claim against Respondent F.F. CRUZ & CO., INC., as follows: [P]2,239,452.63 101,161.57 [P]2,340,614.20 as the balance of its unpaid billings and as reimbursement of the arbitration costs. Total due the Claimant
Interest on the foregoing amount [P]2,239,452.63 shall be paid at the rate of 6% per annum from the date of this Decision. After finality of this Decision, interest at the rate of 12% per annum shall be paid thereon until full payment of the awarded amount shall have been made x x x. SO ORDERED.15 The CIAC held that the payment method adopted by FFCCI is actually what is known as the "back-to-back payment scheme" which was not agreed upon under the Subcontract Agreement. As such, the CIAC ruled that FFCCI could not impose upon HRCC its valuation of the works completed by the latter. The CIAC gave credence to HRCCs valuation of its completed works as stated in its progress billings. Thus: During the trial, [FFCCIs] Aganon admitted that [HRCCs] accomplishments are included in its own billings to the DPWH together with a substantial mark-up to cover overhead costs and profit. He further admitted that it is only when DPWH approves its (Respondents) billings covering [HRCCs] scope of work and pays for them, that [FFCCI] will in turn pay [HRCC] for its billings on the subcontracted works. On clarificatory questioning by the Tribunal, [FFCCI] admitted that there is no "back-to-back" provision in the sub-contract as basis for this sequential payment arrangement and, therefore, [FFCCIs] imposition thereof by withholding payment to [HRCC] until it is first paid by the project owner on the Main Contract, clearly violates said sub-contract. It [is] this unauthorized implementation of a back-toback payment scheme that is seen to be the reason for [FFCCIs] non-payment of the third progress billings. It is accordingly the holding of this Arbitral Tribunal that [FFCCI] is not justified in withholding payment of [HRCCs] third progress billing for this scheme that [HRCC] has not agreed to in the sub-contract agreement x x x. xxx The total retention money deducted by [FFCCI] from [HRCCs] three progress billings, amounts to [P]395,945.14 x x x. The retention money is part of [HRCCs] progress billings and must, therefore, be credited to this account. The two amounts (deductions and net payments) total [P]3,868,467.00 x x x. This represents the total gross payments that should be credited and deducted from the total gross billings to arrive at what has not been paid to the [HRCC]. This results in the amount of [P]2,239,452.63 ([P]6,107,919.63 - [P]3,868,467.00) as the correct balance of [HRCCs] unpaid billings. 16 Further, the CIAC ruled that FFCCI had already waived its right under the Subcontract Agreement to require a joint measurement of HRCCs completed works as a condition precedent to the paym ent of the latters progress billings. Hence: [FFCCI] admits that in all three instances where it paid [HRCC] for its progress billings, it never required compliance with the aforequoted contractual provision of a prior joint quantification. Such repeated omission may reasonably be construed as a waiver by [FFCCI] of its contractual right to require compliance of said condition and it is now too late in the day to so impose it. Article 6 of the Civil Code expressly provides that "rights may be waived unless the waiver is contrary to law, public order, public policy, morals or good customs". The tribunal cannot see any such violation in this case.

xxx [FFCCIs] omission to enforce the contractually required condition of payment, has led [HRCC] to believe it to be true that indeed [FFCCI] has waived the condition of joint quantification and, therefore, [FFCCI] may not be permitted to falsify such resulting position. 17 Likewise, the CIAC held that FFCCIs non-payment of the progress billings submitted by HRCC gave the latter the right to rescind the Subcontract Agreement and, accordingly, HRCCs work stoppage was justified. It further opined that, in effect, FFCCI had ratified the right of HRCC to stop the construction works as it did not file any counterclaim against HRCC for liquidated damages arising therefrom. FFCCI then filed a petition for review with CA assailing the foregoing disposition by the CIAC. The CA Decision On February 6, 2009, the CA rendered the herein assailed Decision18 denying the petition for review filed by FFCCI. The CA agreed with the CIAC that FFCCI had waived its right under the Subcontract Agreement to require a joint quantification of HRCCs completed works. The CA further held that the amount due to HRCC as claimed by FFCCI could not be given credence since the same was based on a survey of the completed works conducted without the participation of HRCC. Likewise, being the main contractor, it ruled that it was the responsibility of FFCCI to include HRCC in the joint measurement of the completed works. Furthermore, the CA held that HRCC was justified in stopping its construction works on the project as the failure of FFCCI to pay its progress billings gave the former the right to rescind the Subcontract Agreement. FFCCI sought a reconsideration19 of the said February 6, 2009 Decision but it was denied by the CA in its Resolution 20 dated April 13, 2009. Issues In the instant petition, FFCCI submits the following issues for this Courts resolution: [I.] x x x First, [d]oes the act of [FFCCI] in conducting a verification survey of [HRCCs] billings in the latters presence amount to a waiver of the right of [FFCCI] to verify and approve said billings? What, if any, is the legal significance of said act? [II.] x x x Second, [d]oes the payment of [FFCCI] to [HRCC] based on the results of the above mentioned verification survey result in the former being obliged to accept whatever accomplishment was reported by the latter? [III.] x x x Third, [d]oes the mere comparison of the payments made by [FFCCI] with the contested progress billings of [HRCC] amount to an adjudication of the controversy between the parties? [IV.] x x x Fourth, [d]oes the failure of [FFCCI] to interpose a counterclaim against [HRCC] for liquidated damages due to th e latters work stoppage, amount to a ratification of such work stoppage? [V.] x x x Fifth, [d]id the [CA] disregard or overlook significant and material facts which would affect the result of the litigation?21 In sum, the crucial issues for this Courts resolution are: first, what is the effect of FFCCIs non-compliance with the stipulation in the Subcontract Agreement requiring a joint quantification of the works completed by HRCC on the payment of the progress billings
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submitted by the latter; and second, whether there was a valid rescission of the Subcontract Agreement by HRCC. The Courts Ruling The petition is not meritorious. Procedural Issue: Finality and Conclusiveness of the CIACs Factual Findings Before we delve into the substantial issues raised by FFCCI, we shall first address the procedural issue raised by HRCC. According to HRCC, the instant petition merely assails the factual findings of the CIAC as affirmed by the CA and, accordingly, not proper subjects of an appeal under Rule 45 of the Rules of Court. It likewise pointed out that factual findings of the CIAC, when affirmed by the CA, are final and conclusive upon this Court. Generally, the arbitral award of CIAC is final and may not be appealed except on questions of law. Executive Order (E.O.) No. 100822 vests upon the CIAC original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines. Under Section 19 of E.O. No. 1008, the arbitral award of CIAC "shall be final and inappealable except on questions of law which shall be appealable to the Supreme Court."23 In Hi-Precision Steel Center, Inc. v. Lim Kim Steel Builders, Inc., 24 we explained raison d etre for the rule on finality of the CIACs arbitral award in this wise: Voluntary arbitration involves the reference of a dispute to an impartial body, the members of which are chosen by the parties themselves, which parties freely consent in advance to abide by the arbitral award issued after proceedings where both parties had the opportunity to be heard. The basic objective is to provide a speedy and inexpensive method of settling disputes by allowing the parties to avoid the formalities, delay, expense and aggravation which commonly accompany ordinary litigation, especially litigation which goes through the entire hierarchy of courts. Executive Order No. 1008 created an arbitration facility to which the construction industry in the Philippines can have recourse. The Executive Order was enacted to encourage the early and expeditious settlement of disputes in the construction industry, a public policy the implementation of which is necessary and important for the realization of national development goals. Aware of the objective of voluntary arbitration in the labor field, in the construction industry, and in any other area for that matter, the Court will not assist one or the other or even both parties in any effort to subvert or defeat that objective for their private purposes. The Court will not review the factual findings of an arbitral tribunal upon the artful allegation that such body had "misapprehended the facts" and will not pass upon issues which are, at bottom, issues of fact, no matter how cleverly disguised they might be as "legal questions." The parties here had recourse to arbitration and chose the arbitrators themselves; they must have had confidence in such arbitrators. x x x25 (Citation omitted) Thus, in cases assailing the arbitral award rendered by the CIAC, this Court may only pass upon questions of law. Factual findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal. This rule, however, admits of certain exceptions. In Spouses David v. Construction Industry and Arbitration Commission,26 we laid down the instances when this Court may pass upon the factual findings of the CIAC, thus: We reiterate the rule that factual findings of construction arbitrators are final and conclusive and not reviewable by this Court on appeal, except when the petitioner proves affirmatively that: (1) the award was procured by corruption, fraud or other undue means; (2) there was evident partiality or corruption of the arbitrators or of any of them; (3) the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; (4) one or more of the arbitrators were disqualified to act as such under section nine of Republic Act No. 876 and willfully refrained from disclosing such disqualifications or of any other misbehavior by which the rights of any party have been materially prejudiced; or (5) the arbitrators

exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted to them was not made. x x x27 (Citation omitted) Issues on the proper interpretation of the terms of the Subcontract Agreement involve questions of law. A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact.28 On the surface, the instant petition appears to merely raise factual questions as it mainly puts in issue the appropriate amount that is due to HRCC. However, a more thorough analysis of the issues raised by FFCCI would show that it actually asserts questions of law. FFCCI primarily seeks from this Court a determination of whether amount claimed by HRCC in its progress billing may be enforced against it in the absence of a joint measurement of the formers completed works. Otherwise stated, the main question advanced by FFCCI is this: in the absence of the joint measurement agreed upon in the Subcontract Agreement, how will the completed works of HRCC be verified and the amount due thereon be computed? The determination of the foregoing question entails an interpretation of the terms of the Subcontract Agreement vis--vis the respective rights of the parties herein. On this point, it should be stressed that where an interpretation of the true agreement between the parties is involved in an appeal, the appeal is in effect an inquiry of the law between the parties, its interpretation necessarily involves a question of law.29 Moreover, we are not called upon to examine the probative value of the evidence presented before the CIAC. Rather, what is actually sought from this Court is an interpretation of the terms of the Subcontract Agreement as it relates to the dispute between the parties. First Substantive Issue: Effect of Non-compliance with the Joint Quantification Requirement on the Progress Billings of HRCC Basically, the instant issue calls for a determination as to which of the parties respective valuation of accomplished works should be given credence. FFCCI claims that its valuation should be upheld since the same was the result of a measurement of the completed works conducted by it and the DPWH. On the other hand, HRCC maintains that its valuation should be upheld on account of FFCCIs failure to observe the joint measurement requirement in ascertaining the extent of its completed works. The terms of the Subcontract Agreement should prevail. In resolving the dispute as to the proper valuation of the works accomplished by HRCC, the primordial consideration should be the terms of the Subcontract Agreement. It is basic that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.30 In Abad v. Goldloop Properties, Inc.,31 we stressed that: A courts purpose in examining a contract is t o interpret the intent of the contracting parties, as objectively manifested by them. The process of interpreting a contract requires the court to make a preliminary inquiry as to whether the contract before it is ambiguous. A contract provision is ambiguous if it is susceptible of two reasonable alternative interpretations. Where the written terms of the contract are not ambiguous and can only be read one way, the court will interpret the contract as a matter of law. If the contract is determined to be ambiguous, then the interpretation of the contract is left to the court, to resolve the ambiguity in the light of the intrinsic evidence.32(Emphasis supplied and citation omitted) Article 4 of the Subcontract Agreement, in part, contained the following stipulations: ARTICLE SUBCONTRACT PRICE
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4
4.1 The total SUBCONTRACT Price shall be THIRTY ONE MILLION TWO HUNDRED NINETY THREE THOUSAND FIVE HUNDRED THIRTY TWO PESOS & 72/100 ONLY ([P]31,293,532.72) inclusive of Value Added Tax x x x. xxx 4.3 Terms of Payment FFCCI shall pay [HRCC] within thirty (30) days upon receipt of the [HRCCs] Monthly Progress Billings subject to deductions due to ten percent (10%) retention, and any other sums that may be due and recoverable by FFCCI from [HRCC] under this SUBCONTRACT. In all cases, however, two percent (2%) expanded withholding tax on the [HRCCs] income will be deducted from the monthly payments. Requests for the payment by the [HRCC] shall include progress accomplishment of completed works (unit of work accomplished x unit cost) as approved by [FFCCI]. Cut-off date of monthly billings shall be every 25th of the month and joint measurement shall be conducted with the DPWHs representative, Consultants, FFCCI and [HRCC] to arrive at a common/agreed quantity.33 (Emphasis supplied) Pursuant to the terms of payment agreed upon by the parties, FFCCI obliged itself to pay the monthly progress billings of HRCC within 30 days from receipt of the same. Additionally, the monthly progress billings of HRCC should indicate the extent of the works completed by it, the same being essential to the valuation of the amount that FFCCI would pay to HRCC. The parties further agreed that the extent of HRCCs completed works that would be indicated in the monthly progress billings should be determined through a joint measurement conducted by FFCCI and HRCC together with the representative of DPWH and the consultants. It is the responsibility of FFCCI to call for the joint measurement of HRCCs completed works. It bears stressing that the joint measurement contemplated under the Subcontract Agreement should be conducted by the parties herein together with the representative of the DPWH and the consultants. Indubitably, FFCCI, being the main contractor of DPWH, has the responsibility to request the representative of DPWH to conduct the said joint measurement. On this score, the testimony of Engineer Antonio M. Aganon, Jr., project manager of FFCCI, during the reception of evidence before the CIAC is telling, thus: MR. J. B. JOAQUIN: Engr. Aganon, earlier there was a stipulation that in all the four billings, there never was a joint quantification. PROF. A. F. TADIAR: He admitted that earlier. Pinabasa ko sa kanya. ENGR. R. B. SAN JUAN: The joint quantification was done only between them and DPWH. xxxx ENGR. AGANON: Puwede ko po bang i-explain sandali lang po regarding lang po doon sa quantification na iyon? Basically po as main contractor of DPWH, we are the ones who [are] requesting for joint survey quantification with the owner, DPWH. Ngayon po, although wala sa papel na nagwitness and [HRCC] still the same po, nandoon din po sila during that time, kaya lang ho . . . MR. J. B. JOAQUIN:

Hindi pumirma? ENGR. AGANON: Hindi sila puwede pumirma kasi ho kami po ang contractor ng DPWH hindi sila.34 (Emphasis supplied) FFCCI had waived its right to demand for a joint measurement of HRCCs completed works under the Subcontract Agreement. The CIAC held that FFCCI, on account of its failure to demand the joint measurement of HRCCs completed works, had effectively waived its right to ask for the conduct of the same as a condition sine qua non to HRCCs submission of its monthly progress billings. We agree. In People of the Philippines v. Donato, doctrine of waiver in this wise:
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Verily, the joint measurement that [FFCCI] claims it conducted without the participation of [HRCC], to which [FFCCI] anchors its claim of full payment of its obligations to [HRCC], cannot be applied, nor imposed, on [HRCC]. In other words, [HRCC] cannot be made to accept a quantification of its works when the said quantification was made without its participation. As a consequence, [FFCCIs] claim of full payment cannot be upheld as this is a result of a quantification that was made contrary to the express provisions of the Subcontract Agreement. The Court is aware that by ruling so, [FFCCI] would seem to be placed at a disadvantage because it would result in [FFCCI] having to pay exactly what [HRCC] was billing the former. If, on the other hand, the Court were to rule otherwise[,] then [HRCC] would be the one at a disadvantage because it would be made to accept payment that is less than what it was billing. Circumstances considered, however, the Court deems it proper to rule in favor of [HRCC] because of the explicit provision of the Subcontract Agreement that requires the participation of the latter in the joint measurement. If the Court were to rule otherwise, then the Court would, in effect, be disregarding the explicit agreement of the parties in their contract.43 Essentially, the question that should be resolved is this: In view of FFCCIs waiver of its right to demand a joint measurement of HRCCs completed works, is FFCCI now barred from disputing the claim of HRCC in its monthly progress billings? We rule in the affirmative. As intimated earlier, the joint measurement requirement is a mechanism essentially granting FFCCI the opportunity to verify and, if necessary, contest HRCCs valuation of its completed works prior to the submission of the latters monthly progress billings. In the final analysis, the joint measurement requirement seeks to limit the dispute between the parties with regard to the valuation of HRCCs completed works. Accordingly, any issue which FFCCI may have with regard to HRCCs valuation of the works it had completed should be raised and resolved during the said joint measurement instead of raising the same after HRCC had submitted its monthly progress billings. Thus, having relinquished its right to ask for a joint measurement of HRCCs completed works, FFCCI had necessarily waived its right to dispute HRCCs valuation of the works it had accomplished. Second Substantive Issue: Validity of HRCCs Rescission of the Subcontract Agreement Both the CA and the CIAC held that the work stoppage of HRCC was justified as the same is but an exercise of its right to rescind the Subcontract Agreement in view of FFCCIs failure to pay the formers monthly progress billings. Further, the CIAC stated that FFCCI could no longer assail the work stoppage of HRCC as it failed to file any counterclaim against HRCC pursuant to the terms of the Subcontract Agreement. For its part, FFCCI asserted that the work stoppage of HRCC was not justified and, in any case, its failure to raise a counterclaim against HRCC for liquidated damages before the CIAC does not amount to a ratification of the latters work s toppage. The determination of the validity of HRCCs work stoppage depends on a determination of the following: first, whether HRCC has the right to extrajudicially rescind the Subcontract Agreement; and second, whether FFCCI is already barred from disputing the work stoppage of HRCC. HRCC had waived its right to rescind the Subcontract Agreement. The right of rescission is statutorily recognized in reciprocal obligations. Article 1191 of the Civil Code pertinently reads: Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either
this Court explained the
Waiver is defined as "a voluntary and intentional relinquishment or abandonment of a known existing legal right, advantage, benefit, claim or privilege, which except for such waiver the party would have enjoyed; the voluntary abandonment or surrender, by a capable person, of a right known by him to exist, with the intent that such right shall be surrendered and such person forever deprived of its benefit; or such conduct as warrants an inference of the relinquishment of such right; or the intentional doing of an act inconsistent with claiming it." As to what rights and privileges may be waived, the authority is settled: x x x the doctrine of waiver extends to rights and privileges of any character, and, since the word waiver covers every conceivable right, it is the general rule that a person may waive any matter which affects his property, and any alienable right or privilege of which he is the owner or which belongs to him or to which he is legally entitled, whether secured by contract, conferred with statute, or guaranteed by constitution, provided such rights and privileges rest in the individual, are intended for his sole benefit, do not infringe on the rights of others, and further provided the waiver of the right or privilege is not forbidden by law, and does not contravene public policy; and the principle is recognized that everyone has a right to waive, and agree to waive, the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, if it can be dispensed with and relinquished without infringing on any public right, and without detriment to the community at large. x x x36(Emphasis supplied and citations omitted) Here, it is undisputed that the joint measurement of HRCCs completed works contemplated by the parties in the Subcontract Agreement never materialized. Indeed, HRCC, on separate occasions, submitted its monthly progress billings indicating the extent of the works it had completed sans prior joint measurement. Thus: (table omitted) FFCCI did not contest the said progress billings submitted by HRCC despite the lack of a joint measurement of the latters completed works as required under the Subcontract Agreement. Instead, FFCCI proceeded to conduct its own verification of the works actually completed by HRCC and, on separate dates, made the following payments to HRCC: (table omitted) FFCCIs voluntary payment in favor of HRCC, albeit in amounts substantially different from those claimed by the latter, is a glaring indication that it had effectively waived its right to demand for the joint measurement of the completed works. FFCCIs failure to demand a joint measurement of HRCCs completed works reasonably justified the inference that it had already relinquished its right to do so. Indeed, not once did FFCCI insist on the conduct of a joint measurement to verify the extent of HRCCs completed works despite its receipt of the four monthly progress billings submitted by the latter. FFCCI is already barred from contesting HRCCs valuation of the completed works having waived its right to demand the joint measurement requirement. In view of FFCCIs waiver of the joint measurement requirement, the CA, essentially echoing the CIACs disposition, found that FFCCI is obliged to pay the amount claimed by HRCC in its monthly progress billings. The CA reasoned thus:

case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period. This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law. The rescission referred to in this article, more appropriately referred to as resolution is on the breach of faith by the defendant which is violative of the reciprocity between the parties. 44 The right to rescind, however, may be waived, expressly or impliedly. 45 While the right to rescind reciprocal obligations is implied, that is, that such right need not be expressly provided in the contract, nevertheless the contracting parties may waive the same.46 Contrary to the respective dispositions of the CIAC and the CA, we find that HRCC had no right to rescind the Subcontract Agreement in the guise of a work stoppage, the latter having waived such right. Apropos is Article 11.2 of the Subcontract Agreement, which reads: 11.2 Effects of Disputes and Continuing Obligations Notwithstanding any dispute, controversy, differences or arbitration proceedings relating directly or indirectly to this SUBCONTRACT Agreement and without prejudice to the eventual outcome thereof, [HRCC] shall at all times proceed with the prompt performance of the Works in accordance with the directives of FFCCI and this SUBCONTRACT Agreement.47 (Emphasis supplied) Hence, in spite of the existence of dispute or controversy between the parties during the course of the Subcontract Agreement, HRCC had agreed to continue the performance of its obligations pursuant to the Subcontract Agreement. In view of the provision of the Subcontract Agreement quoted above, HRCC is deemed to have effectively waived its right to effect extrajudicial rescission of its contract with FFCCI.1wphi1 Accordingly, HRCC, in the guise of rescinding the Subcontract Agreement, was not justified in implementing a work stoppage. The costs of arbitration should be shared by the parties equally. Section 1, Rule 142 of the Rules of Court provides: Section 1. Costs ordinarily follow results of suit. Unless otherwise provided in these rules, costs shall be allowed to the prevailing party as a matter of course, but the court shall have power, for special reasons, to adjudge that either party shall pay the costs of an action, or that the same be divided, as may be equitable. No costs shall be allowed against the Republic of the Philippines unless otherwise provided by law. (Emphasis supplied) Although, generally, costs are adjudged against the losing party, courts nevertheless have discretion, for special reasons, to decree otherwise. Here, considering that the work stoppage of HRCC is not justified, it is only fitting that both parties should share in the burden of the cost of arbitration equally. HRCC had a valid reason to institute the complaint against FFCCI in view of the latters failure to pay the full amount of its monthly progress billings. However, we disagree with the CIAC and the CA that only FFCCI should shoulder the arbitration costs. The arbitration costs should be shared equally by FFCCI and HRCC in view of the latters unjustified work stoppage. WHEREFORE, in consideration of the foregoing disquisitions, the Decision dated February 6, 2009 and Resolution dated April 13, 2009 of the Court of Appeals in CA-G.R. SP No. 91860 are hereby AFFIRMED withMODIFICATION that the arbitration costs shall be shared equally by the parties herein. SO ORDERED. SECOND DIVISION G.R. No. 154885 March 24, 2008 DIESEL CONSTRUCTION CO., vs. UPSI PROPERTY HOLDINGS, INC., Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 154937
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INC., Petitioner,
UPSI PROPERTY HOLDINGS, INC., Petitioner, vs. DIESEL CONSTRUCTION CO., INC. and FGU INSURANCE CORP., Respondents. DECISION VELASCO, JR., J.: The Case Before the Court are these petitions for review under Rule 45 separately interposed by Diesel Construction Co., Inc. (Diesel) and UPSI Property Holdings, Inc. (UPSI) to set aside the Decision 1 dated April 16, 2002 as partly modified in a Resolution 2 of August 21, 2002, both rendered by the Court of Appeals (CA) in CA-G.R. SP No. 68340, entitled UPSI Property Holdings, Inc. v. Diesel Construction Co., Inc., and FGU Insurance Corporation. The CA Decision modified the Decision dated December 14, 2001 of the Arbitral Tribunal of the Construction Industry Arbitration Commission (CIAC) in CIAC Case No. 18-2001, while the CA Resolution granted in part the motion of Diesel for reconsideration and denied a similar motion of UPSI. The Facts The facts, as found in the CA Decision under review, are as follows: On August 26, 1995, Diesel, as Contractor, and UPSI, as Owner, entered into a Construction Agreement3(Agreement) for the interior architectural construction works for the 14th to 16th floors of the UPSI Building 3 Meditel/Condotel Project (Project) located on Gen. Luna St., Ermita, Manila. Under the Agreement, as amended, Diesel, for PhP 12,739,099, agreed to undertake the Project, payable by progress billing.4 As stipulated, Diesel posted, through FGU Insurance Corp. (FGU), a performance bond in favor of UPSI. 5 Inter alia, the Agreement contained provisions on contract works and Project completion, extensions of contract period, change/extra works orders, delays, and damages for negative slippage. Tasked to oversee Diesels work progress were: Grace S. Reyes Designs, Inc. for interior design and architecture, D.L. Varias and Associates as Construction Manager, and Ryder Hunt Loacor, Inc. as Quantity Surveyor.6 Under the Agreement, the Project prosecution proper was to start on August 2, 1999, to run for a period of 90 days or until November 8, 1999. The parties later agreed to move the commencement date to August 21, 1999, a development necessitating the corresponding movement of the completion date to November 20, 1999. Of particular relevance to this case is the section obliging the contractor, in case of unjustifiable delay, to pay the owner liquidated damages in the amount equivalent to one-fifth (1/5) of one (1) percent of the total Project cost for each calendar day of delay. 7 In the course of the Project implementation, change orders were effected and extensions sought. At one time or another, Diesel requested for extension owing to the following causes or delaying factors: (1) manual hauling of materials from the 14th to 16th floors; (2) delayed supply of marble; (3) various change orders; and (4) delay in the installation of shower assembly. 8 UPSI, it would appear, disapproved the desired extensions on the basis of the foregoing causes, thus putting Diesel in a state of default for a given contract work. And for every default situation, UPSI assessed Diesel for liquidated damages in the form of deductions from Diesels progress payments, as stipulated in the Agreement.9 Apparently irked by and excepting from the actions taken by UPSI, Diesel, thru its Project manager, sent, on March 16, 2000, a letter notice to UPSI stating that the Project has been completed as of that date. UPSI, however, disregarded the notice, and refused to accept

delivery of the contracted premises, claiming that Diesel had abandoned the Project unfinished. Apart therefrom, UPSI withheld Diesels 10% "retention money" and refused to pay the unpaid balance of the contract price.10 It is upon the foregoing factual backdrop that Diesel filed a complaint before the CIAC, praying that UPSI be compelled to pay the unpaid balance of the contract price, plus damages and attorneys fees. In an answer with counterclaim, UPSI denied liability, accused Diesel of abandoning a project yet to be finished, and prayed for repayment of expenses it allegedly incurred for completing the Project and for a declaration that the deductions it made for liquidated damages were proper. UPSI also sought payment of attorneys fees. 11 After due hearing following a protracted legal sparring, the Arbitral Tribunal of the CIAC, on December 14, 2001, in CIAC Case No. 182001, rendered judgment for Diesel, albeit for an amount lesser than its original demand. To be precise, the CIAC ordered UPSI to pay Diesel the total amount of PhP 4,027,861.60, broken down as follows: PhP 3,661,692.60, representing the unpaid balance of the contract price; and PhP 366,169 as attorneys fees. In the same decision, the CIAC dismissed UPSIs counterclaim12 and assessed it for arbitration costs in the amount of PhP 298,406.03.13 In time, UPSI went to the CA on a petition for review, docketed as CA-G.R. SP No. 68340. Eventually, the appellate court rendered its assailed Decision dated April 16, 2002, modifying that of the CIAC, thus: WHEREFORE, premises considered, the petition is GRANTED and the questioned Decision is MODIFIED in this wise: a. The claim of [UPSI] for liquidated damages is GRANTED to the extent of PESOS: ONE MILLION THREE HUNDRED NINE THOUSAND AND FIVE HUNDRED (P1,309,500.00) representing forty-five (45) days of delay at P29,100 per diem; b. We hold that [Diesel] substantially complied with the Construction Contract and is therefore entitled to one hundred percent (100%) payment of the contract price. Therefore, the claim of [Diesel] for an unpaid balance of PESOS: TWO MILLION FOUR HUNDRED FORTY-ONE THOUSAND FOUR HUNDRED EIGHTY TWO and SIXTY FOUR centavos (P2,441,482.64), which amount already includes the retention on the additional works or Change Orders, is GRANTED, minus liquidated damages. In sum, [UPSI] is held liable to [Diesel] in the amount of PESOS: ONE MILLION ONE HUNDRED THIRTY ONE THOUSAND NINE HUNDRED EIGHTY TWO and sixty four centavos (P1,131,982.64), with legal interest until the same is fully paid; c. The parties are liable equally for the payment of arbitration costs; d. All claims for attorneys fees are DISMISSED; and e. Since there is still due and owing from UPSI an amount of money in favor of Diesel, respondent FGU is DISCHARGED as surety for Diesel. Costs de officio. The Courts Ruling SO ORDERED.14 We resolve to modify the assailed CA Decision. Therefrom, Diesel and UPSI each sought reconsideration. On August 21, 2002, the CA issued its equally assailed Resolution denying reconsideration to UPSI, but partially granting Diesels motion, disposing as follows: WHEREFORE, the Motion for Reconsideration of [Diesel] is partially GRANTED. The liquidated damages are hereby reduced to P1,146,519.00 (45 days multiplied by P25,478.20 per diem). However, in accordance with the main opinion, We hold that [UPSI] is liable to [Diesel] for the total amount of P3,661,692.64, representing the unpaid balance of the contract price plus the ten-percent retention, from which the liquidated damages, must, of course, be deducted. Thus, in sum, as amended, We hold that petitioner is still liable to respondent Diesel in the amount of P2,515,173.64, with legal interest until the same is fully paid. First Issue The main opinion, in all other respects, STANDS. SO ORDERED.15 Hence, these separate petitions are before us.
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Per its Resolution of March 17, 2003, the Court ordered the consolidation of the petitions. The Issues In its petition in G.R. No. 154885, Diesel raises the following issues: 1. Whether or not the [CA] has the discretion, indeed the jurisdiction, to pass upon the qualifications of the individual members of the CIAC Arbitral Tribunal and declare them to be non-technocrats and not exceptionally well-versed in the construction industry warranting reversal and nullification of the tribunals findings. 2. Whether or not the [CA] may intervene to annul the findings of a highly specialized agency, like the CIAC, on the ground that essentially the question to be resolved goes to the very heart of the substantiality of evidence, when in so doing, [CA] merely substituted its own conjectural opinion to that of the CIAC Arbitral Tribunals well-supported findings and award. 3. Whether or not the [CA] erred in its findings, which are contrary to the findings of the CIAC Arbitral Tribunal. 16 On the other hand, in G.R. No. 154937, UPSI presents the following issues: I Whether or not portion of the Decision dated April 16, 2002 of the Honorable [CA] denying additional expenses to complete the unfinished and abandoned work of [Diesel], is null and void for being contrary to clean and convincing evidence on record. II Whether or not portion of the Decision x x x of the [CA] finding delay of only forty five (45) days is null and void for being not in accord with contractual stipulations upon which the controversy arise. III Whether or not the resolution of the Honorable Court of Appeals denying the herein petitioners motion for reconsideration and partially granting the respondents motion for reconsideration is likewise null and void as it does not serve its purpose for being more on expounding than rectifying errors.17 The issues shall be discussed in seriatim.
Diesel maintains that the CA erred in its declaration that it may review the CIACs decision considering the doctrine on the binding effect of conclusions of fact of highly specialized agencies, such as the CIAC, when supported by substantial evidence. The above contention is erroneous and, as couched, misleading. As is noted, the CA, in its assailed resolution, dismissed as untenable Diesels position that the factual findings of the CIAC are binding on and concludes the appellate court. The CA went to clarify, however, that the general rule is that factual conclusions of highly specialized bodies are given great weight and even finality when supported by

substantial evidence. Given this perspective, the CA was correct in holding that it may validly review and even overturn such conclusion of facts when the matter of its being adequately supported by substantial evidence duly adduced on record comes to the fore and is raised as an issue. Well-established jurisprudence has it that "[t]he consequent policy and practice underlying our Administrative Law is that courts of justice should respect the findings of fact of said administrative agencies, unless there is absolutely no evidence in support thereof or such evidence is clearly, manifestly and patently insubstantial." 18 There can be no serious dispute about the correctness of the CAs above posture. However, what the appellate court stated later to belabor its point strikes the Court as specious and uncalled for. Wrote the CA: This dictum finds greater application in the case of the CIAC because x x x as pointed out by petitioner in its Comment, the doctrine of primary jurisdiction relied upon by [Diesel] is diluted by the indubitable fact that the CIAC panel x x x is not at all composed of technocrats, or persons exceptionally well-versed in the construction industry. For instance, its chair x x x is a statistician; another member, x x x a former magistrate, is a member of the Bar. Doubtless, these two are preeminent in their fields, and their competence and proficiency in their chosen professions are unimpeachable. However, when it comes to determining findings of fact with respect to the matter before Us, the said panel which they partly comprise cannot claim to have any special advantage over the members of this Court. 19 The question of whether or not the findings of fact of the CIAC are supported by substantial evidence has no causal connection to the personal qualifications of the members of the arbitration panel. Surely, a persons undergraduate or postgraduate deg rees, as the case may be, can hardly be invoked as the sole, fool proof basis to determine that persons qualification to hold a certain position. Ones work experiences and attendance in relevant seminars and trainings would perhaps be the more important factors in gauging a persons fitness to a certain undertaking. Correlatively, Diesel, obviously having in mind the disputable presumption of regularity, correctly argues that highly specialized agencies are presumed to have the necessary technical expertise in their line of authority. In other words, the members of the Arbitral Tribunal of the CIAC have in their favor the presumption of possessing the necessary qualifications and competence exacted by law. A party in whose favor the legal presumption exists may rely on and invoke such legal presumption to establish a fact in issue. One need not introduce evidence to prove that the fact for a presumption is prima facie proof of the fact presumed.20 To set the records straight, however, the CA did not cast aspersion on the competence let alone the bona fides of the members of the Arbitral Tribunal to arbitrate. In context, what the appellate court said in reaction to Diesels negative commentary about the CAs expertise on construction matters is that the said members do not really enjoy a special advantage over the members of the CA in terms of fleshing out the facts from the evidence on record. In any event, the fact remains that the CA stands justified in reviewing the CIAC decision. Second and Third Issues The next two issues, being interrelated, shall be discussed jointly. Diesel submits that the CA, in reaching its decision, substituted its own conjectural opinion to that of the CIACs well-grounded findings and award. Even as Diesels submission has little to commend itself, we deem it prudent to address its concern by reviewing the incongruent determinations of the CIAC and CA and the factual premises holding such determinations together. As it were, the CA reduced the award for unpaid balance of the contract cost from PhP 3,661,692.60, as earlier fixed by the CIAC, to PhP 2,441,482.64, although it would consider the reduction and revert to the original CIAC figure. Unlike the CIAC which found the award of liquidated damages to be without basis, the CA was of a different disposition and awarded UPSI PhP 1,309,500, only to reduce the same to PhP 1,146,519 in its assailed resolution. Also, the CA struck out the CIAC award of PhP 366,169 to Diesel for attorneys
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fees. Additionally, the CIACs ruling making UPSI alone liable for the costs of arbitration was modified by the CA, which directed UPSI and Diesel to equally share the burden. The CIAC found Diesel not to have incurred delay, thus negating UPSIs entitlement to liquidated damages. The CA, on the other hand, found Diesel to have been in delay for 45 days. In determining whether or not Diesel was in delay, the CIAC and CA first turned on the question of Diesel s claimed entitlement to have the Project period extended, an excusable delay being chargeable against the threshold 90-day completion period. Both were one in saying that occurrence of certain events gave Diesel the right to an extension, but differed on the matter of length of the extension, and on the nature of the delay, that is, whether the delay is excusable or not. The CA deemed the delay, and the resulting extension of 14 days, arising from the manual hauling of materials, as undeserved. But the CIAC saw it otherwise for the reason that Frederick W. Crespillo, the witness UPSI presented to refute the allegation of Diesels entitlement to time extension for the manual hauling of materials, was incompetent to testify on the issue. As CIAC observed, Crespillo lacked personal knowledge of the real situation at the worksite. The CIACs reasoning, however, is flawed, assuming that the onus rested on UPSI, instead of on Diesel, to prove that the delay in the execution of the Project was excusable. Diesel explained that there was no place for its own hoisting machine at the Project site as the assigned location was being used by the General Contractor, while the alternative location was not feasible due to power constraint. Moreover, Diesel could not use the site elevator of the General Contractor as its personnel were only permitted to use the same for one hour every day at PhP 600 per hour. The provisions in the Agreement on excusable delays read: 2.3 Excusable delays: The Contractor shall inform the owner in a timely manner, of any delay caused by the following: 2.3.a Acts of God, such as storm, floods or earthquakes. 2.3.b Civil disturbance, insurrection. such as riots, revolutions,
2.3.c Any government acts, decrees, general orders or regulations limiting the performance of the work. 2.3.d Wars (declared or not). 2.3.e Any delays initiated by the Owner or his personnel which are clearly outside the control of the Contractor. 2.3.1 Delays caused by the foregoing shall be excusable. A new schedule or adjustments in contract time shall be negotiated with the Owner. As time is of the essence of this agreement, all other delays shall not be excusable. 21 As may be noted, a common thread runs among the events listed above, that is, the delaying event is unforeseeable and/or its occurrence is beyond the control of Diesel as contractor. Here, the lack of a location to establish Diesels own hoisting machine can hardly be tagged as a foreseeable event. As the CA aptly observed: [U]nder the terms of the contract, it is Diesel that would formulate the schedule to be followed in the completion of the works; therefore, it was encumbent upon Diesel to take into account all factors that would come into play in the course of the project. From the records it appears that the General Contractor x x x had been in the premises ahead of Diesel; hence it would have been a simple matter for Diesel to have conferred with the formers officer if the use of its equipment would be viable. Likewise, it would not have been too much trouble for Diesel to have made a prior request from UPSI for the use of its freight elevator in the face of the denial thereof, it could have made the necessary remedial measures x x x. In other words, those delays were foreseeable on the part of Diesel, with the application of even ordinary diligence. But Diesel did all of those when construction was about to commence. Therefore, We hold that the delays occasioned by Diesels inability to install its hoisting machine x x x [were] attributable solely to Diesel, and thus the resultant delay cannot be charged against the ninety-day period for the termination of the construction.22

There can be no quibbling that the delay caused by the manual hauling of materials is not excusable and, hence, cannot validly be set up as ground for an extension. Thus, the CA excluded the delay caused thereby and only allowed Diesel a total extension period of 85 days. Such extension, according to that court, effectively translated to a delay of 45 days in the completion of the project. The CA, in its assailed decision, explained why: 7. All told, We find, and so hold, that [Diesel] has incurred in delay. x x x However, under the circumstances wherein UPSI was responsible for some of the delay, it would be most unfair to charge Diesel with two hundred and forty (240) days of delay, so much so that it would still owe UPSI, even after liquidated damages have eaten up the retention and unpaid balance, the amount of [P4,340,000.00]. Thus, based on Our own calculations, We deem it more in accord with the spirit of the contract, as amended, x x x to assess Diesel with an unjustifiable delay of forty-five (45) days only; hence, at the rate of 1/5 of one percent as stated in the contract, [or at P1,309,500.00], which should be deducted from the total unpaid balance of [P2,441,482.64], which amount already includes the retention on the additional works or Change Orders.23 The CA, in its questioned resolution, expounded on how it arrived at the figure of 45-day delay in this wise: 7. x x x We likewise cannot give Our assent to the asseveration of [Diesel] that Our calculations as to the number of days of delay have no basis. For indeed, the same was arrived at after taking a holistic view of the entire circumstances attendant to the instant case. x x x But prescinding from the above, the basis for Our ruling should not be hard to discern. To disabuse the mind of [Diesel] that the forty-five day delay was plucked from out of the blue, allow Us to let the records speak. The records will show that while the original target date for the completion x x x was 19 November 1999 x x x, there is a total of eighty-five (85) days of extension which are justifiable and sanctioned by [UPSI], to wit: thirty (30) days as authorized on 27 January 2000 by UPSIs Construction Manager x x x; thirty (30) days as again consented to by the same Construction Manager on 24 February 2000 x x x; and twenty-five (25) days on 16 March 2000 by Rider Hunt and Liacom x x x. The rest of the days claimed by Diesel were, of course, found by Us to be unjustified in the main opinion. Hence, the project should have been finished by February 12, 2000. However, by 22 March 2000, as certified to by Grace S. Reyes Designs, Inc. the project was only 97.56% finished, meaning while it was substantially finished, it was not wholly finished. By 25 March 2000, the same consultant conditionally accepted some floors but were still punch listed, so that from 12 February 2000 to 25 March 2000 was a period of forty-one (41) days. Allowing four (4) more days for the punch listed items to be accomplished, and for the "general cleaning" mentioned by Grace S. Reyes Designs, Inc., to be done, which to Us is a reasonable length of time, equals forty-five (45) days. This is why We find the [conclusion] made by the CIAC, x x x that there was no delay whatsoever in the work done by [Diesel], too patently absurd for Us to offer Our unconditional assent. 24 Aside from the fact that the CA seemingly assumed contradictory positions in the span of two paragraphs, its holding immediately adverted to above is patently erroneous. The CA completely failed to factor in the change orders of UPSI to Diesel the directives effectively extending the Project completion time at the behest of UPSI. Section V of the Agreement on the subject Change Orders reads: xxxx V. CHANGES IN SCOPE OF WORK AND EXTRA WORK Any changes or extra work in the SCOPE OF WORK recommended by the INTERIOR DESIGNER/ARCHITECT or directed and approved by the OWNER shall be presented to the CONTRACTOR. Within the shortest time possible, the CONTRACTOR x x x shall also inform the OWNER if such changes shall require a new schedule and/or revised completion date. The Parties shall then negotiate mutually agreeable terms x x x. The CONTRACTOR shall not perform any change order or extra work until the covering terms are agreed upon [in writing and signed by the parties].25 Pursuant thereto, UPSI issued Change Order (CO) Nos. 1 to 4 on February 3, 2, 8, and 9, 2000 respectively. Thereafter, Diesel submitted a Schedule of Completion of Additional Works 26 under
21
which Diesel committed to undertake CO No. 1 for 30 days from February 10, 2000; CO No. 2 for 21 days from January 6, 2000; CO No. 3 for 15 days, subject to UPSIs acceptance of Diesels proposal; and CO No. 4 for 10 days after the receipt of the items from UPSI. The CIAC found that the COs were actually implemented on the following dates: CO No. 1 February 9 to March 3, 2000 CO No. 3 February 24 to March 10, 2000 CO No. 4 March 16 to April 7, 200027 Hence, as correctly held by the CIAC, UPSI, no less, effectively moved the completion date, through the various COs, to April 7, 2000. Moreover, as evidenced by UPSIs Progress Report No. 19 for the period ending March 22, 2000, Diesels scope of work, as of that date, was already 97.56% complete.28 Such level of work accomplishment would, by any rational norm, be considered as substantial to warrant full payment of the contract amount, less actual damages suffered by UPSI. Article 1234 of the Civil Code says as much, "If the obligation had been substantially performed in good faith, the obligor may recover as though there had been a strict and complete fulfillment, less damages suffered by the obligee." The fact that the laborers of Diesel were still at the work site as of March 22, 2000 is a reflection of its honest intention to keep its part of the bargain and complete the Project. Thus, when Diesel attempted to turn over the premises to UPSI, claiming it had completed the Project on March 15, 2000, Diesel could no longer be considered to be in delay. Likewise, the CIAC cited the Uniform General Conditions of Contract for Private Construction (CIAP Document 102), wherein it is stated that no liquidated damages for delay beyond the completion time shall accrue after the date of substantial completion of the work.29 In all, Diesel cannot be considered as in delay and, hence, is not amenable under the Agreement for liquidated damages. As to the issue of attorneys fees, Diesel insists that bad faith tainted UPSIs act of imposing liquidated damages on account of its (Diesels) alleged delay. And, this prompted Diese l to file its petition for arbitration. Thus, the CIAC granted Diesel an award of PhP 366,169 as attorneys fees. However, the CA reversed the CIAC on the award, it being its finding that Diesel was in delay. The Court resolves to reinstate the CIACs award of attorneys fees, there being sufficient justification for this kind of disposition. As earlier discussed, Diesel was not strictly in delay in the completion of the Project. No valid reason, therefore, obtains for UPSI to withhold the retention money or to refuse to pay the unpaid balance of the contract price. Indeed, the retention and nonpayment were, to us, as was to the CIAC, resorted to by UPSI out of whim, thus forcing the hand of Diesel to sue to recover what is rightfully due. Thus, the grant of attorneys fees would be justifiable under Art. 2208 of the Civil Code, thus: Article 2208. In the absence of stipulation, attorneys fees and expenses of litigation x x x cannot be recovered, except:
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim. And for the same reason justifying the award of attorneys fees, arbitration costs ought to be charged against UPSI, too. Fourth Issue UPSI urges a review of the factual basis for the parallel denial by the CIAC and CA of its claim for additional expenses to complete the Project. UPSI states that the reality of Diesel having abandoned the Project before its agreed completion is supported by clear and convincing evidence.

The Court cannot accord the desired review. It is settled rule that the Court, not being a trier of facts, is under no obligation to examine, winnow, and weigh anew evidence adduced below. This general rule is, of course, not absolute. In Superlines Transportation Company, Inc. v. Philippine National Construction Company, the Court enumerated the recognized exceptions to be: x x x (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings the [CA] went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.30 (Emphasis supplied.) In the instant case, the factual findings of the CIAC and CA, with regard to the completion of the Project and UPSIs entitlement to recover expenses allegedly incurred to finish the Project, do not fall under any one of these exceptions. As things stand, the factual findings of the CIAC and CA are supported by evidence presented during the hearing before the Arbitral Tribunal. Consider what the CIAC wrote: This Tribunal finds overwhelming evidence to prove that accomplishment as of the alleged "period of takeover" was 95.87% as of March 3, 2000 and increased to 97.56% on March 15, 2000 based on Progress Report # 18. x x x This is supported by the statement of [UPSIs] witness, Mr. Crespillo x x x where he conced ed that such admissions and statements bound [UPSI, the Owner]. By that time, [Diesel] had substantially completed the project and only needed to correct the items included in the punchlist. 31 The CA seconded what the CIAC said, thus: 6. Neither are We prepared to sustain UPSIs argument that Diesel left the work unfinished and pulled-out all of its workmen from the project. This claim is belied by the assessment of its own Construction Manager in Progress Report No. 19 for the period "ending 22 March 2000," wherein it was plaintly stated that as of that period, with respect to Diesel, there were still twenty-three laborers on site with the project "97.56%" complete x x x. This indicates that the contracted works of Diesel were substantially completed with only minor corrections x x x, thus contradicting the avowal of UPSI that the work was abandoned in such a state that necessitated the engagement of another contractor for the project to be finished. It was therefore not right for UPSI to have declined the turn-over and refused the full payment of the contract price, x x x. 32 Given the 97.56% work accomplishment tendered by Diesel, UPSIs theory of abandonment and of its having spent a sum to complete the work must fall on its face. We can concede hypothetically that UPSI undertook what it characterized as "additional or rectification" works on the Project. But as both the CIAC and CA held, UPSI failed to show that such "additional or rectification" works, if there be any, were the necessary result of the faulty workmanship of Diesel. The Court perceives of no reason to doubt, much less disturb, the coinciding findings of the CIAC and CA on the matter. The foregoing notwithstanding and considering that Diesel may only be credited for 97.56% work accomplishment, UPSI ought to be compensated, by way of damages, in the amount corresponding to the value of the 2.44% unfinished portion (100% 97.56% = 2.44%). In absolute terms, 2.44% of the total Project cost translates to PhP 310,834.01. This disposition is no more than adhering to the command of Art. 1234 of the Civil Code. The fifth and sixth issues have already been discussed earlier and need not detain us any longer. WHEREFORE, Diesels petition is PARTIALLY GRANTED and UPSIs Petition is DENIED with qualification. The assailed Decision dated April 16, 2002 and Resolution dated August 21, 2002 of the CA are MODIFIED, as follows: (1) The award for liquidated damages is DELETED;
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(2) The award to Diesel for the unpaid balance of the contract price of PhP 3,661,692.64 is AFFIRMED; (3) UPSI shall pay the costs of arbitration before the CIAC in the amount of PhP 298,406.03; (4) Diesel is awarded attorneys fees in the amount of PhP 366,169; and (5) UPSI is awarded damages in the amount of PhP 310,834.01, the same to be deducted from the retention money, if there still be any, and, if necessary, from the amount referred to in item (2) immediately above. In summary, the aggregate award to Diesel shall be PhP 3,717,027.64. From this amount shall be deducted the award of actual damages of PhP 310,834.01 to UPSI which shall pay the costs of arbitration in the amount of PhP 298,406.03. FGU is released from liability for the performance bond that it issued in favor of Diesel. No costs. SO ORDERED.

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