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G.R. No. 179628 January 16, 2013 Ruling of the Regional Trial Court On May 5, 2006, the RTC denied both motions.23 Petitioner and Intra Strata separately moved for reconsideration but their motions were denied by the RTC in its subsequent Order24 dated September 11, 2006. Aggrieved, petitioner elevated the case to the CA by way of special civil action for certiorari.25 Ruling of the Court of Appeals On June 7, 2007, the CA rendered a Decision 26 dismissing the petition. The CA ruled that the presence of an arbitration clause in the CCA does not merit a dismissal of the case because under the CCA, it is only when there are differences in the interpretation of Article I of the construction agreement that the parties can resort to arbitration.27 The CA also found no grave abuse of discretion on the part of the RTC when it disregarded the fact that the CCA was not yet signed at the time petitioner issued the performance bond on February 29, 2000.28 The CA explained that the performance bond was intended to be coterminous with the construction of the building.29 It pointed out that "if the delivery of the original contract is contemporaneous with the delivery of the suretys obligation, each contract becomes completed at the same time, and the consideration which supports the principal contract likewise supports the subsidiary one."30 The CA likewise said that, although the contract of surety is only an accessory to the principal contract, the suretys liability is direct, primary and absolute.31 Thus: WHEREFORE, we resolve to DISMISS the petition as we find that no grave abuse of discretion attended the issuance of the order of the public respondent denying the petitioners motion to dismiss. IT IS SO ORDERED.32 Petitioner moved for reconsideration but the CA denied the same in a Resolution33 dated September 7, 2007. Issues Hence, this petition raising the following issues: A. THE HONORABLE CA ERRED WHEN IT HELD THAT IT IS ONLY WHEN THERE ARE DIFFERENCES IN THE INTERPRETATION OF ARTICLE I OF THE CONSTRUCTION AGREEMENT THAT THE PARTIES MAY RESORT TO ARBITRATION BY THE CIAC. B. THE HONORABLE CA ERRED IN TREATING PETITIONER AS A SOLIDARY DEBTOR INSTEAD OF A SOLIDARY GUARANTOR. C. Hence, they filed separate Motions to Dismiss22 on the grounds of lack of cause of action and lack of jurisdiction. THE HONORABLE [CA] OVERLOOKED AND FAILED TO CONSIDER THE FACT THAT THERE WAS NO ACTUAL AND
THE MANILA INSURANCE COMPANY, INC., Petitioner, vs. SPOUSES ROBERTO and AIDA AMURAO, Respondents. DECISION DEL CASTILLO, J.: The jurisdiction of the Construction Industry Arbitration Commission (CIAC) is conferred by law. Section 41 of Executive Order (E.O.) No. I 008, otherwise known as the Construction Industry Arbitration Law, "is broad enough to cover any dispute arising from, or connected with construction contracts, whether these involve mere contractual money claims or execution of the works."2 This Petition for Review on Certiorari3 under Rule 45 of the Rules of Court assails the Decision4 dated June 7, 2007 and the Resolution5 dated September 7, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 96815. Factual Antecedents On March 7, 2000, respondent-spouses Roberto and Aida Amurao entered into a Construction Contract Agreement (CCA)6 with Aegean Construction and Development Corporation (Aegean) for the construction of a six-storey commercial building in Tomas Morato corner E. Rodriguez Avenue, Quezon City.7 To guarantee its full and faithful compliance with the terms and conditions of the CCA, Aegean posted performance bonds secured by petitioner The Manila Insurance Company, Inc.8 (petitioner) and Intra Strata Assurance Corporation (Intra Strata).9 On November 15, 2001, due to the failure of Aegean to complete the project, respondent spouses filed with the Regional Trial Court (RTC) of Quezon City, Branch 217, a Complaint, 10 docketed as Civil Case No. Q-01-45573, against petitioner and Intra Strata to collect on the performance bonds they issued in the amounts ofP2,760,000.00 and P4,440,000.00, respectively.11 Intra Strata, for its part, filed an Answer12 and later, a Motion to Admit Third Party Complaint,13 with attached Third Party Complaint14 against Aegean, Ronald D. Nicdao, and Arnel A. Mariano. Petitioner, on the other hand, filed a Motion to Dismiss15 on the grounds that the Complaint states no cause of action16 and that the filing of the Complaint is premature due to the failure of respondentspouses to implead the principal contractor, Aegean.17 The RTC, however, denied the motion in an Order18 dated May 8, 2002. Thus, petitioner filed an Answer with Counterclaim and Crossclaim,19 followed by a Third Party Complaint20 against Aegean and spouses Ronald and Susana Nicdao. During the pre-trial, petitioner and Intra Strata discovered that the CCA entered into by respondent-spouses and Aegean contained an arbitration clause.21
LICOMCEN INCORPORATED, Petitioner, vs. FOUNDATION SPECIALISTS, INC., Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 169678 FOUNDATION SPECIALISTS, INC., Petitioner, vs. LICOMCEN INCORPORATED, Respondent. DECISION
LICOMCEN was also required to bear the costs of arbitration in the total amount of P474,407.95. LICOMCEN appealed the CIACs decision before the Court of Appeals (CA). On November 23, 2004, the CA upheld the CIACs decision, modifying only the amounts awarded by (a) reducing LICOMCENs liability for material costs at site to P5,694,939.87, and (b) deleting its liability for equipment and labor standby costs and unrealized gross profit; all the other awards were affirmed.24 Both parties moved for the reconsideration of the CAs Decision; LICOMCENs motion was denied in the CAs February 4, 2005 Resolution, while FSIs motion was denied in the CAs September 13, 2005 Resolution. Hence, the parties filed their own petition for review on certiorari before the Court.25 LICOMCENs Arguments
P 1,264,404.12 15,143,638.51 3,058,984.34 9,023,575.29 300,000.00 equivalent to 15% of the total claim
LICOMCEM principally raises the question of the CIACs jurisdiction, insisting that FSIs claims are non-arbitrable. In support of its position, LICOMCEN cites GC-61 of the GCC: GC-61. DISPUTES AND ARBITRATION Should any dispute of any kind arise between the LICOMCEN INCORPORATED and the Contractor [referring to FSI] or the Engineer [referring to ESCA] and the Contractor in connection with, or arising out of the execution of the Works, such dispute shall first be referred to and settled by the LICOMCEN, INCORPORATED who shall within a period of thirty (30) days after being formally requested by either party to resolve the dispute, issue a written decision to the Engineer and Contractor. Such decision shall be final and binding upon the parties and the Contractor shall proceed with the execution of the Works with due diligence notwithstanding any Contractor's objection to the decision of the Engineer. If within a period of thirty (30) days from receipt of the LICOMCEN, INCORPORATED's decision on the dispute, either party does not officially give notice to contest such decision through arbitration, the said decision shall remain final and binding. However, should any party, within thirty (30) days from receipt of the
LICOMCEN again denied liability for the amounts claimed by FSI. It justified its decision to indefinitely suspend the Citimall project due to the cases filed against it involving its Lease Contract with the City Government of Legaspi. LICOMCEN also assailed the CIACs jurisdiction, contending that FSIs claims were matters not subject to arbitration under GC-61 of the GCC, but one that should have been filed before the regular courts of Legaspi City pursuant to GC-05.20 During the preliminary conference of January 28, 2003, LICOMCEN reiterated its objections to the CIACs jurisdiction, which the arbitrators simply noted. Both FSI and LICOMCEN then proceeded to draft the Terms of Reference.21 On February 4, 2003, LICOMCEN, through a collaborating counsel, filed its Ex Abundati Ad Cautela Omnibus Motion, insisting that FSIs petition before the CIAC should be dismissed for lack of jurisdiction; thus, it prayed for the suspension of the arbitration
METROPOLITAN CEBU WATER DISTRICT, Petitioner, vs. MACTAN ROCK INDUSTRIES, INC., Respondent. DECISION MENDOZA, J.: This is a petition for review on certiorari under Rule 45 assailing the February 20, 2006 Decision1 and the March 30, 2006 Resolution2 of the Court of Appeals (CA) in CAG.R. CEB SP. No. 00623. THE FACTS Petitioner Metropolitan Cebu Water District (MCWD) is a government-owned and controlled corporation (GOCC)created pursuant to Presidential Decree (PD) No. 198,3 as amended, with its principal office address at the MCWD Building, Magallanes corner Lapu-Lapu Streets, Cebu City.4 It is mandated to supply water within its service area in the cities of Cebu, Talisay, Mandaue, and LapuLapu and the municipalities of Compostela, Liloan, Consolacion, and Cordova in the Province of Cebu.5 Respondent Metro Rock Industries, Inc. (MRII) is a domestic corporation with principal office address at the 2nd Level of the Waterfront Cebu Hotel and Casino, Lahug, Cebu City.6 On May 19, 1997, MCWD entered into a Water Supply Contract7 (the Contract) with MRII wherein it was agreed that the latter would supply MCWD with potable water, in accordance with the World Health Organization (WHO)standard or the Philippine national standard, with a minimum guaranteed annual volume.8 On March 15, 2004, MRII filed a Complaint9 against MCWD with the Construction Industry Arbitration Commission (CIAC), citing the arbitration clause (Clause 18)10 of the Contract. The case was docketed as CIAC Case No. 12-2004. In the said complaint, MRII sought the reformation of Clause 17 of the Contract, or the Price Escalation/De-Escalation Clause, in order to include Capital Cost Recovery in the price escalation formula, and to have such revised formula applied from 1996 when the bidding was conducted, instead of from the first day when MRII started selling water to MCWD. It also sought the payment of the unpaid price escalation/adjustment, and the payment of unpaid variation/extra work order and interest/cost of money up to December 31, 2003.11 On May 7, 2002, MCWD filed its Answer12 dated April 27, 2004, which included a motion to dismiss the complaint on the ground that the CIAC had no jurisdiction over the case, as the Contract was not one for construction or infrastructure. The CIAC thereafter issued an order13 denying MCWDs motion to dismiss, and calling the parties to a preliminary conference for the review and signing of the Terms of Reference.14 MCWD, thus, filed a petition for certiorari15 under Rule 65 with the CA, questioning the jurisdiction of the CIAC. The petition was docketed as CA-G.R. SP. No. 85579 (First Petition).
Price escalation shall be reckoned from January 1999 when the water was first delivered by Mactan Rock Industries, Inc. to the MCWD facilities in Mactan. The base CPI, base US$ Exchange Rate and the Base Power Rate shall be the prevailing rate in January 1999, while the Base Selling Price of water shall mean the 1996 rate per cubic meter of water as provided for in the Water Supply Contract.
The general rule is that where there is a conflict between the fallo, or the dispositive part, and the body of the decision or order, the fallo prevails on the theory that the fallo is the final order and becomes the subject of execution, while the body of the decision merely contains the reasons or conclusions of the court ordering nothing. However, where one can clearly and unquestionably conclude from the body of the decision that there was a mistake in the dispositive portion, the body of the decision will prevail.65 Following the reasoning of the CIAC in this case, there are three components to price adjustment: (1) Power Cost Adjustment (30% of the base selling price of water); (2) Operating Cost Adjustment (40% of the base selling price of water); and (3) Capital Cost Adjustment (30% of the base selling price of water).