Facts:
METROPOLITAN CEBU WATER DISTRICT V.
MACTAN ROCK INDUSTRIES (G.R. NO. 172438)
Facts:
Petitioner Metropolitan Cebu Water District
(MCWD), a government-owned and controlled
corporation, entered into a Water Supply Contract
with herein respondent, Mactan Rock Industries, Inc.
(MRII), wherein the latter would supply MCWD with
potable water with a minimum guaranteed annual
volume. Respondent filed a complaint against
MCWD with the CIAC citing the arbitration clause of
the contract and seeking 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. MCWD
filed its Answer, including a motion to dismiss the
complaint on the ground that CIAC had no
jurisdiction over the case, as the contract was not
one for construction or infrastructure. Petitioner then
filed two petitions before the CA which were both
denied, hence this petition.
Issues:
(1) Whether or not CIAC may exercise jurisdiction
over disputes arising from a water supply contract;
and if so,
(2) Whether or not CIAC have a jurisdiction over a
complaint praying for a reformation of a water supply
contract.
Ruling:
(1) The Court finds in the affirmative. The motion for
reconsideration was denied by CA and MCWD
never appealed the case. Thus, the decision of the
CA became final and executory. The Court has held
time and again that a final and executory judgment,
no matter how erroneous, cannot be changed even
by this Court. The CA affirming the CIAC’s
jurisdiction and it becoming final, is now beyond the
jurisdiction of the Court to review or modify, even
supposing for the sake of argument, that it is indeed
erroneous.
(2) Where the law does not delineate, neither should
we. Neither the provisions of the Civil Code on
reformation of contracts nor the law creating CIAC
exclude reformation in its jurisdiction. Therefore,
because the CIAC has been held to have jurisdiction
over the contract, it follows that it has jurisdiction to
order the reformation of the contract as well.
William Golangco Construction Corporation v.
Ray Burton Development Corporation, G.R. No.
163582, August 9, 2010
Ray Burton Development Corporation (RBDC) and
William Golangco Construction Corporation
(WGCC) entered into a Contract for the construction
of the Elizabeth Place (Office/Residential
Condominium).
WGCC filed a complaint with a request for arbitration
with the Construction Industry Arbitration
Commission (CIAC). In its complaint, private
respondent prayed that CIAC render judgment
ordering petitioner to pay private respondent the
amount of, to wit:
1. P24,703,132.44 for the unpaid balance on
the contract price;
2. P10,602,670.25 for the unpaid balance on
the labor cost adjustment;
3. P9,264,503.70 for the unpaid balance of
additive works;
4. P2,865,615.10 for extended overhead
expenses;
5. P1,395,364.01 for materials cost
adjustment and trade contractors' utilities
expenses;
6. P4,835,933.95 for interest charges on
unpaid overdue billings on labor cost
adjustment and change orders.
or for a total of Fifty Three Million Six Hundred Sixty-
Seven Thousand Two Hundred Nineteen and 45/xx
(P53,667,219.45) and interest charges based on the
prevailing bank rates on the foregoing amount from
March 1, 2002 and until such time as the same shall
be fully paid.
RBDC filed a Motion to Dismiss the aforesaid
complaint on the ground of lack of jurisdiction. It is
petitioner's contention that the CIAC acquires
jurisdiction over disputes arising from or connected
with construction contracts only when the parties to
the contract agree to submit the same to voluntary
arbitration.
In the contract between petitioner and private
respondent, petitioner claimed that only disputes by
reason of differences in interpretation of the contract
documents shall be deemed subject to arbitration.
Issue:
whether or not CIAC has jurisdiction over the case.
Held:
CIAC had jurisdiction over the dispute between
herein parties
The CIAC has original and exclusive jurisdiction over
disputes arising from, or connected with, contracts
entered into by parties involved in construction in the
Philippines and all that is needed for the CIAC to
acquire jurisdiction is for the parties to agree to
submit the same to voluntary arbitration.
Respondent's contention, that the only disputes it
agreed to submit to voluntary arbitration are those
arising from interpretation of contract documents
and it argued that the claims alleged in petitioner's
complaint are not disputes arising from interpretation
of contract documents, hence, the CIAC cannot
assume jurisdiction over the case, is tenuous.
The contract between herein parties contained an
arbitration clause which mean that parties agreed to
submit disputes arising by reason of differences in
interpretation of the contract to a Board of Arbitrators
the composition of which is mutually agreed upon by
the parties, and, as a last resort, any other dispute
which had not been resolved by the Board of
Arbitrators shall be submitted to the Construction
Arbitration Authority created by the government,
which is no other than the CIAC.
Moreover, other matters not dealt with by provisions
of the contract or by special agreements shall be
governed by provisions of the Construction Industry
Arbitration Law, or Executive Order No. 1008.
Petitioner's claims that it is entitled to payment for
several items under their contract, which claims are,
in turn, refuted by respondent, involves a "dispute
arising from differences in interpretation of the
contract.
Under Section 1, Article III of the CIAC Rules, an
arbitration clause in a construction contract shall be
deemed as an agreement to submit an existing or
future controversy to CIAC jurisdiction,
"notwithstanding the reference to a different
arbitration institution or arbitral body in such contract
x x x." Elementary is the rule that when laws or rules
are clear, it is incumbent on the court to apply them.
When the law (or rule) is unambiguous and
unequivocal, application, not interpretation thereof,
is imperative.
It bears to emphasize that the mere existence of an
arbitration clause in the construction contract is
considered by law as an agreement by the parties to
submit existing or future controversies between
them to CIAC jurisdiction, without any qualification
or condition precedent.
To affirm a condition precedent in the construction
contract, which would effectively suspend the
jurisdiction of the CIAC until compliance therewith,
would be in conflict with the recognized intention of
the law and rules to automatically vest CIAC with
jurisdiction over a dispute should the construction
contract contain an arbitration clause.
Moreover, the CIAC was created in recognition of
the contribution of the construction industry to
national development goals.
Realizing that delays in the resolution of construction
industry disputes would also hold up the
development of the country, Executive Order No.
1008 expressly mandates the CIAC to expeditiously
settle construction industry disputes and, for this
purpose, vests in the CIAC original and exclusive
jurisdiction over disputes arising from, or connected
with, contracts entered into by the parties involved in
construction in the Philippines.
Thus, there is no question that in this case, the CIAC
properly took cognizance of petitioner's complaint as
it had jurisdiction over the same.
STRONGHOLD INSURANCE COMPANY v. SPS.
RUNE AND LEA STROEM, GR No. 204689, 2015-
01-21
Facts:
This case involves the proper invocation of the
Construction Industry Arbitration Committee's
(CIAC) jurisdiction through an arbitration clause in a
construction contract.
Spouses Rune and Lea Stroem (Spouses Stroem)
entered into an Owners-Contractor Agreement[4]
with Asis-Leif & Company, Inc. (Asis-Leif) for the
construction of a two-storey house on the lot owned
by Spouses Stroem.
Antipolo, Rizal
Asis-Leif secured Performance Bond No.
LP/G(13)83056 in the amount of P4,500,000.00
from Stronghold Insurance Company, Inc.
(Stronghold).
Stronghold and Asis-Leif, through Ms. Ma. Cynthia
Asis-Leif,... bound themselves jointly and severally
to pay the Spouses Stroem the agreed amount in the
event that the construction project is not completed
Asis-Leif failed to finish the project on time despite
repeated demands of the Spouses Stroem
Spouses Stroem subsequently rescinded the
agreement.
Appraiser Asian Appraisal Company, Inc.'s
evaluation resulted in the following percentage of
completion
On April 5, 2001, Stronghold sent a letter to Asis-Leif
requesting that the company settle its obligations
with the Spouses Stroem. No response was
received from Asis-Leif.
Spouses Stroem filed a Complaint (with Prayer for
Preliminary Attachment)[13] for breach of contract
and for sum of money with a claim for damages
against Asis-Leif, Ms. Cynthia Asis-Leif, and
Stronghold.
Only Stronghold was served summons.
Regional Trial Court rendered a judgment in favor of
the Spouses Stroem.
The trial court ordered Stronghold to pay the
Spouses Stroem ?4,500,000.00 with 6% legal
interest from the time of first demand
Both Stronghold and the Spouses Stroem appealed
to the Court of Appeals.
The Court of Appeals affirmed with modification the
trial court's Decision. It increased the amount of
attorney's fees to ?50,000.00.
On March 20, 2013, this court required the Spouses
Stroem to submit their Comment on the Petition.
Stronghold argues that the trial court did not acquire
jurisdiction over the case and, therefore, the Court of
Appeals committed reversible error when it upheld
the Decision of the Regional Trial Court... he lower
courts should have dismissed the... case in view of
the arbitration clause in the agreement
Moreover, "the stipulations in said Agreement are
part and parcel of the conditions in the bond. Were
it not for such stipulations in said agreement,
[Stronghold] would not have agreed to issue a bond
in favor of the Spouses Stroem.
On the other hand, the Spouses Stroem argue that
Stronghold committed forum shopping warranting
dismissal of the case.
According to the Spouses Stroem, Stronghold
deliberately committed forum shopping when it filed
the present petition despite the... pendency of the
Spouses Stroem's Motion for Partial
Reconsideration of the Court of Appeals Decision
dated November 20, 2012.
Issues:
The main issue here is whether the dispute liability
of a surety under a performance bond is... connected
to a construction contract and, therefore, falls under
the exclusive jurisdiction of the CIAC.
The issues for consideration are:
(1)
Whether the dispute involves a construction
contract;
(2)
Whether the CIAC has exclusive jurisdiction over the
controversy between the parties;
(3)
Whether the Regional Trial Court should have
dismissed the petition outright as required by law
and jurisprudence and referred the matter to the
CIAC; and
(4)
Whether petitioner Stronghold Insurance Company,
Inc. is liable under Performance Bond No.
LP/G(13)83056.
(a)
Whether petitioner Stronghold Insurance Company,
Inc. is only liable as to the extent of any additional
cost for the completion of the project due to any
increase in prices for labor and materials.
(b)
Whether the case involves ordinary suretyship or
corporate suretyship.
On forum-shopping
On arbitration and the CIAC's jurisdiction
What is at issue in this case is the parties'
agreement, or lack thereof, to submit the case to
arbitration. Respondents argue that petitioner is not
a party to the arbitration agreement. Petitioner did
not consent to arbitration. It is only respondent and
Asis-Leif that may invoke the arbitration clause in the
contract.
Ruling:
this court resolves to deny the Petition.
Records show that petitioner received a copy of the
Decision of the Court of Appeals on December 5,
2012.
Petitioner did not file a Motion for Reconsideration of
the assailed Decision.
It filed before this court a Motion for Extension of
Time To File Petition for Review
Respondents filed their Motion for Partial
Reconsideration of the Court of Appeals Decision on
December 11, 2012.
Respondents alleged in their Comment that as early
as January 9, 2013, petitioner received a copy of the
Court of Appeals' Resolution requiring Comment on
the Motion for Partial Reconsideration... petitioner
did not disclose in its
Verification and Certification Against Forum
Shopping the pendency of respondents' Motion for
Partial Reconsideration.
Indeed, petitioner is guilty of forum shopping.
Petitioner failed to carry out its duty of promptly
informing this court of any pending action or
proceeding before this court, the Court of Appeals,
or any other tribunal or agency. This court cannot
countenance petitioner's disregard of the rules.
On this basis, this case should be dismissed
Petitioner... raised the issue of lack of jurisdiction in
view of an arbitration agreement for the first time.
Petitioner and respondents recognize that CIAC has
jurisdiction over disputes arising from the
agreement.
This court, however, cannot apply the ruling in
Prudential to the present case. Several factors
militate against petitioner's claim.
The contractual stipulations in this case and in
Prudential are different
This court in Prudential held that the construction
contract expressly incorporated the performance
bond into the contract.[79] In the present case,
Article 7 of the Owners-Contractor Agreement
merely stated that a performance bond shall be...
issued in favor of respondents, in which case
petitioner and Asis-Leif Builders and/or Ms. Ma.
Cynthia Asis-Leif shall pay P4,500,000.00 in the
event that Asis-Leif fails to perform its duty under the
Owners-Contractor Agreement.
Consequently, the... performance bond merely
referenced the contract entered into by respondents
and Asis-Leif, which pertained to Asis-Leif's duty to
construct a two-storey residence building with attic,
pool, and landscaping over respondents' property
Owners-Contractor Agreement that the arbitration
clause is found.
Not being a party to the construction agreement,
petitioner cannot invoke the arbitration clause.
Petitioner, thus, cannot invoke the jurisdiction of the
CIAC.
where a surety in a construction contract actively
participates in a collection suit, it is estopped from
raising jurisdiction later.
Assuming that petitioner is privy to the construction
agreement, we cannot allow petitioner to invoke
arbitration at this late... stage of the proceedings
since to do so would go against the law's goal of
prompt resolution of cases in the construction
industry.
petition is DENied
Principles:
There is forum shopping when: as a result of an
adverse opinion in one forum, a party seeks a
favorable opinion (other than by appeal or certiorari)
in another.
The principle applies not only with respect to suits
filed in the courts but also in connection with
litigations commenced in the... courts while an
administrative proceeding is pending... elements of
forum-shopping: "(a) identity of parties, or at least
such parties as represent the same interests in both
actions; (b) identity of rights asserted and reliefs
prayed for, the reliefs being founded on the same
facts; and (c) the identity... with respect to the two
preceding particulars in the two cases is such that
any judgment rendered in the pending cases,
regardless of which party is successful, amount to
res judicata in the other case."
Rule 42, Section 2[45] in relation to Rule 45, Section
4 of the Rules of Court mandates petitioner to submit
a Certification Against Forum Shopping and
promptly inform this court about the pendency of any
similar action or proceeding before other courts or...
tribunals.
The rule's purpose is to deter the unethical practice
of pursuing simultaneous remedies in different
forums, which "wreaks havoc upon orderly judicial
procedure."
Failure to comply with the rule is a sufficient ground
for the... dismissal of the petition... u]ltimately, what
is truly important to consider in determining whether
forum-shopping exists or not is the vexation caused
the courts and parties-litigant by a party who asks
different courts and/or administrative agencies to
rule on the same or related causes... and/or to grant
the same or substantially the same reliefs, in the
process creating the possibility of conflicting
decisions being rendered by the different fora upon
the same issue.
Generally, parties may not raise issues for the first
time on appeal.[50] Such practice is violative of the
rules and due process and is frowned upon by the
courts. However, it is also well-settled that
jurisdiction can never be waived or... acquired by
estoppel.[51] Jurisdiction is conferred by the
Constitution or by law.[52] "Lack of jurisdiction of the
court over an action or the subject matter of an
action cannot be cured by the silence, by
acquiescence, or... even by express consent of the
parties.
In Heunghwa Industry Co., Ltd., v. DJ Builders
Corporation,[55] this court held that "there are two
acts which may vest the CIAC with jurisdiction over
a construction dispute. One is the presence of an
arbitration clause in a construction... contract, and
the other is the agreement by the parties to submit
the dispute to the CIAC."... when a dispute arises
from a construction contract, the CIAC has exclusive
and original jurisdiction.
This court has previously held that a performance
bond, which is meant "to guarantee the supply of
labor, materials, tools, equipment, and necessary
supervision to complete the project[,]"[59] is
significantly and substantially connected to the
construction... contract and, therefore, falls under
the jurisdiction of the CIAC
Prudential Guarantee and Assurance Inc. v. Anscor
Land, Inc.
Although not the construction contract itself, the
performance bond is deemed as an associate of the
main construction contract that it cannot be
separated or severed from its principal.
The Performance Bond is significantly and
substantially connected to the... construction
contract that there can be no doubt it is the CIAC,
under Section 4 of EO No. 1008, which has
jurisdiction over any dispute arising from or
connected with it.
It is settled that the surety's solidary obligation for the
performance of the principal debtor's obligation is
indirect and merely secondary.[73] Nevertheless,
the surety's liability to the "creditor or promisee of the
principal is said to be direct,... primary and absolute;
in other words, he is directly and equally bound with
the principal.
'complementary-contracts-construed-together'
doctrine... an accessory contract must be read in its
entirety and together with the principal agreement."
ART. 1374. The various stipulations of a contract
shall be interpreted together, attributing to the
doubtful ones that sense which may result from all of
them taken jointly
365 SCRA, 697, G.R. No. 141897 September 24,
2001 METRO CONSTRUCTION, INC., petitioner,
vs. CHATHAM PROPERTIES, INC., respondent.
FACTS:
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.
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
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.
In the meantime, the TOR was amended and
finalized on 19 August 1998. 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
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, etc.
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,
5. 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..
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
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.
CIAC rendered Judgment 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. Impugning the decision of
the CIAC, CHATHAM instituted a petition for review
with the Court of Appeals
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.9 on the matter of liquidated
damages.
ISSUE:
WON under existing law and rules the Court of
Appeals can also review findings of facts of the
Construction Industry Arbitration Commission
(CIAC)
HELD:
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. 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.
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. 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. 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. 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.".
In view of all the foregoing, The Supreme Court
rejects 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.
NATIONAL IRRIGATION ADMINISTRATION
(NIA), petitioner, vs. HONORABLE COURT OF
APPEALS (4th Division), CONSTRUCTION
INDUSTRY ARBITRATION COMMISSION, and
HYDRO RESOURCES CONTRACTORS
CORPORATION, respondents. 318 SCRA 255,
G.R. 129169
FACTS:
In a competitive bidding held by Petitioner NIA,
Hydro Resources Contractors Corporation
(HYDRO) was awarded Contract for the construction
of the main civil works of the Magat River Multi-
Purpose Project.
The contract provided that Respondent HYDRO
would be paid partly in Philippine pesos and partly in
U.S. dollars. Respondent HYDRO substantially
completed the works under the contract in 1982 and
final acceptance by Petitioner NIA was made in
1984.
Respondent HYDRO thereafter determined that it
still had an account receivable from Petitioner NIA
representing the dollar rate differential of the price
escalation for the contract.
After unsuccessfully pursuing its case with Petitioner
NIA, Respondent HYDRO filed with the CIAC a
Request for Adjudication of the aforesaid claim.
Petitioner NIA filed its Answer wherein it questioned
the jurisdiction of the CIAC alleging lack of cause of
action, laches and estoppel in view of Respondent
HYDRO’s alleged failure to avail of its right to submit
the dispute to arbitration within the prescribed period
as provided in the contract.
Later, Petitioner NIA filed a Motion to Dismiss
alleging lack of jurisdiction over the disputes. The
arbitral body constituted by both parties issued an
order which deferred the determination of the Motion
to Dismiss and resolved to proceed with the hearing
of the case on the merits as the grounds cited by
Petitioner NIA did not seem to be “indubitable.”
Petitioner NIA filed a Motion for Reconsideration of
the aforesaid Order. CIAC in denying the Motion for
Reconsideration ruled that it has jurisdiction over the
Respondent HYDRO’s claim over Petitioner NIA
pursuant to E.O 1008 and that the hearing should
proceed as scheduled.
CIAC then rendered a decision in the main case in
favor of Respondent HYDRO. Petitioner NIA filed
with the CA an Original Action of Certiorari and
Prohibition with prayer for Restraining Order and/or
Injunction which dismissed the same.
Hence, the present Petition for Certiorari and
Prohibition with urgent prayer for Temporary
Restraining Order and Writ of Preliminary Injunction.
ISSUE:
Whether or not CIAC has jurisdiction to hear and try
the dispute between the parties?
ARGUMENTS:
Petitioner NIA alleged that CIAC has no jurisdiction
to hear and try the dispute between the parties as
EO No. 1008 had no retroactive effect. It contended
that there was no agreement with Respondent
HYDRO to submit the dispute to CIAC for arbitration
considering that the construction contract was
executed in 1978 and the project completed in 1982,
whereas the Construction Industry Arbitration Law
creating CIAC was signed only in 1985; and that
while they have agreed to arbitration as a mode of
settlement of disputes, they could not have
contemplated submission of their disputes to CIAC.
Petitioner NIA further argued that records show that
it had not voluntarily submitted itself to arbitration by
CIAC.
Petitioner NIA contended that the CIAC did not
acquire jurisdiction over the dispute since it was only
Respondent HYDRO that requested for arbitration.
It asserts that to acquire jurisdiction over a case, as
provided under E.O. 1008, the request for arbitration
filed with CIAC should be made by both parties, and
hence the request by one party is not enough.
RULING:
YES. Contrary to the claim of Petitioner NIA, the
CIAC has jurisdiction over the controversy. The
instant Petition is DISMISSED for lack of merit.
RATIO DECIDENDI:
EO No. 1008, otherwise known as the “Construction
Industry Arbitration Law” which was promulgated on
4 February 1985, vests upon 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.
The disputes may involve government or private
contracts. For the Board to acquire jurisdiction, the
parties to a dispute must agree to submit the same
to voluntary arbitration.
The complaint of Respondent HYDRO against
Petitioner NIA on the basis of the contract executed
between them was filed on 7 December 1994, during
the effectivity of E.O. No. 1008.
Hence, it is well within the jurisdiction of CIAC. The
jurisdiction of a court is determined by the law in
force at the time of the commencement of the action.
Petitioner NIA’s argument that CIAC had no
jurisdiction to arbitrate on contract which preceded
its existence is untenable.
E.O. 1008 is clear that the CIAC has jurisdiction over
all disputes arising from or connected with
construction contract whether the dispute arises
BEFORE or AFTER the completion of the contract.
Thus, the date the parties entered into a contract and
the date of completion of the same, even if these
occurred before the constitution of the CIAC, did not
automatically divest the CIAC of jurisdiction as long
as the dispute submitted for arbitration arose after
the constitution of the CIAC. Stated differently, the
jurisdiction of CIAC is over the dispute, not the
contract; and the instant dispute having arisen when
CIAC was already constituted, the arbitral board was
actually exercising current, not retroactive,
jurisdiction.
It is undisputed that the contracts between
Respondent HYDRO and Petitioner NIA contained
an arbitration clause wherein they agreed to submit
to arbitration any dispute between them that may
arise before or after the termination of the
agreement.
Consequently, the claim of Respondent HYDRO
having arisen from the contract is arbitrable.
Petitioner NIA’s reliance with the ruling on the case
of Tesco Services Incorporated v. Vera, is
misplaced.
The 1988 CIAC Rules of Procedure which were
applied by this Court in the Tesco case had been
duly amended by CIAC Resolutions No. 2-91 and 3-
93, Section 1 of Article III of which read as follows:
Submission to CIAC Jurisdiction — An
arbitration clause in a construction contract
or a submission to arbitration of a
construction contract or a submission to
arbitration of a construction dispute shall be
deemed an agreement to submit an existing
or future controversy to CIAC jurisdiction,
notwithstanding the reference to a different
arbitration institution or arbitral body in such
contract or submission.
When a contract contains a clause for the
submission of a future controversy to
arbitration, it is not necessary for the parties
to enter into a submission agreement before
the claimant may invoke the jurisdiction of
CIAC.
Under the present Rules of Procedure, for a
particular construction contract to fall within the
jurisdiction of CIAC, it is merely required that the
parties agree to submit the same to voluntary
arbitration.
Unlike in the original version of Section 1, as applied
in the Tesco case, the law as it now stands does not
provide that the parties should agree to submit
disputes arising from their agreement specifically to
the CIAC for the latter to acquire jurisdiction over the
same.
Rather, it is plain and clear that as long as the parties
agree to submit to voluntary arbitration, regardless
of what forum they may choose, their agreement will
fall within the jurisdiction of the CIAC, such that,
even if they specifically choose another forum, the
parties will not be precluded from electing to submit
their dispute before the CIAC because this right has
been vested upon each party by law, i.e., E.O. No.
1008.
Moreover, it is undeniable that Petitioner NIA agreed
to submit the dispute for arbitration to the CIAC.
Petitioner NIA through its counsel actively
participated in the arbitration proceedings by filing
an Answer with Counterclaim, as well as its
compliance wherein it nominated arbitrators to the
proposed panel, participating in the deliberations on,
and the formulation of, the Terms of Reference of
the arbitration proceeding, and examining the
documents submitted by Respondent HYDRO after
Petitioner NIA asked for the originals of the said
documents.