ALTERNATIVE DISPUTE RESOLUTION | J PLUS ASIA DEVELOPMENT CORPORATION VS. UTILITY ASSURANCE CORPORATION G.R. No. 199650, June 26, 2013

J PLUS ASIA DEVELOPMENT CORPORATION VS. UTILITY ASSURANCE CORPORATION

G.R. No. 199650, June 26, 2013

 

TOPIC/DOCTRINE

On Appeal from CIAC to CA: With the amendments introduced by R.A. No. 7902 and promulgation of the 1997 Rules of Civil Procedure, as amended, the CIAC was included in the enumeration of quasi-judicial agencies whose decisions or awards may be appealed to the CA in a petition for review under Rule 43. Such review of the CIAC award may involve either questions of fact, of law, or of fact and law.

 

FACTS

J Plus Asia Development Corporation entered into a Construction Agreement whereby the latter undertook to build the former’s 72-room condominium/hotel (Condotel Building 25) located at the Fairways & Bluewaters Golf & Resort in Boracay Island, Malay, Aklan. The project, costing P42,000,000.00, was to be completed within one year or 365 days reckoned from the first calendar day after signing of the Notice of Award and Notice to Proceed and receipt of down payment (20% of contract price). The P8,400,000.00 down payment was fully paid on January 14, 2008. Per the agreed work schedule, the completion date of the project was December 2008.

 

Mabunay commenced work at the project site on January 7, 2008. As of September 16, 2008, petitioner had paid the total amount of P15,979,472.03 inclusive of the 20% down payment. However, as of said date, Mabunay had accomplished only 27.5% of the project.

On November 19, 2008, petitioner terminated the contract and sent demand letters to Mabunay and respondent surety. As its demands went unheeded, petitioner filed a Request for Arbitration before the Construction Industry Arbitration Commission (CIAC). Petitioner prayed that Mabunay and respondent be ordered to pay the sums of P8,980,575.89 as liquidated damages and P2,379,441.53 corresponding to the recouped down payment or overpayment petitioner made to Mabunay.

Dissatisfied, respondent filed in the CA a petition for review under Rule 43 of the 1997 Rules of Civil Procedure, as amended.

 

ISSUE

whether the Court of Appeals seriously erred in not holding that the Alternative Dispute Resolution Act and the special rules on alternative dispute resolution have stripped the court of appeals of jurisdiction to review arbitral awards.

 

RULING

No, Alternative Dispute Resolution Act and the special rules on alternative dispute resolution did not stripped the court of appeals of jurisdiction to review arbitral awards.

The court ruled that R.A. No. 9285 did not confer on regional trial courts jurisdiction to review awards or decisions of the CIAC in construction disputes. On the contrary, Section 40 thereof expressly declares that confirmation by the RTC is not required. Executive Order (EO) No. 1008 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, 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. With the amendments introduced by R.A. No. 7902 and promulgation of the 1997 Rules of Civil Procedure, as amended, the CIAC was included in the enumeration of quasi-judicial agencies whose decisions or awards may be appealed to the CA in a petition for review under Rule 43. Such review of the CIAC award may involve either questions of fact, of law, or of fact and law.

Here, the court ruled that petitioner misread the provisions of A.M. No. 07-11-08-SC (Special ADR Rules) promulgated by this Court and which took effect on October 30, 2009. Since R.A. No. 9285 explicitly excluded CIAC awards from domestic arbitration awards that need to be confirmed to be executory, said awards are therefore not covered by Rule 11 of the Special ADR Rules, as they continue to be governed by EO No. 1008, as amended and the rules of procedure of the CIAC. The CIAC Revised Rules of Procedure Governing Construction Arbitration provide for the manner and mode of appeal from CIAC decisions or awards in Section 18 thereof.

SECTION 18.2 Petition for review.—A petition for review from a final award may be taken by any of the parties within fifteen (15) days from receipt thereof in accordance with the provisions of Rule 43 of the Rules of Court.







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