ALTERNATIVE DISPUTE RESOLUTION | METRO RAIL TRANSIT DEVELOPMENT CORP. VS. GAMMON PHILIPPINES, INC., G.R. NO. 200401, JANUARY 17, 2018

METRO RAIL TRANSIT DEVELOPMENT CORP. VS. GAMMON PHILIPPINES, INC.,

G.R. NO. 200401, JANUARY 17, 2018

 

TOPIC/DOCTRINE

Under the Construction Industry Arbitration Law, arbitral awards are binding and shall be final and unappealable, except on pure questions of law.

 

FACTS

MRTDC was awarded a government contract by way of a Build Lease and Transfer Agreement to undertake the MRT 3 North Triangle Development Project. Among the major components of the Project was the construction of a four level podium structure. MRTDC, through its Project Manager, Parsons Inter Pro Joint Venture, give notice to the Gammon, of the award to it of the contract for the construction of the podium superstructure. Shortly thereafter, MRTDC sent a letter to Gammon, notifying the latter of the suspension of all the undertakings because of the currency crisis at that time.

According to Gammon, however, it proceeded to de-water and clean up the Project site. On the other hand, MRTDC claims that before any construction activity could proceed, it formally served Gammon a notice confirming the "temporary suspension of all requirements under the terms of the contract until such time as clarification of scope has been received from the owner. The only exception to this suspension is the re-design of the projects floor slabs and the site de-watering and clean up. As a result of its analysis of the impact of the currency crisis, MRTDC decided to downsize the podium structure to two levels. Gammon then submitted a proposal reducing the contract price. This proposal was accepted by MRTDC.

Gammon qualifiedly accepted the offer but manifested its willingness to consider revisions to the terms and conditions of the NOA/NTP. MRTDC notified Gammon that it was awarding the contract to Filsystems since Gammon did not accept the terms and conditions of the NOA/NTP. Consequently, Gammon sought reimbursement of the direct and indirect costs it incurred in relation to the Project. MRTDC signified its willingness to reimburse Gammon but rejected the latter’s computation and instead offered a fixed cap of five percent of Gammon’s total claims.

Dissatisfied with this figure, Gammon filed its claim with the CIAC invoking the arbitration clause of the General Conditions of Contract which provides that the arbitration of all disputes, claims or questions under the contract shall be in accordance with CIAC rules.

 

ISSUE

Whether appeal is proper in the instant case.

 

RULING

No.

The Court ruled that under the Construction Industry Arbitration Law, arbitral awards are binding and shall be final and unappealable, except on pure questions of law: Section 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. Initially, CIAC’s decisions are appealable only to this Court. However, when the Rules of Court were enacted, appeals from CIAC’s decisions became appealable to the Court of Appeals under Rule 43. Construction Industry Arbitration Commission’s (CIAC’s) factual findings on construction disputes are final, conclusive, and not reviewable by the Supreme Court (SC) on appeal; Exceptions.—CIAC’s factual findings on construction disputes are final, conclusive, and not reviewable by this Court on appeal. The only exceptions are when: (1) [T]he 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.







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