Facts:

This case involves ASEC Development and Construction Corporation (Petitioner) and Toyota Alabang, Inc. (Respondent). The events unfolded in relation to a construction project for the Toyota Alabang Showroom, located at the corner of Filinvest Avenue and Alabang-Zapote Road. Bidding for the project commenced in 2013, where ASEC Development submitted a bid of ₱399,000,000.00 on June 26, 2013, which was subsequently accepted. A construction contract was executed between ASEC Development and Toyota on September 19, 2013. Key issues arose concerning the specification of materials for the project; specifically, ASEC claimed its bid was for tempered glass, while Toyota contended that the requirement was for Low-E glass, a specification aimed at achieving energy efficiency. This led to disputes over costs and deductions concerning glass and aluminum works in the project's Bill of Quantities.

After Toyota notified ASEC of the removal of glass works from the contract, ASEC expressed i

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Facts:

Background of the Project

• In 2013, ME Paragua Construction Consultancy conducted the bidding for the Toyota Alabang Showroom Project, a seven‐story structure with approximately 22,000 square meters of floor area.
• ASEC Development Construction Corporation (ASEC Development) submitted a bid of P399,000,000.00 which was accepted on June 26, 2013.
• ASEC Development and Toyota Alabang entered into a construction contract on September 19, 2013.

Dispute Over Glass Specifications and Contract Adjustments

• ASEC Development clarified that its bid quoted tempered glass only, excluding any glass for the penthouse.
• ME Paragua, referring to documentation (the June 10, 2013 meeting minutes and contract drawing), stated that the bid allegedly included Low‑E glass for both the doors and windows including the penthouse.
• Despite the confusion, RMDA Architects directed ASEC Development to submit a final costing for Low‑E glass, leading to a Financial Bid Evaluation of P60,000,000.00 for tempered glass and red flash.
• Toyota later decided to remove the glass and aluminum works from the project, initially planning to deduct P58,868,716.00 from the contract price, while ASEC Development contended that only P32,504,329.98 should be deducted.

Initiation of Arbitration Proceedings

• ASEC Development filed a request for arbitration before the Construction Industry Arbitration Commission (CIAC) in CIAC Case No. 07‑2014.
• The terms of reference included multiple issues such as:
• The jurisdiction of CIAC given the fulfillment of preconditions to arbitration;
• Whether Low‑E glass, red flash, and penthouse doors and windows were part of the architectural scope;
• The proper deductible amount from the contract price;
• Entitlement to attorney’s fees and allocation of arbitration expenses.
• After hearings and evidence presentation, the arbitral tribunal rendered the First Arbitral Award on June 30, 2014, holding that the correct deduction was P32,540,329.98 (P25,451,311.98 for tempered glass and P7,053,018.00 for sun baffle and canopy), thereby requiring Toyota to return a differential amount of approximately P19,000,000.00.

Subsequent Arbitration and Consolidated Disputes

• While Toyota appealed the First Arbitral Award before the Court of Appeals (CA), it sent a Notice of Termination to ASEC Development over alleged delays and incomplete work.
• ASEC Development disputed the termination, contending its delays were not its fault and that it had substantially completed its scope of works.
• Concurrently, ASEC Development filed a second arbitration request (CIAC Case No. 03‑2015) for claims on unpaid progress billings and variation works amounting to P78,968,626.83.
• In CIAC Case No. 03‑2015, the tribunal rendered a Second Arbitral Award on October 5, 2015 that differed from the first:
• It allowed a deduction of P51,022,240.00 for glass and aluminum works from the original contract price of P399,000,000.00, resulting in a different adjusted contract price.
• It determined the final payment due to ASEC Development along with allowing or denying various additional claims and counterclaims such as additive change orders, liquidated damages, and counterclaims for fines, penalties, and other costs.
• The divergent findings between the two arbitral tribunals led to conflicting awards on the issue of the glass and aluminum works deduction.

Court of Appeals Involvement and Further Litigation

• Toyota petitioned for review before the Court of Appeals to assay the First Arbitral Award.
• The CA consolidated the petitions of Toyota and ASEC Development, ultimately setting aside the First Arbitral Award and affirming the Second Arbitral Award in its October 10, 2018 Decision.
• The CA held that the glass specifications were such that “clear tempered glass and Low‑E tempered glass are not inconsistent,” thereby ruling in favor of Toyota’s deduction of P51,022,240.00.
• ASEC Development subsequently filed a Petition for Review on Certiorari, challenging both the modification of factual findings and the reversal of its original award by the CA, particularly on:
• The interference with the first arbitral tribunal’s determination;
• The reversal of the correct deductible amount (P32,540,329.98) for glass and aluminum works;
• Various issues on termination, completion, and entitlement to variation orders and retention amounts.

Issue:

Factual and Jurisdictional Questions in Arbitration

• Whether the CIAC had jurisdiction to hear the disputes given the fulfillment or non‑fulfillment of the preconditions to arbitration.
• Whether the bid and subsequent contractual documents properly reflected the inclusion or exclusion of Low‑E glass and its associated costs.

Conflicting Arbitral Awards

• Whether a second arbitral tribunal, in CIAC Case No. 03‑2015, may reverse or render a conflicting award that contradicts the First Arbitral Award regarding the deductible amount for glass and aluminum works.
• Whether it was proper to have two arbitral tribunals considering the same contractual dispute and issues already decided in the first arbitration.

Review and Modification by the Court of Appeals

• Whether the Court of Appeals erred in modifying the factual findings of the arbitral tribunals, particularly on the matter of glass and aluminum works.
• Whether the CA exceeded its proper scope of review by supplanting the factual determinations of the CIAC.

Other Contractual Dispute Issues

• The validity of respondent’s termination of the contract.
• Whether ASEC Development was entitled to claims for unpaid progress billings, variation orders, attorney’s fees, and the release of retention.
• Whether the computation of the final adjusted contract price was accurate, especially concerning deductive and additive change orders.

Ruling:

• (Subscriber-Only)

Ratio:

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Doctrine:

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