Case Digest (G.R. No. 198849)
Facts:
Camp John Hay Development Corporation v. Charter Chemical and Coating Corporation, G.R. No. 198849, August 07, 2019, Supreme Court Third Division, Leonen, J., writing for the Court.Petitioner Camp John Hay Development Corporation (Camp John Hay Development) contracted with respondent Charter Chemical and Coating Corporation (Charter Chemical) by a Contractor’s Agreement executed in January 2001 for interior and exterior painting works of a unit in Camp John Hay Manor, at a contract price that included the price of two studio units in Camp John Hay Suites as part of an offsetting scheme. The Agreement contained an arbitration clause but did not state a specific turnover date for the units; Charter Chemical later selected Units 102 and 104 in the second phase of Camp John Hay Suites.
Charter Chemical completed the painting works in 2003; Camp John Hay Development issued a Final Inspection and Acceptance Certificate belatedly on May 30, 2005. The parties executed pro forma contracts to sell in June 2005, and Camp John Hay Development certified in August 2005 that the two units were fully paid by offset, yet the units were not delivered because construction of the Suites remained unfinished. The project’s Master Development Plan and successive Memoranda of Agreement with the Bases Conversion and Development Authority (BCDA) set and revised target completion dates (a 2003 revision targeting end-2006 and a 2008 revision targeting 2012), but construction suffered repeated delays attributable to mutual delays and alleged force majeure.
After demands for delivery and payment, Charter Chemical sought the units’ transfer or payment of their value and filed a Request for Arbitration with the Construction Industry Arbitration Commission (CIAC) on June 12, 2008. In its March 30, 2009 Final Award, the CIAC ordered Camp John Hay Development to pay the monetary equivalent of the two units (P5,900,000.00) and attorney’s fees (P590,000.00), and declined to fix a delivery period under Article 1197 of the Civil Code. Camp John Hay Development filed a Petition for Review under Rule 43 before the Court of Appeals arguing, inter alia, that the CIAC lacked jurisdiction because subsequent contracts to sell contained a venue clause vesting jurisdiction exclusively in Pasig courts and thereby superseded the Contractor’s Agreement; it also contended no definite completion date was agreed between the parties so the proper remedy was fixing a period under Articles 1191 and 1197, not rescission.
The Court of Appeals, in a May 13, 2011 Decision, affirmed the CIAC Final Award, holding that the arbitration clause in the Contractor’s Agreement remained controlling and that the contracts to sell did not supersede it; the CA found petitioner already in delay by August 3, 2007 and that rescission under Article 1191 was appropriate. A ...(Pro-only)
Issues:
- Did the Court of Appeals err in ruling that the Construction Industry Arbitration Commission (CIAC) has jurisdiction over the dispute despite the contracts to sell containing a contrary dispute-resolution/venue clause?
- Did the Court of Appeals correctly rescind the obligation under Article 1191 of the Civil Code instead of ordering the fixing of a period under Article 1197?
- Did the Court of Appeals err in affirming th...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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