Case Digest (G.R. No. 210970)
Facts:
Local Water Utilities Administration v. R.D. Policarpio & Co., Inc., G.R. No. 210970, July 22, 2024, Supreme Court Third Division, Singh, J., writing for the Court.Petitioner Local Water Utilities Administration (LWUA) seeks review of the Court of Appeals' Decision (Dec. 17, 2012) and Resolution (Jan. 15, 2014) affirming the Construction Industry Arbitration Commission's (CIAC) Final Award (Apr. 1, 2011) in CIAC Case No. 15-2010. The CIAC had held LWUA solidarily liable with the Butuan City Water District (BCWD) to pay respondent R.D. Policarpio & Co., Inc. (RDPCI) monetary claims totaling PHP 84,439,378.18 under the Construction Contract.
In 1996 LWUA and BCWD executed a Financial Assistance Contract under which LWUA agreed to re-lend JBIC/OECF funds so BCWD could implement the Butuan City Water Supply System Project. The Financial Assistance Contract authorized LWUA to perform numerous functions usually associated with an owner or project manager, including prequalification, bid evaluation, awarding contracts, releasing payments, inspection and acceptance, and engaging consultants. LWUA engaged a resident Acting Project Manager and approved the Construction Contract (executed April 18, 1998) between BCWD and RDPCI, issued Notice of Award and Notices to Proceed, and later approved an Amendment (July 21, 1998) and a Supplemental Agreement (Sept. 14, 2001). A Memorandum of Agreement (MOA) among LWUA, BCWD and RDPCI set terms for payments.
RDPCI completed the works but BCWD (and LWUA in practice) withheld final payments, retention money and price escalation. RDPCI filed a monetary claim with the CIAC seeking payment and interest; the CIAC constituted an arbitral tribunal, accepted jurisdiction, and in its Final Award granted RDPCI the amounts claimed and found LWUA solidarily liable with BCWD, reasoning that LWUA’s conduct (e.g., amending the contract, deleting works, disbursing payments, issuing final acceptance, and acting as disbursing office) showed it functioned as more than a mere agent.
LWUA filed a Petition for Review under Rule 43 with the ...(Subscriber-Only)
Issues:
- Was the judicial remedy invoked to challenge the CIAC Final Award appropriate (procedural question as to modes of review)?
- Is the LWUA a party to the Construction Contract (including the Supplemental Agreement)?
- If LWUA is a party, is its liability with BCWD solidary?
- Is LWUA liable for attorney’s fees and the cost of a...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)